vs. ) CASE NO. 82-774
Respondent. )
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, R. L. Caleen, Jr., held a formal hearing in this case on March 24, 1982, in Miami, Florida.
For Petitioner: Harold F.X. Purnell, Esquire
Whether respondent's alcoholic beverage license should be revoked or otherwise disciplined on the grounds stated in petitioner's Notice to Show Cause, as amended.
On March 4, 1982, petitioner Division of Alcoholic Beverages and Tobacco ("DABT") entered an Emergency Order of Suspension and Notice to Show Cause against respondent J.J.T., Inc., d/b/a Doc Watson's ("respondent"), holder of an alcoholic beverage license. On March 18, 1982, an Amended Notice to Show Cause was served. Generally, these pleadings charged that respondent, through its employees, engaged in numerous drug violations on its premises; and that as a result of these unlawful activities, the licensed premises constituted a public nuisance.
Respondent disputed the charges and requested a Section 120.57(1) proceeding. Hearing was promptly set for March 24, 1982, a date agreed upon by the parties.
At the outset of hearing, the parties agreed that the charges in issue were encompassed within the Notice to Show Cause, as amended, and agreed to the following modifications: (1) Count 4, No. 3, "February 4, 1982" was amended to read "March 4, 1982"; (2) the term "amphetamines" was dropped from Counts 7 and 13; (3) the term "cocaine" was dropped from Count 12; and (4) Count 1, No. 9 and Count 6, No. 2 were dismissed. The parties further stipulated to the accuracy of the laboratory analysis and the chain of custody pertaining to the controlled substances described in Count 1, Nos.1-5 and 7-8; Count 2, Nos. 1-4; Count 5, No. 1; and Count 6, No. 1. They also agreed to extend this stipulation to Count 4, No. 3 and Count 5, Nos. 2 and 9-13, provided DABT furnished respondent with acceptable property receipts and lab reports prior to the submittal of the recommended order; this condition was subsequently satisfied. As to Count 1, No. 6 and Count 4, the parties agreed that the chemical analyzed was the controlled substance alleged, thereby obviating the need to call a laboratory technician to establish that fact.
DABT called the following witnesses: John Harris, John Wayne Johnson, Chris Perceval, Donald Chastain, Louis Terminello, and Carole Houston; it offered Petitioner's Exhibit 1 Nos. 1 through 9, each of which was received into evidence. Respondent called Larry Williams, Jose Munez, Kathleen Miller, Tom Milligan, Nester Coronado, J. Swanfeld, Judy Forrest, Sandra Sayer, Sonya Olitsky, Atone Hoffman, Barbara Mullin, Marilyn Lifset, and James Harden; it offered Respondent's Exhibit 1/ Nos. 1 through 21, each of which was received.
After hearing, both parties submitted proposed findings of fact and conclusions of law by April 5, 1982. No transcript of hearing has been prepared.
FINDINGS OF FACT I.
Respondent corporation holds alcoholic beverage license No. 23-00739, Series 4 COP, issued by the DABT, and operates a bar known as Doc Watson's ("the licensed premises") at 4591 Northwest 36th Street, Miami Springs, Florida. Entertainment is provided by female dancers who perform to jukebox music. (Testimony of Harden; P-1, R-1.)
As to Count I
II.
Sale, Use, or Possession of Drugs on the Licensed Premises
On November 8, 1981, at approximately 12:30 a.m., undercover Beverage Agent Donald Chastain purchased cocaine for $70 from Mike Pack, a doorman employed by respondent. The sale took place in the storeroom at the east entrance to the west bar on the licensed premises. During the drug transaction, Pack remarked that he "had been turning them [cocaine sales] over like hotcakes-
-10 to 12 a day." (Testimony of Chastain.)
On November 14, 1981, during the evening hours, Agent Chastain purchased a clear plastic baggie of cocaine (a white powder) for $70 from doorman Pack. The transaction took place, in plain view, at the east entrance to the west bar on the licensed premises. (Testimony of Chastain.)
On November 21, 1981, during the evening hours, Agent Chastain again purchased a clear plastic baggie of cocaine for 565 from doorman Pack. The sale took place at the east entrance to the west bar on the licensed premises, and in plain view of Carlos Santana (known as "Manny") , a male patron. (Testimony of Chastain.)
On December 11, 1981, during the evening hours, Agent Chastain again approached doorman Pack at the east entrance to the west bar on the licensed premises and offered to buy cocaine. Pack replied that he had none but would try to find some; he then left his post at the bar entrance, walked to the pool table area where he talked with Sonya Olitsky, a female dancer, then returned to Agent Chastain. Doorman Pack then sold a clear plastic baggie containing cocaine to Agent Chastain for 570. (Testimony of Chastain.)
On December 21, 1981, during the evening hours, Agent Chastain again approached doorman Pack at the east entrance to the licensed premises and asked to purchase cocaine. Pack replied that he had none but could obtain some; a little later, Agent Chastain approached Pack again, but he still did not have any cocaine available. Doorman Pack then offered to obtain some from another employee on the licensed premises; after Chastain gave him 570, Pack left his post and, a few minutes later, returned and gave Agent Chastain a clear plastic baggie containing cocaine. The drug exchange took place in plain view at doorman Pack's duty station, the east entrance to the bar. (Testimony of Chastain.)
On February 10, 1982, doorman Pack, off duty at the time, approached Agent Chastain on the licensed premises and asked if he was looking for cocaine. Chastain said yes; Pack replied that it would cost 570. Chastain then gave him
570 for a white plastic baggie containing cocaine; this transaction occurred at the entrance to the east bar, in plain view of Victor Narin, the on-duty doorman. After the sale, at Pack's request, Chastain brought the cocaine to a bathroom on the premises where Pack ingested a small quantity. (Testimony of Chastain.)
On February 15, 1982, during the evening hours, Agent Chastain entered the premises. Doorman Pack asked him if he wanted to buy some excellent cocaine; Chastain agreed and handed him $70 for a clear plastic baggie of cocaine. This transaction took place in plain view at Pack's duty station at the east entrance to the west bar. (Testimony of Chastain.)
On February 23, 1982, Agent Chastain met doorman Pack at his duty station at the east entrance to the west bar and asked if he had any cocaine for sale; Pack replied that he had none but sent Ray Patterson, an off-duty doorman, to get Joe Hevia, a patron. Hevia told Chastain that he would need $70 "up- front"; Chastain was reluctant to agree since he didn't know Hevia. Doorman Pack then obtained a clear plastic baggie of cocaine from Benjamin Maples, 2/ a former doorman on the premises, and sold it to Chastain for $70. This transaction took place in plain view at the east entrance to the west bar. (Testimony of Chastain.)
As to Count II
On December 15, 1981, Agent Chastain approached Dorothy E. Zink, a dancer employed by respondent, and asked if he could buy some cocaine; she agreed. He gave her $70; she directed him to a pay telephone across from the stage area on the licensed premises where he found a small baggie of cocaine in the coin return slot. (Testimony of Chastain.)
Later that evening, Agent Chastain asked dancer Zink if she knew where he could get some quaaludes; she agreed to sell him some. He handed her $12, and she told him the quaaludes would be placed in the same coin return slot of the pay telephone used earlier. He proceeded to the pay telephone and found a plastic bag containing four tablets of diazepam. (Testimony of Chastain; P-7.)
On January 4, 1982, Agent Chastain approached dancer Zink on the licensed premises and gave her $70 for the purchase of cocaine. After checking elsewhere in the bar, she returned and told him that she could only find one- half a gram for $35. Thereafter, he met her by the pay telephone and, in plain view, gave him a clear plastic baggie containing cocaine. (Testimony of Chastain.)
On January 21, 1982, in response to Agent Chastain's inquiry, dancer Zink agreed to sell him cocaine for $70. He slowly counted out $70 while in the stage area of the west bar of the licensed premises and in plain view of several nearby patrons. He placed the money in an address book held by dancer Zink, then ;net her at the pay telephone where she handed him a folded piece of paper containing cocaine. (Testimony of Chastain.)
As to Count III
On January 26, 1982, Darlene Harper, Melaine Goransky, and Linda Pryor, dancers employed by respondent, exited the west entrance of the licensed premises with purses in hand. They entered a parked vehicle where they removed from one of the purses a marijuana cigarette which they lit and passed between them. (Testimony of Johnson; P-3, P-4.)
As to Count IV
On February 10, 1982, during the evening hours, Agent Chastain entered the west bar of the licensed premises. Michael Stoodley, the doorman, told him that doorman Pack had some good cocaine for sale. Chastain replied that he had just bought some; Stoodley then asked Chastain to give him some. After Chastain handed him the cocaine, Stoodley entered the storeroom near the east entrance and ingested some. Upon exiting the storeroom, doorman Stoodley handed him a tablet containing methaqualone. (Testimony of Chastain.)
When Agent Chastain entered the licensed premises on March 4, 1982, doorman Pack approached him and asked if he wanted to buy some cocaine for $75. Chastain declined but said he wanted to buy some quaaludes. Pack said to contact doorman Stoodley, who was then on duty at the entrance to the east bar. Agent Chastain then proceeded to the entrance and bought four methaqualone tablets from doorman Stoodley for $12. (Testimony of Chastain.)
As to Count V
On February 23, 1982, Benjamin Maples supplied cocaine to doorman Pack which was, in turn, sold to Agent Chastain on the licensed premises. (See paragraph 9 above.) He was, however, no longer employed by respondent, since he had been fired in October, 1981. (Testimony of Chastain, Harden, Swanfeld.)
On February 27, 1982, after midnight, Agent Chastain entered the licensed premises and discussed with doormen Patterson, Pack, and former doorman Maples a cocaine purchase he had made there two days earlier. Maples then offered to sell Chastain a gram of cocaine. Chastain agreed and handed Maples
$70 in return for a clear plastic baggie containing cocaine. But, when this transaction took place, Maples was not an employee of the respondent. (Testimony of Chastain, Harden, Swanfeld, Coronado.)
As to Count VI
On February 25, 1982, during the evening hours, Agent Chastain entered the licensed premises and asked Dale Patterson, the doorman on duty, if he knew where he could buy some cocaine. Patterson told him he would sell him one gram for $100. After Chastain balked at the price, Patterson lowered it to $80 and told him to check back with him in 15 minutes. Later, when Chastain returned, Patterson introduced him to Jack Corderra, a patron, who took him to a room separating the two bars on the licensed premises and sold him two lumps of cocaine for $80. (Testimony of Chastain.)
As to Counts VII and VIII
Between November 8, 1981, and March 6, 1982, illicit drugs, including cocaine, methaqualone, marijuana, and percodan (oxycodone) were kept, sold, and delivered on the licensed premises in the manner described herein.
As to Count IX through XIII
Pursuant to a search warrant executed on the licensed premises on March 6, 1982, respondent's employees and their possessions were searched. Percodan, containing oxycodone, was found in the purse of dancer Cynthia Lytle; marijuana was found in the purse of dancer Margaret McLain; diazepam was found in the purse of dancer Nicole Moon; marijuana was found in the purse of dancer Deronda Doolittle; and a packet of cocaine was found on waitress Ruth Robinson. (Testimony of Houston, Chastain.)
III.
Respondent's Management and Supervision of the Licensed Premises
A. The No-Drug Policy
Both before and during the time in which these drug transactions occurred on the licensed premises, respondent announced a no-drug policy to its employees. It posted notices and distributed memoranda prohibiting the possession, use, or sale of any illicit drugs on the premises; employees were told to report any drug violations to the manager and warned that violation of the no-drug policy would result in immediate dismissal. (Testimony of Harden; R-1, R-3.)
During the time in question, respondent was aware that complaints had been made to DABT about narcotic violations occurring on the licensed premises. By letter to the Dade County Liquor Consortium, Inc., dated November 2, 1981, DABT expressed a hope that the owners of Doc Watson's, and several other named licensees, "will strictly supervise the conduct of their employees (P-2.) Respondent requested information concerning the complaints; DABT did not provide
the requested information because it was conducting an ongoing drug investigation of the premises and did not know, at that time, whether management was involved in illicit drug activities. Respondent also sought advice from Miami Springs police officers on how to control illegal drug activities. (Testimony of Harris, Lifset; P-2, R-21.)
Respondent took several steps to implement its no-drug policy. In February, 1981, it hired Larry Williams, a former police officer, as its-new night manager. Williams was instructed to eliminate drug violations on the premises; during the next several months he caught four employees possessing, using, or selling drugs and summarily fired them. Between 1980 and 1981, several other employees had been fired because of suspected use of drugs on the licensed premises. When customers were observed passing illicit drugs, they were asked to leave the premises. (Testimony of Williams, Lifset, Milligan, Sayer, Harden; R-5, R-6, R-7, R-8, R-9.)
Respondent required its employees to keep their personal belongings in lockers provided on the premises. The combinations to the locks were known to respondent, and it would occasionally spot search the lockers for illicit drugs. (Testimony of Harden, Hoffman.)
Respondent reiterated its no-drug policy at its staff meetings held every four to six weeks. (Testimony of Harden, Lifset, Williams.)
Neither James Harden, sole stockholder of the respondent corporation, nor any of respondent's managers were personally involved in any of the illicit drug violations described in Part II above.
H. Widespread and Persistent Drug Trafficking on the Licensed Premises
Despite respondent's announced no-drug policy, employees, during the time in question, engaged in illicit drug activities on the licensed premises in a persistent and practiced manner. Beverage Agent Chastain was successful in purchasing illicit drugs during one-half of his 25-30 visits to the licensed premises. Employees who did not have drugs available at the time often helped him locate and purchase drugs from others on the premises. (Testimony of Chastain, Houston.)
These drug transactions were not isolated events. Drug trafficking on the premises was widespread and occurred in plain view of other employees and patrons. Drugs were sold and talked about in an open manner. For instance, on March 2, 198.2-- when Agent Chastain stepped from his car in respondent's parking lot--doorman Pack called down from an apartment on the second floor above the licensed premises and, in a loud voice, asked him if he wanted some white powder, meaning cocaine. (Testimony of Chastain.)
Many of the 75 employees of respondent were involved or implicated in the drug transactions described in Part II above. Out of a total of six doormen, three sold drugs to Agent Chastain. Of approximately five waitresses employed by respondent, two were arrested for possessing illicit drugs on March 6, 1982. Of the 30-35 dancers, at least five engaged in illicit drug activities on the premises between November, 1981, and March, 1982. (Testimony of Chastain, Houston.)
C. Respondent's Failure to Diligently Enforce its No-Drug Policy
By November, 1981, the owner of respondent was aware that illicit drug activities had been occurring on its licensed premises. Earlier in the year he had hired a former policeman as night manager to control such activities; several persons had been fired for illicit drug activities on the premises. (Testimony of Harris, Harden, Williams.)
Respondent was also aware of concrete steps--suggested by DABT--which could be taken by bar owners to prevent illicit drug activity on their premises. 3/ Those steps included giving polygraph examinations to employees, forbidding employees access to their personal belongings while on duty, checking the background of prospective employees for drug history, strictly enforcing rules of conduct for employees, and periodically searching employees. (Testimony of Harris, Harden.)
Under these circumstances, respondent failed to diligently supervise its employees and enforce its no-drug policy between November, 1981, and March, 1982. Employees who violated the no-drug policy, such as Darlene Harper, Melanie Goransky, and Linda Pryor (see paragraph 14 above) , were not immediately dismissed. Neither was dancer Dorothy Zink, although day-manager Marilyn Lifset suspected her of selling drugs. Employee searches and spot checks were haphazard and infrequent: Jack Wandel, a bartender for six years, and Sandra Sayer, a waitress for 3 1/2 years, had never been searched; Ann Hoffman, a dancer for five months, had never been searched; Sandra Olitsky, a dancer for two years, and Kathy Mitler, a bartender for eight months, had each been searched once. (Testimony of Chastain, Lifset, Wandel, Sayer, Hoffman, Olitsky, Mitler.)
Night-manager Larry Williams conscientiously enforced the no-drug policy between February and October, 1981. A former police officer, Williams watched his employees closely and fired employees he suspected of drug trafficking. But, manager Williams left respondent's employment in October, 1981, before the drug violations in question here occurred. There is no evidence to indicate that his eventual replacement, who has since left respondent's employment, enforced the no-drug policy with equal commitment.
Most of the illicit drug activities encompassed by the charges at issue occurred during the night shift. (Testimony of Williams, Harden, Chastain.)
Respondent neglected to take reasonable steps to effectively carry out its no-drug policy. Although it knew illicit drug activity had occurred on the premises it: (1) failed to conduct frequent and thorough spot searches of its employees; (2) failed to promptly dismiss employees who violated the policy; (3) failed to consistently investigate the background of prospective employees; (4) failed to administer polygraph examinations; (5) failed to prohibit employee access to personal belongings while on duty; and (6) failed to closely monitor and supervise its nightshift employees for the purpose of detecting illicit drug activity.
IV.
Prior Record
Licensee has never before been cited for any violation of the Beverage Law. (Testimony of Harden.)
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. Section 120.57(1), Fla. Stat. (1981).
License revocation proceedings are penal in nature. Bowling v. Department of Insurance, 394 So.2d 165 (Fla. 1st DCA 1981) . The term "substantial competent evidence" takes on vigorous implications. Bowling, supra at 171. Matters in issue must be proven by evidence "which is indubitably as 'substantial' as the consequences [for the licensee] ." Id. at 172.
Pursuant to Section 561.29(1)(a), Florida Statutes (1981) , a beverage license may be revoked or suspended upon a finding that its agents or employees-
-while on the licensed premises and in the scope of their employment--violated any of the laws of Florida.
Except as specifically authorized by Chapter 893, it is unlawful for any person to sell, deliver, or possess a controlled substance. 893.13, Fla. Stat. (1981). Cocaine, diazepam, marijuana, methaqualone, and percodan (oxycodone) are Controlled substances. Section 893.03, Fla. Stat. (1981)
Section 823.10 provides that any building which is used for the illegal keeping, selling, or delivering of controlled substances "shall be deemed a public nuisance." Id. A beverage license may be revoked for maintaining a nuisance on the licensed premises. Section 561.29(1)(c) , Fla. Stat. (1981).
The appellate courts have, however, held that a licensee is not an absolute insurer of the acts of its employees, Taylor v. State Beverage Department, 194 So.2d 321, 328 (Fla. 2d DCA 1967); that before penalizing a licensee, it must be shown that he was "culpably responsible for the violation through or as a result of his own negligence, intentional wrongdoing or lack of diligence." Pauline v. Lee, 147 So.2d 359, 364 (Fla. 2d DCA 1962).
A single or isolated violation by an employee cannot, without more, justify license revocation. An alcoholic beverage licensee
must maintain a rigid standard of rectitude, both in his own personal conduct and also in supervising his employees, in the operation of his privileged business; but such conduct and such operation of his privileged busi- ness must always be judged on balance and not by any isolated instance. .
Taylor, supra at 329. Nevertheless, the courts have recognized that a licensee has the duty to exercise reasonable care
and diligence to see that the licensed
place of business is conducted in a lawful manner and that its employees do not vio- late any of the laws of the State of Florida. If a licensee does not maintain suf-
ficient intelligence with reference to the activities at his or its licensed premises so as to know that two or more of its em-
ployees are engaged in such activity as was herein established, then such licensee must be held to have been lacking in reasonable diligence in the proper management of its licensed premises.
G & B of Jacksonville, Inc. v. State, 371 So.2d 139 (Fla. 1st DCA 1979)
A standard of simple negligence has been applied to beverage licensees:
As a result, if the evidence support[s] the conclusion that the licensee failed to exer- cise 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)
Measured by these standards, it is concluded that respondent is guilty of violating Section 561.29(1)(a) and (c) as alleged in Counts I-IV and VI-XIII.
Having been placed on notice that illicit drug activity was occurring at its premises, respondent failed to exercise due diligence to ensure that its employees did not violate state laws; it failed to maintain sufficient intelligence with reference to the activities on its premises; it failed to affirmatively increase its supervision of its employees when it became evident that increased supervision was necessary. By failing to consistently and diligently enforce its announced no-drug policy, respondent fostered a permissive attitude among its employees which allowed illicit drug activity to flourish.
Respondent is not guilty of the charges contained in Count V since Benjamin Maples was not an employee of respondent at the time of his alleged misconduct.
Revocation of a beverage license "is a most serious and drastic penalty, even in a flagrant case; it is comparable to the extreme penalty in a criminal case." Taylor, supra at 329. Here, it has neither been alleged nor proven that respondent's violations were intentional--they arise, instead, from simple negligence. Given the absence of any prior violations of the Beverage Law, the record supports suspension, not revocation of respondent's license.
The parties' proposed findings of fact, to the extent they are incorporated in this recommended order, are adopted; otherwise, they are rejected as irrelevant or unnecessary to resolution of the issues presented, or unsupported by the evidence.
90 days, with credit given for any period of suspension effected by the Emergency Order of Suspension executed in March, 1982.
DONE AND RECOMMENDED this 2nd day of April, 1982, in Tallahassee, Florida.
R. L. CALEEN, JR. Hearing Officer
Filed with the Clerk of the Division of Administrative Hearings this 2nd day of April, 1982.
2/ The Notice to Show Cause identifies this individual as Benjamin Naples.
3/ Owner Harden had attended a Dade Liquor Consortium meeting in November, 1981, where Captain John Harris, head of DABT's Miami Beverage Office, had outlined steps which could be taken by licensees to curb drug violations.
Harold F.X. Purnell, Esquire Department of Business
Charles A. Nuzum, Director Division of Alcoholic Beverages
