STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS ) REGULATION, DIVISION OF ALCOHOLIC ) BEVERAGES AND TOBACCO, )

)

Petitioner, )

)

vs. ) CASE NO. 83-1762

) P&D SOUTH OF MARTIN COUNTY, INC. )

d/b/a STAGE EAST )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause was heard by Linda M. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on October 21, 1983, in West Palm Beach, Florida.

Petitioner Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, was represented by John A. Boggs, Esquire, Tallahassee, Florida; and Respondent P & D South of Martin County, Inc., d/b/a Stage East, was represented by Charles L. Curtis, Esquire, Fort Lauderdale, Florida.

On March 11, 1983, Petitioner served on Respondent its Notice to Show Cause why Respondent's alcoholic beverage license should not be suspended, revoked, or have a civil penalty imposed against it. Respondent timely requested a formal hearing on the allegations contained within that Notice. On August 22, 1983, Petitioner filed its Amended Notice to Show Cause. The issues for determination therefore became whether Respondent is guilty of the allegations contained within the Amended Notice to Show Cause and, if so, what disciplinary action should be taken, if any.

Petitioner presented the testimony of Richard P. White. Additionally, Petitioner's Exhibits numbered 1 through 4 were admitted in evidence.

Respondent presented the testimony of Richard B. Pouser, Robert H. Dick, and, by way of deposition, James M. Stuckey. Additionally, Respondent's Exhibits numbered 1 through 7 were admitted in evidence.

Although both parties requested leave to file posthearing proposed findings of fact in the form of a proposed recommended order, only Petitioner did so.

Respondent adopted its closing statement at the formal hearing as its proposed recommended order. To the extent that any proposed findings have not been adopted in this Recommended Order, they have been rejected as not having been supported by the evidence, as having been irrelevant to the issues under consideration herein, or as constituting unsupported argument of counsel or conclusions of law.

FINDINGS OF FACT

1. The first paragraph of charges in the Amended Notice to Show Cause reads as follows:

   
   

   1. That you, P & D SOUTH OF

      MARTIN COUNTY, INC. d/b/a STAGE EAST,

      licensed under the beverage laws of the State of Florida as a licensed vendor holding a SRX series license, did in the year of 1982, violate the beverage laws, to wit: you failed

      to maintain as 51 percent of your gross revenue the sale of food and non- alcoholic beverages, based upon the average monthly gross revenue for the period 12/81 to 12/82, contrary to

      F.S. 561.20(2)(a)(3), Rules 7A-3.14 and

      7A-3.15(3)(b), Florida Administrative Code.

      
      

      In the Joint Pre-Hearing Stipulation and again at the commencement of the formal hearing in this cause, Respondent admitted the violation alleged in that paragraph. Also at the commencement of the formal hearing, Petitioner dismissed with prejudice the charges contained within paragraphs numbered too and three of the Amended Notice to Show Cause. The case therefore proceeded forward for the presentation of evidence in aggravation or in mitigation of any penalty to be imposed against Respondent.

      
      

   2. Respondent corporation, P & D South of Martin County, Inc., does business as Stage East and is the holder of alcoholic beverage license No. 53- 352, Series 6-COP SRX. Stage East opened for business on November 25, 1981, at

      200 South Dixie Highway, Stuart, Martin County, Florida.

      
      

   3. When Richard Pouser, Respondent's president, applied for an alcoholic beverage license, he spoke with Beverage Officer Richard White. White explained to Pouser that an SRX license is a special license, carrying with it a requirement that the restaurant derive at least 51 percent of its gross revenue from the sale of food and nonalcoholic beverages. Pouser advised White that Respondent intended to obtain an unrestricted quota license as soon as one became available in Martin County.

      
      

   4. When Respondent prepared to open Stage East, it leased a building containing two separate portions of space. It was Respondent's intention from the initial creation of its new business to open the first section of the restaurant as an area also geared to entertaining persons under the age of 50. In that section, Respondent has electronic games, televisions, pool tables, a dance and bandstand area, and two bars. There are approximately 25 tables in the "back bar" area and approximately 40 tables in the front or bandstand area. Full food service is available in both areas. In this section, Respondent also provides either recorded or live musical entertainment every day, ranging from local musical talent to "mini-concerts" by groups or individuals with national or international recognition. The second section of Stage East, which comprises an additional 4,000 square feet, is to be a family-type food service area, analogous to a "Bennigan's" style of restaurant. Only the first section of Stage East was opened on November 25, 1981, and Respondent continued its preparations to open the second section also.

   5. Respondent filed its plans for the proposed second section and application for a building permit and zoning approval with the City of Stuart on January 4, 1982. The City denied Respondent's application the same day, citing as its reason "inadequate parking." After Respondent expended substantial monies for legal fees and engineering studies, zoning approval was finally obtained in June 1983. The evidence is uncontroverted that the City had no legal basis for its denial of Respondent's application; rather, certain members of the City Commission personally did not approve of an establishment like Stage East.

      
      

   6. In February 1982, Beverage Officer White received an anonymous complaint that Respondent was not meeting its 51 percent requirement. He visited the premises and, upon examining the cash register receipts and food tickets, ascertained that only approximately 25 to 30 percent of Respondent's business had been from the sale of food and nonalcoholic beverages. On February 9, 1982, White served on Pouser an Official Notice with a compliance deadline of August 9, 1982. On September 15, 1982, White returned to Stage East to make a compliance inspection. After speaking with Pouser and ascertaining that the 51 percent requirement was still not being met, White issued a second Official Notice. Although that Notice contained a compliance deadline of January 1, 1983, White returned to Stage East on December 23, 1982, met with Pouser, and reviewed Respondent's records. A cursory examination revealed that Respondent still had not met the 51 percent requirement.

      
      

   7. Between the time that White first advised Pouser of the 51 percent requirement and the date of the formal hearing in this cause, Respondent attempted to obtain a quota license, which carries no requirements as to food consumption on the premises. For a year, Respondent advertised daily in the Stuart newspaper that it wished to purchase a quota license. Respondent contacted Beverage Officer White, liquor distributors, and owners of quota licenses in Martin County to ascertain if they had a quota license for sale or if they knew someone who did. During this time, the quota license for Harper's became available. The license holder asked $250,000 cash, Respondent offered

      $200,000 cash, and Walgreen's purchased Harper's license for $215,000. By the time of the formal hearing in this cause, Respondent had entered into favorable negotiations for the SR license at Boston's. Although Respondent had inquired whether Petitioner would permit the transfer of Boston's license to Respondent, Petitioner had not answered Respondent's inquiry at the time this cause was heard.

      
      

   8. In addition to taking steps to expand its restaurant area and to obtain an alternate license throughout the time period in question, Respondent did all it could to encourage its customers to purchase food so that Respondent could meet the 51 percent requirement to which its license was subject. Respondent hired an experienced chef and additional kitchen staff in order to offer a larger variety of food at lower prices. Respondent changed its menu to add "quicker" foods and advertised its menu in the Stuart News. Respondent opened for lunch and advertised its daily luncheon specials; advertised its food service when advertising its new "happy hours" and those prices; opened for breakfast after 2:00 a.m.; advertised its dinner programs; hired male dancers to perform during certain hours on Monday nights "for ladies only;" offered discount Prices for women on Tuesdays for "ladies night;" and attempted to attract an older crowd on Sundays by providing a buffet and a Dixieland band or "the big band sound." Respondent increased its radio advertising to six to eight ads a week, sometimes advertising as a restaurant with a nightclub and sometimes only as a restaurant.

   9. Although Respondent had on its premises during 1982 sufficient foods, utensils, and personnel to serve everything on its menus, Respondent started a nightly buffet which was either self-service or could be served by a waitress. The cost of the buffet depended upon the day of the week, with ladies paying a small price on Tuesdays, ladies' night, for example. Sometimes the cost of the buffet (which is collected as the customer enters the premises) included the customer's alcoholic beverages on an "all you care to consume" basis, and sometimes the customer paid for his alcoholic beverages in addition to paying for the buffet. On the evening before the formal hearing, the buffet cost $10, and the price of drinks was not included.

      
      

   10. Since Respondent opened Stage East, it has made continuing good faith efforts to encourage the purchase of food at its premises, to add the "Bennigan's" family-style restaurant, and to obtain an alternate license without the 51 percent requirement. During the three-month period immediately before the formal hearing, Respondent approached, just exceeded, and then just missed the 51-percent mark.

       
       

       CONCLUSIONS OF LAW

       
       

   11. The Division of Administrative Hearings has jurisdiction over the subject matter hereof and the parties hereto. Section 120.57(1), Florida Statutes.

       
       

   12. Respondent has admitted that in 1982 it failed to maintain the sale of food and nonalcoholic beverages as 51 percent of its gross revenue at Stage East, based upon the average monthly gross revenue for the period December 1981 to December 1982, contrary to Section 561.20(2)(a)(3), Florida Statutes, and Sections 7A-3.14 and 7A-3.15(3)(b), Florida Administrative Code; and Petitioner has dismissed with prejudice the other charges in the Amended Notice to Show Cause.

       
       

   13. Section 561.29, Florida Statutes, authorizes Petitioner to revoke or suspend an alcoholic license or to impose a civil penalty against a licensee not to exceed $1,000 for violations of the Beverage Law or rules issued thereunder. It is assumed that, by providing a range of disciplinary action which could be taken, the Legislature presumed that Petitioner would exercise not just discretion but also sound judgment in assessing the severity of the penalty to be exacted. The statute which Respondent admits violating is not one designed to protect the health and safety of patrons but rather is one founded on economic considerations.

       
       

   14. Petitioner recommends revocation of Respondent's license, and Respondent argues that any penalty other than a fine would be unduly harsh since suspension will put Respondent out of business and revocation might mean Petitioner will revoke the other licenses held by one of Respondent's officers and shareholders. Since the violation committed by Respondent does not affect anyone's health or safety; and since, therefore, the severity of the conduct is not such as to justify, or require, the severity of revocation or suspension; and since the time period in question commences immediately upon Respondent's opening one half of its anticipated new business; and since Respondent has continued to try new approaches to building its food-service revenues, only a civil penalty is appropriate at this time. No competent, substantial evidence was offered to show the effect of Respondent's opening its additional 4,000 square feet or the date on which it was opened, if ever. Such evidence would certainly be aggravating or mitigating. The fact that Petitioner did not participate in the withholding of building permit and boning variance approval

does not mean that the governmental delay did not occur. However, Respondent should not benefit from that delay. Accordingly, Petitioner should inspect Respondent's books and records as soon as Respondent has had a reasonable time to expand its facilities, whether or not it does so, to insure compliance with the 51 percent requirement.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding Respondent guilty of the

charge in paragraph numbered one of the Amended Notice to Show Cause, dismissing with prejudice the charges in paragraphs numbered two and three of the Amended Notice to Show Cause, and imposing a civil penalty in the amount of $1,000 to be paid by Respondent within 30 days of the entry of the Final Order in this cause.

DONE and RECOMMENDED this 17th day of February, 1984, in Tallahassee, Leon County, Florida.

LINDA M. RIGOT

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 17th day of February, 1984.

COPIES FURNISHED:

John A. Boggs, Esquire

Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

Charles L. Curtis, Esquire 1177 Northeast Third Avenue

Fort Lauderdale, Florida 33316

Gary R. Rutledge, Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

Docket for Case No: 83-001762

Orders for Case No: 83-001762