STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

IDA KNOW, INC., d/b/a )

THE ANCHORAGE, )

)

Petitioner, )

)

vs. ) Case No. 85-1836

)

DEPARTMENT OF BUSINESS )

REGULATION, DIVISION OF ) ALCOHOLIC BEVERAGES AND TOBACCO, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice this matter came before P. Michael Ruff, duly designated Hearing Officer, for formal hearing on December 11, 1985 in Tallahassee, Florida. The appearances were as follows:

APPEARANCES

For Petitioner: James C. Hauser, Esquire

Post Office Box 1876 Tallahassee, Florida 32301

For Respondent: Lynne A. Quimby, Esquire

Staff Attorney

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

The Petitioner, Ida Know, Inc. d/b/a The Anchorage, (Applicant), applied to the Respondent, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco (Division), for issuance of a "4-COP" quota liquor license for specified premises in Pasco County, Florida. After review by the Division the application was denied. The basis for denial was the Division's position that the Applicant had not secured legal right of occupancy for the identified premises depicted in the application, and that those premises did not have sufficient zoning for the intended purpose of the Applicant in seeking the liquor license. Thereafter, in due course, the Applicant petitioned for formal administrative proceedings to challenge the

Division's denial of its liquor license application on these grounds. The cause was duly transmitted to the Division of Administrative Hearings, and proceeded to hearing on December 11, 1985 in Tallahassee.

At the hearing, the Petitioner presented the testimony of witnesses Barry Schoenfeld in the general subject area of Division policy regarding the review of liquor license applications; Charles Bartlett, a lawyer accepted as an expert witness in the fields of commercial and real estate law, related agreements and the legal import of such agreements; William Fisher, an investigator for the Division; and Ida Bartlett, president of the Petitioner corporation. The Respondent presented the testimony of William Fisher, Ida Bartlett, and Barry Schoenfeld, the Bureau Chief of Licensing and Records for the Division. The Petitioner-Applicant presented eight exhibits, all of which were admitted into evidence, consisting of the Division's letter of denial; the November 1, 1984 agreement between Mr. Sasser and the Applicant; the liquor license application itself; the "October 31, 1984 zoning letter;" the "Bartlett affidavit;" the "October 1, 1985 zoning letter;" the "December 5, 1985 zoning letter;" and the lease agreement for the "alternate premises." The Respondent presented its letter of September 8, 1984 to Ida Bartlett; the "Sasser withdrawal of licensure escrow" which was not admitted on the basis that it did not come within the business records exception to the hearsay rule; Respondent's Exhibit 3, the "Fisher memorandum to Mr.

Espinola," which was not admitted for the reason that it is

hearsay and not within any recognized exception to the hearsay rule, including that embodied in Section 120.58, Florida Statutes; Respondent's Exhibit 4 (Schoenfeld's memorandum concerning policy); Exhibit 5, the Beverage License held by Mr. Sasser, and; Respondent's Exhibit 6, the "November 1, 1984 escrow letter from Mr. Sasser" which was not admitted on the same basis that Respondent's Exhibit 2 was excluded.

The issue to be resolved in this cause concerns whether the Respondent, Division, should issue to the Petitioner a quota alcoholic beverage license. Embodied in that general issue are the questions concerning the Petitioner's legal right of occupancy to the premises sought to be licensed; and that concerning evidence of proper zoning approval for the premises sought to be licensed.

At the conclusion of the proceedings, the parties requested a transcript of the proceedings and elected to file proposed findings of fact and conclusions of law, concomitantly waiving the requirements of Rule 28-5.402, Florida Administrative Code. Those proposed findings of Pact and conclusions of law were timely filed and Petitioner moved to strike certain portions of

the Respondent's proposed recommended order by motion filed January 29, 1986. That motion will be ruled upon in the Conclusions of Law below. The proposed findings of fact submitted by the parties are treated in this Recommended Order and additionally, are addressed in the Appendix attached hereto and incorporated by reference herein.

FINDINGS OF FACT

1. Ida Bartlett is the sole shareholder, officer and director of the Applicant corporation. She pursued the lottery drawing for Pasco County for a quota liquor license in order to embark on her own business venture involving the sale of alcoholic beverages for on-premises consumption in a lounge-type situation, as well as possibly to sell alcoholic beverages in a package store for off-premises consumption.

   
   

2. On September 18, 1984, the Division informed Ms. Bartlett by letter that she had been selected in the lottery drawing for an available quota liquor license in Pasco County. The letter advised her that she had 45 days from the date of the letter to file her application with the Tampa field office of the Division, which she did.

   
   

3. In preparing her application, she sought the advice and counsel of her son, Charles Bartlett, an attorney who has extensive experience in commercial and real estate matters, including commercial litigation, contract litigation, landlord tenant litigation and zoning matters, as well as experience representing other quota liquor license applicants as clients. Mr. Bartlett was tendered and accepted without objection as an expert in these areas of law, and in the interpretation of contracts, leases and other documents related to these fields of law. In particular, Mr. Bartlett currently represents establishments holding liquor licenses, has recently been actively involved in leasing and licensing matters for them and was counsel for a 4-COP quota liquor license applicant in Sarasota County with regard to the same lottery drawing as the instant application.

   
   

4. After she was advised of her successful lottery drawing and of the right to file her application within the 45 days, Mr. Bartlett and Ms. Bartlett began the preparation process for the application by attempting to locate suitable premises in Pasco County at which to locate the license and operate the related business. Mr. Bartlett contacted several real estate brokers in this connection and eventually met Mr. Harry Sasser, who had an existing lounge establishment in Hudson, Florida, Pasco County. Mr. Sasser's premises were then used for only on premises consumption of alcoholic beverages in a lounge-type situation.

   Mr. Bartlett and Mr. Sasser negotiated an agreement, reduced to writing and executed by the Applicant and Mr. Sasser, whereby his premises would be used for the liquor license sought by Ms.

   Bartlett.

   
   

5. That agreement was entered into on November 1, 1984. It provided that upon the issuance of a license to Ms. Bartlett, Mr. Sasser would place his liquor license in escrow so that the only license applicable and used at the Sasser premises would be the license to be awarded Ms. Bartlett. Ms. Bartlett entered into this agreement in good faith and with the bona fide intent to be bound by it and to actually operate the premises under the license she sought (Applicant's Exhibit 2, in evidence).

   
   

6. Mr. Bartlett drafted the agreement which required Mr. Sasser to lease the premises to the Applicant upon the occurrence of the condition precedent which is the granting of the liquor license. The agreement does not specify a rental amount, but rather provides that the rent shall be the prevailing market rate upon the execution of the related lease, which the parties agreed to enter into upon the granting of the license. The agreement does not specify a date certain for execution of the lease, but rather provides that the leasing of the subject premises will take effect upon the issuance of the liquor license. Mr. Bartlett established that this agreement is a legally binding document and affords the Applicant a legal right of occupancy to Mr. Sasser's premises upon the occurrence of that condition precedent. Such provisions for rental payment at market rates are common in lease agreements of that nature, and such a provision as to rental amount does not mitigate the binding effect and enforceability of such an agreement. Agreements contingent on the occurrence of a specific event which

   would trigger the execution of a lease to which the agreement

   refers, are common. Otherwise there would be no purpose to be served in leasing the premises for either party, until it is clear that the Applicant can use the premises for the purposes for which the agreement and contemplated lease are intended.

   
   

7. Charles Bartlett and the Applicant prepared and completed the remainder of the license application and related documents to be filed with it. Mr. Sasser was actively involved in the completion and submission of the application, and indeed took it himself to the Pasco County zoning Authority to secure that body's approval of the purpose to which the premises involved would be devoted. The Pasco County Zoning Authority indicated no objection to issuance of the liquor license for the Sasser premises and it is noted in three letters, (in evidence) from the Pasco County Attorney regarding the zoning question, that the property was correctly zoned for on-premises consumption of alcoholic beverages, which is what the premises were currently

   used for and would be used for under the sought license, at least in part. The letters from the County Attorney regarding zoning do indicate that if off-premises package store sales were engaged in under the sought liquor license, that further certification from the zoning authority concerning the question of whether that would be a substantial departure from the existing use of the premises might be necessary and that rezoning to commercial zoning might be necessary before the premises could be used for package sales for off-premises consumption. Mr. Bartlett opined, based upon his experience in similar liquor license application matters that the premises were appropriately zoned for the issuance of the subject liquor license. Mr. Sasser took the application to the appropriate health department official and secured his approval as to the suitability of the Sasser premises for the use of the liquor license. The zoning authority approval and health department approval were asserted on the face of the application when filed.

   
   

8. On about November 1, 1984, Mr. Sasser, Mr. Bartlett, and Ms. Bartlett met at the Tampa field office of the Respondent to assemble the liquor license application, submit it, and sign the agreement concerning the use of Sasser premises. The Division's filing clerk thereupon reviewed the materials submitted with the application and the application to make certain that all information had been provided in the spaces and blanks on the application, and that it was duly executed and signed. Those parties then met with Mr. Espinola who identified himself to them as the "licensing officer" to review the completeness of the application. Mr. Espinola met with the parties for about 15 minutes to review the application and the related agreement with Mr. Sasser. After reviewing the Sasser agreement, Mr. Espinola suggested that Sasser enter into an escrow agreement for his existing liquor license for those premises, so that the Applicant's license, if issued, could be located at the Sasser premises without occurrence of the situation of two licenses being issued for the same premises. Mr. Sasser agreed and entered into and signed an escrow agreement to that effect in the presence of Mr. Espinola, Charles Bartlett and Ms. Bartlett, the principal of the applicant corporation.

9. Mr. Espinola, on behalf of the Division, accepted the application as complete upon submission. Mr. Bartlett was advised that the acceptance of the application as complete would stand so long as he submitted an affidavit from his father concerning the source of financing for the proposed business. Mr. Bartlett had the affidavit executed the same day and sent it by Federal Express the same day to Mr. Espinola. He then called Mr. Espinola the following day to verify the receipt of the financial affidavit by Federal Express, and Mr. Espinola indicated that all was in order.

10. Thereafter the Applicant, being advised that the application was complete and in order, waited to hear from the Division as to its decision regarding the application. Neither the Applicant nor her attorney, Mr. Bartlett, was contacted further by the Division or by anyone from its headquarters in Tallahassee concerning any questions regarding the review of the application.

    
    

11. In the meantime, Ms. Bartlett and her attorney, Mr. Bartlett, remained in contact with Mr. Sasser to make certain that everything was still in order regarding their arrangement. Mr. Sasser gave them no indication that anything was amiss or that he had changed his position regarding escrow of his license and the lease of his premises to the applicant corporation. Since a binding agreement between the Applicant and Mr. Sasser had been entered into, and since the execution of the contemplated lease only required occurrence of the condition precedent, that is the issuance of the license, there was no reason to enter into other agreements by the parties until the license was issued. Thus, the Applicant and Mr. Sasser awaited the Division's decision before taking any further action regarding the application or the inauguration of the new business.

    
    

12. On March 6, 1985, by letter, the Applicant was advised that its application was denied by the Division. This was the first indication the Applicant had that the application was not in order and would not be routinely approved following Mr. Espinola's assurance that the application was complete and in order. The Division indicated in its letter of denial that the bases for denial were a lack of establishment of a right of occupancy of the subject premises, and lack of sufficient zoning for the subject premises. Upon learning of the Division's denial of the application, Mr. Bartlett contacted the Tampa and Tallahassee offices of the Division seeking further explanation for the denial. He offered to file an amendment to the application to cure the alleged defects, but was informed by a staff member of Mr. Schoenfeld, the Bureau Chief's office, that amendments would not be accepted. Thereupon, the Applicant instituted this-administrative challenge to the denial of the application.

    
    

13. During the interim period of time prior to the subject hearing, the Applicant took further steps to secure approval of the application. Thus, at Mr. Bartlett's behest, the Chief Assistant County Attorney for Pasco County provided Attorney Sandra Stockwell of the Division a letter setting forth further and clarifying the zoning authority's position regarding the Sasser premises. This letter (in evidence) makes clear that the County has no objection to the issuance of a 4-COP liquor license

    for the Sasser premises, although it points out that should the holder of the license desire to expand the alcoholic beverage use to include the sale of liquor for on-premises consumption then a determination would have to be obtained from the zoning administrator of the County whether or not the expansion constituted a substantial expansion of use. If the administrator determined that the expansion of use was substantial in nature, then the Board of County Commissioners would have to approve the actual sale of liquor on the premises. Correspondingly, if the holder of the license were to seek to expand the alcoholic beverage use for the Sasser premises to include the sale of alcoholic beverages for off-premise consumption (package sales) the same action would be necessary prior to actual sale of the alcoholic beverages for off-premise consumption. Additionally, rezoning of property to the appropriate commercial district would be required prior to sale of alcohol for off-premise consumption.

    
    

14. The Applicant also secured alternate premises to locate the applied-for liquor license in the event the Sasser arrangement fails to consummate or is otherwise deemed undesirable. The Applicant thus entered into a three-year lease agreement with two 5-year options for premises on U.S. 19 in the City of Port Richey. These premises had been recently used as a lounge establishment and are equipped with all required lounge and bar equipment and fixtures. The lease depicted in Applicant's Exhibit 8, in evidence, gives the Applicant a legal right to occupy the premises identified in that lease for the purposes of this license application. Those premises, additionally, are zoned for commercial use, which according to the City of Port Richey Zoning Code is appropriate for the on premises consumption of alcoholic beverages. In this connection, it was established by Mr. Bartlett, based on his personal experience in representing liquor license applicants, that the Division has approved the issuance of 4-COP liquor licenses to a number of applicants he has represented for premises zoned for

    on-premises consumption of alcoholic beverages only without them

    being zoned at the time of issuance for off-premises package sales.

    
    

    DIVISION POLICY

    
    

15. Mr. Barry Sehoenfeld is the Bureau Chief of Licensing and Records for the Division. He has been delegated the authority to process and finalize all quota liquor license applications and is in charge of the state-wide system for the review and issuance of alcoholic beverage licenses. He is the final decision maker on quota liquor license applications.

    
    

16. Quota liquor licenses authorize license holders to sell alcoholic beverages for on-premise consumption and/or package

    sales. A quota liquor license enables the holder to sell alcoholic beverages for on-premise consumption, to sell such beverages in a package store capacity or both, according to Mr. Schoenfeld. Quota liquor licenses are issued on a county basis. Only a certain number of such licenses are issued in a county, depending on the population of the county. When the Division determines that it is appropriate for additional quota liquor licenses to be issued for a county, the Division holds a drawing and all interested persons may apply to get in the pool for the lottery drawing. When such a person is drawn, that person can then file an application with the Division for issuance of a liquor license. A "4-COP quota liquor license" refers to a county which has more than 100,000 population.

    
    

17. When a party is selected from the lottery drawing to file an application for a quota liquor license, that person has

    45 days from notice of the drawing to do so. The application is filed in the local field office of the Division in which the applicant seeks a license. The field office involved in this proceeding is the Tampa office. The application and all related documents must be filed with the licensing clerk of that field office, who then determines whether all documents are in order and whether the application can be accepted by the field office for review. Another staff member in the field office then meets with the applicant to determine whether all necessary forms and documents are complete. In the instant situation, that person was Mr. Espinola. According to Division policy, the field office will not accept an application if not complete. According to policy the applicant does not receive a letter regarding completeness from the field office, but simply a verbal understanding from the personnel of the field office that the application is complete upon submission and acceptance by that office. Here the Applicant was so informed.

18. Once an application is submitted and deemed complete, the field office may ask the applicant for additional information. Requesting additional information is common practice and is often done after the 45-day submission deadline. In fact, if an application is missing the field office will contact an applicant to request that he provide the missing documents. According to Division policy, as explicated by Mr. Schoenfeld, review of an application should be performed with the applicant present so that additional information or explanation required may be done at that time. The intent of this policy is to keep the applicant advised of Division requirements and to communicate freely with an applicant to ensure that all necessary data is gathered for review. Further investigation of an application will be pursued if the field office supervisor deems that necessary and it is within the discretion of that supervisor as to whether an investigation is necessary, and if so, the scope

    of that investigation. If an investigation is deemed necessary, the supervisor should provide specific instructions to an investigator as to the scope of his investigation. There is no set time during which an investigation should be completed, and the scope depends on the particular circumstances of the application. It is common for an investigation to require one to to three months. The purpose of the investigation is to discover as much information as necessary to fairly make a recommendation on the application.

    
    

19. After review by the field office, and any investigation by that office if it is deemed necessary, the field office makes a recommendation to the Division headquarters and Mr. Schoenfeld in Tallahassee regarding disposition of the license application. It is at this point that Mr. Schoenfeld becomes involved with any license application. Thereafter Mr. Schoenfeld makes a final determination on the application and the applicant is sent either a liquor license or a letter of denial. The letter of denial sets forth all bases for the Division's denial of such an application.

    
    

20. According to statute, the application process must be completed and the Division must make its decision within 180 days. This time frame can be waived by an applicant however, if it appears for any reason that the statutory time requirement cannot be met, as for instance in situations where the premises to be used are not yet constructed or other delays have been encountered by the applicant or the Division, when both are acting in good faith. In such situations, the Division's decision on the application is placed in abeyance for an indefinite period until the premises are constructed or the other basis for delay by either the Division or the applicant in the review process have been alleviated.

    
    

21. Mr. Schoenfeld also explained Division policy to allow for a liquor license holder to move his license to another premises by submitting an application to the Division for a transfer. Additionally, Division policy allows an applicant to propose to locate his license in a premise already holding a liquor license, if the existing license holder places his license in escrow. It is a routine matter for such previous license holders to place their licenses in escrow under these circumstances.

    
    

22. Pursuant to the below-cited statutory authority, an applicant must have "suitable premises" in which to house or locate the liquor license for which it has applied. The Division interprets this to mean that an applicant must demonstrate a legal right of occupancy for the premises identified in an application. Mr. Schoenfeld acknowledged that the phrase "legal

    right of occupancy" is not defined by statute or agency rule, but that the intent is to make certain that an applicant has a lawful right to occupy the identified premises. The Division determines on a case by case basis whether an applicant has secured a lawful right of occupancy. Typically, this determination process does not employ the use of Division attorneys to review and determine from a legal standpoint whether a right of occupancy has been demonstrated. There is no statutory provision or Division rule which requires that written documentation be submitted with an application in establishing a legal right of occupancy. The Division's policy and procedures manual does not specifically require a right of occupancy document to be filed with the application. The Division's application form furthermore, does not require written documentation by the applicant to prove its legal right of occupancy.

    
    

23. Although Mr. Schoenfeld indicated that the Division requires written documentation of an applicant's lawful right of occupancy to the identified premises, no specific type of agreement is required. Rather, any document reflecting a binding, lawful right of occupancy is sufficient, nor is it necessary that the written document be a lease agreement. In the instant case, as Mr. Bartlett established, a binding, written contract calling for the occupancy of the Sasser premises was timely executed by the parties to the application and filed with the application, which binds the parties to enter into a written lease upon the occurrence of the condition precedent, that is the issuance of the liquor license.

    
    

24. The Division requires an applicant to show sufficient, appropriate zoning for the premises identified to be used in an application. On the second page of the application there is a section requiring indication whether the appropriate zoning authority has determined whether the identified premises are in compliance with existing zoning regulations. Additional information in the form of letters from the appropriate governing authority is commonly submitted with an application to demonstrate that the premises have sufficient zoning.

    
    

25. A 4-COP quota liquor license authorizes on-premises consumption of alcoholic beverages and/or package store sales. In some situations, existing zoning regulations permit only the on-premises consumption of alcoholic beverages and not package store sales for off-premise consumption. That is the case with the Sasser premises involved herein and as to the alternate premises, depicted in Applicant's Exhibit 8, in evidence, although that property is commercially zoned. Commercial zoning also encompasses on-premises consumption of alcoholic beverages

    only. Division policy, however, provides that conditional zoning approvals are acceptable in the process of reviewing and granting

    liquor licenses. The Division has approved applications where the zoning only allowed on-premises consumption of alcoholic beverages and, as discussed above, in Mr. Bartlett's experience with his own clients such approval has been given where zoning only permitted on-premises consumption for quota liquor licenses on more than one occasion. In these situations, the Division's policy is that it is not responsible for enforcing the terms of the conditional zoning approval' that is a matter to be negotiated or enforced between the local zoning authority and the ultimate holder of the liquor license involved. Conditional zoning approval does not bar the issuance of a quota liquor license.

    
    

26. Additionally, Mr. Schoenfeld corroborated Mr. Bartlett's testimony showing that it is often reasonable to waive the 180-day statutory time period to accommodate situations where an applicant must change the premises originally applied for in such instances where a landlord or owner of the premises originally identified in an application breaches the right of occupancy agreement after the application is submitted for review by the Division. In those instances, it has often been determined to be reasonable to allow an applicant to amend his application after the 45-day time period has elapsed to allow for such a change of premises. Licenses have indeed been issued frequently for alternate or changed premises from those originally identified in an application so long as an applicant has acted in good faith throughout the application process.

    
    

27. Also, according to Division policy, if an applicant is making a good faith effort to arrange for a suitable, appropriately zoned premises from which to operate his license, the Division will permit the applicant to locate alternate premises in instances where zoning approval is denied subsequent to the 45-day period or has not yet been obtained at the end of the 45-day period. It should be noted that Mr. Bartlett described two instances where this policy was followed where the Division permitted a change of premises after submission of an application. In one case an application was submitted for premises in a shopping center not yet built. After it was filed and prior to issuance of the license, the applicant elected to change the location and to amend the application. The license was granted for the second location. In another situation an amendment to the application was effected after the 45-day period, proposing a change of premises. The amended application was approved by the Division and the zoning on the changed location allowed only on-premises consumption of alcoholic beverages and not package store sales. Even so the Division approved issuance of that license.

    DIVISION REVIEW

    
    

28. Mr. William Fisher is a law enforcement investigator for the Tampa field office of the Division. Mr. Fisher's immediate supervisor is Reuben Espinola. Mr. Fisher's duties involve investigation of liquor license applicants and related premises to ascertain whether the application should be recommended for approval or not. He does not investigate applications independently, but rather acts on Mr. Espinola's instructions. Mr. Espinola normally does not instruct him as to the scope of his investigation (contrary to policy as stated by their superior, Mr. Schoenfeld). In any event, Mr. Espinola ordered Mr. Fisher to investigate the Ida Know, Inc. application without giving him specific instructions. Mr. Fisher was not present at the meetings between the applicant and Mr. Espinola and other members of the staff in the Tampa field office when the application was first submitted and accepted as complete.

    
    

29. Mr. Fisher traveled to Mr. Sasser's establishment to investigate the application, and conferred with Mr. Sasser for approximately 75 minutes on January 29, 1985, which meeting constituted the entirety of his investigation of this application, although he had acknowledged that such application investigations normally require one to three months so as to discover as many facts as possible to completely and fairly conduct the review. The next day, however, Mr. Fisher recommended to his superiors that the application be denied after his single conversation with Mr. Sasser. No further investigation by the Tampa field office was performed. Mr. Fisher never conversed with the applicant nor Mr. Bartlett during the investigation or at any other time, nor did he communicate in writing with them, although he acknowledged that conversing with applicants concerning matters involved in investigation of an application is common practice.

    
    

30. Mr. Fisher had not read the Division's policy and procedures manual in its entirety. He exhibited some unfamiliarity with Division policy, as for example, his belief that Division policy does not allow issuance of a liquor license for premises where the zoning does not authorize both on-premises consumption and package store sales for off-premises consumption.

    
    

31. Mr. Schoenfeld acknowledged that Mr. Fisher misunderstood the pertinent Division policies regarding this liquor license application and the review of it, and yet Mr. Schoenfeld's denial of the application was based entirely on the investigation performed by the Tampa field office and specifically Mr. Fisher. Mr. Schoenfeld did not conduct any independent investigation of his own and never conferred with either Mr. Sasser, the Applicant, Ms. Bartlett, or Mr. Bartlett.

    His conclusion, and Mr. Fisher's conclusion that no right of occupancy of the Sasser premises existed was evidently based on the Division's Exhibit No. 3, which was not admitted into evidence.

    
    

32. In any event, if indeed Mr. Sasser was seeking to recant his agreements with the Applicant and that fact was within the knowledge of Mr. Fisher or someone else in the Tampa field office or the Tallahassee office of the Division, no Division staff member ever contacted the Applicant to advise them of that purported situation, nor to seek additional information from the Applicant concerning it. Even if Mr. Sasser could successfully repudiate his agreement to escrow his liquor license and his agreement to allow the Applicant to use his premises, the Applicant has successfully established its right of occupancy and use of the alternative premises depicted and described in Applicant's Exhibit 8, however, which is zoned commercially such that on-premises consumption of any alcoholic beverage is permitted.

    
    

    CONCLUSIONS OF LAW

    
    

33. The Division of Administrative Hearings has jurisdiction of the subject matter of and the parties to this proceeding. Section 120.57(1), Florida Statutes.

    
    

34. The Petitioner has filed a Motion to Strike certain portions of the Respondent's proposed recommended order in that the Respondent proposes findings of fact based upon a deposition of Mr. Fisher, the Division's investigator. The Petitioner maintains that a deposition which has not been introduced into evidence cannot be considered as evidence in making any determination in a case, citing R. L. Bernardo and Sons, Inc. v. Duncan, 145 So. d 476 (Florida, 1962). Petitioner's argument in support of its Motion to Strike is well taken. The pre-trial deposition of Mr. Fisher was not even offered into evidence in this proceeding as an exhibit by either party, and thus the deposition and the testimony it contained cannot possibly be considered by the Hearing Officer in resolving this case. Even had the deposition been offered into evidence by Respondent, it could not be admitted and considered by the Hearing Officer since it is not the subject of any of the conditions under which a deposition may be used at trial pursuant to Rule 1.330, Florida Rules of Civil Procedure. Mr. Fisher, the deponent involved, was certainly not in excess of 100 miles from the place of trial and was not an expert witness, nor did his deposition fit into any other of the conditions under which a deposition can be admitted at trial under the above-cited rule. Indeed, Mr. Fisher was present and testified as a live witness at trial.

35. The provision of Rule 1.350, Florida Rules of Civil Procedure, cited by the Respondent, concerns merely the filing of depositions with the court and concerns in no way the use of depositions as evidence which is controlled by the rule cited first above. The mere filing of depositions with the court or in this case, the Clerk of the Division of Administrative Hearings, does not create any inference whatever that such a deposition can be used as evidence upon which findings of fact and conclusions of law may be based, as established by the Bernardo decision, supra. Thus, for these reasons and the reasons further delineated in Petitioner's Motion to Strike, the Motion to Strike is hereby GRANTED.

    
    

36. In proceedings such as those at bar, it is well established that an applicant for a license or permit situated as the Petitioner is herein, carries the ultimate burden of proof of entitlement to the license. Department of Transportation v. JWC Company, 396 So. 2d 778 (Fla. 1st DCA 1981); Astral Liquors, Inc.

    v. Department of Business Regulation, 432 So. 2d 93 (Fla. 3rd DCA 1983). In consideration of all testimony and evidence adduced at final hearing and the above Findings of Fact, it is concluded for the reasons explained below, that the Applicant has complied with all relevant statutory criteria and Division policy as enunciated by the Division's own witness on that subject, Mr. Schoenfeld. Thus, the Applicant has proved its entitlement to the requested

    4-COP quota liquor license.

    
    

37. Sections 561.18, 561.19 and 562.06, Florida Statutes require a liquor license applicant to secure a suitable premises in which to locate the applied-for license and to conduct business thereunder. Section 561.19(2) requires that an applicant for a license must first establish to the satisfaction of the director of the Division of Beverages that the premises to be licensed qualifies under the beverage law, Chapter 561, Florida Statutes. Nowhere in the statutes is a written documentation of the "right of occupancy" required. Neither the Division's rules nor the policies and procedures manual referenced above require that written documentation be submitted. with an application to demonstrate a legal right of occupancy. The two bases for denying the Petitioner's application by the Division were lack of a right to occupy the premises and lack of sufficient zoning for the premises. The application form itself does not specify what type of proof of right of occupancy is required. In this connection, Applicant's Exhibit No. 2 demonstrates, that the Applicant has secured a binding contractual right to occupy the Sasser premises. No testimony or evidence was offered to rebut the legal opinion by Attorney Bartlett that the contract embodied in Exhibit 2 affords the Petitioner the legal right to require Mr. Sasser to let it use his premises, the only pertinent condition precedent thereto

    being the entry into a formal lease once the liquor license is actually granted. This right could include the eventuality of forcing Mr. Sasser to abide by his written agreement to place his license in escrow, or to transfer his license to another premises. The equitable remedy of specific performance is available as a means of compelling a party to do precisely what he ought to have done under a contract or agreement to which he is a party. See 71 Am Jur. 2d, Specific Performance, Section 1; Matter of Chick Smith Ford, Inc., 46 BR 515 (Bkrtcy. Fla. 1985). In short, it has been demonstrated that the Applicant has a legally enforceable right of occupancy to the Sasser premises sufficient to comport with the general requirements of Chapter 561, Florida Statutes. There has been demonstrated to be no enforceable statute or rule requiring any additional proof of the right of occupancy to those premises to be established by this Applicant, nor any Division policy which dictates that any additional proof of right of occupancy be demonstrated.

    
    

38. Additionally, the Applicant has proven a legal right to occupy a second premise, as shown by Applicant's Exhibit 8, in evidence. Exhibit 8 is a binding lease agreement for a different premises on U.S. 19 in Pasco County, which has recently been used and is fully equipped as a lounge and bar establishment. Again the testimony of Attorney Bartlett, which was not contradicted, clearly delineates the Applicant's binding right to enforce that lease and secure occupancy of those premises. Thus, in terms of the Respondent's objection to licensure concerning securing of a suitable premises, the testimony and evidence of record and the above Findings of Fact clearly reveal that the Applicant has a legal right to occupy both premises involved herein and, in that regard, the license could be issued for either one.

    
    

39. Concerning the issue raised by Respondent regarding the allegedly deficient zoning, the Applicant has demonstrated that both premises described in Applicant's Exhibit 2 and Applicant's Exhibit 8 have adequate zoning for issuance and location of liquor licenses. Concerning the Sasser premises, the application as originally submitted, includes the notation or information that the Pasco County zoning authority has no objection to the location of the liquor license at the Sasser premises vis-a-vis. the existing zoning regulations. This evidence of suitability of zoning is accompanied by the caveat referenced in the above Findings of Fact and explained in the various letters from the County Attorney, Mr. Smolker, in evidence, to the effect that should on-premises consumption of liquor be desired, as opposed to beer and wine, then an additional certification that such is a conforming use must be obtained from the local zoning administrator. Should off-premises sales of packaged alcoholic beverages be envisioned by the Applicant-licensee, approval by the full Board of County Commissioners would be required, and

    possibly rezoning of the site to commercial zoning. Although the Sasser premises are not zoned at the present time for package store sales for off-premises consumption, testimony by Mr.

    Schoenfeld makes it abundantly clear that under Division policy it is not necessary for zoning for package store sales to exist as a prerequisite to the issuance of a quota liquor license.

    Indeed, Mr. Schoenfeld testified, as corroborated by Mr. Bartlett's own experience with his clients, that the Division has repeatedly licensed establishments with quota liquor licenses which are only zoned for on-premises consumption even though the license involved would, in and of itself, aside from zoning, permit package sales for off-premises consumption. As acknowledged by Respondent, the quota liquor license is for on premises and/or off-premises consumption or package sales. Thus, it has been established that the zoning for the Sasser premises is adequate for issuance of the license, although as Mr.

    Schoenfeld himself established, the expansion of the sale of alcoholic beverages at that site, might require "additional use certification," or additional zoning approval if package sales are contemplated. However, he acknowledged that that is a local zoning enforcement matter and is not a prerequisite to issuance of the subject quota liquor license.

40. It was additionally established by the Applicant that the alternative premises depicted in Applicant's Exhibit 8, which is the lease agreement by which the Applicant has obtained the right to use those premises for operation of the subject liquor license, are appropriately zoned for on-premises consumption of alcoholic beverages since that property is commercially zoned by Pasco County.

    
    

41. Concerning the Division's position that Mr. Sasser's liquor license has not been placed in escrow and therefore it cannot issue a license to the Applicant for those premises, it should be pointed out that the enforceability of Applicant's Exhibit 2, the Sasser agreement, has been established. Moreover, Mr. Sasser entered into a specific agreement to escrow his liquor license so that the Division's position that two licenses cannot be issued for the same premises would be obviated. Further, this position taken by the Division only relates to the Sasser premises and the Applicant has demonstrated conclusively that the license can be issued in terms of its legal right of occupancy and appropriate zoning to either the premises identified in Exhibit 8 or the Sasser premises. Thus, the license could be issued to the Applicant for the alternate premises identified in Exhibit 8 without regard to the "two-licenses on one premises issue" raised by the Division. In any event, the agreements as to the right of occupancy for the Applicant in the Sasser premises and the escrowing of the Sasser liquor license have been shown to be legally enforceable and the remedy of specific

    performance would seem to be available to the Applicant to enforce its right to use the Sasser premises, such that the license for those premises can be issued.

    
    

42. Further, in that connection, no competent, admissible testimony or evidence in this case indicates that Mr. Sasser truly is seeking to recant and avoid the effect of those agreements. Should that prove to be the case, and should enforcement of those agreements occasion inordinate delay in the. Applicant's preparation for business at those premises, there is no impediment to issuance of a license for the alternate premises depicted in Applicant's Exhibit 8. Thus, in either event, the Division's objection to issuing two licenses for one premises can be obviated.

    
    

43. Accordingly, in consideration of the foregoing it must be concluded as a matter of law that Ida Know, Inc. has met all relevant statutory and regulatory review criteria and standards and the license should be issued. The Division should issue the license for the Sasser premises conditioned upon the Applicant's obtaining the additional certification by the Pasco County Zoning Administrator showing that on-premises consumption of liquor in addition to the already authorized consumption of beer and wine, is not a substantial change from the use presently authorized at the Sasser premises. If that condition is met, the license should be issued for those premises. Alternatively, in the interest of avoidance of further delay in issuance of the entitled license, the license should be issued for the premises identified in Applicant's Exhibit 8.

RECOMMENDATION

Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, and the candor and demeanor of the witnesses, as well as the pleadings and arguments of the parties, it is, therefore

RECOMMENDED that the application of Ida Know, Inc. d/b/a The Anchorage, be approved and that the subject 4-COP quota liquor license be issued to that applicant in a manner consistent with the conditions and alternatives posited in the paragraph last above.

DONE and RECOMMENDED this 1st day of April, 1986 in Tallahassee, Florida.

P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 1st day of April 1986.

ENDNOTES

1/ The Division has a policy and procedures manual for the filing and review of such liquor license applications. The manual is intended to apply consistently throughout the State of Florida but is not adopted as an agency rule. (Schoenfeld, pp. 18-19).

2/ The Division provides an application form to all applicants. This form (No. 700-L) is adopted as a Division rule at Rule 7A- 2.19, Florida Administrative Code.

3/ This exhibit was a memorialization of Mr. Fisher's conversation with Mr. Sasser, wherein Mr. Sasser purportedly attempted to recant his agreement to "escrow" his own liquor, license and his agreement to give the Applicant the right to use his premises. Thus, the Respondent's Exhibit 3 is predicated entirely upon the hearsay declarations of Mr. Sasser and because Mr. Fisher's testimony concerning his belief that the Applicant had no right of occupancy to the Sasser premises was predicated entirely upon the out-of-court statements made by Mr. Sasser, the Respondent's Exhibit 3 could not be admitted as corroborative hearsay pursuant to Section 120.58, Florida Statutes, since there is no competent testimony by Mr. Fisher for that exhibit to corroborate.

COPIES FURNISHED:

James C. Hauser, Esquire MESSER, VICKERS, CAPARELLO,

FRENCH & MADSEN

Post Office Box 1876 Tallahassee, Florida 32301

Lynne A. Quimby, Esquire Staff Attorney

Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301-1927

Howard M. Rasmussen, Director Division of Alcoholic

Beverages and Tobacco 725 South Bronough Street

Tallahassee, Florida 32301

E. James Kearney, Secretary Department of Business Regulation Johns Building

725 South Bronough Street Tallahassee, Florida 32301

APPENDIX

Petitioner's Proposed Findings of Fact

1. Paragraphs 1 through 16 are accepted.

2. Paragraph 17 is accepted, but is subordinate to and unnecessary to a resolution of the material issues presented.

3. Paragraphs 18 through 23 are accepted.

4. Paragraph 24 is accepted as to its content and import, although the proposed finding of fact really amounts to only a recitation of testimony.

5. Paragraphs 25 through 35 are accepted.

6. Paragraph 36 is accepted as to its import, although it really amounts to a recitation of Mr. Bartlett's testimony as opposed to an actual proposed finding of fact.

7. Paragraph 37 is accepted.

8. Paragraph 38 is accepted as to its content and import although it too constitutes only a recitation of Mr. Bartlett's testimony.

9. Paragraph 39 is accepted except for the sentence which indicates that the Pasco County Zoning Authority expressly noted the Sasser premises were properly zoned for the subject license. The competent, credible testimony and

   evidence of record reveals that the zoning for the Sasser premises is appropriate provided the additional certification referenced in the body of the Recommended Order is met.

10. Paragraphs 40 through 47 are accepted.

11. Paragraph 48 is accepted with the same qualification noted as to paragraph 39.

12. Paragraphs 49 through 65 are accepted.

13. Paragraphs 66, 67 and 68 are accepted to the extent they represent Division policy as delineated by Mr. Schoenfeld, however, otherwise these three proposed findings of fact in reality constitute argument of counsel.

Respondent's Proposed Findings of Fact:

1. Paragraphs 1 through 4 are accepted.

2. Paragraph 5 is accepted to the extent that it accurately depicts the various terms of the agreements between the Applicant and Mr. Sasser, but not as to the legal import the Respondent seeks to convey in proposed finding no. 5.

3. Paragraph 6 is accepted, but this proposed finding concerning the subject lease agreement is subordinate to and not necesary to resolution of the material issues presented concerning the legal right of occupancy of the Applicant in the Sasser premises.

4. Paragraph 7 is accepted, but is subordinate to and not in itself directly germane to a resolution of the material issues presented concerning the "dual licensing issue" regarding the Sasser premises.

5. Paragraph 8 is accepted with the same condition as paragraphs

   6 and 7.

6. Paragraph 9-is rejected as constituting a discussion of the quantity and quality of evidence, rather than being a proposed finding of fact.

7. Paragraph 10 is accepted to the extent that Petitioner's Exhibit 8, the lease for the alternate premises involved, apparently was not submitted to the Division for investigation prior to this proceeding, but that proposed finding is subordinate to and unnecessary to a resolution of the material issues presented concerning zoning and lawful right of occupancy to the premises involved in this application. These proceedings are de novo in nature and items of evidence in support of a party's position which has come into being subsequent to the agency's free form review and issuance of a notice of intent are admissible and can be considered by the Hearing Officer in rendering his findings of fact and conclusions of law at the conclusion of these de novo proceedings, in which the agency appears from the time of referral of the cause to the Division of Administrative Hearings, as a party litigant on equal footing with this Petitioner. See, Section 120.57 (as amended);

   MacDonald v. Department of Banking and Finance, 346 So. 2d 569 (Fla. 1st DCA 1977) and Turro v. Department of Health and Rehabilitative Services, 455 So. 2d 345 (Fla. 1st DCA 1984).

8. Paragraph 11 is rejected as constituting a recitation of testimony and argument of counsel as to admissability of evidence, which issue has been resolved in the Hearing Officer's ruling on the Petitioner's Motion to Strike a portion of these proposed findings of fact with further reason that this proposed finding of fact is not predicated on competent, substantial, credible testimony and evidence admitted in this proceeding. 9. Paragraph 12 is accepted in part, although it constitutes a recitation of evidence adduced, but this proposed finding is subordinate to and not predicated upon the entire body of testimony and evidence of record upon which the proposed findings of fact concerning the zoning of the subject premises was based.

1. Paragraph 13 is rejected as constituting a recitation of the content of an exhibit in evidence rather than a proposed finding of fact, and for the further reason that the proposed findings of fact on the issue of appropriateness of zoning are not predicated solely on the letters of Mr. Smolker in evidence.

2. Paragraph 14 is rejected for the same reason.

3. Paragraph 15 is accepted.

Docket for Case No: 85-001836

Orders for Case No: 85-001836