STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 84-1157

) GREEN FROG ENTERPRISES, INC., ) d/b/a THE GREEN FROG, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing on April 4, 1984, in Pensacola, Florida, before the Division of Administrative Hearings and its duly appointed Hearing Officer, R. T. Carpenter. The parties were represented by:

For Petitioner: James N. Watson, Esquire

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

For Respondent: Ernest L. Cotton, Esquire

3 Plew Avenue

Shalimar Florida 32579

This matter arose on Petitioner's Notice to Show Cause/Administrative Complaint charging Respondent with various violations involving the alleged use and sale of controlled substances in Green Frog lounge. On the basis of these allegations, Petitioner suspended Respondent's alcoholic beverage license by Emergency Order dated March 27, 1984.

FINDINGS OF FACT

1. Respondent holds alcoholic beverage license no. 56-526, Series 2-COP. The licensed premises is known as the "Green Frog" and is located at 1216 Santa Rosa Boulevard, Fort Walton Beach, Florida. The corporate officers of Respondent are Charles J. Schoener, Marlene D. Schoener, Mitch M. Smith and Charles M. Hall.

   
   

2. On September 27, 1983, Investigator Robert Randle of the Gulf Breeze Police Department was approached by two individuals as he exited the licensed premises of the Green Frog and was asked if he wanted to purchase some marijuana. While discussing the marijuana purchase, Randle was approached by the Green Frog doorman who was working on the premises that night. The doorman,

   known as "Animal," inquired of Randle if he wanted to buy a small quantity of cocaine and displayed a small plastic baggie containing a white substance which he offered to sell for $30. After paying the doorman $30 for the small package represented to be cocaine, Randle submitted the contents for chemical analysis. Subsequent analysis revealed the presence of no controlled substance.

   
   

3. On or about February 18, 1984, Officer Randle again entered the licensed premises of the Green Frog in an undercover capacity. While on the licensed premises, Randle contacted a dancer known as "Angel." Randle asked Angel where he could obtain some narcotics and she directed him to her apartment. Randle went to the apartment but was unable to purchase any drugs. He returned to the Green Frog and told Angel that he had been unsuccessful. She left Randle's presence but later delivered a partial marijuana cigarette to him on the licensed premises. Subsequent analysis of the partial cigarette showed the contents to be cannabis/marijuana.

   
   

4. On or about February 28, 1984, Officer Randle again entered the licensed premises in an undercover capacity. On this date, he made contact with a dancer known as "Sugar" and asked her if he could obtain some marijuana or cocaine. Sugar directed Randle to the dancer Angel's apartment where he was told he could purchase a baggie of marijuana. Upon reaching the apartment Officer Randle informed Angel that Sugar had told him he could buy a bag of marijuana from her. At this time Angel sold a baggie of marijuana to Officer Randle for $25. Subsequent analysis of the baggie's contents revealed that it contained cannabis/marijuana.

   
   

5. On or about March 6, 1984, Officer Randle returned to the licensed premises as part of this investigation. Upon entering, Randle engaged the dancer Sugar in conversation and advised her he was looking for narcotics. Shortly thereafter, Sugar told Randle he could purchase one-quarter gram of cocaine for $25. Later, she informed him that she was obtaining the cocaine from another dancer who would only sell half-gram amounts for $50. Randle then gave Sugar $50 and observed Sugar leave his table, speak to an unidentified dancer and return to his table. Sugar then handed Randle a plastic baggie containing a white powdery substance. Subsequent analysis of the contents of the bag showed that it contained cocaine.

   
   

6. On or about March 17, 1984, Officer Randle again entered the licensed premises as part of the ongoing investigation. Randle made contact with the dancer "Kelly" and the dancer "Lisa." Randle told Kelly that he had "scored" some good cocaine previously from the dancer Sugar and that he was looking for her. In response to this statement, Kelly informed Randle that she had supplied Sugar with the cocaine and that she could sell him a half-gram of cocaine for

   $50 that evening. Later, Randle was approached by the dancer Lisa who asked him if he was holding some cocaine. Randle informed her that he was looking for cocaine and asked her if she could sell him some. Lisa also told him that she was waiting for her supplier and that she would sell him a $50 package when the supplier arrived. While waiting for the supplier to arrive on the premises, Randle was again approached by Lisa who gave him the phone number of her supplier and suggested he call the supplier and tell him to come to the licensed premises with the cocaine. Later, a male patron arrived at the premises and was observed talking to Lisa by Randle. Shortly thereafter, both Lisa and Kelly delivered small plastic baggies containing white substances to Randle who was seated at a table. Both deliveries were made inside the lounge in plain view.

   Subsequent analysis confirmed that both packages contained cocaine.

7. Beginning around late February 1984, Mr. Tim Forehand regularly sold and supplied cocaine on the licensed premises. His sales were generally in one- half gram packages and the dollar amount of such sales on the licensed premises ranged from $200 to $1800 per night. Forehand supplied the cocaine on March 17, 1984, to the dancers Lisa and Kelly who then sold this substance to Officer Randle. Forehand also sold cocaine six or eight times to a corporate officer's son, David Schoener, who worked as a bartender on the licensed premises. On one occasion, Charles Schoener barred Forehand from the licensed premises for dealing drugs. He was, however, allowed back onto the premises within one week,

   
   

8. The testimony of Lisa Dixon, Melissa Crawford (a/k/a Sugar) and Tim Forehand indicated that drug use and sales in the licensed premises were open and extensive. Sugar testified that see had used cocaine with Charles Hall, an officer-owner, on the licensed premises. Similarly, Lisa Dixon testified that she was in the presence of Charles Schoener on an occasion when he used cocaine in the licensed premises.

   
   

9. In their testimony, Charles Schoener and Charles Hall denied using drugs on the licensed premises. Their testimony and that of a third owner- manager, Mitch Smith, a bartender, Jim Ellis, and a dancer, Evangeline Potts, indicated that drug use and sales were rarely observed and that action was taken to bar customers or warn employees when such incidents occurred.

   
   

10. The documentary evidence and testimony of both Petitioner's and Respondent's witnesses established that Respondent had a stated policy against drug use or possession on the premises. Employee rules to this effect had been adopted and posted for over a year and periodic employee meetings were held at which the no drug policy was discussed. However, enforcement was not vigorous as indicated by the fact that Forehand was allowed to return to the Green Frog even though he had earlier been barred for drug activity. Further, Charles Schoener, the corporation president, did not discharge the dancer Kelly, even when he suspected her of illegal drug activity on the licensed premises.

    
    

11. Much of the testimony of the witnesses with the exception of Officer Randle and Officer Kiker (who was not directly involved), was self-serving and lacking in credibility. Forehand, Dixon and Crawford have all been arrested and charged with criminal offenses. They were advised that their cooperation in this proceeding could favorably effect their sentences if convicted. Respondent's witnesses are owners and employees of the licensed premises, and thus have a stake in preserving the beverage license.

    
    

12. In addition to their denials, the purported use of cocaine by Charles Schoener and Charles Hall on the licensed premises in the presence of their employees is inconsistent with their efforts to prohibit or at least discourage drug use. Further, the testimony of Officer Randle indicates that drug sales and use were not "wide open" as claimed by Petitioner's other witnesses. Randle visited the licensed premises in an undercover capacity on numerous occasions beginning September 27, 1983, but was not able to obtain a delivery of a controlled substance until February 18, 1984.

    
    

    CONCLUSIONS OF LAW

    
    

13. Section 561.29, Florida Statutes, provides in part:

    
    

    1. 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 determined or found by the division upon sufficient cause appear- ing of:

       1. Violation by the licensee or his or its agents, officers, servants, or employees, on the licensed premises, or elsewhere while in the scope of employment, of any of the laws of this state or of the United States, or violation of any municipal or county regula- tion 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.

       2. Violation by the licensee or, if a corporation, by any officers thereof, of any laws of this state or any state or territory of the United States.

       3. Maintaining a nuisance on the licensed premises.

          
          

14. 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.

    
    

15. These provisions have been construed to permit license suspension or revocation only where the license holder had 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/

    
    

16. In Lash, Inc. v. State, Department of Business Regulation, 411 So. 2d

    276 (Fla. 3rd DCA 1982) a license revocation was upheld where it was established that beverage agents had on five occasions over a one week period, purchased controlled substances from two of appellant's employees. The Court noted therein that where the laws are repeatedly and flagrantly violated by employees of the licensed premises, an inference arises leading to the conclusion that such violations are either fostered, condoned, or negligently overlooked by the licensee.

    
    

17. Petitioner has charged and proven that four of Respondent's employees

    made five separate deliveries of controlled substances 3/ to its investigating officer 4/ during the one month period between February 18 and March 17, 1984. These are persistent and recurring violations, and not single, isolated incidents which the Courts have found excusable. Thus, Respondent is subject to the disciplinary provisions cited above.

    
    

18. Section 823.10, Florida Statutes, declares as a public nuisance any place which is visited by persons for the purpose of unlawfully using controlled substances. Subsection 893.13(2)(a)5, Florida Statutes contains similar provisions. Subsection 561.29(1)(c), Florida Statutes (quoted above) also condemns the maintenance of a nuisance.

    
    

19. Petitioner established that illegal drug activity was recurring during at least the final weeks of its investigation. Forehand made regular sales of controlled substances to the dancers and the bartender David Schoener during this period. Additionally, Officer Randle was able to make regular purchases from dancers during this period. Thus, Respondent is guilty of maintaining a nuisance in violation of Sections 561.29(1)(c), 823.10, and 893.13(2)(a)5, F.S. 5/

    
    

20. Count 1 of the Notice to Show Cause/Administrative Complaint did not involve a controlled substance. Petitioner abandoned Counts 9 and 10. Therefore, Counts 1, 9, and 10 are dismissed.

    
    

21. Petitioner seeks to revoke Respondent's license. However, "the outright revocation of a beverage license is a most serious and drastic penalty, even in a flagrant case. . . ." 6/ Here, Respondent had no previous convictions and made at least some effort to control the illegal drug activity. Therefore, the penalty of revocation is not warranted.

    
    

22. The parties submitted proposed findings of fact and conclusions of law. To the extent these proposed findings have not been adopted or otherwise incorporated herein, they are found to be subordinate, cumulative, immaterial, unnecessary or not supported by the evidence.

RECOMMENDATION

From the foregoing, it is RECOMMENDED:

That Petitioner enter a Final Order suspending Respondent's alcoholic beverage license for a period of 90 days, including the emergency suspension now in effect.

DONE and ENTERED this 17th day of April, 1984, in Tallahassee, Florida.

R. T. CARPENTER 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 April, 1984.

ENDNOTES

1/ G & B Jacksonville, Inc. v. State, 371 So. 2d 138; 371 So. 2d 138; 371 So. 2d 1074 (Fla. 1st DCA 1979); Pauline v. Lee, 147 So. 2d 359 (Fla. 2nd DCA 1962).

2/ Id.

3/ Cannabis and cocaine are controlled substances under Chapter 893, F.S., which makes possession or use of these substances illegal except in circumstances not applicable here.

4/ Notice to Show Cause/Administrative Complaint, Counts 2, 3, 4, 5, and 6. 5/ Notice to Show Cause/Administrative Complaint, Counts 7 and 8.

6/ Taylor v. State Beverage Department, 194 So. 2d 321, 329 (Fla. and DCA 1967).

COPIES FURNISHED:

James N. Watson, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

Ernest L. Cotton, Esquire

3 Plew Avenue

Shalimar Florida 32579

Howard M. Rasmussen, Director Division of Alcoholic Beverages

and Tobacco

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

Docket for Case No: 84-001157

Orders for Case No: 84-001157