Cape Gazette

Rehoboth restaurant owner arrested for selling alcohol without a license

By Ryan Mavity and Melissa Steele | Sep 23, 2011
Photo by: Rachel Swick Mavity The former La La Land is now called Mallory Square Fish House and Grill under the new ownership of Ken Heaps.

The building at 22 Wilmington Ave. in Rehoboth Beach once held the venerable La La Land, but its successor is facing troubles of the le-le-legal variety.

On Sept. 22, Mallory Square Fish House and Grill owner Kenneth P. Heaps, of Bel Air, Md., was charged with selling alcohol without a license and illegal storage of alcoholic beverages. He was released pending a trial.

Officers with the Division of Alcohol and Tobacco Enforcement received a tip that Mallory Square Fish House & Grill was selling alcohol even though the restaurant did not have a license to do so, said Kimberly Chandler of the Delaware Department of Safety and Homeland Security.

When officers visited the restaurant, she said, they saw alcohol sold and served on the premises.

Kevin Jones, officer with the Division of Alcohol and Tobacco Enforcement, said the penalty would likely be a fine. There are no ramifications with the Alcoholic Beverage Control Commission because Mallory Square did not have a liquor license and does not fall under the commission’s jurisdiction.

Heaps said he inadvertently jumped the gun and that it was a stupid error on his part. Heaps said he pleaded guilty and has a court date scheduled in Justice of The Peace Court 2 in Rehoboth on Monday, Oct. 10.

The liquor license at La La Land had expired before Heaps took over. He said he filed for a liquor license in May, but city officials thought he was seeking a renewal, not a new license. When he called the commission, Heaps said, he was told he already had a license. He said he could not get a temporary license.

Heaps said the lack of a liquor license hurt Mallory Square’s business this summer, as they had to tell people up front that they did not serve liquor.

Mallory Square was granted a permit of compliance by the Rehoboth commissioners Sept. 16, and Heaps said he thought he had approval from the commission. He said the weekend before he was arrested, Jones had paid him a visit; Jones told him he was in violation of the law. The next week, Heaps said, he was told to meet at Mallory Square where he was arrested and charged.

Heaps said after his conversation with Jones, he stopped selling alcohol at Mallory Square and moved the alcohol to his house. Heaps said he should have understood the law better and waited until he got his license to post.

Heaps owns a second Rehoboth restaurant, Cypress, 37 Wilmington Ave., which has a valid liquor license and permit of compliance. Jones said he did not believe alcohol was being moved from Cypress to Mallory Square.

In Sussex County Superior Court, Heaps’ landlord, Carl Seldomridge, is suing Heaps over rent owed on the restaurant. Brian Ellis, attorney for Seldomridge, said Heaps has not paid $22,000 in rent.

Ellis did not wish to comment further, saying, “Hopefully things will work out, so I don’t want to poison the well.”

Heaps’ attorney, Eric Howard, declined to discuss the ongoing case.

A hearing on the suit in Justice of the Peace Court 17 in Georgetown has been continued to Oct. 6.

In addition, Heaps’ Bethany Beach home is listed for sheriff’s sale Tuesday, Oct. 18. According to court documents, the sale is part of a judgment against Heaps to collect on a mortgage debt owed to National City Mortgage Co., a subsidiary of PNC Bank. National City filed a civil suit against Heaps in Aug. 2009 to collect on an $847,000 mortgage debt. The debt includes the $775,000 principal plus foreclosure costs, interest, legal fees and late fees.

Sussex County Superior Court Judge Richard Stokes closed the case by issuing a writ against Heaps, allowing the sheriff to seize Heaps’ home and sell it at auction.

Heaps said the notice of sale is incorrect and that the issue with the bank has been settled. He said he was getting a modification on his mortgage as part of an agreement with the bank. He said the foreclosure people have to do their job as part of the process, but that he would not be going anywhere.


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