STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, DEPARTMENT OF ) BUSINESS REGULATION, DIVISION ) OF BEVERAGE, )

)

Petitioner, )

)

vs. ) CASE NO. 75-2038

) DOB NO. 3-75-113-A SPECIALTY TAVERNS OF AMERICA, )

INC. d/b/a THE DEPOT, License ) No. 23-548, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held an administrative hearing in this cause on July 14, 1975, in Miami, Florida.

APPEARANCES

For Petitioner: Charles Curtis, Esquire

Department of Business Regulation The Johns Building

Tallahassee, Florida 32304

For Respondent: Richard Maloy, Esquire

370 Minorca Avenue

Coral Gables, Florida 33134

and

James O. Nelson, Esquire

Suite 600, Eastern Union Building Miami, Florida 33130

ISSUES

The Division of Beverage seeks to assess a civil penalty against, or to suspend or revoke beverage license 23-748 issued to Respondent setting forth the following two reasons as alleged in the administrative complaint: 1/

1. That on June 2, 1975, investigation revealed that Respondent failed to disclose an interest of Daniel Guthry, in its sworn application dated February 4, 1971, contrary to Section 561.17, Florida Statutes.

   
   

2. That, on or about June 16, 1975, investigation revealed that Respondent conspired to violate the beverage laws by permitting a person found not qualified, to engage in the business of selling or dealing in any way in alcoholic beverages, contrary to Florida Statutes, 562.23 to wit, Florida Statutes 561.17.

3. Based upon my observation of the witnesses and their demeanor while testifying, I make the following:

FINDINGS OF FACT

1. Florence Fitzgerald is the mother of Daniel Guthry. Mr. Guthry is a graduate of the Cornell Hotel and Restaurant School and a graduate of the Miami Law School. While a student at the University of Miami Law School, Guthry opened a small restaurant known as the Ale House which was a college pub. It was successful until sometime in 1965 when a civil law suit was filed and the Ale House was closed.

   
   

2. The contention of the Petitioner is that Guthry owned 100 percent of Specialty Taverns of America, Inc., and that he attempted to transfer the license from the Ale House to the Stable which was a restaurant located on 79th Street which was then owned by a Virginia Mariani. 2/ Petitioner alleges that Guthry attempted to effectuate this transfer while he had been previously denied a license based on a prior beverage law violation during his operation of the Ale House. Petitioner introduced checks indicating that Guthry had drawn checks to pay for salaries, beer and wine and other day to day operations of The Depot. Daniel Guthry was also the owner of Collegiate Marketing and Petitioner contends that Collegiate Marketing and Specialty Taverns, Inc., are interrelated corporations and through this interrelationship, bills are paid for The Depot. Evidence was also introduced indicating that Guthry paid bills for both Collegiate Marketing and The Depot including phone bills and other personal items such as parking tickets, haircuts, medical and dental expenditures, property taxes, repair bills, stocks and other incidental items. The contention is further made that Guthry holds himself out as being the owner of The Depot and that while he operated the Stable, he wanted a 4-COP license which is a license which allows the licensee to sell mixed drinks, beer and wine whereas he then owned a 2-COP license which only permitted him to sell beer and wine. A check was also introduced by Petitioner indicating that Guthry had drawn a check for $1,000 in payment to his mother, Mrs. Fitzgerald. Finally, the contention is made that by these acts, Guthry has free control of The Depot for all receivables and that there is absolutely no control by Fitzgerald over the licensed premises. It is further alleged that Guthry advised several persons including suppliers that he was the owner of The Depot.

   
   

3. At the conclusion of the Petitioner's case, Respondent moved for a dismissal based on an allegation that Petitioner had advanced no evidence indicating that there was a conspiracy nor was there any evidence of any intent or interest on the part of Daniel Guthry. The undersigned denied the motion for dismissal inasmuch as there was, at least in the undersigned's opinion, sufficient evidence to indicate that a prima facie case had been established.

   
   

4. Richard H. W. Maloy, an attorney practicing since 1953 in Dade County, Florida, indicated that he has represented Florence Fitzgerald in sundry matters since 1968 and he also represented Daniel Guthry during the late 1960's. Guthry approached Maloy sometime in the early `70's about forming a corporation to purchase the license on 79th Street (The Stable). Maloy checked with the Secretary of State to see if the corporate name, Specialty Taverns, Inc., was available and when he determined that it was, articles were drawn up showing that Guthry owned 80 percent of the shares while Maloy owned 10 percent and another undisclosed person owned the remaining 10 percent. The corporation was formed on February 4, 1970. According to Maloy, Guthry wanted to make application immediately with the Division of Beverage to effectuate a transfer

   and personal data forms were submitted on Guthry, Mr. Hanson and Mr. Maloy to the Division of Beverage. On February 5, 1970, a signed application was submitted to the Division of Beverage and on the following day a health inspection was made of the premises. Maloy was advised on February 11, that the stock was to be transferred to Fitzgerald and not Guthry. It should be noted that at that point, the license transfer application had been filed. This advice came to Maloy via a telephone call from Mrs. Fitzgerald who advised that she had tendered all the money and was liable for all the other obligations for the premises in question. At that time, all stock rights were given to Mrs.

   Fitzgerald and while Guthry remained as president, he owned no stock. He testified that he was unaware that Guthry had previously made application to the Division of Beverage and had been rejected when the above referenced application was submitted.

   
   

5. According to the evidence, that application was filed on or about February 20, 1970 and Guthry listed himself as being the owner of the Stable. A report was rendered to the Division of Beverage on April 3, 1970, indicating that Guthry had violated the beverage laws while he operated the Ale House in the late 1960's. Maloy received a certified copy of Guthry's beverage violation at the Ale House on April 17, 1970. The Division of Beverage denied his application on May 12. Mr. Kimbrow advised Maloy that since Mrs. Fitzgerald owned all the stock etc., that she should submit her application for the license transfer and this was done on February 4, 1971. On May 22, 1970, Guthry resigned as president of Specialty Taverns of America, Inc. On April 14, 1971, the transfer application was approved and it was transferred from Mrs. Morioni, the prior owner to Mrs. Fitzgerald. On October 1, 1971, the license fee of

   $1,750 was paid. The license was held in escrow until February 11, 1972. During the period February to May of 1972, plans were made by Fitzgerald to purchase the restaurant and during that period, all ideas regarding its operation were formulated by Guthry. Maloy testified that he frequents the restaurant on a regular basis and he has witnessed both Daniel Guthry and Mrs. Fitzgerald present and he is personally aware that Mrs. Fitzgerald is the sole owner of the Depot's stock. He also testified that Guthry exercises managerial authority.

   
   

6. Mrs. Fitzgerald testified that she is very active in the business and she hires and fires employees. She maintained records of checks and reconciles all cancelled checks. She owns the company outright and purchased it in part by obligating herself for a $50,000 mortgage from the First National Bank of South Miami. She testified that her son Daniel Guthry, only manages the restaurant. She testified that while he manages the restaurant, she maintains absolute control over the entire operation and that Guthry received no benefit from the appreciation of the business.

   
   

7. Guthry testified that the Depot was opened on February 8, 1974. He testified that he can only hire and fire employees with his mother's consent and that he never invested any money in the Depot. Arnold Hampton, a certified public accountant, for the Depot, testified that the corporation has had a net loss carried forward at least since 1974, and that Fitzgerald advanced loans to the corporation on an as needed basis. He testified that checks were used to repay the loans that she had advanced, which according to him were the checks received into evidence.

   
   

8. Barry Tamlon, an employee at the Depot and a prior employee of the Ale House since 1966, testified that he was the former manager of the Ale House. He testified that Fitzgerald manages the Depot on a continuous basis and that

   Guthry does so incidentally, during his extensive travels on an intermittent basis.

   
   

9. Mrs. Fitzgerald testified that her son only derives prestige and fulfillment from operating a successful restaurant but that he receives no economic compensation other than incidental expenses. In conclusion she testified that he received no profits from the corporation and has no obligations to repay any of its bills.

   
   

10. Based on the above facts, the undersigned finds that there is insufficient evidence to establish that Mrs. Florence Fitzgerald and her son Daniel Guthry engaged in a conspiracy to violate the beverage laws as alleged or that Respondent failed to disclose the interest of Daniel Guthry. It is clear from evidence introduced that Guthry has no ownership or other interest in the licensed premises. Mrs. Fitzgerald whose testimony as corroborated by Maloy lends support for Respondent's claim that Mrs. Fitzgerald is the sole owner of approximately eighty percent (80 percent) of the Depot's stock. While the evidence indicates that Guthry manages the Depot apparently without much restriction from Mrs. Fitzgerald, there has been no showing and no claim is made by Petitioner that a person who has previously violated a beverage law is incapable of managing a restaurant that has a beverage license. Based on these findings, I therefore conclude that Petitioner has failed to establish that Respondent has engaged in the conduct as alleged in its administrative complaint. I shall therefore recommend that it be dismissed in its entirety.

    
    

    CONCLUSIONS OF LAW

    
    

11. The parties were properly noticed pursuant to Chapter 120, Florida Statutes.

    
    

12. The authority of the Petitioner, Division of Beverage, is derived from Chapter 561, Florida Statutes.

    
    

13. The Respondent did not unlawfully fail to disclose an interest of Daniel Guthry, in its sworn application dated February 4, 1971, since the evidence reveals that Daniel Guthry did not have an interest in the licensed premises.

    
    

14. The Respondent did not conspire to violate the beverage laws as alleged.

RECOMMENDATION

Based on the above finding and conclusions, I recommend that the complaint filed herein be dismissed in its entirety.

DONE and ENTERED this 21st day of September, 1976, in Tallahassee, Florida.

JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

ENDNOTES

1/ At the outset of the hearing, it appeared that Petitioner was withdrawing the first allegation of the complaint however no formal motion was made. Since evidence was introduced on that allegation, it is considered in this Recommended Order.

2/ Phonetic spelling used.

COPIES FURNISHED:

Charles Curtis, Esquire Department of Business Regulation The Johns Building

Tallahassee, Florida 32304

Richard Maloy, Esquire

370 Minorca Avenue

Coral Gables, Florida 33134

James O. Nelson, Esquire

Suite 600, Eastern Union Building Miami, Florida 33130

Docket for Case No: 75-002038

Orders for Case No: 75-002038