Opinion ID: 2584287
Heading Depth: 3
Heading Rank: 1

Heading: Ownership and Operation of Cliff Enterprises, Inc.

Text: Cliff Enterprises, Inc. (CEI) was incorporated on May 15, 2000 by Clifton Yamamoto, at Fong's direction. [3] Yamamoto subsequently transferred all of the shares of stock of CEI to Michael Tamura, who paid part of the purchase price with a promissory note in favor of Fong. Ownership subsequently passed to Batle in October 2000. Pursuant to an agreement between Tamura, Fong, and Batle, a promissory note designating Fong as the payee of a sum of $280,000 in monthly payments of $8,000 was signed in October 2000 by CEI (Batle signing as President), Batle, Ann Tamura, and David Tamura. The note was secured by mortgages on two condominiums owned by Ann and David Tamura, as well as a mortgage on Batle's house. Under Batle's ownership and operation, she sold cigarettes to retail customers at discount prices, allegedly because she was not paying the requisite Hawaii excise tax of five cents for each cigarette sold required by HRS § 245-3. [4] Batle testified that she purchased cigarettes from the mainland via a wholesale company she owned, and would resell them at the store. This gray market or illegal sales practice continued until December 2000, after which she did not make further purchases from her mainland company but continued to sell the remaining inventory. [5] Batle was arrested on April 3, 2001 for selling cigarettes without the required stamps. Ten months later, on January 31, 2002, she was formally charged with selling cigarettes without stamps, with one count against her individually and one count against her as corporate representative of CEI. Batle reached a plea agreement with the state, in which she would plead no contest, agree to a five year term of probation, and pay a $10,000 fine, in return for a dismissal of the charge against CEI.