vs. ) Case No. 85-1663
Respondent. )
Pursuant to notice, a hearing was held before William R. Cave, Hearing Officer with the Division of Administrative Hearings, on July 8, 1985 in Orlando, Florida. The issue for determination is whether Respondent's alcoholic beverage license should be revoked, suspended or otherwise disciplined because of the alleged misconduct by Respondent outlined in the Amended Notice to Show Cause.
For Petitioner: Louisa E. Hargrett, Esq.
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301-1927
For Respondent: Richard L. Wilson, Esq.
On May 17, 1985, a Notice to Show Cause was served on Respondent along with an Emergency Order of Suspension. On May 20, 1985 an Amended Notice To Show Cause was served on Respondent. The Amended Notice To Show Cause contained allegations of several instances of the sale, delivery or possession of cocaine and marijuana by employees of Respondent; the maintenance of a public nuisance on the premises the maintenance of the licensed premises as a place where controlled substances are kept or sold, in violation of various sections of Chapter 893, Florida Statutes (1983), all of which are also violations of Section 561.29(1), Florida Statutes (1983); and the solicitation of customers to purchase alcoholic beverages by employees of Respondent in violation of Section 562.131, Florida Statutes (1983). Thereafter, the Respondent requested a formal hearing.
In support of the charges Petitioner presented the testimony of Captain Jack B. Wallace, supervisor in charge of the Petitioner's Orlando, Florida office Kerry R. Farney and Kimberly A. Nowik, both officers with the Orlando Police Department and Rodney Russ, Carl E. Lloyd and Claude E. Cruce,
all law enforcement investigators with Petitioner. Petitioner offered 13 exhibits. Petitioner's Exhibits Nos. 1, 2, 5-7, 9-13 were received into evidence without objection. A ruling on the admissibility of Petitioner's Exhibits Nos. 3, 4 and 8 was reserved and the parties were allowed an opportunity to file written arguments in their posthearing proposed findings of fact and conclusions of law. Having considered the argument of counsel on the admissibility of Petitioner's Exhibit No. 8 presented at the hearing, there being no subsequent arguments in the posthearing pleadings, Petitioner's Exhibit No. 8 is admitted into evidence. Although the charge is for an offense occurring "on or about May 9, 1985" and Petitioner's Exhibit No.
8 shows an offense date of May 8, 1985 there was sufficient evidence to tie the lab report recorded in Petitioner's Exhibit No. 8 to the offense which occurred shortly after midnight of May 8, 1985 (12:15 a.m.., May 9, 1985). Having considered the arguments presented by the parties in the posthearing pleadings and those presented at the hearing in regard to the admissibility of Petitioner's Exhibits Nos. 3 and 4, the Respondent's objection to the introduction of those exhibits is sustained and neither the exhibits nor the testimony surrounding the exhibits shall be considered in this Recommended Order.
This ruling is based on the fact that neither exhibit is relevant to the charges against Respondent in the Amended Notice To Show Cause and the matters contained therein are outside the scope of any "notice" received by the Knights.
Respondent presented the testimony of Captain Jack B. Wallace and Lieutenant Randall Keith Farmer, an officer with the Orlando Police Department. Respondent presented one exhibit which was received into evidence.
The parties submitted posthearing proposed findings of fact and conclusions of law pursuant to Section 120.57(1)((b)(4), Florida Statutes (Supp. 1984). A ruling on each proposed finding of fact has been made either directly or indirectly in this Recommended Order, except where such proposed findings of fact have been rejected as subordinate, cumulative, immaterial or unnecessary.
1718, Inc. held alcoholic beverage license number 58- 1581, Series 2-Cop; for the premises of the Fox Hunter, 1718 South Orange Avenue, Orlando, Florida, at all times relevant to these proceedings. The license was issued on June 18, 1981.
Although the testimony of Captain Jack B. Wallace that John and Fay Knight (Knights) were the owners of the real property located at 1718 South Orange, Orlando, Florida, went unrebutted, the record does not reveal the date when John and Fay Knight became the owners of the real property located at 1718 South Orange Street, Orlando, Florida.
The Knights were absentee landlords and leased the premises to 1718, Inc. d/b/a/ Fox Hunter (Fox Hunter) through a real estate agency in Orlando, Florida.
On June 3, 1985 Petitioners mailed a letter to the Knights informing them that the alcoholic beverage license of Fox Hunter had been suspended on an emergency basis due to 13 alleged sales of narcotics on the premises by employees of Fox Hunter; that Respondent had requested a hearing on the charges; that Petitioner would seek license revocation with prejudice as provided in Section 561.58, Florida Statutes (1983); that the Petitioner would present evidence at the hearing in support of license revocation with prejudice; and that the Knights would be advised of the date, time and location of the hearing at a later date. The record does not reveal that Petitioner ever advised the Knights as to the date, time and location of the hearing, however, counsel for Respondent announced at the time of the
hearing that he would be representing the Knights. Additionally, the record does not reveal that a copy of the original or Amended Notice To Show Cause was ever furnished to the Knights. Nor does the record reveal that the Knights had any knowledge of any previous violations at the premises.
On April 29, 1985, Orlando Police Officer Kerry Farney (Farney) went to the premises of Fox Hunter and spoke to dancer Joyce Travis concerning the purchase of cocaine. Joyce agreed to sell Farney a half gram for $50.00. Farney gave Joyce
$55.00, including $5.00 for a dance which she performed, and Joyce returned to Farney a dollar bill wrapped around two- plastic packages of cocaine.
Officer Farney returned to the Fox Hunter on April 30, 1985, and spoke with dancer Lisa Nolen a/k/a Dusty concerning the purchase of a quarter gram of cocaine. Dusty agreed to sell the cocaine and obtained $25.00 from Farney. She later returned to Farney and handed him a plastic package containing cocaine.
Officer Farney again returned to the Fox Hunter on May 2, 1985 and was later met there on this same day by Investigator Rodney Russ (Russ). The Officers arranged to purchase cocaine from the dancer Dusty. Farney gave Dusty $30.00, $5.00 for a dance and $25.00 for a quarter gram of cocaine. Russ gave Dusty
$50.00 for one half gram of cocaine. After going into the dancers' locker room, Dusty returned to the officers and handed to Farney a dollar bill wrapped around two plastic packages of cocaine and asked Farney to pass it to Russ. Farney passed the cocaine wrapped in the money to Russ which Russ opened and inspected the two plastic-packages of cocaine contained therein.
Later that same night Dusty delivered the cocaine to Farney which he had paid for earlier.
Russ returned to the Fox Hunter on May 3, 1985 and entered into conversation with dancer Laura, who asked if he was looking for a quarter gram of cocaine. Russ stated that he wanted a half gram and Laura responded that she would see what she could do. After speaking with an unknown male patron, Laura returned to Russ and stated that all he had left was three- tenths of a gram for $30.00. Russ stated that he would take the three tenths of a gram and gave Laura $30.00. Laura again approached the unknown patron and then returned to Russ after being assured by Russ that he was not a cop or with law enforcement, placed a bill in his pocket. Russ removed and opened the bill and inspected the plastic package of cocaine.
Russ returned to the Fox Hunter on May 7, 1985 and entered into conversation with the dancer Joyce concerning the purchase of a half gram of cocaine. Joyce stated that she would be able to get it later. Joyce subsequently asked Russ how much he wanted to buy and Russ responded that he wanted a half gram. Russ gave Joyce a $100.00 bill and she went into the women's dressing room. Joyce later returned to Russ and gave him $25.00 change wrapped around two clear plastic packages of cocaine.
Russ returned to the Fox Hunter on May 8, 1985, and was solicited by dancer Joyce for the purchase of two beers.
Russ returned to the premises of the Fox Hunter on May 9, 1985, and entered into conversation with the dancer Joyce concerning the purchase of a half gram of cocaine. Joyce left
Russ to talk to an unidentified black male and returned to inform Russ that she could get the half gram of cocaine from the black male after he split it up and that Russ would have delivery soon. The male went into the restroom and when he emerged from the restroom, Joyce approached him and then went into the women's restroom. After exiting the restroom, Joyce performed a dance for Russ, during which she told him to take a dollar bill out of her garter. Russ took the dollar bill and opened it up to inspect two tinfoil packages of cocaine.
Russ returned to the licensed premises on May 10, 1985, and again entered into conversation with the dancer Joyce concerning the purchase of a half gram of cocaine. When Joyce agreed, Russ handed her $75.00. Joyce subsequently returned to Russ and handed him a plastic package of cocaine which Russ placed into the cellophane wrapper of his cigarette pack. Joyce stated that the person from whom she had obtained the cocaine only had a quarter gram but would be getting a delivery soon, at which time Joyce would give Russ his other quarter gram. Russ did not obtain the additional quarter gram prior to leaving the premises on this occasion.
Russ returned to the Fox Hunter later the night of May 10, 1985 and spoke with Joyce about obtaining his remaining quarter gram of cocaine and she advised him that delivery had not been made. Russ then talked with dancer Laura about obtaining some cocaine. Laura first said that it would be after 2:00 a.m. when the bar closed but when Russ told her he could not wait that long she obtained a short quarter gram from an unidentified white male. Laura then left to go into the women's restroom. When she returned to Russ, Laura placed a plastic
package of cocaine in his pocket stating that she had tried the substance and it was good. Russ removed the package from his pocket and inspected it. As Russ was leaving, Joyce approached him near the entrance and handed him a plastic package containing his remaining quarter gram of cocaine.
Russ returned to the premises of the Fox Hunter on May 15, 1985, and was solicited by the dancer Dusty to purchase her a bottle of champagne for $5.75, which he did.
Russ again went to the Fox Hunter on May 16, 1985 and entered into conversation with the dancer Laura concerning the purchase of a half gram of cocaine. Laura stated that she would be able to get him some. Laura approached and spoke to an unknown patron and the dancer Michelle, after which she went into the women's dressing room. She shortly returned to Russ and placed two plastic packages of cocaine into his pocket.
On May 17, 1985, the Respondent served an Emergency Order of Suspension and Search Warrant on the Fox Hunter. Located during the search was a dollar bill wrapped around a package of cocaine, a plastic package of cocaine, a package of marijuana and several marijuana cigarettes.
The sale or delivery of the cocaine on April 29, 30, 1985 and May 2, 3, 7, 9, 10, 16, 1985 to investigator Farney and Russ took place in and around the dance area of the premises.
On April 20, 1982 the Respondent served a letter of warning to Fox Hunter alleging that on August 4, 1981, an employee had solicited the sale of an alcoholic beverage in
violation of Section 562.131, Florida Statutes and further alleging that on October 30, 1981, an employee had delivered a controlled substance to a police officer on the premises. No proof was offered as to the disposition of those matters, or indeed, whether the incidents ever actually took place.
In July, 1984, the manager of Fox Hunter --Lawrence Siegel -- apprehended one of its employees and a patron engaged in a drug transaction: he detained them and called the Orlando Police Department, and the two were taken into custody. The Petitioner's response to this action was to issue a citation against the Fox Hunter for the alleged sale, even though it was Lawrence Siegel who uncovered the transaction and apprehended the perpetrators.
Mr. Siegel contacted Lt. Farmer of the Orlando Police Department and requested assistance in placing an undercover officer in the lounge as an employee. Mr. Siegel wanted to interdict narcotics and assist in the apprehension of the persons who might be dealing with them. However, the request was turned down because, as Lt. Farmer explained, the police department did not have the necessary resources to assist in this manner.
The record is not clear as to the period of time Lawrence Siegel maintained contact with the police, but he did contact them about the problem, identifying suspected dealers and providing names and descriptions of vehicles. However, Jason Robaudo replaced Lawrence Siegel as night manager during this period of time. James Robaudo was present in the licensed
premises during most of, if not all of, the time during which the unlawful activities accursed.
Although the record is not entirely clear on the details, there were other alcoholic beverage establishments in the same general area that had been charged with the sale of controlled substances on the premises where a heavy fine plus a short license suspension had been imposed rather than a license revocation or a license revocation with prejudice.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, this proceeding. Section 120.57(1) Florida Statutes (1983).
In paragraph l(a-m) of the Amended Notice to Show Cause, Petitioner alleges that certain employees of the Respondent sold or delivered cocaine, a controlled substance, on the licensed premises, on the dates set out in violation of Section 893.13, Florida Statutes (1983), which if established, is also a violation of Section 561.29(1)(a), Florida Statutes (1983). In addition, paragraph 4 of the Amended Notice To Show Cause alleges that certain employees did unlawfully possess a controlled substance on the licensed premises of the Respondent in violation of Section 893.13, Florida Statutes (1983).
Cocaine is a controlled substance and its unlawful possession, sale or delivery constitutes a violation of Section 893.13, Florida Statutes (1983), as alleged. Section 529.29(1)(a), Florida Statutes, (1983) provides that an
alcoholic beverage license may be disciplined upon a showing of a:
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 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 sate 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 evidence presented at hearing is sufficient to support the allegations of paragraphs 1 and 3 of the Amended Notice To Show Cause with the exception of subparagraphs l(b)(c)(k)(l). Subparagraphs l(b)(c)of the Amended Notice to Show Cause were dismissed by Petitioner. There was no evidence
introduced by Petitioner to support the allegation of subparagraphs l(k)(l) of the Amended Notice to Show Cause.
In paragraph 3 of the Amended Notice to Show Cause, Petitioner alleges that from April 29, 1985 until and including May 17, 1985, Respondent maintained a public nuisance on its licensed premises by maintaining it as a place used for keeping, selling, and delivery of controlled substances, in violation of Section B23.10, Florida Statutes (1983). If the nuisance is established and if it is of a nature which tends to annoy the community, to injure the health of the citizens in general, or to corrupt the public morale, it constitutes a misdemeanor in violation of Section 823.01, Florida Statutes (1983).
The evidence indicates that the licensed premises repeatedly served as the focus for the sale and delivery of cocaine, a controlled substance, by employees of the Respondent, the license holder. Consequently, a nuisance has been established which tends to, at least, annoy the community and Section 823.01, and 823.10, Florida Statutes (1983) have been violated. In addition, Section 561.29(1)(a) and (c) Florida Statutes (1983) has been violated which permits a license to be disciplined if it is proven that the license holder is maintaining a nuisance on the licensed premises.
The same evidence also clearly establishes that the violation alleged in paragraph 2 of the Amended Notice to Show Cause has been established as well. The conduct described here is a violation of Section B93.13(2)(a)5, Florida Statutes, which makes it a misdemeanor of the first degree to keep a place which is used for the keeping or selling of controlled substances and,
therefore, a violation of Section 561.29(1)(a), Florida Statutes (1983).
In paragraph 5 of the Amended Notice To Show
Cause, Petitioner alleges that certain employees of Respondent did unlawfully solicit the purchase of alcoholic beverages from Investigator Russ in violation of Section 562.131, Florida Statutes (1983). If the solicitation for purchase of alcoholic beverage is proven then there is a violation of Section 562.i31, Florida Statutes (1983). Here the evidence is sufficient to prove the solicitation for alcoholic beverage by an employee on the licensed premises and a violation of Section 562.131, Florida Statutes (1983) did occur. In addition, Section 561.29(1)(a), Florida Statutes (1983) has been violated which permits a license to be disciplined.
There is no question that the offenses alleged took place and that the cited violations occurred. The real question is whether the offenses charged and proved are sufficient to warrant the penalty of revocation of license.
The dispositive court decision appears to be Lash, Inc. v. State, Department of Business Regulation, 411 So. 2d 276 (3 DCA Fla. 1982). The operative facts before the court in Lash are described as follows at page 277:
The license revocation stemmed from narcotics violations on appellant's premises. The evidence established that on five occasions over a period of a week, undercover beverage agents purchased
controlled substances from two of appellant's employees.
The proper standard for revocation or suspension of a beverage license is set forth by the court in Lash at Page 278 of its decision.
Under Section 561.29(1), where the unlawful activity is committed by the licensee's agent, simple negligence is sufficient for revocation. Admittedly, the courts have refused to uphold revocations when the evidence showed only that on one occasion the licensee's employees violated the laws, and that the licensee otherwise took measures to comply with them. (citations omitted) Where, however, the laws are repeatedly and flagrantly violated by the employees, an inference arises leading to the conclusion that such violations are either fostered, condoned or negligently overlooked by the licensee, notwithstanding his absence from the premises when the violations occur. (citation omitted) Consequently, if the evidence supports the conclusion that the licensee failed to exercise ordinary care in the maintenance of the licensed premises or the supervision of his employees, he can be found negligent and his license revoked. (citation omitted).
Where the violations are, as here, committed in a persistent and recurring manner consisting of more than one isolated incident, the courts have not hesitated to find that such violations were either fostered, condoned, or negligently overlooked by the licensee, even though he may have been absent at the time of the commission of such. (citations omitted) In the present case, the recurring sales were made possible by appellant's failure to supervise the premises and his employees in a reasonably diligent manner, properly leading to the license revocation.
When comparing the facts of Lash to the facts in this case there is no question that the violations in this case were more persistent and recurring than in Lash. Therefore, there must be a showing that these violations occurred in spite of Respondent's due diligence to detect and prevent them in order to avoid a license revocation.
While there is evidence that one of Respondent's managers, Lawrence Siegel, requested assistance from the Orlando Police Department and on occasion gave information concerning the names, tag numbers and description of suspected drug dealers who came on the licensed premises, Respondent offered no evidence to show that it took an active role in hiring, training and supervising employees; had formulated written rules or procedures to regulate the conduct of employees or the operation of the licensed premises or had taken the initiative to hire a
security person to detect and prevent drug transactions on the licensed premises. These are positive steps that Respondent could have taken that would have put both employees and patrons on notice that it would not tolerate these unlawful activities. But instead, Respondent changed night managers from a person who showed some concern over these unlawful activities occurring on the licensed premises to a person -- Jason Robaudo -- who was apparently indifferent to the occurrence of the unlawful activities. The evidence in this case fails to show that Respondent supervised the licensed premises and its employees in a reasonably diligent manner. Therefore, an inference arises leading to the conclusion that such violations were either fostered, condoned or negligently overlooked by Respondent.
License revocation is warranted.
The next question to be answered is whether, under the facts of this case, the license should be revoked with prejudice. There is no doubt that license revocation with prejudice would be proper if the Respondent was also the owner of the premises. That is not the case here. In this case there is no contention that the landlord (Knights) were involved by knowledge, acquiescence, consent or collusion of any of the wrong doing of which Respondent is charged.
Although Section 561.58, Florida Statutes (1983) gives the Petitioner the discretion when a license is revoked, to "prohibit or permit a license to be issued for the location of the place of business formerly operated under such revoked license", the court in Keating v. State, 173 So. 2d 673 (Fla. 1965), in upholding the constitutionality of that statute, found that, at the minimum, notice and hearing was required before the
landlord's premises could be "padlocked" for use as a liquor establishment. The minimum notice and hearing required by Keating was that provided in Sections 120.22 120.23, Florida Statutes (1965) now contained in Sections 120.57(1), Florida Statutes (1983).
The letter to the Knights from Petitioner's counsel does meet the requirements of Keating and, therefore, Section 120.57(1), Florida Statutes (19B3). However, while the Knights are not required to defend themselves of the charges brought against the Respondent, the notice must be specific enough to inform the Knights with reasonable certainty the acts complained of which would, if proven, support license revocation with prejudice so that the Knights would have a fair opportunity to prepare a defense against their property being "padlocked" for use as a liquor establishment. See Hunter v. Department of Professional Regulation, 458 So. 2d 842 (2 DCA Fla. 1984) and Davis v. Department of Professional Regulation, 457 So. 2d 1074 (1 DCA l984). The letter, and even if the Knights received the Amended Notice To Show Cause, only put them on notice of the current alleged violations, those occurring in April and May of 1985. Therefore, allowing evidence into the record concerning other violations that may have occurred on the licensed premises without giving the Knights an opportunity to prepare a defense against "padlocking" for use as a liquor establishment would deny them due process. Therefore, the Respondent's objection to the admissibility of Petitioner's Exhibits Nos. 3 and 4 and the testimony surrounding those exhibits is sustained. However, even considering the excluded evidence there is not sufficient evidence to justify the Petitioner in imposing the penalty of "padlocking" the Knights' premises for use as an alcoholic
beverage establishment. This is especially so when it is considered that the Knights had not participated in, equiesced in, or condoned the repeated violations on the part of the Respondent, and, in fact, had no knowledge of such violations. In regard to the innocent landlord versus the licensee who owns and occupies the licensed premises the court in Keating at page 67B of the decision said:
The immunity against the "padlocking" power of the Director provided for herein relates to an innocent landlord, not involved in the misconduct of the licensee complained of by the Beverage Department.
The Petitioner has clearly met its burden of proof and under the standards of Lash, revocation of the license is clearly warranted. However, under the circumstances of this case revocation with prejudice is not warranted. Accordingly, I recommend the following:
For all of the foregoing reasons it is RECOMMENDED that the Petitioner, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco enter a Final Order revoking alcoholic beverage license number 58-1581, Series 2-COP, issued to 1718, Inc., d/b/a Fox Hunter.
Respectfully submitted and entered this 3rd day of September, 1985, in Tallahassee, Leon County, Florida.
WILLIAM R. CAVE
FILED with the Clerk of the Division of Administrative Hearings this 3rd day of September, 1985.
Louisa E. Hargrett, Esq. Department of Business Regulation 725 South Bronough Street
Richard L. Wilson, Esq. 1212 East Ridgewood Street Orlando, Florida 32803
Howard M. Rasmussen, Director Department of Business Regulation
Richard B. Burroughs, Jr. Secretary
