STATE OF FLORIDA, DEPARTMENT OF ) BUSINESS REGULATION, DIVISION OF ) ALCOHOLIC BEVERAGES AND TOBACCO, )
vs. ) CASE NO. 84-0764
Respondent. )
A formal hearing was held in this matter before Marvin E. Chavis, a duly designated Hearing Officer of the Division of Administrative Hearings, on March
5 and 6, 1984, in Tampa, Florida.
For Petitioner: William A. Hatch, Esquire
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
For Respondent: Joseph F. McDermott, Esquire
St. Petersburg, Florida 33701
Michael N. Athanason, Esquire 500-First Avenue North
St. Petersburg, Florida 33701 ISSUES AND BACKGROUND
This case concerns the issue of whether the Respondent's beverage license should be suspended, revoked, or otherwise disciplined for multiple sales and transfers of controlled substances on the licensed premises.
At the formal hearing, the Petitioner called as witnesses, Bruce Ashley, Michael Scott Freese, and D. Patton. Petitioner offered and had admitted, Exhibits 1 through 4. Petitioner offered the case report as Petitioner's Exhibit No. 5 and that exhibit was not admitted. Respondents called as witnesses Angela J. McGrath, Gail Robin Davis, Dawn Murray Iafrate, Caroline Beatty, Elizabeth Schubert, Lisa Tucker, Carol Pinizzotto, Kim Stein, Ray Reed, Russel Carlisle "Carl" Stone, Jack Leveritt and Tom Witaker. Jack Leveritt and Tom Whitaker are the shareholders and owners of the Respondent Fresh Start, Inc. The Respondent offered and had admitted into evidence three exhibits.
At all times material to the charges raised in this matter, the Respondent, Fresh Start, Inc., was the holder of a valid beverage license No. 62-661, Series 4-COP. That beverage license is issued to the licensed premises located at 7898 U.S. Highway 19, Pinellas Park, Florida, and known as the Strip Ahoy.
Mr. Jack Leveritt is president of Fresh Start, Inc., and one of the two owners of that corporation. Mr. Tom Whitaker owns 50 percent of the stock of Fresh Start, Inc., and is vice president of that corporation.
Pursuant to a stipulation entered into by and between the parties, on the record at the formal hearing, the following findings of fact are made:
Count 1 - On or about March 9, 1983, Theresa Ann White, also known as Teanna, did unlawfully possess, sell and/or deliver controlled substance, diazepan, as defined in Florida Statute 893.03, to Sheriff's Deputy D. Patton, on the licensed premises.
Count 2 - On or about March 9, 1983, Theresa Ann White, also known as Teanna, did unlawfully possess, sell and/or deliver a controlled substance, diazepan, as defined in Florida Statute 893.03, to Sheriff's Deputy D. Herrick, on the licensed premises.
Count 3 - On or about March 10, 1983, Theresa Ann White, also known as Teanna, did unlawfully possess, sell, and/or deliver a controlled substance, diazepan, as defined in Florida Statute 893.03, to Sheriff's Deputy D. Ferdon, on the licensed premises.
Count 4 - On or about March 12, 1983, Theresa Ann White, also known as Teanna, did unlawfully possess, sell, and/or deliver a controlled substance, as defined in Florida Statute 893.03, cannabis, to Sheriff's Deputy D. Ferdon, on the licensed premises.
Count 5 - On or about March 20, 1983, Joyce Ann Seville, also known as Sherry, did unlawfully possess, sell and/or deliver a controlled substance as defined in Florida Statutes 893.03, Lysergic acid Diathamine, to Sheriff's Deputy C. Kanehl, on the licensed premises.
Count 6 - On or about March 31, 1983, Sherry Ann Peters, also known as Carol, did unlawfully possess, sell, and/or deliver a controlled as defined in Florida Statute 893.03, cannabis, to Sheriff's Deputy D. Herrick, on the licensed premises.
Count 7 - On or about April 1, 1983, Elizabeth Chader, also known as Luwanda, did unlawfully possess, sell and/or deliver a controlled substance as defined in Florida Statute 893.03, cocaine, to Sheriff's Deputy C. Kanehl, on the licensed premises.
Count 8 - On or about November 29, 1983, Theresa Yerby, also known as Brandy, did unlawfully possess, sell, and/or deliver a controlled substance as defined in Florida Statute 893.03, cannabis, to Sheriff's Deputy C. Kanehl, on the licensed premises.
Count 9 - On or about December 15, 1983, Theresa Yerby, also known as Brandy, did unlawfully possess, sell, and/or deliver a controlled substance as defined in Florida Statute 893.03, cocaine, to Sheriff's Deputy C. Kanehl, on the licensed premises.
Count 10- On or about January 8, 1984, Kimberly Grenzbach, also known as Kimberly, did unlawfully possess, sell, and/or deliver a controlled substance as defined in Florida Statute 893.03, cocaine, to Beverage Investigators M. Freese and B. Ashley, on the licensed promises.
Count 11 - On or about January 12, 1984, Theresa
Yerby, also known as Brandy, did unlawfully possess, sell, and/or deliver a controlled substance as defined in Florida Statute 893.03, cocaine, to Sheriff's Deputy C. Kanehl, on the licensed premises.
Count 12 - On or about January 12, 1984, Cherie Webber, also known as Cherie, did unlawfully possess, sell, and/or deliver a controlled substance as defined in Florida Statute 893.03, cocaine, to Beverage Investigator M. Freese, on the licensed premises.
Count 13 - On or about January 12, 1984, Kimberly Grenzbach, also known as Kimberly, did unlawfully possess, sell, and/or deliver a controlled substance as defined in Florida Statute 893.03, cocaine, to Beverage Investigator M. Freese, on the licensed premises.
Count 14 - On or about January 12, 1984, Kimberly Grenzbach, also known as Kimberly, did unlawfully possess, sell, and/or deliver a controlled substance as defined in Florida Statute 893.03, cocaine, to Beverage Investigator B. Ashley, on the licensed premises.
Count 15 - On or about January 13, 1984, Cherie Webber, also known as Cherie, did unlawfully possess, sell, and/or deliver a controlled substance as defined in Florida Statute 893.03, cocaine, to Beverage Investigator B. Ashley, on the licensed premises.
Count 16 - On or about January 13, 1984, Kimberly Grenzbach, also known as Kimberly, did unlawfully possess, sell, and/or deliver a controlled substance as defined in Florida Statute 893.03, methaqualone, to Beverage Investigator M. Freese, on the licensed premises.
Count 17 - On or about January 17, 1984, Kimberly Grenzbach, also known as Kimberly, did unlawfully possess, sell, and/or deliver a controlled substance as defined in Florida Statute 893.03, methaqualone, to Beverage Investigator M. Freese, on the licensed premises.
Count 18 - On or about January 17, 1984, Kimberly Grenzbach, also known as Kimberly, did unlawfully possess, sell, and/or deliver a controlled substance as defined in Florida Statute 893.03, methaqualone, to Beverage Investigator B. Ashley, on the licensed premises.
Count 19 - On or about January 19, 1984, Christie Howard, also known as Christie, did unlawfully possess, sell, and/or deliver a controlled substance as defined in Florida Statute 893.03, methaqualone, to Sheriff's Deputy C. Kanehl, on the licensed premises.
Count 20 - On or about January 28, 1984, Kimberly Grenzbach, also known as Kimberly, did unlawfully possess, sell, and/or deliver a controlled substance as defined in Florida Statute 893.03, methaqualone, to Beverage Investigator M. Freese, on the licensed premises.
Count 21- On or about February 3, 1984, Theresa Yerby, also known as Brandy, did unlawfully possess, sell, and/or deliver a controlled substance as defined in Florida Statute 893.03, cannabis, to Beverage Investigator B. Ashley, on the licensed premises.
Count 24 - On or about the below listed dates and times, entertainers Cody, Cherie, Valerie, Kimberly, Kim and Gayla, while actively engaged as dancers on the licensed premises, did unlawfully beg or solicit, patrons, customers or visitors, Beverage Investigators B. Ashley, D. O'steen and M. Freese to purchase beverages for the entertainers.
NO. DATE APPROX. TIME EMPLOYEE VICTIM
1 | 4-6-83 | 10:00 | P.M. | CODY, dancer | O'STEEN |
2 | 4-6-83 | 11:45 | P.M. | CODY, dancer | O'STEEN |
3 | 1-6-84 | 8:00 | P.M. | CHERIE, dancer | FREESE |
4 | 1-6-84 | 8:50 | P.M. | CHERIE, dancer | FREESE |
5 | 1-17-84 | 8:50 | P.M. | CHERIE, dancer | FREESE |
6 | 2-3-84 | 10:15 | P.M. | CHERIE, dancer | FREESE |
7 | 2-3-84 | 10:30 | P.M. | GAYLA, dancer | ASHLEY |
8 | 2-3-84 | 11:00 | P.M. | KIMBERLY, dancer | FREESE |
9 | 2-7-84 | 7:15 | P.M. | KIM, barmaid | ASHLEY |
10 | 2-7-84 | 7:30 | P.M. | VALERIE, dancer | ASHLEY |
11 | 2-7-84 | 11:20 | P.M. | KIM, barmaid | FREESE |
The transaction referred o in Count I above, occurred on the evening of March 9, 1983. On that particular evening, Deputy D. Patton entered the licensed premises with too other undercover officers and was approached by a dancer named Theresa White. Ms. white and Officer Patton began talking and during the course of the conversation, Ms. White offered to obtain some Valium for Deputy Patton. Officer Patton indicated that he would be interested in purchasing some valium and Ms. White then left him and was seen talking with another dancer at the bar area. A short time later she came back and said there was none left at that time but that she was going to get some later in the evening. Approximately 1 1/2 hours later, she returned to Officer Patton and indicated that she had obtained the diazepan. Officer Patton paid her $5.00 and she gave four diazepan (Valium) tablets to Officer Patton. The money and the tablets were passed under the table out of sight.
The purchase of cocaine referred to in Count 10 above occurred on the evening of January 8, 1964. On that particular evening, Beverage Officers B. Ashley and M. Freese, went to the licensed premises and upon entering sat along the west wall of the main lounge area. They were joined by a dancer named Kimberly Grenzbach. They had previously discussed buying some cocaine from Kimberly Grenzbach. Shortly after they arrived, Kimberly and Officer Freese went into the back room of the lounge.
The Strip Ahoy Lounge is built somewhat in the shape of a ship with the bow pointing toward the north. In the northern most portion of the lounge is located an office and a dressing room separated by a wall. Just outside the office is a square bar area with stools surrounding the bar. This bar is located in the main lounge portion of the bar which is a room approximately 63
feet long and 27 feet wide. In the southwest corner of the building is located the men's and women's restroom. The back room referred to above is a room located at the southeast corner of the lounge with a doorway leading into the main lounge. This back room is used for table or lap dancing.
When Officer Freese and Kimberly went into the back room, they sat at a table and Kimberly took two triangular shaped plastic baggies containing cocaine out of her purse and handed them to Freese. She made no attempt to conceal these baggies. Freese then examined the baggies and handed her $100. The money was handed to her above the table and in the open. The total purchase price of the 2 grams of cocaine was $200 and Freese told Kimberly that Ashley had the other $100. Kimberly and Freese them returned to a large lounge area and sat next to Ashley who then gave the additional $100 to Kimberly.
On the evening of January 9, 1984, Officer Freese was in the Strip Ahoy Lounge and went into the back room with Kimberly to examine some cocaine she was proposing to sell him. After entering the back room, they sat at a table and Kimberly took two small plastic baggies of cocaine out of her purse and handed them to Freese. Freese then examined the baggies and said they looked short to him. About that time Cherie Webber and her ex-boyfriend came into the back room and sat at a table. Kimberly then said "Cherie would know if anyone would" whether the baggies were short. Kimberly and Freese then walked over to Cherie's table and Kimberly handed the two baggies to Cherie, who held them up and examined them. Cherie said they looked short to her and she then handed them to her boyfriend who examined them and said it looked like about $60 worth to him.
On the evening of January 12, 1984, Officers Ashley and Freese returned to the Strip Ahoy and made the drug purchases referred to in Counts 12, 13, and
14 discussed above. Prior to entering the lounge that evening, the two officers had made arrangements to buy cocaine from Kimberly Grenzbach. After they entered the lounge, they sat and waited for Kimberly and were approached by another dancer named Cherie Webber. Cherie walked by and asked if they wanted any "coke." Coke is a street term or slang for cocaine. Freese and Ashley told her they had already made arrangements to buy some from Kimberly. Cherie then said that she had hers with her now and Freese asked her about the quality of the coke she had. She responded that hers was always good quality. Cherie then sat down and agreed to sell Freese a half gram and said she needed to go into the bathroom because she had a large bag in her purse and she didn't want the small baggies to fall on the fiber when she opened her purse. She went to the bathroom and returned a short time later and sat next to Freese. Ashley was seated on the other side of Freese and observed Cherie hand a small, clear plastic baggie of cocaine to Freese. Freese then handed $50 to Cherie.
After completing the purchase from Cherie, Freese went into the back room with Kimberly. They sat at a table and Kimberly handed him two plastic baggies containing cocaine. He held them up and examined them very carefully because of the problem he had on January 9. He tapped the baggies as he examined them and then selected one of the two baggies. He then handed $100 to Kimberly and told her she would have to talk to Ashley about the other gram of cocaine. Handing over the cocaine and the cash was done openly and not concealed.
Later, on the evening of January 12, 1984, Freese and Ashley were approached by Kimberly, who walked up and told Ashley she had his cocaine. Ashley then went into the back room with Kimberly and sat at a table. Kimberly handed a clear plastic baggie containing cocaine to Ashley. Ashley held it up at eye level and examined it and then handed cash to Kimberly. There were other patrons and dancers in the room at the time.
After purchasing the cocaine from Kimberly, Freese had spoken to Cherie once again and told her that Ashley wanted another half gram. When Ashley rejoined Freese, they left the bar to obtain more money and returned after midnight. While sitting in the back room with a dancer named Brandy, Ashley was approached by Cherie who walked up and asked if he wanted the half gram. She took a large baggie out of her purse. The large baggie contained several small baggies. Ashley then told Brandy she would have to move so he could get some money out of his pocket. He handed $50 to Cherie and she handed him a small baggie containing cocaine. This transaction was openly viewed by Brandy, Kimberly Grenzbach, and Officer Freese. This purchase is referred to in Count 15 above.
The purchase discussed in Count 16 above occurred on the evening of January 13, 1984. Prior to going to the Strip Ahoy, Officer Freese had telephoned Kimberly and made arrangements to buy some "gorilla biscuits" which is slang for Quaaludes or methaqualone. After entering the lounge Kimberly walked up to Freese and said she had the Quaaludes. They then went into the back room and sat at a table. Kimberly was working as a dancer this evening and when they sat down, another dancer named Nellie was performing a lap dance for a patron at the next table. Kimberly handed Freese a clear cellophane packet containing 6 capsules of methaqualone. Freese paid her $24. There was no attempt to conceal the transfer of the cash or the methaqualone.
On January 17, 1984, Officers Freese and Ashley returned to the licensed premises. They had previously arranged to buy some methaqualone from Kimberly Grenzbach. Shortly after arriving, Freese went into the back room with Kimberly where he purchased three Quaaludes (methaqualone capsules). Prior to paying Kimberly the agreed $12 price, Officer Freese examined the capsules. The cash and capsules were exchanged in open view with no attempt to conceal the exchanges.
After completing the transaction with Freese, Kimberly returned to the main lounge area where Ashley was waiting. She took Ashley into the back room where she took a clear cellophane cigarette packet containing 3 capsules of methaqualone out of her purse and handed them to Ashley. Ashley then handed her
$12 cash. There was no attempt by either of them to conceal the transfer of the drugs or cash.
Officer Freese returned to the licensed premises on January 28, 1984, and made the drug purchase referred to in Count 20 above. Freese had previously phoned Kimberly Grenzbach and arranged to buy 25 methaqualone capsules. When he entered the licensed premises, Freese sat next to the west wall in the main lounge area. He was reined by Kimberly Grenzbach, who told him she had the Quaaludes. She said she would have to go into the dressing room and get them out of the locker. She left and returned a short time later and sat next to Freese. She placed a clear plastic baggie containing the 25 methaqualone capsules on the bench seat between them. Freese picked up the bag and looked at the capsules. Someone walking by at that moment could have seen the bag and capsules. Freese then handed Kimberly $100 in cash.
On the evening of February 1, 1984, Officers Freese and Ashley were again in the licensed premises. At one point Officer Freese observed Kimberly Grenzbach talking with a gentleman seated at the bar. Kimberly left the man and walked over to Freese. She said the man at the bar had asked her to go in the back room and dance for him and snort some cocaine. Later, Freese and Kimberly went into the back room and sat at a table. They observed a dancer named Nellie come into the back room with the gentleman that Kimberly had previously been talking to at the bar. Nellie and the man sat at a table across the room from Freese. Freese observed the man take something out of his pocket, pour it on the table and line it up on the table. Kimberly said the man was going to snort coke with Nellie. The man then bent ever the table and made a loud snorting noise. Nellie then bent over the table and made a loud snorting noise.
While this was occurring, Officer Ashley had come into the back room to look for Freese. When Ashley entered, Kimberly said, "Hey go over there and tell them you are a cop." Ashley observed Nellie and her male companion lining up a white powder on the table and then heard and observed a loud sniffing of the powder. This is typically the way cocaine is snorted or sniffed. Although the lights were fairly dim, there was sufficient light to observe people completely across the room.
While on the licensed premises, Officer Ashley observed numerous other patrons and customers make drug purchases in the lounge. On the first three drug purchases made by Ashley, the dancer selling the drugs initiated the discussion and offered to sell drugs prior to any inquiry about drugs by Ashley.
The Strip Ahoy is a topless bar and during the dates discussed above, the women involved in the drug purchases were working as dancers at the lounge. Each of the dancers was required to sign a contract before coming to work at the lounge. They were not paid a salary but danced solely for tips. They received no benefits such as workmen's compensation or Social Security from the Respondent. The contracts (see Respondent's composite Exhibit 2A through 2H) stated that the dancers were of three dances on a stage in an order established by Carl, the doorman. Carl Stone, the doorman and manager, would in the evenings, use a microphone and sound system to inform each dancer when it was her time to dance. While they were not dancing on the stage, the dancers would sit with patrons and perform table or lap dances for them in the back room. The lounge retained the right to approve or disapprove of a particular dancer's dance routine. Carl Stone supervised the dancers, and along with the owners, had the right to fire any dancer. Patrons, at least in part, came to the lounge to see the dancers perform. The lounge decided which dancers worked days and which dancers worked at night.
Each dancer was given a copy of the House Rules and a copy was posted in the dressing room. These rules provided:
Keep yourself well groomed at all times.
Have attractive attire to wear when not performing.
No Husbands, Boyfriends, ETC! Allowed while working.
No one is to frequent club during off hours. No smoking or drinking while on stage.
Only one girl on the stage at a time. No talking while on stage performing.
Do not leave club except in street clothes. No sitting on stage bar.
No more than two Ladies in dressing room at a time. (Except during beginning or ending of shift.)
Any Dancer threatening another will be dismissed.
Do not engage in any act which could be considered Lewd or Lascivious.
Any Dancer stealing from a customer or other employees will be dismissed and prosecuted.
Anyone suspected of Using, Buying or Selling of Drugs will be dismissed immediately.
NO LOUD TALKING OR SHOUTING IN ROOM. KEEP YOUR VOICES DOWN. NO WHISTLING!!
The individual who was responsible for the management and supervision of the club in the evenings from 7:00 p.m. to closing time at 2:00 a.m. was Carl Stone. He controlled the conduct of the dancers. Carl Stone was employed by the lounge as a salaried employee from April 1983 to August 26, 1983. In August, 1983, Carl Stone was also required to enter into a contract which stated he was an independent contractor and not entitled to a salary or other benefits. He was subject to the supervision, orders, advise, and direction of Respondent and was to provide management of the exotic dancers. Mr. Stone performed the same function and duties after this agreement as he did before the agreement was executed. When the owners were absent from the lounge at night, Carl was the sole person in charge. He worked at the door and collected the cover charge from 7:00 p.m. until 1:15 a.m. The first eight months of operation, Tom Whitaker was in the club almost every night. However, the last four months of operation, he generally did not come into the club until midnight or 1:00 a.m.
On Friday and Saturday nights, there were two waitresses in the lounge. On other nights there was only one waitress. The waitresses were responsible for serving drinks in the lounge area and the back room and were the persons responsible for checking on the activities of the dancers in the back room on a regular basis. The back room could not be observed from the bar area, the office, or the entrance area. The door of the office has a two-way mirror which permits the owners to observe most of the main lounge from the office.
During the year 1983, the owners gave polygraph exams on two occasions to all employees. One waitress, named Elizabeth Chader, had previously worked as a dancer and was fired after failing the polygraph on two questions relating to money and knowledge of drug activity on the licensed premises. This woman was also known as Luwanda and is the individual who sold drugs referred to in Count 7 discussed above. One of the owners, Jack Leverett, was questioned by the police about this dancer some time after she was fired and he gave them all the information he had.
Dancers were not considered employees and were only polygraphed if a specific complaint was received. No dancers were polygraphed regarding drug activity. One dancer was fired after a bartender caught her with a needle in her arm in the restroom and reported it to the owners. Carl fired one dancer named Nikki after he observed her erratic behavior and found needle tracks on her arm.
On at least two occasions, the owners called the Pinellas Park Police Department regarding suspected drug activity by patrons in the club. No such calls were made about any of the dancers at the club.
When the club initially opened, a lot of "bikers" or motorcycle gang members frequented the club. The owners used a strict dress code and discouragement to eliminate these types of patrons from the club.
The main lounge area and back room are dimly lit with candles on each table. The stage in the main lounge has lights in the floor and running red lights above. There are also lights in the bar area. The dim lighting makes it more difficult to observe the activities of dancers and patrons in the bar.
The number of dancers in the club varied from 6 to 10 per shift. Typically, over an entire shift between 100 to 150 patrons would come into the club.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding.
Section 561.29(1)(a), Florida Statutes (1981), empowers the Division of Alcoholic Beverages and Tobacco to revoke or suspend an alcoholic license if it finds that the licensee or his agents, servants, or employees are permitting another on the licensed premises to violate any of the laws or this state or the United States. Section 561.01(11), defines the "licensed premises" to include the building area where alcoholic beverages are served and the area embraced within the sketch of the premises attached to the license application. Based upon the evidence, the licensed premises in this case includes the main lounge area, the back room for table dancing, the dressing room, office, and restrooms.
In the instant case, the Respondent is charged with multiple violations of Sections 893.13(1)(a) and 561.29 (1)(a), Florida Statutes (1981), as a result of dancers Theresa Ann white, Joyce Anne Seville, Sherry Thin Peters, Elizabeth Chader, Theresa Yerby, Kimberly Grenzbach, Cherie Webber, and Christie Howard selling or delivering controlled substances on March 9, 10, 20, and 31, 1983, April 1, 1983, November 29, 1983, December 15, 1983, January 8, 12, 13, 17, 19, and 28, 1984, and February 3, 1984. Respondents are also charged with maintaining their establishment as a place resorted to by persons using drugs in violation of Sections 893.13(2)(a)(5) and 561.29(1)(a), Florida Statutes (1981). Count 23 of the Notice to Show Cause alleges that Respondent operated a nuisance in violation of Section 823.10 and 561.29 (1)(a) and (c), Florida Statutes (1981). The last count of the Notice to Show Cause charges that the Respondent violated Florida Statute 562.131(1) as a result of several dancers soliciting customers or patrons to buy beverages in the licensed premises.
A license may be disciplined by the Division if the licensee is found guilty of "maintaining a nuisance on the licensed premises." Section 561.29(1)(c), Florida Statutes (1981). Section 823.10 of the Florida Statutes declares a place or building where controlled substances are illegally kept, sold, or used to be a nuisance.
Florida Statute 893.13(2)(a)(5) 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.
A violation of this section also constitutes a violation of the Beverage Law through Section 561.29(1)(c), Florida Statutes.
Cannabis, cocaine, diazepan, and methaqualone are controlled substances and it is a violation of state law to sell, use, deliver, or possess them. Section 893.13, Florida Statutes (1981).
In order to discipline Respondent's license, the Division of Alcoholic Beverages and Tobacco must prove the Respondent was culpably responsible for the violations alleged; that he is guilty either of intentional wrongdoing, or of condoning wrongdoing or failing to exercise due diligence in supervising and maintaining surveillance over the licensed premises. See, e.g., Bach v. Florida State Board of Dentistry, 378 So. 2d 34 (Fla. 1st DCA 1980); Pauline v. Lee, 147 So. 2d 359 (Fla. 2d DCA 1962); Golden Dolphin II v. State of Florida, Division of Alcoholic Beverages and Tobacco, 403 So. 2d 372 (Fla. 5th DCA 1981); G. & B. of Jacksonville, Inc. v. State, 371 So. 2d 137 (Fla. 1st DCA 1979).
Although a single isolated incident may not serve as a basis for disciplining a beverage license, where the evidence shows a persistent or recurring activity, the fact finder may infer the licensee had knowledge. Golden Dolphin II v. State, supra, G. & B. of Jacksonville, Inc., d/b/a Out of
Sight v. State, 371 So. 2d 205 (Fla. 1979), Pauline v. Lee, 147 So. 2d 359 (Fla. 2d DCA 1962). A licensee may not remove itself from responsibility by not being present on the premises or by claiming ignorance of the repeated violations.
Pauline v. Lee, supra; G. & B. of Jacksonville, Inc. v. State, 371 So. 2d 137 (Fla. 1st DCA 1979).
The Respondent contends that the dancers were independent contractors and not employees and that Respondent is not therefore liable for their actions. The key issue in determining whether a person is an employee or independent contractor is the degree of control exercised over the individual hired.
Collins v. Federated Mutual Implement and Hardware Insurance Company, 247 So. 2d
461 (Fla. 4th DCA 1971); Higgins v. Investors Acceptance Co. of Miami, 287 So. 2d 724 (3d DCA Fla. 1974); Crawford v. Department of Military Affairs of the State of Florida, 412 So. 2d 449 (Fla. 5th DCA 1982). The test in such an issue has been defined as:
Generally the test of what constitutes independent service lies in the control exercised, the decisive question being who has the right to direct what shall be done, and when and how it shall be done. The right of control as to the mode of doing the work contracted for is the principal consideration in determining whether one is employed as an independent contractor or as
a servant. The relationship of employer and employee requires control and direction by the employer over the actual conduct of the employee. This exercise of control over the person as well as the performance of the work to the extent of prescribing the manner in
which the work shall be executed and to the method and details by which the desired result is to be accomplished, is the feature that distinguishes an independent contractor from a servant. 17 Fla. Jur., Independent Contractors s. 4.
Collins v. Federated Mutual Implement and Hardward Insurance Co., supra at 463-464.
Under this test, the dancers in the instant case are clearly employees and not independent contractors. In hiring the dancers, the Respondent retained the right to set a dress code, approve or disapprove of dance routines, and to hire and fire the dancers. The Respondent also controlled whether they worked days or nights and set the order in which they danced. The Respondent established the number of dances to be performed each set on the stage. The conduct of the dancers while on the licensed premises was subject to the supervision and control of the Respondent and its manager.
There is no question in the instant case that the dancers made the sales of controlled substances as charged in the Notice to Show Cause and that they solicited patrons to purchase beverages. At the time these incidents occurred, the dancers were on duty at the Strip Ahoy and held the status of employees. The only remaining issue is whether the Respondent is culpable and thus guilty of the violations charged.
Where the unlawful activity is committed by a licensee's agent or employee simple negligence is sufficient for disciplinary action including revocation. Lash, Inc. v. Department of Business Regulation, 411 So. 2d 276 (Fla. 3d DCA 1982). It is not necessary that an owner have actual knowledge of the various transactions. Where recurring sales are made possible by appellant's failure to supervise the premises and his employees in a reasonably diligent manner, the owner is culpable. Lash, Inc. v. Department of Business Regulation, supra. In the instant case, there was no evidence that the owners had actual knowledge that the dancers were dealing drugs. However, the owners were on notice of the potential for such activity. Two patrons had been reported to the police for suspected drug activity. One waitress, who was originally a dancer at the club, showed a misleading response to a question regarding knowledge of drug activity in the club during a polygraph exam. Two dancers were fired because of drug use. Even in light of this knowledge, the owners relied solely on a single waitress and on two nights a week two waitresses to regularly check the back room where most of the drug buys occurred. The dim lighting and isolation of the back room coupled with inadequate supervision created a haven for drug dealing. The back room could not be observed from the bar area, the door where Carl Stone was stationed, or the office.
The owner created a lounge layout that made supervision and control of the back room virtually impossible and failed to provide adequate supervision and control throughout the club. This made the numerous and recurring drug transactions discussed above possible and makes the owner culpably responsible for these unlawful sales of drugs.
The Respondent is guilty of the violations as charged in Counts 1 through 21 and Count 24. The evidence also established that the Strip Ahoy Lounge is a place resorted to by persons using controlled substances and used for keeping or selling drugs. Under the facts of this case, the licensed premises also constitute a nuisance as defined in Section 823.10, Florida Statutes (1982). Respondent is therefore guilty of the violations charged in Counts 23 and 24 of the Notice to Show Cause.
Penalty: License 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 (Fla. 2d CA 1962). In this case, the owners were on notice of a potential drug problem. No particular employee was given the specific responsibility of security and monitoring the activities of the dancers. A minimum staff was utilized during the week and only a waitress was used to check the back room. This total lack of security in the isolated back room created an atmosphere where the dancers felt free to transfer, use, and joke about drugs.
The owners did cooperate with the police on three different occasions and fired some dancers suspected of drug use. However, this falls far short of reasonable supervision. There was no evidence of any prior beverage violations or disciplinary actions. Under these circumstances it is concluded that an appropriate penalty is a nine (9) month suspension of the beverage license and a
$10,000 fine.
Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED
That the Petitioner enter a final order finding the Respondent guilty of the violations as charged in the Notice to Show Cause and suspending Beverage License No. 82-661 for a period of nine (9) months and imposing a civil penalty of $10,000.
DONE AND ENTERED this 15th day of March, 1984, in Tallahassee, Florida.
MARVIN E. CHAVIS
Filed with the Clerk of the Division of Administrative Hearings this 15th day of March, 1984.
William A. Hatch, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
Joseph F. MeDermott, Esq.
544 First Avenue North Division of Administrative St. Petersburg, Florida
Michael N. Athanason, Esq. 500-First Avenue North
St. Petersburg, Florida 33701
Howard M. Rasmussen, Director Division of Alcoholic Beverages
Gary R. Rutledge, Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
