By Mike De Felice

Special to the Kitsap Daily News

PORT ORCHARD – A test of wills between That One Place restaurant owner Craig Kenady and the state’s Labor & Industries continues after an unproductive hearing Wednesday between the two sides as they met regarding Kenady’s appeal of $132,000 in fines imposed on his establishment for reportedly violating Gov. Jay Inslee’s COVID-19 proclamation prohibiting serving customers indoors.

State L&I officials imposed the fines after they said That One Place continued serving customers inside the establishment for several days during a period when inside dining was prohibited by the governor’s proclamation.

A hearing on Kenady’s appeal finally took place after it had been delayed twice after the restaurant owner failed to show up for the hearing. He told Kitsap Daily News that he did not receive notice of the earlier hearings.

Although Kenady attended Wednesday’s hearing by phone, it seems little was accomplished and nothing was decided.

According to the restaurant owner, the hearing was unproductive.

“We feel it was a complete waste of time. [The state] only wants to negotiate the fine,” the restauranteur said.

“We will not negotiate a fine, as doing so would be admitting to violating some policy that we didn’t violate. We will not bow down to the tyrannical government that controls our state.

“We told them we weren’t interested [in a compromise],” Kenady said.

The restaurant owner said he asked that the arbitration end and the matter go before a judge.

The battle between the state and Kenady over reportedly serving customers indoors had previously been played out before a Kitsap County Superior Court judge. The state sought to have the judge impose a restraining order to stop the restaurant from serving customers in person.

The restraint-order court case was eventually dismissed by L&I after the department concluded the restaurant was making “good faith efforts” to come into compliance with health regulations.

The court case dismissal did not eliminate the fines, however, said L&I spokeswoman Dina Lorraine. The appeal of the fines, which Kenady insists are unlawful, is being heard by the Board of Industrial Insurance Appeals, she said.

At Wednesday’s hearing, Kenady insisted the court case that was dismissed was associated with the fines, Lorraine said.

“The mediation judge and [our attorney] unsuccessfully attempted to explain to Mr. Kenady that these are separate proceedings,” she said.

Kenady was told during the hearing that L&I is working with the governor’s office to develop an approach to settle the COVID-19 fines, Lorraine said. She said it is possible that a reduction of the daily $12,000 fine or a decrease in the number of days penalties were issued might instead be issued, she said.

“He was told that there could not be a resolution of the case in which the penalties were reduced to zero,” she added.

A follow-up hearing date has not yet been determined.