vs. ) CASE NO. 81-2450
Respondent. )
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, R. L. Caleen, Jr. , conducted a formal hearing in this case on October 6 and November 2, 1981, in Lauderhill, Florida.
For Petitioner: Daniel C. Brown, Esquire
Whether respondent's alcoholic beverage license should be disciplined on grounds that (1) illicit drugs were sold and delivered on its premises by its agents and employees, and (2) its premises was used for the selling and delivery of illicit drugs.
By Notice to Show Cause served in October, 1981, the Division of Alcoholic Beverages and Tobacco ("DABT") charged respondent 1431 Corporation, d/b/a Butch Cassidy's Saloon ("Licensee") with 15 counts of violating Section 561.29(1), Florida Statutes (1979). Generally, the violations concern alleged sale or delivery of controlled substances on Licensee's premises by its employees or agents.
Licensee requested a hearing on the charges and on October 5, 1981, this case was forwarded to the Division of Administrative Hearings. At hearing, DABT called as witnesses Louis Terminello, Mike Berk, George Miller, Michael Imperial, D. Shomers, John Pennie, P. Duncan, and Jeffrey Flavitta. It offered Petitioner's Exhibit 1/ Nos. 1 through 26, each of which was received.
Albert Buschmann, Richard Leighton, Daniel Redgate, Robert Smith, Sharon Scraggs, Barbara Laxon, Don Austin, and George Sherman. Respondent's Exhibit Nos. 1 through 5 were received into evidence.
The parties filed proposed findings of fact by November 20, 1981, and agreed that the recommended order would be due within 30 days thereafter. Neither party ordered a transcript of the hearing prepared.
FINDINGS OF FACT I.
Licensee, 1431 Corporation, owns a business known as Butch Cassidy's Saloon located at 1431 North Federal Highway, Dania, Florida. In connection with its operation of Butch Cassidy's, Licensee holds alcoholic beverage license No. 16-02422 series 2-COP.
Under this license, Licensee sells beer and wine for on-premises consumption. Soft drinks and sandwiches are also served. The entertainment consists of female nude dancers who perform to juke box music.
Licensee is owned by Don Austin and George Sherman. Austin and Sherman operate and manage Butch Cassidy's Saloon; they alternate work shifts so that, except for short temporary absences, one or the other is always on the premises.
The premises contain a bar, a stage and runway for the female dancers, two dressing rooms, a business office, and rest rooms. It is dimly lit, though not completely dark; the lighting is most pronounced above the pool tables and along the length of the dance stage.
II.
Sale or Delivery of Controlled Substances on Premises
On August 10, 1981, at approximately 11:30 p.m., Beverage Officer L. Terminello entered Butch Cassidy's Saloon ("the premises") with a confidential informant. After sitting at the rear of the premises, he asked "Connie," a female dancer employed by Licensee, if she' could sell him some quaalude tablets; she answered affirmatively. Several minutes later, she returned and handed him five tablets; he paid her $15. Subsequent laboratory analysis of the tablets by the Broward County Sheriff's Office revealed the presence of diazepam. (Testimony of Terminello; P-16.)
On August 12, 1981, at approximately 9:40 p.m., Officer Terminello again entered the premises and sat at a table at the rear. After some initial conversation, a customer known as "Jerry" asked him if he would buy some ludes"; Terminello agreed. Jerry placed the tablets on Terminello's table. Terminello picked them up and gave him $3 for each tablet. Subsequent laboratory analysis of the tablets revealed the presence of diazepam. (Testimony of Terminello; P- 15.)
Later on that evening (August 12, 1981), Connie, in response to Officer Terminello's request, sold him another quaalude tablet for $2. The transaction took place, again, at a table located opposite the stage, at the rear of the premises. Subsequent laboratory analysis of the tablet revealed the presence of diazepam. (Testimony of Terminello; P-17.)
On August 15, 1981, at approximately 11:30 p.m., Officer Terminello again entered the premises and sat at a table at the rear. He asked a female dancer known as "Dusty" (who was employed on the premises) whether she had any cocaine or quaaludes. She said she had none but offered, instead, a marijuana cigarette which she took from her pocketbook and handed him. He left her a tip of $1 for the cigarette. This drug transaction occurred in the vicinity of the pool table, an area which is well-lighted in relation to other parts of the premises. Subsequent laboratory analysis of the cigarette confirmed that it contained cannabis. (Testimony of Terminello; p-18.)
On August 19, 1981, at approximately 10:40 p.m., Officer Terminello reentered the premises and sat at another table in the vicinity of the pool table. He again asked Dusty, a female dancer, if he could buy some cocaine. She said he might be able to purchase some from "Don," the doorman, but that he sold a lot of cocaine by "stepping on it"--a street term for cutting cocaine. She told him that another dancer, known as "Renee," could provide better cocaine; he decided to wait for Renee. While waiting, he asked Dusty if she would sell him some quaalude tablets; she agreed and delivered two tablets to him at his table. He paid her $3 each. Subsequent laboratory analysis of the tablets revealed the presence of diazepam. (Testimony of Terminello; P-19.)
Dusty then asked Terminello if he wanted to smoke a "joint," meaning a marijuana cigarette. They then walked outside to the parking lot and smoked the cigarette. Subsequent laboratory analysis indicated that the cigarette contained cannabis. (Testimony of Terminello; P-20.)
Later that evening, at about 1:00 a.m., Officer Terminello returned to the premises and contacted Dusty for the cocaine promised earlier. Dusty went over and talked to Renee, then returned to Terminello's table near the pool table. She told him that the cocaine would cost $80. He handed her $80 which she placed in her pocketbook. Shortly thereafter, she returned from a dressing room and handed him a plastic bag containing white powder. This exchange took place in an area where there were 15-20 patrons; several of them were 2-3 feet from Terminello. Subsequent laboratory analysis of the powder revealed the presence of cocaine. (Testimony of Terminello; P-21.)
A short time later, Renee asked Officer Terminello if he wanted to purchase more cocaine; he replied that he would buy another one-half gram.
After completing her performance on the dance floor, she agreed to sell him one- half gram for $40. At her request, he placed $40 in her garter belt; shortly thereafter, she returned from the dressing room and handed Terminello a white zip-lock bag of white powder. This transaction took place in a relatively well- lighted area, with a clear line-of-sight to the dance stage and bar. Subsequent laboratory analysis of the powder revealed the presence of cocaine. (Testimony of Terminello; P-22.)
Officer Mike Berk of the Broward County Sheriff's Office entered the premises (with Terminello) at approximately 12:30 a.m., on August 20, 1981.
After sitting at a table near the dance stage, he asked a female dancer (employed by Licensee) known as Robin" if he could buy some quaaludes; she handed him one white tablet. This exchange took place in a relatively well- lighted area of the bar. Subsequent laboratory analysis of the tablet revealed the presence of diazepam. (Testimony of Berk; P-23.)
On August 29, 1981, at approximately 11:45 p.m., Beverage Sergeant George Miller entered the premises, sat at a table near the dance stage, and asked a female dancer (employed by Licensee) known as "Jackie" if she could get him some quaaludes. She asked him to wait. Approximately an hour later, she indicated that she could obtain some quaaludes; she approached the bartender (employed by Licensee) known as "Rusty." He removed a tablet from his pocket, laid it on the bar, and cut it in half. He handed one-half of the tablet to Jackie who returned to the table and handed it to Miller. Subsequent laboratory analysis ,of the one-half tablet revealed the presence of diazepam. (Testimony of Miller; P-24.)
On September 2, 1981, Sergeant Miller reentered the premises, sat at a table near the dance stage and was joined by a female dancer (employed by Licensee) known as "Candy." From her seat, she shouted to Dusty, the bartender (who was approximately 10 feet away) : "Make some calls for some ludes, I want to get f cked up." (Testimony of Miller.)
On September 10, 1981, at approximately 8:15 p.m., Beverage Officer Mike Imperial entered the premises, sat at the bar and asked Connie (a female dancer) if there were any "ludes" around. She replied that she didn't know but she would check. She then asked Jackie who, in turn, said she would check with "Ann," another female dancer employed by Licensee. Jackie then returned and said that no one had any quaaludes. Connie then told Imperial that she would be off-duty the next day but that she would leave six quaaludes for him with Tom, the bartender. She then told the bartender that she would leave something with him to give to Imperial (and his companion) the next day. (Testimony of Imperial.)
The next day, September 11, 1981, at approximately 7:20 p.m., Officer Imperial reentered the premises and spoke with Tom, the bartender. Tom told him that Connie had not arrived yet, that he would check around the bar but that he doubted anyone had quaaludes because it was too early. Imperial then departed the premises. (Testimony of Imperial.)
The next day, September 12, 1981, at approximately 7:00 p.m., Officer Imperial (accompanied by a confidential informant) returned to the premises. They sat at the bar, where Tom, the bartender, told them that the quaaludes were not then available but would be there soon. Shortly thereafter, Tom went to the rest room, then returned to the bar and handed Imperial ten white tablets wrapped in a bar napkin. Tom then handed the informant (who accompanied Imperial) a loose tablet and openly stated, "Here's one for the road." Subsequent laboratory analysis of the tablets revealed the presence of methaqualone. (Testimony of Imperial; P-25.)
On September 23, 1981, at approximately 8:30 p.m., Beverage Officer Imperial (with his confidential informant) reentered the premises, sat at the bar, and asked a female dancer (employed by Licensee) known as "Gail" if there was any "pot" around. She replied that she would see if she could find him some; later, she returned and handed the confidential informant two cigarettes. Subsequent laboratory analysis of the cigarettes revealed the presence of cannabis. (Testimony of Imperial; P-26.)
On September 28, 1981, at approximately 4:10 p.m., Officer Imperial reentered the premises and sat at the bar. He observed an unidentified female dancer (employed by Licensee) approach Tom, the bartender, and ask if he had a "joint." Tom replied that he had one, then removed a partially smoked cigarette from his wallet and handed it to the dancer. She placed it in her mouth and asked him for a light; he replied, "Don't do that here, I'm already on probation." The dancer then departed, saying that she would smoke it in the dressing room. Several patrons were nearby when this exchange took place. (Testimony of Imperial.)
III.
Open, Persistent, and Recurring Nature of Illicit Drug Activity on the Premises
The illicit drug transactions described were open, persistent, and recurring; they took place in fairly well-lighted areas of the premises. The actions of Licensee's employees who engaged in such activities can fairly be described as practiced and routine. When undercover law enforcement officers asked for illicit drugs, the employees actively cooperated in an effort to accommodate them. The drug activity on the premises was not isolated or limited to one or two employees; it was pervasive during the evening hours, involving at least six different employees or agents. Drugs were either available on the premises or readily obtainable. During the course of the two-month investigation, at least ten illicit drug transactions took place on the premises. (Testimony of Terminello, Imperial, Berk, Miller.)
However, no evidence was presented which established that, during the time in question, illicit drugs were actually used on the premises. Several customers testified that they had never seen anyone selling, buying, or using drugs on the premises, that no one had ever approached them attempting to buy or sell drugs. 2/ (Testimony of Leighton, Redgate, Johns, Smith, Bushmann.)
George Sherman and Don Austin, owners and operators of the bar, testified that they had a policy against the use or sale of drugs on the premises; that they advised new employees of this policy, posted a sign in the dressing room restating the policy, 3/ and fired employees who violated it. However, the practiced and recurring nature of the drug transactions demonstrates that their anti-drug policy was not diligently and aggressively implemented. The drug transactions took place in a relaxed atmosphere of permissiveness. The employees made little effort to conceal the transactions; drug use was openly discussed and joked about. Neither George Sherman nor Don Austin were personally involved in any of the drug transactions in question. However, they failed to aggressively monitor and supervise their employees; they failed to effectively emphasize that drug activity on the premises would not be tolerated. Their lack of diligence in this regard allowed their employees to develop an attitude which fostered illicit drug activity on the premises. (Testimony of Sherman, Austin, Terminello, Berk, Miller, Imperial.)
The open, persistent, and practiced nature of the drug transactions on the premises supports an inference that, if Austin and Sherman did not know that they were occurring, they should have known with the exercise of reasonable diligence. (Testimony of Terminello, Berk, Miller, Imperial.)
During the 4 1/2 years it has operated the premises, the Licensee has not been found guilty of violating the beverage law or any other law of this State. (Testimony of Sherman, Austin.)
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and parties to this proceeding. 120.57(1), Fla. Stat. (1979).
Section 561.29(1)(a), Florida Statutes (1979), empowers the DABT to revoke or suspend a beverage license when it finds that the licensee, its agents or employees, have violated laws of this State on the business premises. Id. However, a licensee is not an insurer that its employees will not violate State laws. G & B of Jacksonville, Inc. v. Department of Business Regulation, Division of Beverage, 371 So.2d 137, 139 (Fla. 1st DCA 1979). Before penalizing a licensee, DABT must show that the licsensee was "culpably responsible for the Violation through or as a result of his own negligence, intentional wrongdoing for lack of diligence." Pauline v. Lee, 147 So.2d 359, 364 (Fla. 2d DCA 1962). Thus, a standard of simple negligence applies:
As a result, if the evidence supported the conclusion that the licensee failed to exercise ordinary care in the maintenance of the licensed premises or the supervision of his employees, he could be found guilty of the negligence and his license revoked. Bach v. State Board of Dentistry, 378 So.2d 34, 36 (Fla. 1st DCA 1979).
Section 893.13(1)(a)2, Florida Statutes (1979), makes it unlawful to sell or deliver a controlled substance. Controlled substances include diazepam, Section 893.03(4)(h); methaqualone, Section 893.03(2)(c)5; cannabis, Section 893.03(1)(c)3; cocaine, Section 893.03(2)(a)4.
In addition, Section 893.13(2)(a)5, Florida Statutes (1979), makes it unlawful for any person to, among other things keep or maintain a place which is used for keeping or selling controlled substances. Section 823.10, Florida Statutes (1979), declares that any place which is used for the illegal keeping, selling, or delivering of drugs is deemed a public nuisance.
The evidence establishes that on August 10, 1981; August 12, 1981; August 15, 1981; August 19, 1981; August 20, 1981 (five separate occasions); September 12, 1981; and September 23, 1981, employees or agents of Licensee violated Sections 893.13(1)(a)2 or 893.13(1)(a)1, Florida Statutes (1979), as alleged. Such violations, on their face, constitute violations of Section
561.29 (1)(a), Florida Statutes (1979). The evidence is insufficient to establish the violations alleged in Count 10 or Count 12. (Count 12 appears to be an inadvertent repetition of Count 11.)
Additionally, the evidence establishes that between August 10, 1981, and October 1, 1981, by virtue of the conduct underlying the above violations, the licensed premises was used for the keeping and selling of controlled substances in violation of Section 893.13(2)(a)B, thus constituting another violation of Section 561.29(1)(a), Florida Statutes. During this time period, the premises constituted a public nuisance (because of the illegal drug transactions on the premises) in violation of Sections 823.10 and 561.29(1)(c), Florida Statutes.
However, before a beverage license may be disciplined for violations of law which occurred on the premises, the licensee must be found culpably responsible. In this case, the evidence establishes the requisite culpability on the part of Licensee's owners and managers. They failed to diligently and aggressively supervise and monitor their employees' activities on the premises. Although they had announced a policy prohibiting drugs on the premises, they failed to effectively implement it. They allowed their employees to develop an attitude which facilitated illicit drug activity on the premises. As the court stated in G & B of Jacksonville, supra, at 139:
We are not here presented with a single isolated occurrence. If the licensee does not maintain sufficient intelligence with reference to the activity 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 licensee must be held to have been lacking in reasonable diligence and the proper management of its licensed premises.
A licensee cannot avoid the consequences of its actions by claiming ignorance of repeated violations. Id.
The facts and circumstances of this case support suspension of the beverage license, not revocation. No intentional wrongdoing by the Licensee or its owners was alleged or shown. The Licensee has a good prior record. The DABT did not alert the Licensee that illicit drug activity was occurring on its premises; consequently, no opportunity for remedial action was provided. Revocation is an extreme and drastic penalty which should be applied only in the most flagrant cases. Taylor v. State Beverage Department, 194 So.2d 321, 329 (Fla. 2d DCA 1967)
The parties submitted proposed findings of fact and conclusions of law. To the extent their proposed findings are incorporated in this recommended order they are adopted; 4/ otherwise, they are rejected as unsupported by a preponderance of evidence or unnecessary to resolution of the issues presented. Licensee's posthearing "Motion to Extend Time for Filing Recommended Order and to Consolidate" is denied.
That the Division of Alcoholic Beverages and Tobacco suspend respondent's beverage license for 120 days.
DONE AND RECOMMENDED this 23rd day of December, 1981, in Tallahassee, Florida.
R. L. CALEEN, JR. Hearing Officer
Filed with the Clerk of the Division of Administrative Hearings this 23rd day of December, 1981.
2/ However, many of these customers normally visited the premises during the afternoon and early evening; drug activity did not usually take place until the later evening hours.
3/ However, the sign was not on the wall when the investigation was completed and arrests were made.
4/ In addition, respondent's proposed ,findings of fact Nos. 7, 10, and 15 are specifically adopted.
Daniel C. Brown, Esquire Department of Business
Charles A. Nuzum, Director Division of Alcoholic Beverages
