Court Opinion

ID: 2675382
Source: CourtListenerOpinion
Date Created: 2014-05-22 15:01:49.020764+00
Date Added: 2024-06-11T08:45:47.352487
License: Public Domain

2014 IL 116173

                                  IN THE
                             SUPREME COURT
                                    OF
                           THE STATE OF ILLINOIS

                                     (Docket No. 116173)

        WISAM 1, INC., d/b/a Sheridan Liquors, Appellant, v. ILLINOIS LIQUOR
                    CONTROL COMMISSION et al., Appellees.

                                  Opinion filed May 22, 2014.

         JUSTICE THEIS delivered the judgment of the court, with opinion.

        Chief Justice Garman and Justices Freeman, Thomas, Kilbride, Karmeier, and
     Burke concurred in the judgment and opinion.

                                           OPINION

¶1       This appeal arises out of a decision by the Illinois Liquor Control Commission,
     which affirmed the decision of the deputy local liquor control commissioner of the City
     of Peoria (Local Commissioner) to revoke the liquor license of WISAM 1, Inc., doing
     business as Sheridan Liquors (Sheridan Liquors). The circuit and appellate courts
     affirmed the decision on administrative review. 2013 IL App (3d) 110607-U. At issue
     is whether Sheridan Liquors was denied due process at the revocation proceeding
     before the Local Commissioner. For the following reasons, we hold that its due process
     rights were not violated and affirm the decision of the Commission.

¶2                                     BACKGROUND

¶3       Since 2002, Sheridan Liquors operated a liquor store at 2415 North Sheridan Road
     in Peoria, Illinois, and held a valid liquor license issued by the City of Peoria (the City).
     Adnan Asad was the president and owner of the business. His brothers, Mohamed
     (Mike) and Jalal Asad, managed and operated the business.

¶4       In 2009, Mike and Jalal were indicted in federal court on five counts of violating or
     conspiring to violate the Money Laundering Control Act of 1986 (31 U.S.C.
     § 5324(a)(3) (2006)). 1 That Act requires a bank involved in a cash transaction
     exceeding $10,000 to file a report with the Secretary of the Treasury. 31 U.S.C.
     § 5313(a) (2006); 31 C.F.R. § 103.22(b) (2009). The purpose of this requirement is to
     ferret out criminal activity hidden through money laundering and other financial
     devices. United States v. MacPherson, 424 F.3d 183, 188 (2d Cir. 2005). The Act
     further makes it illegal to break up a single transaction above the reporting threshold
     into two or more separate transactions for the purpose of evading the reporting
     requirement. 31 U.S.C. § 5324(a)(3) (2006); 31 C.F.R. § 103.11(gg) (2009).

¶5       The indictment alleged that Mike and Jalal were involved in the management and
     operation of Sheridan Liquors, and that as part of the business, in addition to selling
     liquor and other products, they cashed checks for a fee. As a result of the check-cashing
     operation, they needed a substantial amount of cash. The cash generated from the sale
     of liquor and other products was insufficient to provide the amounts needed to cover
     the checks that were being cashed. From June 2003 to March 2007, they withdrew
     large amounts of cash from Sheridan Liquors’ bank account by writing checks payable
     to cash and, knowing of the federal reporting requirements, structured the withdrawal
     of more than $4 million from that account to evade the reporting requirements. For
     example, the indictment alleged that on the same date in 2006, two checks were written
     for $9,500 on Sheridan Liquors’ account at different branch offices in Peoria. The next
     day, a $9,800 and a $9,000 check were cashed at these same branch offices. The next
     month, eight checks were cashed in separate transactions each in increments of $9,000,
     $9,500, and $9,800 at various branch offices.

¶6      In June 2010, a jury found Mike guilty on all five counts in the federal indictment.
     He was subsequently sentenced to three years in prison. He did not appeal.

¶7       One month later, the City of Peoria issued a notice of hearing to Sheridan Liquors
     charging a violation of section 3-28 of the Peoria Municipal Code (the Code). That
     section prohibits, in relevant part, any liquor licensee or its agent or employee from
     engaging in any activity or conduct in or about the licensed premises that is prohibited

         1
        Jalal fled the country prior to trial and is currently a wanted fugitive.
     www.interpol.int/notice/search/wanted/2009-11204. His conduct is not at issue here.
                                                   -2-
       by federal law. Peoria Municipal Code § 3-28 (adopted Apr. 20, 1993). The City
       alleged that between 2003 and 2007, Mike, as Sheridan Liquors’ agent or employee,
       engaged in illegal activity in or about the premises by conspiring to unlawfully
       structure financial transactions related to Sheridan Liquors’ operations to evade the
       federal reporting requirements, as charged in the federal indictment.

¶8         On August 4, 2010, an administrative hearing was held before the Local
       Commissioner. At the outset of the hearing, the City entered into evidence a stipulation
       between the parties. The stipulation, which was read into the record, provided as
       follows:

                  “1. At all dates and time[s] as indicated in the notice of charge against the
              licensee, [Mike] Asad, was acting as a manager or employee or agent of the
              licensee.

                 2. The attached Exhibit A is an accurate and true copy of the indictment
              against [Mike] Asad in the federal criminal case 09-10110 before the U.S.
              Central District Court.

                  3. That [Mike] Asad was found guilty and convicted by a jury for
              committing federal criminal offenses, counts 1 through 5, as charged in [the]
              indictment contained in the federal criminal case 09-10110 before the U.S.
              Central District Court.

                  4. The federal criminal offenses of which [Mike] Asad was convicted all
              related to the financial and business operations of Sheridan Liquors located [at]
              2415 N. Sheridan, Peoria, Illinois.

                 5. That as part of Sheridan Liquors’ business, [Mike] Asad and other
              employees of Sheridan Liquor[s] cashed checks for its customers.”

¶9         In addition to the stipulation and the attached indictment, the City introduced the
       three volume transcript from the federal criminal trial. Sheridan Liquors objected to the
       admission of the transcripts because the business and its owner, Adnan, were not
       parties to the criminal proceeding against Mike and had no opportunity to defend in
       that proceeding or cross-examine those witnesses. The Local Commissioner admitted
       the evidence over objection.

¶ 10       After entering into evidence the stipulation, the attached indictment, and the trial
       transcripts, the parties made what they referred to as “opening statements.” Sheridan
                                               -3-
       Liquors maintained that Mike’s federal conviction should not have preclusive effect
       against it in this case because Adnan, the owner, was never given an opportunity to
       present a defense in the federal criminal proceeding. Counsel stated that Adnan would
       seek to introduce evidence that he had a bona fide reason for structuring the
       transactions in amounts under the reporting requirement. Counsel additionally
       maintained that the indictment provided only that the transactions that were the subject
       of the federal offense occurred at the bank and not in or about the premises as required
       under section 3-28 of the Code. He provided the Local Commissioner with a packet of
       various ordinances and case law to support his arguments.

¶ 11       After responding to Sheridan Liquors’ arguments, the City then sought what it
       called a “directed finding” that Mike, as Sheridan Liquors’ agent, violated section 3-28
       of the Code based upon the evidence it had presented. 2 The Local Commissioner made
       an initial finding on the record that “there is a clear violation [of section 3-28] based
       upon the federal indictment.” He later clarified that his finding was based on the federal
       conviction. Thereafter, the following colloquy took place:

                    “MR. O’DAY [counsel for Sheridan Liquors]: Can we present some
                evidence about the case, or are we precluded?

                    MR. TURNER [Local Commissioner]: Well, since this is a more relaxed
                atmosphere, I don’t have a problem with you presenting any additional
                information.”

¶ 12       Sheridan Liquors introduced various items of evidence into the record. It offered
       some insurance policy declarations pages which purported to show relevant business
       insurance coverage with limits of $10,000 for cash on the premises. It explained the
       purpose in introducing these policies was to support a defense theory that the reason for
       structuring the transactions below $10,000 was not to evade the reporting requirements
       but, instead, because the insurance coverage on the premises was limited to $10,000
       cash on hand. Sheridan Liquors requested that the policies be admitted into evidence, 3
       and sought a finding that they were not admitted at the federal trial. It additionally
       introduced a subpoena for Adnan in the federal criminal trial, but explained that Adnan

           2
             A directed finding is generally made by a defendant at the close of the plaintiff’s case where the
       defendant contends the plaintiff has not established a prima facie case. See 735 ILCS 5/2-1110 (West
       2010). We will refer to it simply as a finding.
           3
             The record reflects that some of the policy declarations pages covered periods outside the time
       period alleged in the City’s notice of hearing and the indictment, and provided coverage limits of only
       $5,000 inside the premises which was inconsistent with the defense theory.
                                                      -4-
       was never called to testify. It also asked the court to take judicial notice of various
       sections of the Code, and then stated, “that’s all I have.”

¶ 13       The Local Commissioner allowed Sheridan Liquors the opportunity to make a
       further record. Sheridan Liquors presented various legal arguments, including that the
       finding of guilt against the agent should not be binding on the licensee in the revocation
       proceeding. The City responded to those arguments, and the Local Commissioner
       addressed those legal arguments.

¶ 14        The parties then presented evidence related to the penalty phase of the proceedings.
       In support of the revocation of the liquor license as a penalty for the violation, the City
       presented testimony from a neighbor and several local police officers regarding
       loitering, litter, and potential drug use around the store. Additionally, the City entered
       into evidence a 2005 order from the local liquor commissioner, finding that Sheridan
       Liquors had sold liquor to a minor in violation of section 3-28 of the Code. Counsel for
       Sheridan Liquors then cross-examined each of the witnesses and entered into evidence
       letters from the Peoria Police Department indicating that the establishment had
       subsequently complied with law enforcement with regard to the sale of alcohol to
       minors.

¶ 15       In its defense, Sheridan Liquors presented the testimony of Adnan. In response to a
       question from counsel, Adnan testified that he was familiar with “the insurance
       declarations pages that we’ve put into evidence.” Adnan stated that he was familiar
       with the insurance provisions which covered up to $10,000 if money was stolen in a
       robbery at the store. Adnan further reiterated that he attempted to limit the amount of
       cash on hand in the store to less than $10,000 for insurance and safety purposes and
       denied that it was to avoid currency transaction reporting requirements. Adnan
       acknowledged that the store had a sign indicating that it cashed paychecks and that the
       liquor store employees would cash checks for its customers in order for the customers
       to have money to spend in the store.

¶ 16      At the conclusion of the two-and-a-half-hour hearing, the Local Commissioner
       made the following statement:

                   “I don’t take the City’s request for revocation lightly. So what I want to do
              is I want to review all of the testimony, the exhibits, and the evidence that has
              been presented here today over the next few days and render a decision that is
              based on the findings of fact and the information that was presented here
              today.”
                                                -5-
¶ 17       Thereafter, the Local Commissioner issued a written order revoking Sheridan
       Liquors’ license. Therein, he made the following findings of fact. Based on the
       stipulation, Mike was acting as a manager and employee or agent of Sheridan Liquors
       at all dates and times indicated in the notice of hearing, Mike was found guilty by a jury
       of committing counts I through V as charged in the federal indictment in the federal
       case, and the federal criminal offenses for which Mike was convicted all related to the
       financial and business operations of Sheridan Liquors. Additionally, the Local
       Commissioner found that, based on the testimony presented during the federal trial, the
       operation of Sheridan Liquors was “intricate and central to the motive, means and
       manner in which the federal criminal offenses were committed.”

¶ 18       Sheridan Liquors appealed the decision to the Illinois Liquor Control Commission
       (the Commission), pursuant to section 7-9 of the Liquor Control Act of 1934 (235 ILCS
       5/7-9 (West 2010)). After extensive argument by both parties, the Commission
       affirmed the revocation order and denied Sheridan Liquors’ petition for rehearing. The
       Commission found that the Local Commissioner proceeded in a lawful manner by
       providing the necessary due process to be heard and by basing his order on section 3-28
       of the Code. The Commission further found that the findings of the Local
       Commissioner were supported by substantial evidence in light of the whole record.
       Specifically, it found that the stipulation established all of the elements of a violation of
       the ordinance, and that the federal transcripts confirmed that the premises were central
       to the criminal activity. Additionally, the Commission found that the conduct was
       fairly related to the control of liquor, and that the transcripts were properly admitted to
       identify the location of the illegal act committed by Mike.

¶ 19       Thereafter, Sheridan Liquors filed a complaint for administrative review in the
       circuit court of Peoria County pursuant to the Administrative Review Law (235 ILCS
       5/7-11 (West 2010); 735 ILCS 5/3-101 et seq. (West 2010)). Therein, Sheridan Liquors
       alleged, inter alia, that the Local Commissioner violated its right to procedural due
       process when he summarily determined its liability without allowing it the opportunity
       to present a defense or be otherwise heard. After a hearing, the circuit court affirmed
       the decision of the Commission. The court concluded that Sheridan Liquors had been
       provided with due process, and that there was sufficient competent evidence in the
       record to support the Commission’s decision.

¶ 20       The appellate court affirmed. Although it found that Sheridan Liquors “was not
       given the opportunity to present its defense in the normal manner, or to cross-examine
       witnesses,” it found that Sheridan Liquors could not show prejudice caused by any lack
                                                 -6-
       of due process. 2013 IL App (3d) 110607-U, ¶ 14. It based its determination on the
       facts that Sheridan Liquors had proper notice, attended the hearing, and entered into a
       stipulation that the Commission found was sufficient evidence to support the
       revocation. Id. The appellate court further found that the admission of the federal
       transcripts was not prejudicial error where there was sufficient competent evidence to
       support the revocation. Id. Justice McDade dissented. She would have held that there
       was insufficient competent evidence to support a finding that the prohibited conduct
       occurred in or about the premises, it was an abuse of discretion for the Local
       Commissioner to admit the federal transcripts, and their improper admission resulted in
       significant prejudice. Id. ¶¶ 27-29 (McDade, J., dissenting).

¶ 21      This court allowed Sheridan Liquors’ petition for leave to appeal. Ill. S. Ct. R.
       315(a) (eff. July 1, 2013).

¶ 22                                        ANALYSIS

¶ 23        In its brief before this court, Sheridan Liquors raises three issues: (1) the Local
       Commissioner denied it due process; (2) the Local Commissioner’s findings were not
       supported by substantial evidence; and (3) the Local Commissioner’s decision to
       revoke its license was not supported by the record. As a preliminary matter, Sheridan
       Liquors concedes that, whether the revocation was an appropriate penalty was an issue
       not raised below or in its petition for leave to appeal and is therefore forfeited. People v.
       Fitzpatrick, 2013 IL 113449, ¶ 26 (issues not raised in the petition for leave to appeal
       are forfeited); Vine Street Clinic v. HealthLink, Inc., 222 Ill. 2d 276, 301 (2006)
       (arguments not raised in either the circuit or appellate court are forfeited). Additionally,
       we find that Sheridan Liquors did not raise a sufficiency of the evidence claim in its
       petition for leave to appeal. Accordingly, that issue is also forfeited. Fitzpatrick, 2013
IL 113449, ¶ 26. Therefore, we confine our consideration to the issue of due process,
       which was preserved for review. To the extent that the sufficiency of the evidence is
       relevant to Sheridan Liquors’ due process contentions, we will consider it in that
       context.

¶ 24      Pursuant to section 7-11 of the Liquor Control Act (235 ILCS 5/7-11 (West 2010)),
       decisions of the Commission are subject to judicial review in accordance with the
       provisions of the Administrative Review Law (735 ILCS 5/3-101 et seq. (West 2010)).
       Where judicial review of an agency’s decision is governed by the Administrative
       Review Law, “[t]he applicable standard of review, which determines the degree of
                                                 -7-
       deference given to the agency’s decision, depends upon whether the question presented
       is one of fact, one of law, or a mixed question of law and fact.” AFM Messenger
       Service, Inc. v. Department of Employment Security, 198 Ill. 2d 380, 390 (2001).
       Whether Sheridan Liquors was provided with the necessary due process is a question of
       law which this court reviews de novo. Lyon v. Department of Children & Family
       Services, 209 Ill. 2d 264, 271 (2004).

¶ 25       The fourteenth amendment prohibits states from depriving a person of life, liberty,
       or property, without due process of law. U.S. Const., amend. XIV. Initially, we note
       that although a liquor license is generally regarded as a privilege, and not a property
       right under the Liquor Control Act (235 ILCS 5/6-1 (West 2010)), once issued, it
       becomes a property right in a functional sense for due process purposes because it is
       only revocable for cause. Club Misty, Inc. v. Laski, 208 F.3d 615, 619 (7th Cir. 2000);
       Lopez v. Illinois Liquor Control Comm’n, 120 Ill. App. 3d 756, 760 (1983) (“a licensee
       must be afforded the basic rights of procedural due process”).

¶ 26        Due process is “a flexible concept and requires only such procedural protections as
       fundamental principles of justice and the particular situation demand.” Abrahamson v.
       Illinois Department of Professional Regulation, 153 Ill. 2d 76, 92 (1992). Thus, in
       administrative matters, due process is satisfied when the party concerned has the
       “opportunity to be heard in an orderly proceeding which is adapted to the nature and
       circumstances of the dispute.” Obasi v. Department of Professional Regulation, 266 Ill.
       App. 3d 693, 702 (1994). A fair hearing includes the right to be heard, the right to
       cross-examine adverse witnesses, and impartiality in ruling on the evidence.
       Abrahamson, 153 Ill. 2d at 95.

¶ 27       Nevertheless, the process due in an administrative setting does not necessarily
       require a proceeding akin to a judicial proceeding, and not all judicial procedures are
       appropriate in administrative proceedings. Stratton v. Wenona Community Unit
       District No. 1, 133 Ill. 2d 413, 433 (1990); Desai v. Metropolitan Sanitary District of
       Greater Chicago, 125 Ill. App. 3d 1031, 1033 (1984). Administrative proceedings are
       less formal and technical than judicial proceedings. Id.

¶ 28        With these principles in mind, we consider Sheridan Liquors’ contentions of error.
       It raises three due process arguments: (1) the Local Commissioner should have allowed
       it to relitigate Mike’s federal criminal conviction; (2) the Local Commissioner made a
       premature finding on its liability, denying it a meaningful opportunity to refute the

                                              -8-
       City’s evidence; and (3) the Local Commissioner improperly admitted the federal
       transcripts as substantive evidence, prejudicing its ability to defend.

¶ 29                                    Right to Relitigate

¶ 30       We reject Sheridan Liquors’ argument that the Local Commissioner denied it due
       process by not allowing it to relitigate Mike’s criminal conviction. Sheridan Liquors
       misunderstands the nature of its liability in these proceedings. When a licensee accepts
       the privilege of a liquor license, he impliedly agrees to abide by the provisions of the
       Liquor Control Act. A liquor license may be revoked where the licensee has violated
       any valid local ordinance as long as the violation is fairly related to liquor control. 235
       ILCS 5/7-5 (West 2010); Sip & Save Liquors, Inc. v. Daley, 275 Ill. App. 3d 1009,
       1020 (1995) (citing Lopez, 120 Ill. App. 3d at 761).

¶ 31      Additionally, section 10-3 of the Liquor Control Act specifically provides:

              “Every act or omission of whatsoever nature constituting a violation of any of
              the provisions of this Act, by any officer, director, manager or other agent or
              employee of any licensee, shall be deemed and held to be the act of such
              employer or licensee, and said employer or licensee shall be punishable in the
              same manner as if said act or omission had been done or omitted by him
              personally.” 235 ILCS 5/10-3 (West 2010).

¶ 32       Thus, the Act holds the licensee strictly accountable for any conduct of its agent
       which constitutes a violation of the Act. 235 ILCS 5/10-3 (West 2010). The purpose of
       holding a licensee to a higher standard is to ensure that the holder of a license for
       alcoholic beverages has an affirmative responsibility to see that his liquor business is
       not conducted by its employees in violation of the law. Nappi v. License Appeal
       Comm’n, 50 Ill. App. 3d 329, 330 (1977) (recognizing that the legislature sought to
       ensure the licensee’s accountability for violations of the Act, knowing that a liquor
       licensee may conduct business through agents and employees).

¶ 33       Illinois case law has consistently applied the Act to hold the licensee strictly
       accountable for the conduct of its agent where the violation fairly relates to liquor
       control and is on the licensed premises. See, e.g., Byrne v. Stern, 103 Ill. App. 3d 601,
       606 (1981) (“the law imposes strict liability upon the licensee for the action or conduct
       of his agents or employees on the premises regardless of whether the licensee has
       exercised control over the conduct of his employees or agents”); Maldonado v. License
                                               -9-
       Appeal Comm’n, 100 Ill. App. 3d 639, 641 (1981) (licensee accountable for the actions
       of his employee in performing an act of prostitution on the premises); Cox v. Daley, 93
Ill. App. 3d 593, 597 (1981) (licensee was accountable for agent’s battery with the use
       of a deadly weapon upon a patron); Daley v. Ferguson, 21 Ill. App. 3d 888 (1974)
       (abstract of op.) (licensee was responsible for agent’s act of allowing solicitation for
       prostitution on the premises); Daley v. Resnick, 5 Ill. App. 3d 683, 684 (1972)
       (recognizing that the acts of a licensee’s agent in violating a statute prohibiting the
       solicitation for prostitution would be attributable to the licensee); Daley v. Richardson,
       103 Ill. App. 2d 383, 388 (1968) (licensee was strictly accountable for the assault
       committed by his employee on the premises).

¶ 34        Here, the City sought to revoke Sheridan Liquors’ license based on its agent’s
       violation of a liquor ordinance prohibiting illegal conduct on the premises. Section
       3-28 of the Code provides, in relevant part:

                  “No licensee or any *** agent or employee of such licensee shall engage in
              any activity or conduct or suffer or permit any other person to engage in any
              activity or conduct in or about the licensed premises which is prohibited by any
              *** law of the *** United States.” Peoria Municipal Code § 3-28 (adopted Apr.
              20, 1993).

       Specifically, the City alleged that Mike, as an agent or employee of Sheridan Liquors,
       had engaged in illegal activities on the licensed premises between June 2003 and
       March 2007, by conspiring to structure financial transactions relating to the operation
       of the premises to evade federal reporting requirements in violation of section
       5324(a)(3) of the Money Laundering Control Act (31 U.S.C. § 5324(a)(3) (2006)).
       Thus, the City sought to hold Sheridan Liquors, the licensee, strictly accountable for
       the conduct of its agent, Mike.

¶ 35       The parties stipulated that Mike was an agent of the licensee, and stipulated that
       Mike was found guilty by a jury in the federal criminal proceeding of conspiring to
       structure the financial transactions to evade the federal reporting requirements.
       Sheridan Liquors does not dispute that a licensee can be held accountable for the
       conduct of his agent. Rather, Sheridan Liquors argues that, because it was not a party to
       the criminal proceeding, it should be able to challenge Mike’s conviction in the
       administrative proceeding.

¶ 36      We disagree. To allow the licensee to relitigate its agent’s federal conviction would
       render the strict accountability provisions of the Act meaningless. As indicated, the
                                               - 10 -
       licensee stands in the shoes of his agent. 235 ILCS 5/10-3 (West 2010). Therefore,
       based on Mike’s criminal conviction, Sheridan Liquors could not relitigate the fact that
       Mike’s conduct violated federal law.

¶ 37       That is not to say that Sheridan Liquors’ claim, that it had a legitimate reason to
       structure the financial transactions, was irrelevant. Rather, it was relevant to whether
       the revocation of the license was an appropriate sanction as a consequence of Mike’s
       conviction. A licensee may always challenge whether revocation is warranted,
       notwithstanding the conduct of its agent. See, e.g., Byrne, 103 Ill. App. 3d at 606-07;
       Hanson v. Illinois Liquor Control Comm’n, 201 Ill. App. 3d 974, 984 (1990). Indeed,
       Adnan, the owner of Sheridan Liquors, testified in this regard during the penalty phase
       of the hearing. He testified that he had a legitimate business reason for structuring the
       transactions under the reporting requirements, and that he directed his employees to
       maintain less than $10,000 on the premises because of coverage limitations in his
       business insurance policies and for safety reasons.

¶ 38       Not only was that evidence presented to the Local Commissioner for consideration,
       the Commission was mandated to consider the whole record which included the
       testimony of Adnan and the group insurance exhibits that were made part of the record
       in support of his testimony in mitigation. 4 See 235 ILCS 5/7-9 (West 2010). There is
       no indication that the Local Commissioner or the Commission failed to consider that
       evidence for its proper purpose as mitigation. The Local Commissioner affirmatively
       stated on the record that he was going to “review all of the testimony, the exhibits, and
       the evidence that has been presented” prior to rendering his decision whether to revoke
       the license. Accordingly, we reject Sheridan Liquors’ argument that due process
       required that it be allowed to relitigate Mike’s federal criminal conviction in the
       revocation proceeding.

¶ 39                                        Premature Finding

¶ 40       We next consider Sheridan Liquors argument that the Local Commissioner entered
       a premature finding, after opening statements, that it violated the liquor ordinance,
       denying it a meaningful opportunity to refute and test the City’s evidence. Sheridan
       Liquors correctly asserts that Mike’s conviction alone does not satisfy the necessary
       elements to support its liability for a violation of section 3-28 of the Code. To prove a
           4
             We note that in its own pre-trial memorandum before the Commission, Sheridan Liquors indicated
       that the insurance policies were admitted into evidence.
                                                   - 11 -
       violation of section 3-28, the City had to establish (1) an agency relationship; (2) that
       the agent committed a violation of federal law; and (3) that the conduct occurred in or
       about the licensed premises. See Peoria Municipal Code § 3-28 (adopted Apr. 20,
       1993).

¶ 41       The record established that prior to any finding on its liability, Sheridan Liquors
       stipulated to the agency relationship, stipulated that Mike was convicted of the federal
       offenses as charged in the indictment, stipulated that the offenses for which Mike was
       convicted all related to the financial and business operations of Sheridan Liquors, and
       stipulated that the business operations included check cashing on the premises.

¶ 42       In People v. Woods, 214 Ill. 2d 455 (2005), this court explained the nature and
       effect of a stipulation. A stipulation is “an agreement between parties or their attorneys
       with respect to an issue before the [tribunal].” Id. at 468. They are looked upon
       favorably because they promote the disposition of cases, simplify the issues, and save
       expense to the parties. Id. “ ‘A stipulation is conclusive as to all matters necessarily
       included in it’ [citation] and ‘[n]o proof of stipulated facts is necessary, since the
       stipulation is substituted for proof and dispenses with the need for evidence’
       [citation].” Id. at 469. “Generally speaking, a [party] is precluded from attacking or
       otherwise contradicting any facts to which he or she stipulated.” Id. Thus, based on the
       stipulation, Sheridan Liquors was precluded from attacking or otherwise contradicting
       the fact of an agency relationship and, as explained, was precluded from attacking the
       federal conviction.

¶ 43       With respect to whether the conduct occurred in or about the premises, Sheridan
       Liquors indeed had an opportunity to refute the City’s evidence on this element prior to
       any finding by the Local Commissioner. Although Sheridan Liquors characterizes its
       statements as merely an “opening statement,” we note that the statement was made
       after evidence was admitted by its stipulation. Additionally, during Sheridan Liquors’
       “opening,” it made various legal arguments and introduced case law and other
       authority. Notably, Sheridan Liquors argued that section 3-1 of the Code defines
       premises to mean the area within a building for which a license to sell alcoholic liquor
       is issued. Peoria Municipal Code § 3-1 (adopted Apr. 20, 1993). Sheridan Liquors
       further argued that the evidence presented by the City, namely the indictment,
       indicated that the transactions relating to the conviction occurred at a bank.
       Specifically, counsel made the following argument:

                                               - 12 -
                  “And in the case of this federal indictment, which is part of the stipulation
              here, you know, that’s already been entered without our objection by the City
              into evidence, if you turn to, for example, Page 4 of the indictment, which is
              attached to the stipulation. They say that these transactions occurred at National
              City Bank’s facilities in or near Peoria, Illinois. These would be the transactions
              that were the subject of the federal indictment that were supposedly structured
              improperly to be less than $10,000 at a time.

                  And the premises of a bank of a liquor licensee would not be included
              within the definition of premises in the city ordinance. Thus, when Section 3-28
              refers to premises, that would not include any conduct that occurs at a bank as
              opposed to on the licensed premises themselves.”

       Thus, the record reflects that prior to any finding that Sheridan Liquors violated the
       ordinance, it had a meaningful opportunity to test, explain, and refute the City’s
       evidence by arguing that the definition of premises in the Code did not include a bank,
       and by relying on the indictment as evidence to support its position that the City did not
       meet its burden of proof to show that the conspiracy occurred in or about the licensed
       premises. Therefore, we reject Sheridan Liquors’ contention that a premature finding
       was made, denying it an opportunity to refute the City’s evidence.

¶ 44                                   Federal Transcripts

¶ 45        Finally, we consider Sheridan Liquors’ argument that it was denied due process
       when the Local Commissioner admitted the federal transcripts as substantive evidence.
       Sheridan Liquors maintains that the testimony was inadmissible hearsay that was
       prejudicial because it represented the only proof that the offenses occurred in or about
       the premises, and Sheridan Liquors had no opportunity to cross-examine those
       witnesses.

¶ 46       Generally, procedural due process protections preclude the admission of hearsay
       evidence in an administrative proceeding. Abrahamson, 153 Ill. 2d at 94; Sudzus v.
       Department of Employment Security, 393 Ill. App. 3d 814, 828 (2009). However,
       “ ‘where there is sufficient competent evidence to support an administrative decision,
       the improper admission of hearsay testimony in the administrative proceeding is not
       prejudicial error.’ ” Abrahamson, 153 Ill. 2d at 94 (quoting Goranson v. Department of

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       Registration & Education, 92 Ill. App. 3d 496, 501 (1980)); Sudzus, 393 Ill. App. 3d at
       828.

¶ 47       We agree with Sheridan Liquors that the City improperly sought to admit the entire
       transcript of proceedings from the federal trial, without identifying the purpose for
       which it sought to use the testimony, and without identifying what specific testimony it
       sought to rely upon. The Local Commissioner could not properly consider whether the
       City had established an adequate basis for admission of this evidence. Nevertheless, we
       need not consider whether the testimony was inadmissible hearsay where there was
       sufficient competent evidence to support the administrative decision.

¶ 48       The Commission had before it the stipulation, the attached indictment, and the
       testimony of Adnan. As explained, the stipulation established that Mike was an agent
       of Sheridan Liquors, and that he had been found guilty by a jury of conspiring to
       structure financial transactions to evade the federal reporting requirements. Although
       the stipulation and attached indictment did not expressly state that the illegal conduct
       occurred on the premises, the Commission was entitled to draw reasonable inferences
       from the facts established. See, e.g., People v. Reynolds, 358 Ill. App. 3d 286, 298
       (2005) (finding that the stipulation supported a reasonable inference of criminal intent).

¶ 49       The stipulation provided that the conduct for which Mike was convicted related to
       the business operations of Sheridan Liquors located at 2415 North Sheridan Road in
       Peoria, Illinois. The stipulation and attached indictment further provided that the
       business operations included check cashing on the premises. The check cashing
       operation on the premises was the impetus for requiring large amounts of cash which
       resulted in the need to structure the cash withdrawals to evade the reporting
       requirements. Additionally, Adnan testified that the purpose of the check cashing
       services at the liquor store was specifically to bring people into the store to promote the
       purchase of liquor.

¶ 50      Taking all of this competent evidence together, a reasonable and logical inference
       could be made that the conspiracy to structure the transactions to evade the federal
       reporting requirements occurred “in or about the licensed premises.” Therefore, the
       admission of the transcripts was not prejudicial error warranting reversal.

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¶ 51                                    CONCLUSION

¶ 52       Based upon our consideration of the whole record, including the 148-page
       transcript of the two-and-one-half-hour hearing before the Local Commissioner, we
       hold that Sheridan Liquors was not denied due process. It had an opportunity to present
       relevant evidence and relevant defenses. Procedural due process does not guarantee an
       outcome, it only guarantees a meaningful opportunity to be heard. Sheridan Liquors
       had a thorough opportunity to be heard at every stage of the proceedings.
       Consequently, we affirm the decision of the Commission.

¶ 53      Affirmed.

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