STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DIVISION OF ALCOHOLIC BEVERAGES ) AND TOBACCO, )

)

Petitioner, )

)

vs. ) CASE NO. 78-1492

) FRANK J. and JULIE SCHOFIELD ) d/b/a MEZZANINE LOUNGE AND )

PACKAGE STORE, )

)

Respondents. )

)

RECOMMENDED ORDER

This matter came on for hearing in Pensacola, Florida, before the Division of Administrative Hearings, by its duly designated Hearing Officer, Robert T. Benton, II, on May 6, 1980. The parties were represented by counsel:

APPEARANCES

For Petitioner: Daniel C. Brown, Esquire

725 South Bronough Street Tallahassee, Florida 32301

For Respondent: Robert G. Kerrigan, Esquire

224 East Government Street Pensacola, Florida 32501

By notice to show cause No. 1-78-1A, petitioner alleges that respondents "[o]n or about December 14, 1977, . . . and/or [their] . . . employee . . .

Phung Kim Holland, did beg or solicit a customer . . . Beverage Officer D. J. Cobb, on [their] licensed premises, to purchase a beverage . . . for [them] or [their] . . . employee . . . contrary to F.S. 562.13(1);" and, on the same date, "did solicit or offer to commit prostitution with . . . Beverage Officer D. J. Cobb, on [their] licensed premises, contrary to F.S. 561.29 and F.S.

796.07(3)(A)." The notice to show cause also alleges that, on or about January 5, 1978, respondents "and/or . . . [their] employee . . . Christine Haney Hampton, did beg or solicit a customer . . . Beverage Officer D. J. Cobb, on [their] licensed premises to purchase a beverage . . . for [them] or [their] employee . . . contrary to F.S. 562.131(1) . . . [and] did solicit or offer to commit prostitution with . . . Beverage Officer D. J. Cobb, on [their] licensed premises, contrary to F.S. 561.29 and F.S. 796.07(3)(A)"; and that, on the same date, respondents "and/or . . . [their] employee . . . Christine Haney Hampton, did beg or solicit a customer . . . Beverage Lieutenant R. E. Baxley, on [their] licensed premises to purchase a beverage . . . for [them] or . . . [their] employee . . . contrary to F.S. 562.131(1) . . . [and] did solicit or offer to commit prostitution with . . . Beverage Lieutenant R. E. Baxley, on [their] licensed premises, contrary to F.S. 561.29 and F.S. 796.03(3)(A)."

By motion to dismiss made ore tenus at the final hearing, respondents' counsel asserted that the notice to show cause should be dismissed because of the lapse of time between the alleged offenses and the final hearing.

FINDINGS OF FACT

1. At about half past ten o'clock on the night of December 14, 1977, Daniel James Cobb, than a beverage officer under the supervision of Lieutenant Robert E. Baxley, arrived at the Mezzanine Lounge at the corner of Intendencia and South Palafox Streets in Pensacola. He entered through the south door, went upstairs, and sat down at a table. An Asain woman who said her name was Charlene asked him if he wanted a drink and asked him to buy a drink for her, which he did. Subsequently, he bought a bottle of champagne for $18.00, at her request. Other customers at other tables also bought drinks for this woman, who went from table to table, occasionally stopping to chat with Officer Cobb. She asked him if he wanted a "chick," offered her own sexual services for $50.00, and said that he could have two girls for $100.00. Officer Cobb left the premises alone about midnight.

   
   

2. At approximately quarter past eight on the night of January 5, 1978, Officer Cobb returned to the Mezzanine Lounge. Again he went upstairs and sat at a table. After he had ordered a drink for himself, he bought a drink for a dancer who sat down at his table. A second dancer, a blonde known professionally as Gigi, came over and offered to dance "for tips." Gigi, who is also known as Christine Haney Hampton, performed an impromptu dance after Officer Cobb gave her $5.00. At Gigi's insistence, he then bought a bottle of champagne for $30.00, which Gigi opened. When she did, the cork ricocheted off the ceiling and hit Lieutenant Baxley, who had taken a seat at a nearby table.

   
   

3. Lieutenant Baxley had arrived 15 or 30 minutes after Officer Cobb, and was drinking bourbon, when he was hit by the cork. Maintaining the pretense that they were strangers, Officer Cob invited Lieutenant Baxley to join him for champagne. Lieutenant Baxley accepted, struck up a conversation with Gigi, then left with Gigi for another table. Shortly thereafter Officer Cobb left the premises alone. Gigi said to Lieutenant Baxley, "If you buy me a bottle of champagne, we'll have a party." She told him she would do anything for $100.00. Lieutenant Baxley purchased a bottle of champagne for $30.00, and he also bought three flowers for Gigi for $2.00, at her request.

   
   

4. At one point on the night of January 5, 1978, respondent Julie Schofield came upstairs. When asked, she said Gigi could not leave early.

   
   

5. Respondents purchased the Mezzanine Lounge from a Mr. Aliberti some three years ago. At the time it was a topless bar. For the first three months they owned it, respondents did not operate it as a topless bar, but they "reverted." The dancers were topless on the nights of December 14, 1977, and January 5, 1978. Respondent Julie Schofield spent five nights a week at the Mezzanine Lounge during that period. Respondent Frank Joseph Schofield visited the premises daily.

   
   

6. After Gigi had worked for respondents as a dancer for two or three months, respondents entered into an agreement with her husband, Harry Hampton, who undertook the management of the upstairs portion of the licensed premises, called the "Hideaway Lounge area." Mr. Schofield described the agreement in these words:

   "[M]y mark up percentage is 600 percent or as close as possible to it. any additional income may be disbursed as he sees fit. At the even- ings close Mr. Hampton gives me a sheet showing total liquor and bar sales for the evening.

   The cash for the evening is also turned in minus whatever cash disburs[e]ments were made. Most of the excess profit is derived

   from cocktail sales at 1000 percent mark up and bonus money is handed out from that by Mr.

   Hampton as determined by the number of drinks they had. This is approximately 30 percent of the drink price." Petitioner's exhibit No. 2.

   
   

   The more drinks the girls sold, the more money they made. Respondents terminated this agreement after hearing that Mr. Hampton was inviting bar patrons elsewhere for "exotic treats" and "personalized service." Respondents made no investigation of Mr. Hampton before hiring him.

   
   

7. On January 18, 1978, Officer Cob and Lieutenant Baxley arrested Christine Hampton and the Asian woman who had identified herself as Charlene, who is also known as Phung Kim Holland. Although both women were charged criminally, neither was convicted. Ms. Holland was acquitted after trial by jury; Ms. Hampton pleaded nolo contendere, but adjudication was withheld. After the arrests, respondents "fired a few people." In addition, respondents posted a sign on a wall urging patrons to report the solicitation of drinks to the management and placed "table tents" imprinted with the same message on various tables; and they also installed more lights on the licensed premises. At one point, Mr. Schofield asked some of the employees of the Mezzanine Lounge not to solicit for prostitution.

   
   

8. Petitioner instituted the present proceedings by serving respondents with a notice to show cause on March 17, 1978. An informal conference on March 24, 1978, was attended by Mr. Schofield and Lieutenant Baxley. Respondents were not represented by counsel at the informal conference. On May 23, 1978, respondents' counsel wrote Lieutenant Baxley suggesting that the notice to show cause be dismissed "[i]n light of the outcome of the criminal cases." Respondents' exhibit No. 1. On August 24, 1978, the petitioner referred the matter to the Division of Administrative Hearings for formal hearing, even though respondents have never made demand for formal hearing. On August 28, 1978, notice of hearing issued setting the final hearing for September 29, 1978, but the hearing was continued on application of respondents' counsel, according to the file.

   
   

9. The final hearing was next noticed for December 13, 1979. On December 13, 1979, according to the file, counsel for petitioner sought a continuance on grounds of Lieutenant Baxley's illness and represented that counsel for respondents had no objection to the continuance; and the final hearing was again continued. Also on December 13, 1978, respondents' counsel (who had previously corresponded with counsel for petitioner, respondents' exhibit No. 3) wrote a letter to Lieutenant Baxley "objecting to any kind of hearing . . . because so much time has transpired [sic] since the original offense." Respondents' exhibit No. 2. Respondents' counsel did not send copies of this letter either to petitioner's counsel or to the hearing officer.

   CONCLUSIONS OF LAW

   
   

10. Respondents contend that the notice to show cause should be dismissed because the final hearing was not held more promptly. No authority has been cited in support of this contention, and it must be rejected since respondents never asked for an earlier (or any) formal hearing and demonstrated no prejudice on account of the delay, in any event. It is petitioner who has the burden of proof. According to Lieutenant Baxley, it was petitioner who was unable to locate certain witnesses. Respondents never tried to subpoena the first witness. The only witness called by respondents, Mr. Schofield, responded lucidly and precisely to questions of counsel. Although at least one of the witnesses called by petitioner said his memory was fresher closer to the events, petitioner's witnesses respondent fully to questions on cross examination.

    
    

11. Petitioner established, by a preponderance of the evidence, that, while they were on respondents' licensed premises, Phung Kim Holland on the nigh of December 14, 1977, and Christine Haney Hampton on the night of January 5, 1978, "offer[ed] to commit . . . prostitution," Section 796.07(3)(a), Florida Statutes (1977), in violation of Florida law. The testimony of Officer Cobb and Lieutenant Baxley to this effect was rebutted. Petitioner established that Ms. Hampton solicited Lieutenant Baxley but not Officer Cobb on the night of January 5, 1978.

    
    

12. Petitioner is authorized to take disciplinary action against a license like respondents' whenever there has been established a "[v]iolation by the licensee or his . . . employees, on the licensed premises, . . . of any of the laws of this state." Section 561.29(1)(a), Florida Statutes (1979). It is immaterial "whether or not the . . . employees have been convicted in any criminal court" Section 561.29(1)(a), Florida Statutes (1977).

    
    

13. But disciplinary action against a license on account of an employee's violating the law is authorized only where the licensee is "found to have been culpably responsible for such violation through or as a result of his own negligence, intentional wrongdoing or lack of diligence." Taylor v. State Beverage Department, 194 So.2d 321, 325 (Fla. 2d DCA 1967). Accord, Cohen v. Schott, 48 So. 143 (Fla. 1950); Woodbury v. State Beverage Department, 219 So.2d

    47 (Fla. 1st DCA 1969). Proof that one employee solicited for prostitution on one occasion, without more, is an insufficient basis for disciplinary action against a license. G & B of Jacksonville, Inc. t/a The Climax v. State Department of Business Regulation, Division of Beverage, 381 So.2d 1074 (Fla. 1st DCA 1979) (on reh.); G & B of Jacksonville, Inc. d/b/a Out of Sight v. State Department of Business Regulation, Division of Beverage, 366 So.2d 877 (Fla. 1st DCA 1979). Here petitioner proved that two employees solicited for prostitution within approximately three weeks of each other, but nothing in the evidence suggested that respondents had any knowledge of either incident before both employees were arrested on January 18, 1978. Petitioner has not shown respondents to be "culpably responsible" for either violation.

    
    

14. Petitioner proved that Phung Kim Holland on December 14, 1977, and Christine Haney Hampton on the night of January 5, 1978, "solicit[ed] . . . customer[s] . . . in . . . licensed premises to purchase . . . beverage[s] . . . for [respondents'] employee[s]," Section 562.131(1), Florida Statutes (1977), in three instances, as alleged in the notice to show cause. The agreement respondents entered into with Harry Hampton showed respondents to be "culpably responsible" for their employees' soliciting patrons for drinks.

RECOMMENDATION

Upon consideration of the foregoing, it is RECOMMENDED that petitioner impose a civil penalty against respondents' license in the amount of three thousand dollars ($3,000.00).

DONE AND ENTERED this 30th day of May 1980 in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 30th day of May 1980.

COPIES FURNISHED:

Daniel C. Brown, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

Robert G. Kerrigan, Esquire

224 East Government Street Pensacola, Florida 32501

Docket for Case No: 78-001492

Orders for Case No: 78-001492