Judges: CLAUDE B. ARRINGTON
Agency: Department of Business and Professional Regulation
Latest Update: Jun. 12, 1989
Summary: The issue is whether Petitioner requested that Respondent record a lien against a certain liquor license within the time period allowed by statute.Secured party failed to timely record and perfect lien on a beverage license.
89-0919.PDFSTATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
THE BUTTON OF HALLANDALE, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 89-919
) DEPARTMENT OF BUSINESS REGULATION, ) DIVISION OF ALCOHOLIC BEVERAGES ) AND TOBACCO, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Claude B. Arrington, held a formal hearing in the above-styled case on April 27, 1989, in Fort Lauderdale, Florida.
APPEARANCES
For Petitioner: Norman Elliott Kent, Esquire
Post Office Box 14486
Fort Lauderdale, Florida 33302-4486
For Respondent: John B. Fretwell, Esquire
Assistant General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007
STATEMENT OF THE ISSUES
The issue is whether Petitioner requested that Respondent record a lien against a certain liquor license within the time period allowed by statute.
PRELIMINARY STATEMENT
The style of the instant case has been changed to reflect that the petitioning party is The Button of Hallandale, Inc. As originally styled the named Petitioner was 587 Enterprises, Inc., d/b/a Button South, the owner of the liquor license against which The Button of Hallandale, Inc. seeks to record its lien. The appearance of Mr. Norman Elliott Kent, Esquire, was on behalf of The Button of Hallandale, Inc. There was no appearance on behalf of 587 Enterprises, Inc., d/b/a Button South and that entity is not a party to these proceedings. The Button of Hallandale, Inc., will be referred to as the Petitioner.
At the hearing, Petitioner presented the testimony of one witness and introduced four documentary exhibits, each of which was admitted into evidence. Respondent presented the testimony of one witness and introduced seven
documentary exhibits, each of which was admitted into evidence. Only a portion of Respondent's Exhibit 5 was admitted after an objection to the admissibility of part of the document was sustained.
A transcript of the proceedings was filed on May 15, 1989. Petitioner has filed no posthearing documents. Respondent timely submitted its Proposed Recommended Order which contains proposed findings of fact and proposed conclusions of law. All findings of fact proposed by the Respondent are addressed in the appendix attached to this Recommended Order.
FINDINGS OF FACT
Based on the evidence received at the final hearing, the following findings of fact are made.
On December 7, 1988, Petitioner, The Button of Hallandale, Inc., requested that Respondent record a lien against spirituous alcoholic beverage license number 16-00318 so as to perfect Petitioner's security interest in the license. Respondent denied Petitioner's request on the basis that the request was not made within 90 days of the creation of the security interest as required by Section 561.65(4), Florida Statutes.
Petitioner was the owner of license 16-00318 until July 15, 1987, the date Petitioner sold to 587 Enterprises, d/b/a Button South, (hereinafter called
587 Enterprises) license 16-00318, together with certain other assets.
Prior to the sale, on May 13, 1987, Petitioner executed a promissory note in favor of Citizens and Southern National Bank of Fort Lauderdale (hereinafter called C&S Bank) together with a security agreement which included license 16-00318 as collateral. The note, in the principal amount of
$56,000.00, was to be paid in 16 installments with the final payment in full falling due on August 17, 1988. C&S Bank's security interest in license 16- 00318 was perfected by the recording of a lien with Respondent as provided by Section 562.65(4), Florida Statutes.
Prior to the closing, Petitioner told C&S Bank of its contemplated transaction with 587 Enterprises. Petitioner asked C&S Bank to release it from the promissory note dated May 13, 1987, and to allow 587 Enterprises to assume the note. C&S Bank refused this request and refused to release its lien against license 16-00318.
To accommodate the position of C&S Bank, Petitioner and 587 Enterprises closed the transaction on July 15, 1987, with 587 Enterprises agreeing to accept license 16-00318 subject to the lien of C&S Bank and with Petitioner agreeing to pay the debt to C&S Bank according to the terms of the promissory note dated May 13, 1987. Petitioner and 587 Enterprises also made adjustments to the consideration 587 Enterprises was to pay to Petitioner for the assets being sold.
At the closing of the transaction on July 15, 1987, 587 Enterprise executed and delivered to Petitioner a promissory note in favor of Petitioner in the principal amount of $219,000.00. This sum represented the deferred portion of the purchase price 587 Enterprises agreed to pay Petitioner for the assets being sold. The payment of the promissory note was secured by a Security Agreement executed by 587 Enterprises and delivered to Petitioner at the closing on July 15, 1987. Specifically included in the collateral listed in the
Security Agreement was license 16-00318. On July 15, 1987, the value of License 16-00318 exceeded the amount of the C&S Bank lien.
In August 1988 Petitioner made the final payment on the debt to C&S Bank.
On October 11, 1988, the C&S Bank advised Respondent that the promissory note dated May 13, 1987, had been paid and requested that its lien against license 16-00318 be released.
On December 7, 1988, Respondent received a request from Petitioner to have its lien recorded against license 16-00318. On the request form Petitioner asserted that the effective date of its lien or security interest was October 15, 1988.
In response to Respondent's request for documentation of its lien, Petitioner forwarded to Respondent copies of the promissory note and security agreement executed by 587 Enterprises on July 15, 1987.
After Respondent denied Petitioner's request to record its lien against license 16-00318, Petitioner filed a timely demand for a formal hearing.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Section 120.57(1), Florida Statutes.
Section 561.65(4), Florida Statutes, provides in pertinent part:
(4) In order to perfect a lien or
security interest in a spirituous alcoholic beverage license which may be enforceable against the license, the party which holds the lien or security interest, within 90 days of the date of creation of the lien or security interest, shall record the same with the division on or with forms authorized by the division, which forms shall require the names of the parties and the terms of the obligation.
Petitioner's contention that its security interest in license 16-00318 was not created until October 14, 1988, the date Respondent was asked to release the C&S Bank lien, is rejected. Petitioner argues that because it was the debtor on the C&S Bank obligation, it could not record a second lien on license 16-00318 until the prior C&S Bank lien was released. This argument relates to the priority of the Petitioner's security interest, not the date the interest was created. While the satisfaction of the first lien may have enhanced Petitioner's lien position, the satisfaction of the C&S Bank lien had no bearing on the date Petitioner's security interest in the license was created. Pursuant to Section 561.65(4), Florida Statutes, Respondent would have been required to record Petitioner's lien if it had been requested to do so within 90 days of its creation even if other liens, including the C&S Bank lien, had remained unsatisfied.
Petitioner's security interests in license 16-00318 was created on July 15, 1987. The promissory note and security agreement executed by 587 Enterprises, Inc. and delivered to Petitioner at the closing of its purchase of license 16-00318 on July 15, 1987, created the Petitioner's security interest in license 16-00318. As of July 15, 1987, Petitioner's security interest had attached to the license because a security agreement describing the collateral had been executed and delivered, value had been given, and the debtor had rights in the collateral. See, Section 679.203(1), Florida Statutes.
Petitioner's request to have its security interest recorded against license 16-00318, filed with Respondent on December 7, 1988, was not made within
90 days of the creation of the lien or security interest as required by Section 561.65(4), Florida Statutes.
RECOMMENDATION
Based on the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that the Department of Business Regulation, Division of
Alcoholic Beverages and Tobacco, issue a Final Order which denies Petitioner's
request to have its lien or security interest recorded against spirituous alcoholic beverage license 16-00318.
DONE AND ENTERED this 12th day of June, 1989, in Tallahassee, Leon County, Florida.
CLAUDE B. ARRINGTON
Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division Of Administrative Hearings this 13th day of June, 1989.
APPENDIX
The findings of fact contained in paragraphs 1, 3, 4, 6, 7, 8, 9, 10, 11 of Respondent's proposed findings of fact are adopted in substance, insofar as material.
The findings of fact contained in paragraphs 2, 5 and 12 of Petitioner's proposed findings of fact are immaterial.
COPIES FURNISHED:
NORMAN ELLIOTT KENT, ESQUIRE POST OFFICE BOX 14486
FORT LAUDERDALE, FLORIDA 33302-4486
JOHN B. FRETWELL, ESQUIRE ASSISTANT GENERAL COUNSEL DEPARTMENT OF BUSINESS REGULATION 725 SOUTH BRONOUGH STREET TALLAHASSEE, FLORIDA 32399-1007
CAPT. RUSSELL R. SMITH DISTRICT SUPERVISOR
499 NORTHWEST 70TH AVENUE, SUITE 312 ATRIUM EXECUTIVE PLAZA
PLANTATION, FLORIDA 33317
STEPHEN R. MACNAMARA, SECRETARY DEPARTMENT OF BUSINESS REGULATION 725 SOUTH BRONOUGH STREET TALLAHASSEE, FLORIDA 32399-1007
JOSEPH A. SOLE, GENERAL COUNSEL DEPARTMENT OF BUSINESS REGULATION 725 SOUTH BRONOUGH STREET TALLAHASSEE, FLORIDA 32399-1007
LEONARD IVEY, DIRECTOR
DEPARTMENT OF BUSINESS REGULATION DIVISION OF ALCOHOLIC BEVERAGES
AND TOBACCO
THE JOHNS BUILDING
725 SOUTH BRONOUGH STREET TALLAHASSEE, FLORIDA 32399-1000
VAN B. POOLE, SECRETARY DEPARTMENT OF BUSINESS REGULATION THE JOHNS BUILDING
725 SOUTH BRONOUGH STREET TALLAHASSEE, FLORIDA 32399-1000
Docket for Case No: 89-000919
Orders for Case No: 89-000919
