DEPARTMENT OF BUSINESS REGULATION ) DIVISION OF ALCOHOLIC BEVERAGES ) AND TOBACCO, )
vs. ) CASE NO. 81-2566
Respondent. )
These matters came on for hearing in Tampa, Florida, on January 13, March 15-19, and April 21-22, 1982, before the Division of Administrative Hearings and its duly appointed Hearing Officer, R. T. Carpenter. The parties were represented by:
For Petitioner: William A. Batch, Esquire
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
John A. Boggs, Esquire
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
For Respondent: Donald E. McLawhorn, Esquire
These cases arose on Petitioner's Administrative Complaints/Notices to Show Cause charging Respondent with violations of various Florida Statutes in its application for an alcoholic beverage license and in the operation of its business under such license.
The parties filed proposed findings of fact and conclusions of law. To the extent these proposed findings have not been adopted or otherwise incorporated herein, they have been rejected as irrelevant or not supported by the evidence. All pending motions are hereby denied; provided, however, that Petitioner's objection to Respondent's proposed late filed exhibit filed after the close of the evidentiary record is sustained.
5 Former Tampa Police Department Detective Nick Haynes was in the licensed premises on November 6, 1980, and was approached by the dancer-employee, Cheryl Jonas, who requested that Haynes purchase a drink for her. He did so. This transaction occurred as charged in Count No. 51.
Beverage Officer Freese individually and in conjunction with Beverage Officer Hodge, accounted for 38 solicitation charges (Counts 53-57, 59-63, 66, 68-88, and 163-167) . The solicitations charged in Counts 53, 55, 71-80, 83, - 84, 88, 163, 166 and 167 occurred as alleged and involved direct requests for the purchase of drinks ("Will you buy me a drink," or words of similar import) . Freese observed employees receive tickets for these drinks from the bartender or waitress in most instances.
The solicitations charged in Counts 54, 56, 57, 59-63,66, 68-70, 81, 82, 164 and 165 were not supported by evidence of direct requests for the beverage purchases by employees of Respondent. At a meeting held about December 17, 1980, Beverage Officers Freese and Hodge were instructed by their supervisor to require that dancers request drinks before ordering. This procedure was adopted to avoid situations where the beverage officer was not asked to buy a drink, but eventually received the bill for the dancer's drink.
In implementing the instructions, Freese used these or similar words: "If you want a drink, ask for it.", This statement possibly misled the dancers to believe that Freese was inviting them to order whenever they wanted drinks. The date when Freese first used this statement was not established, but it was subsequent to the mid-December meeting. It was noted that Freese was not solicited during the first two months of the investigation. Therefore, all or substantially all of the solicitation charges involving Freese took Place after he first issued the "invitation."
Beverage Officer Hodge individually testified as to solicitation Counts 58, 64, 65 and 67. Counts 58, 65 and 67 did not involve a direct request for beverage purchase. Count 64 occurred as alleged and was based on a direct request for beverage Purchase ("Why don't you buy me one now?"). This request was made during the early morning of January 13, 1981. Although this was after the December meeting which Hodge attended, it was not shown that he made any statement which could have been interpreted as an "invitation" by any employee of Respondent.
The fact that customers regularly Purchased drinks for the dancers was well known to the management as evidenced by the tickets issued to employees for drinks purchased in their behalf. These tickets were redeemable by the dancers for one dollar each. Thus, employees were rewarded and implicitly permitted to solicit drinks.
Respondent's announced policy was, however, to reprimand or discharge any employee who was caught begging or soliciting drinks. This policy was attested to by bartenders; former employees and dancers. Although it cannot be found that Respondent actively encouraged its employees to solicit drinks, it did encourage socializing with customers to a degree which would elicit offers to purchase drinks for them. Respondent has since discontinued the practice of issuing tickets or other employee incentives to obtain customer purchased drinks.
Counts 127 through 161 involve drug charges. Purchases were made by Beverage Officer Freese and Hedge, individually and together. Their testimony and that of Florida Department of Law Enforcement Crime Lab personnel established that controlled substances were purchased from dancer-employees of Respondent on the licensed premises as charged in Counts 127 through 137, 156 and 158.
The transactions which-were established to have been carried out involved cocaine, methaqualone and cannabis deliveries by dancer-employees Margie Wade, Janie Marsie, Lori Basch and Lisa Scibilia on February 21, 24, 27; March 2, 9, 13, 17, 23; May 13, 15, 1981. It should be noted that Counts 136 and 137 actually involved one transaction where Hodge and Freese split the delivery. Count 161 concerned a transaction outside the licensed premises and this count, as well as Count 158, involved an employee of another establishment. Petitioner's Exhibit 43 and the supporting testimony concerned a transaction for which there was no charge.
Counts 138 through 151, 154 and 159-161 alleged conspiracies to deliver controlled substances corresponding to other counts which alleged actual deliveries. There was testimony on the involvement of third person (not shown to be associated with the Respondent) only as to Counts 134, 146, and 147, which essentially covered a single transaction. No other evidence of conspiracy was presented.
On one occasion, Redner was in the Tanga Lounge and within about 15 feet of the beverage officer and the dancer when the delivery took place. However, there was no evidence that Redner was involved or that he had any knowledge of the transaction. Testimony by a former employee that Redner participated in drug use was lacking in credibility and was not corroborated.
Counts 3 through 30 and 33 through 50 are charges of lewd dancing by employees of Respondent on the licensed premises. The charges cover 46 dances on 12 separate dates between October, 1980, and February, 1981, performed by 11 different dancer-employees. The acts complained of in these counts were witnessed and attested to by Beverage Officers Hodge and Freese and Tampa Police Department Detective Mickel.
The alleged lewd conduct included exposing of the breasts, vagina and anus by dancers during their on-stage performances. Typically, the dancers received dollar tips which customers placed in their bikini bottoms. Some dancers allowed customers to reach inside the bikinis in order to touch their pubic areas. On several occasions the dancers squatted and picked up the dollar bills with their exposed genital areas. On December 11, dancer Cathy Andrews rubbed her vagina, then rubbed the genital area of Beverage Officer Freese, who was observing the dance.
Mr. Redner was present during much of the alleged lewd conduct. Although Redner testified that "flashing" was acceptable, the exposure of sexual organs as attested to was not limited to brief "flashes," but was prolonged. Further, Respondent's contention that dancers receiving tips tried to avoid contact by customers is not credible. Rather, the testimony of the officers established that dancers frequently encouraged customers to place their hands against the dancers pubic areas when offering tips.
Respondent's, lounge is advertised as an adult entertainment facility and is generally known to include nude dancing. There was no competent evidence as to community standards for this type of conduct in the Tampa area, nor was there any evidence that these acts shocked or offended anyone present other than the investigating officers. Detective Mickel conceded that about five other bars he has visited offer this type of entertainment.
Counts 31 and 32 concern an offer of prostitution by one of the
dancer-employees to the beverage officers. Their testimony established that the offer was made as charged. This was, however, a single incident and there was no evidence that such offers were recurring or that Respondent had knowledge of this transaction.
Counts 1 and 2 of Case No. 81-2567 allege that Robert Rodriguez holds an undisclosed interest in the licensed premises. Such interest, if any, was not reflected in the license transfer application submitted on April 23, 1976. Rather, Joseph Redner and Joe DeFriese were identified as the sole stockholders with no direct or indirect interest held by any other person.
Rodriguez previously owned an interest in Deep South Plantation Foods, Inc., whose alcoholic beverage license was revoked by Petitioner. Redner was at one time employed by Rodriguez as manager of Deep South
Petitioner asserts that Rodriguez became ineligible to hold an interest in an alcoholic beverage license as a result of the revocation, pursuant to Section 561.15, Florida Statutes, and that he and Redner therefore concealed Rodriguez's subsequent interest in the Tanga Lounge. Respondent contends that Rodriguez is the manager of the Tanga Lounge, but holds no direct or indirect interest therein.
Rodde, Inc., was organized on April 19, 1976, and a $2,000 down payment deposit on the contract for purchase of the Tanga Lounge and liquor license was made on April 20, 1976, pursuant to contract signed by DeFriese and the prior owners on that date. This $2,000 check was issued by Robert Rodriguez against his own account.
Petitioner produced this cancelled check (Petitioner's Exhibit 4) and numerous other documents which establish that Rodriguez participated in all aspects of Rodde, Inc., management and financial operations since its inception. Rodriguez has unrestricted authority to withdraw funds from corporate accounts and has signed or cosigned for loans and credit purchases. Rodriguez also utilized a Rodde, Inc., credit card to pay personal expenses on a vacation to Las Vegas in 1979. There was no evidence of reimbursement or other accounting to the corporation for these expenditures.
The testimony of the Rodde, Inc., employees did not corroborate Redner's testimony that Rodriguez is manager of the Tanga Lounge. Rather, these employees believed Rodriguez was somehow associated with the business, but regarded Redner as the manager and their only supervisor.
Rodriguez issued two checks for $1,408.05 on December 1, 1979, one payable to himself and the other to Redner (Petitioner's Exhibit 32) . These checks each carried the notation "bonus $1500", with a further notation apparently accounting for $91.95 in withholding tax. In view of Rodriguez's duties and functions within the corporation, this "bonus" can only be considered a participation in profits.
Redner's credit rating and financial management skills are poor. Therefore, Respondent contends that a manager with strength in these areas was needed to ensure business success. However, Rodriguez's unlimited authority in dealing with corporate funds, the investment or loan of his personal funds, his participation in business profits and the absence of any apparent supervisory duties are inconsistent with the employee theory held out by Respondent.
CONCLUSIONS OF LAW
Section 561.29, Florida Statutes (1981), provides in part:
The division 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 de- termined 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 employ- ment, of any of the laws of this state or of the United States, or violation of any municipal or county regulation in regard to the hours of sale, service, or consumption of alcoholic beverages, 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 or of the United States; except that whether or not the licensee or his or its agents, officers, servants, or employees have been convicted in any criminal court of any violation as set forth in this paragraph shall not be considered in proceedings before the division for suspension or revocation
of a license except as permitted by chapter 92 or the rules of evidence.
The division may impose a civil penalty against a licensee for any vio-
lation mentioned in the Beverage Law, or any rule issued pursuant thereto, not to
exceed $1,000 for violations arising out of a single transaction.
The above provisions empower Petitioner to revoke or suspend a beverage license for violation by the licensee or his employees of a federal or state law or applicable ordinance. Violation of the beverage statute or rules by the licensee may also result in fines of up to $1,000 per transaction.
These provisions have been construed to permit license suspension or revocation only where the license holder has knowledge of the illegal activity or has been negligent in supervising the licensed premises. 1/ Although a single, isolated incident outside the licensee's knowledge does not warrant a finding of negligence, violations of a persistent and recurring nature render the licensee culpably responsible. 2/
Section 562.131, Florida Statutes (1979) , makes solicitation of alcoholic or other beverages by employees of the licensee a second degree misdemeanor. Petitioner demonstrated through substantial, competent evidence that the three violations charged in Case No. 81-2566 and that three of the violations charged in Case No. 81-2567 involved direct requests for the purchase of drinks by persons who were employees of Respondent, in violation of this statute.
The recurring nature of these violations along with the policy of rewarding employees who secured drinks from customers renders the licensee culpably responsible. It was not shown, however, that Respondent engaged in any conspiracy to commit these violations. Conspiracy charges, solicitation charges involving indirect requests, and all solicitation charges supported by the testimony of Beverage Officer Freese should be dismissed. In proceedings such as this which are penal in nature, a finding of statutory violation may not be based on problematic evidence. 3/
Subsection 893.13(1)(a), Florida Statutes (1979) makes sale or delivery of a controlled substance unlawful except in circumstances not applicable here. Cocaine, methaqualone and cannabis are listed as controlled substances under Section 893.03, Florida Statutes (1979)
Petitioner demonstrated by substantial, competent evidence that four different employees sold and delivered controlled substances on the licensed premises on ten different days between February 21 and May 15, 1981, as charged in Counts 127 through 137, 156 and 158 of the Administrative Complaint (Case No. 81-2567)
Although the evidence did not establish that Respondent conspired or had actual knowledge of these transactions, they were carried out openly in the licensed premises. This is the sort of persistent and recurring activity that renders the licensee culpably responsible. 4/
Respondent contends that no prior police or beverage department investigations (which it represents have been numerous) uncovered any drug violations. Respondent concludes on this basis that it had no reason to believe that such violations were occurring. This argument is rejected as it attempts to shift responsibility for supervising the licensed premises to law enforcement agencies.
Subsection 847.011(4), Florida Statutes (1979), provides in part:
Any person who knowingly promotes, conducts, performs, or participates in an obscene, lewd, lascivious, or indecent show, exhibition, or performance by live persons
or a live person before an audience is guilty of a misdemeanor of the first degree, punish- able as provided in a. 775.082 or a. 775.083.
Any person who, after having been convicted
of violating this subsection, thereafter violates any of its provisions and is convicted thereof
is guilty of a felony of the third degree. .
The conduct complained of by Petitioner in Counts 3-30 and 33-50 of the Administrative Complaint exceeded mere nude dancing which Respondent characterizes as protected expression. However, Petitioner failed to establish any standards for determination of acts which constitute obscene, lewd, lascivious or indecent conduct. Evidence of contemporary community standards is essential to a finding of such violation in an administrative proceeding. 5/
Subsection 796.07(3)(a), Florida Statutes (1979), prohibits offers of prostitution. Counts 31 and 32 of the Administrative Complaint describe essentially a single offer of prostitution by an employee of Respondent, which was established to have taken place as charged. However, there was no evidence of knowledge by the licensee, nor can it be held negligent with respect to violations of this statute based on a single transaction.
Subsection 561.17(1) , Florida Statutes (1979) , requires a beverage license applicant to identify any person directly or indirectly interested in the business for which the license is sought. "Interest" as used here has been interpreted as "precuniary interest."
Petitioner charged that Respondent failed to disclose the interest of Robert Rodriguez in Count 1 of the Administrative Complaint (Case No. 81-2567) in violation of the above provision. In Count 2, Petitioner further charged Respondent with conspiring to violate this provision of the Beverage Law in violation of Section 562.23, Florida Statutes (1979)
Petitioner made a prima facie case in support of these charges through the production of numerous documents, such as the initial $2,000 down payment by Rodriguez (Petitioner's Exhibit 4). Respondent's rebuttal evidence, which was essentially limited to denials by Redner, was weak and unconvincing.
Respondent's insistence that Rodriguez was manager of the Tanga Lounge was discredited by its own employee witnesses. Their testimony established that Rodriguez was neither a manager nor supervisor, but a casual visitor to the Tanga Lounge whose status was not known to them.
1968)
Even if, as Respondent contends, Rodriguez did not own this business or any part of it, he clearly held a financial stake in it, having invested his assets (Petitioner's Exhibit 4) and having shared in the profits (Petitioner's Exhibit 32). Therefore, Rodriguez must be found to have held an interest in the licensed premises which was not disclosed in violation of Sections 561.17(1) and 562.23, Florida Statutes (1979).
The controlled substance charges herein for which Respondent has been found culpably responsible involved the commission of serious crimes. License revocation or long-term suspension is therefore justified on the basis of these findings.
The undisclosed interest charge, including conspiracy to conceal, of which Respondent is guilty is likewise a proper basis for license revocation or long-term suspension. These offenses are somewhat less serious than those involving drug sales. However, Respondent's direct involvement and participation in the commission and furtherance of these offenses justify a substantial penalty.
Viewed separately, the solicitation of beverage violations are not sufficiently serious to warrant more than a brief license suspension. Similarly, the offer of prostitution finding would justify no more than a fine or reprimand.
3 of the Administrative Complaint/Notice to Show Cause in Case No. 81-2566. It is further
RECOMMENDED that Respondent be found guilty of the charges contained in Counts 1, 2, 31, 32, 51, 52, 64, 127-137, 156, and 158 of the Administrative Complaint/Notice to Show Cause in Case No. 81-2567. It is further
RECOMMENDED that all other charges be dismissed. It is further RECOMMENDED that Respondent's Alcoholic Beverage License No. 39-738 be
revoked.
DONE and ENTERED this 9th day of July, 1982 at Tallahassee, Florida.
R. T. CARPENTER, Hearing Officer Division of Administrative Hearings The Oakland Building
Filed with the Clerk of the Division of Administrative Hearings this 9th day of July, 1982.
1/ G&R of Jacksonville, Inc., v. State, 371 So.2d 138, 371 So.2d 139, 381 So.2d
1074 (Fla. 1st DCA 1979); Pauline v. Lee, 147 So.2d 359 (Fla. 2nd DCA 1962) 2/ Id.
3/ Bowling v. Department of Insurance, 394 So.2d 165,172 (Fla. 1st DCA 1981) 4/ See, Pauline v. Lee, supra.
5/ Golden Dolphin No. 2, Inc. v. State, 403 So.2d 1372 (Fla., 5th DCA 1981). 6/ Wilkenfeld vs. Meiklejohn, 216 So.2d 237, 239 (Fla. 1st DCA )
William A. Hatch, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
John A. Boggs, Esquire
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
Donald E. McLawhorn, Esquire 800 West Platt Street, Suite 2
Gary A. Rutledge, Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
Charles A. Nuzum, Director Division of Alcoholic Beverages and Tobacco
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
