STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DIVISION OF ALCOHOLIC BEVERAGES ) AND TOBACCO, )
)
Petitioner, )
)
vs. ) CASE NO. 81-1090 and
) 81-1218
27TH AVENUE CORPORATION, d/b/a ) CLIMAX LOUNGE, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice the Division of Administrative Hearings, by its duly designated Hearing Officer, P. Michael Ruff, held an administrative hearing in these cases on Monday, May 4, 1981 in Miami, Florida. The two cases numbered above, having an identical style, were, by agreement of the parties, heard on a consolidated basis.
APPEARANCES
For Petitioner: James N. Watson, Jr., Esquire
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
For Respondent: Kenneth G. Oertel, Esquire
646 Lewis State Bank Building Tallahassee, Florida 32301
Pursuant to two Notices to Show Cause, the first of which was served February 11, 1981, the second of which was dated April 6, 1981, the Department of Business Regulation, Division of Alcoholic Beverages and Tobacco ("Petitioner") has charged the Respondent 27th Avenue Corporation, d/b/a Climax Lounge, with two counts of violations of various portions of Chapters 893 and 561, Florida Statutes. The Department seeks to revoke, suspend or otherwise discipline the subject beverage licensee charging in both counts of the two substantially identical Notices to Show Cause that the Respondent maintained a place or licensed premises which is resorted to by persons using controlled substances for the Purpose of using such controlled substances within the meaning of Chapter 893, Florida Statutes, and Section 561.29, Florida Statutes, and that by keeping or maintaining a building or place which is visited by persons for the purpose of unlawfully using controlled substances or which is used for the illegal keeping, selling or delivering of controlled substances, that the Respondent's licensed premises constitute a public nuisance in violation of law.
At the final hearing the Petitioner presented two witnesses and two exhibits. The Respondent presented six witnesses and two exhibits. All of the exhibits were received into evidence.
In addition, at the final hearing the Petitioner was allowed to amend Count I of the Notice to Show Cause issued in February, 1981 (the initial Notice to Show Cause) to allege, instead of Section 893.13(1)(2)(a)(c) that the Respondent had violated Section 893.13(2)(a)(5), Florida Statutes, and also by agreement of counsel for Respondent, to amend Count II of that same Notice to Show Cause so as to indicate that the alleged violations occurred between January 17, 1981 and January 25, 1981.
Finally, in addition to stipulating that the two cases be consolidated for hearing, the Respondent waived the 14 day notice of hearing requirement pursuant to Chapter 120, Florida Statutes, as well as his right to an informal conference prior to the initiation of formal proceedings pursuant to Section 120.60, Florida Statutes.
FINDINGS OF FACT
The Petitioner is an agency of the State of Florida which has as its responsibility the licensure and regulation of beverage license holders in the State. The Respondent, 27th Avenue Corporation, doing business as Climax Lounge, holds Division of Alcoholic Beverages and Tobacco License No. 23-0358, Series 4-COP.
At all times pertinent hereto John Ekberg and Daniel A. Wick were the sole corporate officers and shareholders of 27th Avenue Corporation. The Climax Lounge, the premises which are the subject of this proceeding, is located at 12001 N. W. 27th Avenue, Miami, Florida.
In the early morning hours of January 17, 1981, undercover Beverage Officer Aurelius Thompson visited the Climax Lounge in the course of an investigation of suspected "drug violations" allegedly occurring on the premises. Officer Thompson approached a barmaid by the name of O. Z. Porter and engaged her in conversation, ultimately asking if she knew where he could obtain cocaine and she indicated she had none. At this time Officer Thompson observed a group of patrons "snorting a white powder" at the end of the bar where he was sitting. He spoke with an individual named "Larry" who indicated he had one gram of cocaine for sale for $75.00. Officer Thompson left the bar to get the required purchase price, and upon returning, Larry's brother Michael sold him approximately one gram of a white powdery substance which later proved to be cocaine.
The parties in this proceeding have stipulated into evidence the lab reports and agreed that the substances obtained or purchased by the two investigating officers, Officer Thompson and Officer Alford, were cocaine and marijuana.
The above described exchange of cocaine occurred inside the licensed premises at the bar. The exchange was made with the barmaid O. Z. Porter standing across the bar in close proximity to the transaction. Officer Thompson offered Ms. Porter some cocaine at the time of the exchange, but she refused, although she accepted some in a wadded up dollar bill for later use.
In the early morning hours of January 23, 1981 this same officer returned to the Climax lounge. He went into the men's restroom and encountered an individual by the name of "Leech." "Leech" had a cellophane bag of capsules containing a white powder which he offered for sale for $10.00 each. He also had a bag with a larger amount of white powder selling for $25.00 per packet. Officer Thompson, during this encounter, purchased a foil package containing the white powder from Leech for $25.00. The contents of the packet proved to be cocaine. After concluding his transaction with the individual called "Leech" In the restroom, Officer Thompson then returned to the common area of the lounge and took a seat at the bar. He encountered and engaged in a conversation with the same individual named "Larry" whom he had met on his visit to the bar on January 17, 1981 in connection with the first purchase of cocaine on the premises. As a result of the second encounter, Larry ultimately sold Officer Thompson a packet of cocaine for $70.00. This transaction was conducted and concluded in approximately the center portion of the bar in plain view and was observed by "Norma", a barmaid employed by the Respondent.
Beverage Officer Alford was also present on the premises the night of January 23, 1981 assisting in this investigation. While on the Respondent's premises he also purchased a quantity of cocaine from the individual known as Leech. The cocaine was contained in a capsule for which he paid $10.00, which transaction also occurred in the men's restroom of the Respondent's facility.
Officer Thompson described his training in identification of cocaine and marijuana and established that on both visits of January 17 and January 23, 1981 he observed patrons in various areas of the lounge "snorting" what he believed to be cocaine and smoking or rolling marijuana cigarettes.
Officer Thompson returned to the Climax Lounge on January 25, 1981. He approached a barmaid by the name of "Johnnie Mae" and inquired of her whether she knew who could sell him some marijuana. Johnnie Mae directed Officer Thompson to an individual called "Richard". The barmaid introduced Thompson to Richard and informed Richard that Thompson wanted to purchase some marijuana. Richard led Officer Thompson into the men's restroom where Thompson viewed "Leech" at the sink with a small quantity of marijuana in view. Thompson then purchased from Leech a small quantity of marijuana for $10.00. Upon leaving the restroom, Officer Thompson was summoned to the bar area by the previously identified individual, Larry, who informed Thompson that he had a gram of cocaine which he wished to sell him for $70.00. Thompson agreed and purchased the cocaine for that amount with the transaction taking place at the bar in front of the barmaid "Norma." Thompson thereupon asked Norma if she desired any cocaine, which she refused. On this evening, while he was in the restroom purchasing marijuana from Leech, Thompson observed approximately five individuals smoking marijuana.
Pursuant to the investigation conducted by these officers, at this point, an Emergency Order of Suspension was entered against the license of the Respondent on January 29, 1981. On February 14, 1981 Officer Thompson accompanied by Officer Alford again entered the lounge on an additional visit. On this occasion Officer Thompson was approached by the same individual "Larry" from whom he had made the previous purchase and ultimately bought from Larry a quantity of cocaine for $65.00 on this occasion. Officer Thompson's observations on each occasion were approximately one to three hours in duration and he observed the use of cocaine and marijuana on each occasion, as did Officer Alford. Both officers indicated that they saw security guards on duty and circulating through the licensed premises, but were apparently unaware of the extent and vigor of enforcement procedures by the security guards. Officer
Thompson did describe a plain clothed individual, whom the Respondent established was its security guard Larry McFadden, who forced he and other patrons to leave the men's restroom of the facility on the occasion of the February 14, 1981 visit. Other than this incident, the two officers testifying did not observe security guards attempting to curb the use or sale of drugs on the premises other than the management attempting to keep out of the restrooms people who had been there an inordinate period of time.
The Respondent presented testimony from its corporate owners and several employees regarding their policy and efforts designed to curb the use of drugs on the premises. The manager, Ira Maxwell, verbally informed his employees of the licensee's prohibition of the presence or use of drugs on the premises and promulgated a set of written rules against certain activities, including the use of drugs or condonation by employees of the presence of drugs on the premises. The employees were required to sign acknowledgments that they had read and were informed of these rules. Employees Norma Jean Riley and O. Z. Porter signed these acknowledgments. The Manager' testimony established that the licensee's policy regarding controlled drug presence and drug transactions was to ask the possessors of drugs to leave the premises and, if their behavior was repetitive, to permanently bar them from the premises. Both the licensee's manager and its owner, Mr. Ekberg, established that warning signs prohibiting the use of drugs, or transactions involving drugs, were posted at several points in the common areas of the club at all times pertinent herein. Officer Thompson stated that he had simply not noticed the signs while he was on the premises. The club's manager, Ira Maxwell, testified that although he made personal observations of the public areas of the premises, most of his time was spent in the office. The principle stockholder and owner, Mr. Ekberg, is on the premises daily, but generally leaves around 10:00 p.m. each night. The lounge's open hours are from 9:00 p.m. to 5:00 a.m. Three security officers patrol the club at all times it is open with instructions to eject drug traffickers, users or possessors from the premises. Employees are instructed to advise management when a patron is observed using or possessing controlled drugs.
The principle security officer, Larry McFadden, Jr. corroborated the fact that the drug warning signs were posted at the club during all times pertinent hereto. Be is constantly on watch for drug use and orders such people to leave the premises if he suspects their use or involvement with drugs. McFadden established that at certain times, although he maintains a constant vigil, it is difficult to observe everything that transpires. Sometimes he must make rapid judgments in deciding whether situations involving violence or use of weapons are more critical at a given moment than apprehension of patrons who have brought drugs onto the premises. Neither McFadden nor the club's manager, Ira Maxwell, had ever summoned police in an effort to curb the possession or use of controlled drugs on the Premises.
Mr. Ekberg, the Respondent's president, inquires daily of McFadden regarding problems occurring the previous evening and primarily relies on his manager, Ira Maxwell, to maintain order. His inquiries are generally directed to instances of property damage and fights. He too emphasized that the Respondent's policy towards drug use is to eject those possessing drugs and permanently bar those suspected of dealing in drugs from entry on the premises. His primary duties when present at the club involve ordering supplies, preparing the payroll and other administrative duties. He has in the past had difficulty obtaining police assistance and controlling drug use at his club. On one occasion Mr. Ekberg suggested to the police that they place undercover officers at the club for curbing drug usage and he has inquired of his employees on occasion regarding individuals suspected of being drug users, but has not made a
practice of seeking law enforcement assistance nor have his management and employees ever summoned police in an effort to eliminate illegal drug activity. Mr. Ekberg believes that only hiring an undercover, unknown security staff would permit him to obtain any better results in eliminating the presence of drugs on his licensed premises. He has been in the liquor business for approximately 20 years with no previous violations. No testimony was offered however which could establish that any member of management or any employee of the Respondent attempted to learn the identities of patrons alleged to have been using or trafficking in drugs on the licensed premises or to aid in apprehending them, even after being served with the subject emergency suspension orders.
On April 22, 1981 the second Notice to Show Cause (Case No. 81-1218) was served on the Respondent with the identical charges relating to the observations by the Petitioner's officers occurring on February 13 and 14, 1981 at the licensed premises referred to above which observations occurred after the initial suspension order entered in Case No. 81-1090 was served on the Respondent.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Section 120.57(1), Florida Statutes.
Section 561.29(1), Florida Statutes, provides in pertinent part as follows:
The Division [of Alcoholic Beverages and Tobacco] is given full power
and authority to revoke or suspend the license of any person holding a license under the beverage law, when it is determined or found
by the division upon sufficient cause appearing of:
Violation by the licensee or his or its agents, officers, servants, or employees, on
the licensed premises, or elsewhere while in the scope of employment, of the laws of this State . . . , or engaging in or permitting disorderly conduct on the licensed premises, or permitting another on the licensed premises to violate
any of the laws of this State [Emphasis supplied]
(c) Maintaining a nuisance on the licensed premises.
Section 893.13(1)(a), Florida Statutes, makes it unlawful for any person to sell, manufacture or deliver or possess with intent to sell, manufacture or deliver a controlled substance. Cannabis sativa or "marijuana" and cocaine are controlled substances identified in Sections 893.03(1)(c)3 and 893.03(2)(a)4, Florida Statutes, respectively.
Section 893.13(2)(a) 5, Florida Statutes, makes it unlawful for any person:
To keep or maintain any store, shop, warehouse, dwelling, building, vehicle, boat, aircraft or other structure or place which is resorted to by persons using controlled substances in violation of this chapter for the purpose of
using these substances, or which is used for keeping or selling them in violation of this chapter.
Section 823.10, Florida Statutes, provides in pertinent part as follows:
Any store, shop . . . building . . . or any place whatever, which is
visited by persons for the purpose of unlawfully using any substance controlled under Chapter 893 or any drugs as described in Chapter 500, which is used for the illegal keeping, selling or delivering of the same, shall be deemed a public nuisance. No person shall keep
or maintain such public nuisance or aid another in keeping or maintaining such public nuisance.
The record in this cause clearly demonstrates the Respondent's licensed premises were regularly resorted to by individuals dealing in controlled substances as defined hereinabove; cocaine and cannabis sativa. The record clearly establishes that drug transactions were occurring on the premises on a regular, repetitive basis, even after the issuance of the first emergency suspension order referred to in the Findings of Fact above. The record also reflects that some of the patrons of the Respondent's establishment were using these drugs on a regular basis inside the licensed premises. The record does not reflect, however, that the Respondent knowingly and willfully maintained or held the premises out as a place maintained for the purpose of such activity. There was no showing that the Respondent intended that the premises be operated for the purpose of effecting drug transactions or drug use.
The case of Pauline v. Lee, 147 So.2d 359 (Fla. 2nd DCA 1962), stands for the proposition that before a liquor license can be suspended or revoked for a violation of law on the licensee's premises, the licensee should be found to have been culpably responsible for the violation through or as a result of his intentional wrongdoing, negligence or lack of diligence. The Court went on to hold that where violations occur in a persistent and practiced manner that they may permit an inference that such activities were either fostered, condoned or negligently overlooked by the licensee.
G & B of Jacksonville, Inc. v. Department of Business Regulation, 371 So.2d 138, 139 (Fla. 1st DCA 1979), involved an action similar to the instant one arising from a charge pursuant to Section 561.29, Florida Statutes. The G & B case differs from the case at bar in that the violations charged against the
license holder in that case sprang from illegal activity on the part of the licensee's agents or employees. The case is directly applicable to the instant situation, however, in that s. 561.29, while prescribing disorderly conduct or other violation of state law, by the licensee or his agents or employees, also makes it a violation to permit another on the licensed premises to violate any laws of the State. The Court in that case held that although the holder of a license to sell alcoholic beverages
. . . is not an insurer that an agent or servant will not in any particular violate any law of the State of Florida, such licensee nevertheless has a duty
to exercise reasonable care and diligence to see that the licensed place of business is conducted in a lawful manner . . . We have here a record that presents several acts
as charged on the part of three separate employees. We are not hereby presented with a single isolated occurrence . . . If a licensee does not maintain sufficient intelligence with reference
to activities at his or its licensed premises so as to know that two or more of its employees are engaged in such activity as was herein established, then such a licensee must be held to have been lacking in reasonable diligence in the proper management
of its licensed premises. (Emphasis supplied).
Thus, this case, as well as the Pauline decision, supra, stands for the proposition that a licensee must maintain sufficient contact and intelligence with regard to the activities actually occurring on his premises (regardless of whether any illegal activity is fostered or committed by his employees or by the patrons) such that he may prevent such conduct or its repetition. Such a licensee must exercise reasonable diligence and care in seeing that the operation at the licensed place of business is conducted in a lawful manner.
The Court in G & B went on to hold that where the violations occurred on two different days in a "persistent and practiced manner" then the licensee could not "remove itself from the responsibility by not being present on the premises or by claiming ignorance of the repeated violations."
In connection with the theory and principle enunciated in these two decisions, it is noteworthy that in the instant case the violations described in the Findings of Fact above, to wit: the drug transactions observed by the two officers, occurred on a repetitive basis at the licensed premises and at least two of the drug transactions occurred after the licensee received direct written notice of the illegal activity occurring on his premises and proscribed by the above authority, in the form of the service of the first suspension order. It is also noteworthy, and concluded, that three of its employees, barmaids O. Z. Porter, Norma Jean Riley and "Johnnie Mae" engaged in or at the very least condoned the subject illegal activity in that the various transactions occurred under the eyes of barmaids Porter and Riley, and barmaid "Johnnie Mae" actually sought out and introduced the beverage officer to the patron from whom the officer bought the illegal drugs as described in the above Findings of Fact.
The record in this proceeding clearly establishes the violations alleged. It establishes without question that the sale, use and delivery of controlled drugs occurred on Respondent's premises. The occurrence of the drug transactions, the possession and use of illegal drugs on the licensed premises on a repetitive basis, and especially the fact that two drug transactions occurred in open view on the premises after the issuance of the first suspension order herein, establishes that this unlawful conduct was the direct result of the Respondent's failure to exercise due and reasonable care and diligence to assure that unlawful activities did not occur on the licensed premises.
Although the Respondent demonstrated that its policy was to prohibit the possession, use and transactions involving controlled drugs on its premises by the posting of warning signs, the employment of security guards and the barring of drug users and possessors from the premises, the record establishes that the Respondent's policy suffered for want of diligent execution. The Respondent's president established that he was on the premises each evening, but left by 10:00 p.m. although the lounge remained open until 5:00 a.m. and the record also establishes that most of the drug transactions occurred after midnight when the president was absent. The manager spent the majority of his time on the premises in the office and although the subject barmaids acknowledged that they had signed acknowledgments of the house rules against drug usage and possession, the record also established that they failed to report their observances of drug dealing on the premises. The Respondent's president showed that he had daily discussions with his chief security officer regarding problems occurring the night before, but that those discussions consistently related to fights and property damage, and not problems with drug users or dealers. The Respondent's president acknowledged the problem with drug users on the premises but also admitted, as did his chief security guard, that the police had never been summoned. The final drug transaction which is the subject of this proceeding occurred with a patron of the establishment who had been on the premises at the time of or involved in the earlier transactions and who had been the subject of the emergency order served January 29, 1981. This belies the argument raised by the Respondent that drugs were brought in and dealt with by strangers or outsiders to the normal clientele of the lounge and thus were not known or controllable by the Respondent. Further, the president admitted that he had made no effort to determine who had been dealing in drugs even after receiving the subject initial emergency suspension order and that other than temporarily barring such persons from the lounge, no effort had ever been made to permanently exclude such individuals from future entry to the premises or to aid in their apprehension by the police. Such a fact pattern clearly evidences a lack of diligence and negligence on the part of the Respondent's management and employees and constitutes a direct causative factor in the maintenance of the licensed premises as a place to which drug users and dealers resort to both use and transact business involving illegal drugs in violation of the above authority.
It can thus only he concluded that the Respondent licensee, although it did not intentionally allow or condone the presence, use or sales of illegal drugs on its premises, was negligent in overlooking the drug violations when they should have been obvious and especially when it was put on actual notice of them and still failed to diligently carry out its purported policy against such illegal activity. There is no question that the facts of record clearly establish that the licensed premises were used for the delivery and sale of controlled substances in violation of Sections 623.10, 893.13(2)(a) 5, and 561.29(1)(a) and (c) , Florida Statutes, as alleged in the Notices to Show Cause.
In view of the fact that the Respondent has never been charged with any violations of the beverage laws heretofore and that the nature of the offenses charged and proven herein involved not the Respondent itself or its employees, agents or servants, but rather the patrons of its establishment, as well as the vicarious nature of the Respondent's responsibility therefor, and especially with a view toward the principle in the law that ". . . outright revocation of a beverage license is a most serious and drastic penalty, even in a flagrant case . . .", Taylor v. State Beverage Department, 194 So.2d 321,
329 (Fla. 2nd DCA 1967), it is
RECOMMENDED that a Final Order be entered by the State of Florida, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, suspending the license of 27th Avenue Corporation, d/b/a Climax Lounge, for a period of 30 days from the date of final agency action with regard to the violations alleged and established in the Notices to Show Cause issued in Case Nos. 81-1090 and 81-1218.
RECOMMENDED this 15th day of June, 1981 In Tallahassee, Leon County, Florida.
P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 15th day of June, 1981.
COPIES FURNISHED:
James N. Watson, Jr., Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
Kenneth G. Oertel, Esquire 646 Lewis State Bank Building Tallahassee, Florida 32301
================================================================= AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA DEPARTMENT OF BUSINESS REGULATION
DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO
DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO,
Petitioner,
vs. CASE NOS. 81-1090
and 81-1218
27TH AVENUE CORPORATION, d/b/a CLIMAX LOUNGE,
Respondent.
/
FINAL ORDER
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, P. Michael Ruff, held an administrative hearing in these cases on Monday, May 4, 1981 in Miami, Florida. The two cases numbered above, having an identical style, were, by agreement of the parties, heard on a consolidated basis.
APPEARANCES
For Petitioner: James N. Watson, Jr., Esquire
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
For Respondent: Kenneth G. Oertel, Esquire
646 Lewis State Bank Building Tallahassee, Florida 32301
Pursuant to two Notices to Show Cause, the first of which was served February 11, 1981, the second of which was dated April 6, 1981, the Department of Business Regulation, Division of Alcoholic Beverages and Tobacco ("Petitioner"), has charged the Respondent 27th Avenue Corporation, d/b/a Climax Lounge, with two counts of violations of various portions of Chapter 893 and 561, Florida Statutes. The Department seeks to revoke, suspend or other wise discipline the subject beverage licensee charging in both counts of the two substantially identical Notices to Show Cause that the Respondent maintained a place or licensed premises which is resorted to by persons using controlled substances for the purpose of using such controlled substances within the meaning of Chapter 893, Florida Statutes, and Section 561.29, Florida Statutes, and that by keeping or maintaining a building or place which is visited by persons for the purpose of unlawfully using controlled substances or which is used for the illegal keeping, selling or delivering of controlled substances, that the Respondent's licensed premises constitute a public nuisance in violation of law.
At the final hearing the Petitioner presented two witnesses and two exhibits. The Respondent presented six witnesses and two exhibits. All of the exhibits were received into evidence.
In addition, at the final hearing the Petitioner was allowed to amend Count I of the Notice to Show Cause issued in February 1981 (the initial Notice to Show Cause) to allege, instead of Section 893.13(1)(2)(a)(c), that the Respondent had violated Section 893.13(2)(a)(5), Florida Statutes, and also by agreement of counsel for Respondent, to amend Count II of that same Notice to Show Cause so as to indicate that the alleged violations occurred between January 17, 1981 and January 25, 1981.
Finally, in addition to stipulating that the two cases be consolidated for hearing, the Respondent waived the 14 day notice of hearing requirement pursuant to Chapter 120, Florida Statutes, as well as his right to an informal conference prior to the initiation of formal proceedings pursuant to Section 120.60, Florida Statutes.
FINDINGS OF FACT
The Petitioner is an agency of the State of Florida which has as its responsibility the licensure and regulation of beverage license holders in the State. The Respondent 27th Avenue Corporation, doing business as Climax Lounge, holds Division of Alcoholic Beverages and Tobacco License No. 2-30358, Series 4- COP.
At all times pertinent hereto John Ekberg and Daniel A. Wick were the sole corporate officers and shareholders of 27th Avenue Corporation. The Climax Lounge, the premises which are the subject of this proceeding, is located at 12001 N.W. 27th Avenue, Miami, Florida.
In the early morning hours of January 17, 1981, undercover Beverage Officer Reylius Thompson visited the Climax Lounge in the course of an investigation of suspected "drug violations" allegedly occurring on the premises. Officer Thompson approached a barmaid by the name of O. C. Porter and engaged her in conversation, ultimately asking if she knew where he could obtain cocaine and she indicated she had none. At this time Officer Thompson observed a group of patrons "snorting a white powder" at the end of the bar where he was sitting.
He spoke with an individual named "Larry" who indicated he had one gram of cocaine for sale for $75.00. Officer Thompson left the bar to get the required purchase price, and upon returning, Larry's brother Michael sold him approximately one gram of a white powdery substance which later proved to be cocaine.
The parties in this proceeding have stipulated into evidence the lab reports and agreed that the substances obtained or purchased by the two investigating officers, Officer Thompson and Officer Alford, were cocaine and marijuana.
The above described exchange of cocaine occurred inside the licensed premises at the bar. The exchange was made with the barmaid O. C. Porter standing across the bar in close proximity to the transaction. Officer Thompson offered Ms. Porter some cocaine at the time of the exchange, but she refused, although she accepted some in a wadded up dollar bill for later use.
In the early morning hours of January 23, 1981 this same officer returned to the Climax Lounge. He went into the men's restroom and encountered an individual by the name of "Leech." "Leech" had a cellophane bag of capsules containing a white powder which he offered for sale for $10.00 each. He also had a bag with a larger amount of white powder selling for $25.00 per packet. Officer Thompson, during this encounter, purchased a foil package containing the
white powder from Leech for $25.00. The contents of the packet proved to be cocaine. After concluding his transaction with the individual called "Leech" in the restroom Officer Thompson then returned to the common area of the lounge and took a seat at the bar. He encountered and engaged in a conversation with the same individual named "Larry" whom he had met on his visit to the bar on January 17, 1981 in connection with the first purchase of cocaine on the premises. As a result of the second encounter, Larry ultimately sold Officer Thompson a packet of cocaine for $70.00. This transaction was conducted and concluded in approximately the center portion of the bar in plain view and was observed by "Norma," a barmaid employed by the Respondent.
Beverage Officer Alford was also present on the premises the night of January 23, 1981 assisting in this investigation. While on the Respondent's premises he also purchased a quantity of cocaine from the individual knows as Leech. The cocaine was contained in a capsule for which he paid $10.00, which transaction also occurred in the same men's restroom of the Respondent's facility.
Officer Thompson described his training in identification of cocaine and marijuana and established that on both visits of January 17 and January 23, 1981 he observed patrons in various areas of the lounge "snorting" what he believed to be cocaine and smoking or rolling marijuana cigarettes.
Officer Thompson returned to the Climax Lounge on January 25, 1981. He approached a barmaid by the name of "Johnnie Mae" and inquired of her whether she knew who could sell him some marijuana. Johnnie Mae directed Officer Thompson to an individual called "Richard." The barmaid introduced Thompson to Richard and informed Richard that Thompson wanted to purchase some marijuana.
Richard led Officer Thompson into the men's restroom where Thompson viewed "Leech" at the sink with a small quantity of marijuana in view. Thompson then purchased from Leech a small quantity of marijuana for $10.00. Upon leaving the restroom, Officer Thompson was summoned to the bar area by the previously identified individual, Larry, who informed Thompson that he had a gram of cocaine which he wished to sell him for $70.00. Thompson agreed and purchased the cocaine for that amount with the transaction taking place at the bar in front of the barmaid "Norma." Thompson thereupon asked Norma if she desired any cocaine, which she refused. On this evening, while he was in the restroom purchasing marijuana from Leech, Thompson observed approximately five individuals smoking marijuana.
Pursuant to the investigation conducted by these officers, at this point, an Emergency Order of Suspension was entered against the license of the Respondent on January 29, 1981. On February 14, 1981, Officer Thompson accompanied by Officer Alford again entered the lounge on an additional visit. On this occasion Officer Thompson was approached by the same individual "Larry" from whom he had made the previous purchase and ultimately bought from Larry a quantity of cocaine for $65.00 on this occasion. Officer Thompson's observations on each occasion were approximately one to three hours in duration and he observed the use of cocaine and marijuana on each occasion, as did Officer Alford. Both officers indicated that they saw security guards on duty and circulating through the licensed premises, but were apparently unaware of the extent and vigor of enforcement procedures by the security guards. Officer Thompson did describe a plain clothed individual whom the Respondent established was its security guard Larry McFadden, who forced he and other patrons to leave the men's restroom of the facility on the occasion of the February 14, 1981 visit. Other than this incident, the two officers testifying did not observe security guards attempting to curb the use or sale of drugs on the premises
other than the management attempting to keep out of the restrooms people who had been there an inordinate period of time.
The Respondent presented testimony from corporate owners and several employees regarding their policy and efforts designed to curb the use of drugs on the premises. The manager, Ira Maxwell, verbally informed his employees of the licensee's prohibition of the presence or use of drugs on the premises and promulgated a set of written rules against certain activities, including the use of drugs or condonation by employees of the presence of drugs on the premises.
The employees were required to sign acknowledgments that they had read and were informed of these rules. Employees Norma Jean Riley and O. C. Porter signed these acknowledgments. The manager's testimony established that the licensee's policy regarding controlled drug presence and drug transactions was to ask the possessors of the drugs to leave the premises and, if their behavior was repetitive, to permanently bar them from the premises. Both the licensee's manager and its owner, Mr. Ekberg, established that warning signs prohibiting the use of drugs, or transactions involving drugs, were posted at several points in the common areas of the club at all times pertinent herein. Officer Thompson stated that he had simply not noticed the signs while he was on the premises.
The club's manager, Ira Maxwell, testified that although he made personal observations of the public areas of the premises, most of his time was spent in the office. The principle stockholder, Mr. Ekberg, is on the premises daily, but generally leaves around 10:00 p.m. each night. The lounge's open hours are from 9:00 p.m. to 5:00 a.m. Three security officers patrol the club at all times it is open with instructions to eject drug traffickers, users or possessors from the premises. Employees are instructed to advise management when a patron is observed using or possessing controlled drugs.
The principle security officer, Marry McFadden, Jr., corroborated the fact that the drug warning signs were posted at the club during all times pertinent hereto. He is constantly on watch for drug use and orders such people to leave the premises if he suspects their use or involvement with drugs. McFadden established that at certain times, although he maintains a constant vigil, it is difficult to observe everything that transpires. Sometimes he must make rapid judgments in deciding whether situations involving violence or use of weapons are more critical at a given moment than apprehension of patrons who have brought drugs onto the premises. Neither McFadden nor the club's manager, Ira Maxwell, had ever summoned police in an effort to curb the possession or use of controlled drugs on the premises.
Mr. Ekberg, the Respondent's president, inquires daily of McFadden regarding problems occurring the previous evening and primarily relies on his manager, Ira Maxwell, to maintain order. His inquiries are generally directed to instances of property damage and fights. He too emphasized that the Respondent's policy towards drug use is to eject those possessing drugs and permanently bar those suspected of dealing in drugs from entry on the premises. His primary duties when present at the club involve ordering supplies, preparing the payroll and other administrative duties. He has in the past had difficulty obtaining police assistance and controlling drug use at his club. On one occasion Mr. Ekberg suggested to the police that they place undercover offices at the club for curbing drug usage and he has inquired of his employees on occasion regarding individuals suspected of being drug users, but has not made a practice of seeking law enforcement assistance nor have his management and employees ever summoned police in an effort to eliminate illegal drug activity. Mr. Ekberg believes that only hiring an undercover, unknown security staff would permit him to obtain any better results in eliminating the presence of drugs on his licensed premises. He has been in the liquor business for approximately 20
years with no previous violations. No testimony was offered however which could establish that any member of management or any employee of Respondent attempted to learn the identities of patrons alleged to have been using or trafficking in drugs on the licensed premises or to aid in apprehending them, even after being served with the subject emergency suspension orders.
On April 22, 1991, the Second Notice to Show Cause (Case No. 81-1218) was served on the Respondent with the identical charges relating to the observations by the Petitioner's officers occurring on February 13 and 14, 1991, at the licensed premises referred to above which observations occurred after the initial suspension order entered in Case No. 81-1090 was served on the Respondent.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Section 120.57(1), Florida Statutes.
Section 551.29(1), Florida Statutes, provides in pertinent part as follows:
The Division [of Alcoholic Beverages and Tobacco] is given full power and authority to revoke or suspend the license of any person holding a license under the beverage law, when it is determined or found by the division upon sufficient cause appearing of:
Violation by the licensee or his or its agents, officers, servants, or employees, on the licensed premises, or elsewhere while in the scope of employment, of the laws of this State . . . , or engaging in or permitting disorderly conduct on the licensed premises, or permitting another on the licensed
premises to violate any of the laws of this State. . .
(c) Maintaining a nuisance on the licensed premises.
Section 893.13(1)(a), Florida Statutes, makes it ". . . unlawful for any person to sell, manufacture or deliver or possess with intent to sell, manufacture or deliver a controlled substance."
Cannabis sativa or "marijuana" and cocaine are controlled substances identified in Sections 893.03(1)(c)3 and 893.03(2)(a)4, Florida Statutes, respectively.
Section 893.13(2)(a)5, 893.13(2)(a)5, Florida Statutes, makes it unlawful for any person:
To keep or maintain any store, shop, warehouse, dwelling, building, vehicle, boast, aircraft or other structure or place which is resorted to by persons using controlled substances in violation of this chapter for the purpose of using these substances, or which is used for keeping or
selling them in violation of this chapter.
Section 823.10, Florida Statutes, provides in pertinent part as follows:
Any store, shop . . . building . . . or any place whatever, which is visited by persons for the purpose of unlawfully using any substance controlled under Chapter 893 or any drugs as described in Chapter 500, which is used for the illegal keeping, selling or delivering of the same, shall be deemed a public nuisance. No person shall keep or maintain such public nuisance or aid another in keeping or maintaining such public nuisance.
The record in this case clearly demonstrates the Respondent's licensed premises were regularly resorted to by individuals dealing in controlled substances as defined herein above; cocaine and cannabis sativa. The record clearly establishes that drug transactions were occurring on the premises on a regular, repetitive basis, even after the issuance of the first emergency suspension order referred to in the Findings of Fact above. The record also reflects that some of the patrons of the Respondent's establishment were using these drugs on a regular basis inside the licensed premises. The record does not reflect, however, that the Respondent knowingly and willfully maintained or held the premises out as a place maintained for the purpose of such activity.
There was no showing that the Respondent intended that the premises be operated for the purpose of effecting drug transactions or drug use.
The case of Pauline v. Lee, 147 So.2d 359 (Fla. 2nd DCA 1962), stands for the proposition that before a liquor license can be suspended or revoked for a violation of law on the licensee's premises, the licensee should be found to have been culpably responsible for the violation through or as a result of his intentional wrongdoing, negligence or lack of diligence. The Court went on the hold that where violations occur in a persistent and practiced manner that they may permit an inference that such activities were either fostered, condoned or negligently overlooked by the licensee.
G & B of Jacksonville, Inc. v. Department of Business Regulation, 371 So.2d 138, 139 (Fla. 1st DCA 1979), involved an action similar to the instant one arising from a charge pursuant to Section 561.29, Florida Statutes. The G & B case differs from the case at bar in that the violations charged against the license holder in that case sprang from illegal activity on the part of the licensee's agents or employees. The case is directly applicable to the instant situation, however, in that s. 561.29, while proscribing disorderly conduct or other violation of state law, by the licensee or his agents or employees, also makes it a violation to permit another on the licensed premises to violate any laws of the State. The Court in that case held that although the holder of a license to sell alcoholic beverages
. . . is not an insurer that any agent or servant will not in any particular violate any law of the State of Florida, such licensee nevertheless has a duty to exercise reasonable care and diligence to see that the licensed place of business is conducted in a lawful manner . . . We have here a
record that presents several acts as charged on the part of three separate employees. We are not hereby presented with a single isolated occurrence . . . If a licensee does not maintain sufficient intelligence with reference to activities as his or its licensed premises so as to know that two or more of its employees are engaged in such activity as was herein established, then such a licensee must be held to have been lacking in reasonable diligence in the proper management of its licensed premises.
Thus, this case, as well as the Pauline decision, supra, stands for the proposition that a licensee must maintain sufficient contact and intelligence with regard to the activities actually occurring on his premises (regardless of whether any illegal activity is fostered or committed by his employees or by the patrons) such that he may prevent such conduct or its repetition. Such a licensee must exercise reasonable diligence and care in seeing that the operation at the licensed place of business is conducted in a lawful manner.
The Court in G & B went on to hold that where the violations occurred on two different days in a "persistent and practiced manner" then the licensee could not "remove itself from the responsibility by not being present on the premises or by claiming ignorance of the repeated violations."
In connection with the theory and principle enunciated in these two decisions, it is noteworthy that in the instant case the violations described in the Findings of Fact above, to wit: the drug transactions observed by the two officers, occurred on a repetitive basis at the licensed premises and at least two of the drug transactions occurred after the licensee received direct written notice of the illegal activity occurring on his premises and proscribed by the above authority, in the form of the service of the first suspension order. It is also noteworthy, and concluded, that three of its employees, barmaids O. C. Porter, Normal Jean Riley and "Johnnie Mae," engaged in or at the very least condoned the subject illegal activity in that the various transactions occurred under the eyes of barmaids Porter and Riley, and barmaid "Johnnie Mae" actually sought out and introduced the beverage officer to the patron from whom the officer bought the illegal drugs as described in the above Findings of Fact.
The record in this proceeding clearly establishes the violations alleged. It establishes without question that the sale, use and delivery of controlled drugs occurred on Respondent's premises. The occurrence of the drug transactions, the possession and use of illegal drugs on the licensed premises on a repetitive basis, and especially the fact that two drug transactions occurred in open view on the premises after the issuance of the first suspension order herein, establishes that this unlawful conduct was the direct result of the Respondent's failure to exercise due and reasonable care and diligence to assure that unlawful activities did not occur on the licensed premises.
Although the Respondent remonstrated that its policy was to prohibit the possession, use and transactions involving controlled drugs on its premises by the posting of warning signs, the employment of security guards and the barring of drug users and possessors from the premises, the record establishes that the Respondent's policy suffered for want of diligent execution. The Respondent's president established that he was on the premises each evening, but left by 10:00 p.m. although the lounge remained open until 5:00 a.m. and the record also establishes that most of the drug transactions occurred after midnight when the
president was absent. The manager spent the majority of his time on the premises in the office and although the subject barmaids acknowledged that they had signed acknowledgments of the house rules against drug usage and possession, the record also established that they failed to report their observations of drug dealing on the premises. The Respondent's president showed that he had daily discussions with his chief security officer regarding problems occurring the night before, but that those discussions consistently related to fights and property damage, and not problems with drug users or dealers. The Respondent's president acknowledged the problem with drug users on the premises but also admitted, as did his chief security guard, that the police had never been summoned. The final drug transaction which is the subject of this proceeding occurred with a patron of the establishment who had been on the premises at the time of or involved in the earlier transactions and who had been the subject of the emergency order served January 29, 1981. This belies the argument raised by the Respondent that drugs were brought in and dealt with by strangers or outsiders to the normal clientele of the lounge and thus were not known or controllable by the Respondent. Further, the president admitted that he had made no effort to determine who had been dealing in drugs even after receiving the subject initial emergency suspension order and that other than temporarily barring such persons from the lounge, no effort had ever been made to permanently exclude such individuals from future entry to the premises or to aid in their apprehension by the police. Such a fact pattern clearly evidences a lack of diligence and negligence on the part of the Respondent's management and employees and constitutes a direct causative factor in the maintenance of the licensed premises as a place to which drug users and dealers resort to both use and transact business involving illegal drugs in violation of the above authority.
It can thus only be concluded that the Respondent licensee, although it did not intentionally allow or condone the presence, use or sales of illegal drugs on its premises, was negligent in overlooking the drug violations when they should have been obvious and especially when it was put on actual notice of them and still failed to diligently carry out its purported policy against such illegal activity. There is no question that the facts of record clearly establish that the licensed premises were used for the delivery and sale of controlled substances in violation of Sections 823.10, 893.13(2)(a)5, and 561.29(1)(a) and (c), Florida Statutes, as alleged in the Notices to Show Cause.
Based upon a full consideration of the Findings of Fact, Conclusions of Law, the complete record including the transcript of the formal hearing, it is hereby,
ORDERED that the beverage license of Respondent, Number 23-0358, Series 4- COP, located at 12001 N.W. 27th Avenue, Miami, Florida, t/a 27th Avenue Corporation/Climax Lounge is suspended for a period of six (6) months.
DONE AND ORDERED this 5th day of October 1981, in Tallahassee, Florida.
CHARLES A NUZUM, DIRECTOR
Division of Alcoholic Beverages and Tobacco
725 South Bronough Street Tallahassee, Florida 32301
COPIES FURNISHED:
Michael Ruff, Hearing Officer Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
James N. Watson, Jr., Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
Kenneth Oertel, Esquire
646 Lewis State Bank Building Tallahassee, Florida 32301
| Issue Date | Proceedings |
|---|---|
| Oct. 09, 1981 | Final Order filed. |
| Jun. 15, 1981 | Recommended Order sent out. CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Oct. 05, 1981 | Agency Final Order | |
| Jun. 15, 1981 | Recommended Order | Respondent was not actively involved in drugs in its lounge, only vicariously. Respondent, therefore, suspend license for thirty days. |
