STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS )

REGULATION, DIVISION OF ) ALCOHOLIC BEVERAGES AND TOBACCO, )

)

Petitioner, )

)

vs. ) CASE NO. 90-1194

) BEAR CAP INVESTMENTS, INC., ) d/b/a SUWANNEE LOUNGE AND )

PACKAGE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly- designated Hearing Officer, Stephen F. Dean, held a formal hearing in the above- styled case on June 28 and 29, 1990 in Gainesville, Florida.

APPEARANCES

For Petitioner: Thomas A. Klein, Esquire

Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007

For Respondent: Don Reid, Esquire

605 N.E. 1st Street, Suite E Gainesville, Florida 32601

STATEMENT OF THE ISSUES

Whether the Alcoholic Beverage License No. 31-0001, Series 8-COP, issued to the Respondent, should be reinstated and the action dismissed or whether the Petitioner should impose a civil penalty, suspend, or revoke the liquor license of the Respondent, pursuant to Section 561.29(1)(a), Florida Statutes, due to a violation of Chapter 893, Florida Statutes, by Respondent's agents, officers, servants or employees while in the scope of their employment, or by negligently overlooking or condoning violations of Chapter 893, Florida Statutes, by others on the licensed premises; or did the licensee violate Section 561.29(1)(c), Florida Statutes, by maintaining a nuisance on the licensed premises in that flagrant violations of Chapter 823 and 893, Florida Statutes, were allowed.

PRELIMINARY STATEMENT

On February 24, 1990, the Petitioner suspended Beverage License No. 31- 0001, Series 8-COP, owned by Bear Cap Investments, Inc., d/b/a Suwannee Lounge and Package by emergency order.

Prior to the deadline of 12:00 p.m. on Tuesday, February 27, 1990, the Respondent filed a timely Request for an Emergency Hearing.

The Respondent waived his right to the emergency hearing in a telephonic conference with attorney for Petitioner, Thomas A. Klein, and Hearing Officer, Stephen F. Dean, on Thursday, March 1, 1990 and stipulated to a hearing on why the license should not be suspended or revoked or have a civil penalty imposed based upon an Administrative Complaint issued on February 24, 1990. By agreement, the hearing was noticed for June 28, 1990 in Gainesville, Alachua County, Florida.

It was stipulated that the identity of the controlled substances taken into custody and the chain of custody would not have to be proven by the State. It also was stipulated that the drug transactions, alleged to have occurred in the Administrative Complaint, did occur.

It was stipulated that the proposed findings of fact and recommended orders would be posted on July 27, 1990. The Petitioner's findings were received on July 25, 1990 and Respondent's findings were received on July 30, 1990.

The Appendix, attached hereto and incorporated by reference herein, contains a listing of those findings which were adopted and those which were rejected and why.

The evidence received during the hearing includes the following:

EXHIBITS

1. Emergency Suspension Order and Administrative Complaint and Order to Show Cause and part of the record of the Division of Administrative Hearings, by Stipulation.

   
   

2. The Petitioner's certified packet of licensing data, by Stipulation (Petitioner's Exhibit 1).

   
   

3. Deposition of Daniel Robert McKenzie, Jr., taken on March 27, 1990 in the Gilchrist County Courthouse, Trenton, Florida, by Stipulation (Respondent's Exhibit 1).

   
   

4. Deposition of Beverage Agent Reylius Thompson, taken on June 6, 1990 in the Gilchrist County Courthouse, Trenton, Florida, in the Case of State of Florida v. Daniel McKenzie, Jr., Case No. 90-33-CF through 90-37-CF, by Stipulation (Respondent's Exhibit 2).

   
   

5. Deposition of Beverage Agent Ernest M. Green, Jr., taken on June 6, 1990 in the Gilchrist County Courthouse, Trenton, Florida, in the case of State of Florida v. Daniel McKenzie, Jr., Case No. 90-33-CF through 90-37-CF, by Stipulation (Respondent's Exhibit 3).

   
   

6. Diagram of the establishment prepared by Beverage Agent Anthony Drinkwater, by Stipulation (Hearing Officer's Exhibit 1).

   WITNESSES

   
   

   Petitioner's witnesses:

   
   

   1. Bruce Ashley

   2. Michael Hawkins

   3. Jeanine Krause

   4. Sheriff James J. Floyd

      D. Betty D. Warner

      1. Randy West

      2. Anthony Drinkwater Respondent's witnesses:

      1. Barbara Edelen

      2. Patricia Ann "Annie" Curiel

      3. Phyllis Ann "Rusty" Chase

      4. Wanda Bernice Sampley

      D. Candy H. Allen

      1. Judy Marie Russell

      2. Diana Marie Kirkland

      3. Richard "Teddy Bear" Chase

      
      

7. A two-volume transcript of the proceedings was provided. References to the transcript will be T-I or T-II-page number.

FINDINGS OF FACT

1. The Respondent is the holder of Alcoholic Beverage License No. 31-0001, Series 8-COP, for a licensed premises known as the Suwannee Lounge and Package, which is located at the intersection of U.S. Highway 19 and State Road 26, Fanning Springs, Florida. Richard D. Chase, a/k/a "Teddy Bear", is the President of the licensed corporation.

   
   

2. On February 24, 1990, the Petitioner suspended the Respondent's license by an Emergency Suspension Order. The Petitioner made a timely request for hearing.

   
   

3. 1984, Mr. and Mrs. Richard D. Chase, together with two Miami investors, formed Bear Cap Investments, Inc. and purchased the above-referenced alcoholic beverage license. Mr. and Mrs. Chase each had over eight (8) years experience in managing bars at American Legion Posts in the Dade County area. The Miami corporate investors relied upon Mr. Chase's management skills and were not involved in the day-to-day operation of the business.

   
   

4. Only licensee Richard Chase, a corporate officer and stockholder of Bear Cap Investments, Inc., was involved in the alleged violation under Chapter 561, Florida Statutes. Mr. Chase is a 15% owner of stock and the other stockholders, John Gmyrek (40% stockholder); Tom Sullivan (30% stockholder); and Phyllis Chase (15% stockholder), are not directly involved with the management of the lounge.

5. The licensed premises was a concrete structure, 60 x 100 feet, sitting on a two-acre parcel of land. The lounge was in Gilchrist County, but the Levy County line ran through the parking lot. The front entrance, facing U.S. 19, has an enclosed 12 x 12 foot foyer with standard glass doors as an entrance to the building.

   
   

6. To the left of the entrance, there was a 40-foot bar that ran from a storage room towards the front of the establishment and could seat approximately

   40 people on both sides of the U-shaped structure. A second bar to the right of the door, running approximately 15 feet along the west wall, was used only on weekends. In front of the bar was an opened walkway area, then tables and chairs which could seat approximately 200 people, a dance floor and a bandstand. Further, to the right of this bar was an area with game machines and pool tables. Along the south wall was an office for licensee Richard Chase, which was approximately 10 x 12 feet, along the corridor leading to the bathrooms. A diagram of the interior was introduced as Hearing Officer Exhibit 1.

   
   

7. The parking lot held upwards of 100 vehicles on weekends. It was illuminated by floodlights and by a sign 60 feet from the foyer door. Entertainment, other than on weekends, was provided by a juke box.

   
   

8. Agents in the Special ABSET Unit of the Division of Alcoholic Beverages and Tobacco conducted an investigation in Gilchrist County, Florida, from February 3-22, 1990 of drug sales in licensed liquor establishments following a complaint from the Police Chief of Trenton, Florida, in a letter to the Department, and following conferences with Gilchrist County Sheriff Jim Floyd. In addition to the Suwannee Lounge, the Division of Alcoholic Beverages and Tobacco investigated the Old Tavern, the Hitching Post, and the Santa Fe Lounge.

   
   

9. The investigation of the premises was conducted by Agents Randy West, Anthony Drinkwater, Betty D. Warner and Janine Krause. When any of the agents were at the Suwannee Lounge, they were kept under surveillance from a van in the parking lot by Agents Reylius Thompson and Ernest Green. ABSET Director Bruce Ashley also participated in some of the surveillance from the van. Due to Agent Krause's employment as a waitress at the Suwannee Lounge, agents were there during the weekend nights of February 9th, 10th and 16th and 17th.

   
   

10. On the night of February 3, 1990, investigators from the DABT arrived on the licensed premises for the purpose of conducting an undercover investigation. They reported nothing untoward, and left, returning again on February 5, 1990. T-I- 26,27. February 4, 1990 was a Saturday.

    
    

11. On the night of February 4, 1990, there was a band and an all-male review at the licensed premises. T-I-27. On that date, Investigators Krause and Warner entered the premises together, where they were covered inside by Investigator West and outside by Investigators Ernest Green and Ray Thompson. On this occasion, Krause spoke with Richard Chase with whom she indicated she was trying to find a job. Chase suggested the Wal-Mart; and after finding that Krause had experience as a waitress, he also suggested she see Diana, his head bartender, who did all of the hiring. February 4, 1990 was a Sunday.

    
    

12. (a) On the night of February 5, 1990, Investigators Krause, Warner, and West returned to the licensed premises. T-I-30. There was no band; however, there was a juke box playing. A customer named Dave, last name unknown (LNU), was seated at the bar, one seat away from where Krause was sitting, and talking to an unidentified man next to Krause. Krause could not hear the

    conversation between the two men. After Dave got up, the unidentified man next to Krause commented to her that Dave had been the second person to offer to sell him drugs on that evening.

    
    

    1. Dave subsequently approached Investigator West, who was standing close to the door, and offered to sell marijuana to West. West agreed; they both walked to Dave's truck, which was parked in the parking lot; and West purchased marijuana from Dave. T-I-149.

       
       

    2. Thereafter, Dave approached Krause, who was walking to the bathroom, and offered to sell her marijuana. She agreed, sought out Investigator Warner, who accompanied her to Dave's truck, where Krause purchased marijuana from Dave. T-I- 31.

       
       

    3. Subsequently, one of the male dancers, who Krause had met the night before, approached Krause and asked her whether she had purchased drugs from Dave. T-I-33. She smiled and the dancer approached Dave. Dave and the dancer left the bar, returned sometime later, and asked Krause if she had some cigarette papers. T-I-33. She said she did not and the dancer left again. T- I-34.

       
       

    4. Krause and another patron sat at the bar carrying on a discussion about drug use during this period. While they were talking, Viola was tending bar in their vicinity. T-1-34.

       
       

       The dancer returned and said he had found some cigarette papers. He and Dave asked if Krause wanted to go get high. Krause asked where and was advised they could go to the "band house", a small building detached from the licensed premises in which the male dancers were being permitted to stay. The dancer and Dave left and returned in a few minutes. T-I-36. Krause and Warner left the premises shortly after that. T-I-37.

       
       

    5. The drugs purchased by West and Krause were analyzed and found to be marijuana.

       
       

    6. Richard Chase was not on the premises on February 5, 1990, which was a Monday.

    
    

13. On February 7, 1990, Investigator Drinkwater entered the licensed premises. While there, he went to the bathroom, where he observed three males bent over what appeared to be three "lines" of cocaine on the bathroom vanity. Upon his return to the bar, he was asked by a customer, Wayne Vincent (or Vinson), if he wanted to "do a line" of drugs.

    
    

14. On the night of February 8, 1990, Krause and Warner entered the licensed premises covered by Jackson and Green in the van parked in the parking lot. T-I-37. While inside the premises, Krause and Warner were invited by a customer, Carlton Jackson, a patron of the bar, to leave the bar and smoke marijuana in his car in the parking lot of the bar. They smoked marijuana (or simulated smoking it) in Jackson's car, which he moved from the front of the door to the side of the building. February 8, 1990, was a Thursday.

    
    

15. (a) On the night of Friday, February 9, 1990, Krause worked as a waitress on the licensed premises. She was accompanied by Warner. T-I-112 and T-I-39. As she began to wait on tables, she was given a tray, money, and a ticket book by Diana, the head bartender, who did not give any instructions to Krause about what to do about drugs on the premises.

    1. Richard Chase was on the premises on February 9, 1990.

       
       

    2. Krause observed the patrons as she waited tables. She saw patrons walk outside together and re-enter the premises. Krause observed the patrons had a marijuana smell about them, their eyes were bloodshot; and they appeared to be under the influence. Other patrons were talking about using drugs.

       
       

    3. Krause had six offers to take her outside and get high, which she declined, and was given a marijuana cigarette as a tip.

    
    

16. On February 10, 1990, Investigator West negotiated the purchase of half a gram of cocaine in the licensed premises from a customer, Wayne Vinson or Vincent. Vinson or Vincent delivered the cocaine to West in the bathroom of the bar.

    
    

17. On February 11, 1990, Krause worked as a waitress again at the licensed premises. T-I-43. Annie LNU, another waitress, advised Krause that she could safely discuss drugs with her and most others there, but not in front of Diana, the head bartender. Annie also told Krause she could not leave her station during her shift, except to go to the bathroom and doing drugs in there was "not cool." After closing on that night, Krause displayed a package of cigarette papers to Richard Chase and thought that he saw them. Outside the premises, a couple of white, male patrons commented to Krause that she "had just missed some snort."

    
    

18. (a) On the evening of February 16, 1990 and on the morning of February 17, 1990, Krause worked as a waitress at the licensed premises. T-I-46. Investigator Warner was covering Krause inside the premises. Warner was introduced to a customer, James Corbin, by Investigator Drinkwater, who told Corbin that Warner wanted to purchase some cocaine. Corbin told Warner he could get her a half gram of cocaine. Later, Drinkwater came to Warner and said that Corbin did not trust her and would only do business through him. Warner gave

    $40.00 to Drinkwater while he was standing at the second bar in the vicinity of the bathrooms. Subsequently, Corbin delivered a bag of cocaine to Drinkwater in the bathroom, and Drinkwater, in turn, delivered the cocaine to Warner.

    
    

    1. Warner walked up to Krause in the middle of the darkened lounge while she was working, held up a small bag of cocaine, and stated, "See what I have got." Krause held up a marijuana cigarette which she had received from a patron and stated, "See what I have got." This occurred while the band was playing, and their conversation was loud enough that they could hear one another. She left the marijuana cigarette on her tray for 45 minutes while waiting on customers and ordering drinks from the bar. Krause was working a station serviced by Wanda LNU, and if Wanda saw the marijuana cigarette, Wanda made no comment about it.

       
       

    2. After closing, Krause conversed with Richard Chase in his office as he was counting money. She advised him that it had been a weird night and that she had had several offers to go outside and get high. Chase answered her with one word, "Yeah."

    
    

19. (a) On February 17, 1990, Krause worked as a waitress at the licensed premises. T-I-50. Krause asked a patron, Mitch LNU, if he could find a bag of marijuana for her. Mitch later told Krause that he had found a marijuana cigarette for her, and it would be great to smoke that after work. T-I-51.

    Krause also told a patron named Shannon LNU that she was looking for a quarter of an ounce of marijuana. Shannon later told her that he had looked at a bag of marijuana but that it was over priced.

    
    

    1. Investigator Warner approached James Corbin and asked him if he could get her another half gram of cocaine. Warner got $40.00 from her purse at the bar, delivered it to James Corbin, and Corbin subsequently delivered a bag of cocaine to Warner in the vicinity of the hallway to the bathrooms. T-I-51 and T-I-120. Warner showed Krause the cocaine in the middle of the bar; however, the lights were turned down. Krause put her tray down at her station, went to the bathroom with Warner and pretended as if they had taken cocaine.

       
       

    2. Krause talked with Annie and told her that it had been a bad night, and the only good thing that had happened was that she had received a marijuana cigarette for a tip. Annie replied to Krause that she wished someone would leave her a marijuana cigarette. T-I-53.

       
       

    3. Krause told Wanda, her bartender, that someone had walked out on a drink tab, and someone had left her a marijuana cigarette as a tip. Wanda commented that that sometimes happened. T-I-53.

       
       

    4. Krause showed the marijuana cigarette to Rob LNU, a member of the band and his girlfriend, Sharon LNU. Rob tried to get her to split it with them, but Krause refused. T-I-53.

       
       

    5. As Krause left the premises that night, Krause showed Chase a marijuana cigarette outside the premises which she had gotten as a tip and commented that it was the only good thing that had happened that night. Chase laughed and put his arm around her.

    
    

20. On February 18, 1990, Krause and Warner entered the premises as patrons. Another patron, Tommy LNU, asked them if they wanted to go outside and smoke a marijuana cigarette. They left the bar with Tommy, went to his truck which was across the parking lot in view of the front door, and simulated smoking a marijuana cigarette. Tommy also gave them the remains of several marijuana cigarettes.

    
    

21. On February 21-22, 1990, Krause and Warner entered the licensed premises. T-I-60 and T-I-129. Investigators West and Drinkwater were sitting at the bar when Krause and Warner arrived. Investigator Drinkwater purchased marijuana from Daniel "Dano" McKenzie and Investigator West purchased cocaine at the bar of the licensed premises. T-I-l64-166, T-I-60 and T-I-129. At the time of the purchase, the bartender and manager, Diana Kirkland was tending bar by herself, (T-I-82) and had her back turned towards West and McKenzie while they were conversing. During these sales, West and Drinkwater were seated at the end of the main bar closest to the main entrance, and Kirkland was standing in the middle of the main bar approximately 15-20 feet away. See Hearing Officer's Exhibit 1. During the transaction, West stated that Kirkland was standing there looking over at her customers and looking back at West and McKenzie. Although Krause heard part of the conversation between McKenzie and West (T-I-57), Kirkland did not hear the conversation (T-I-254), and although West held up the bags of drugs, Kirkland did not see them.

    
    

22. On February 21-22, 1990, Krause purchased a half gram of cocaine from McKenzie for $40.00 while sitting at the back bar. McKenzie told her to be real careful around the people in the bar and told Krause to find him when he was on the door and he would tell her which people were okay.

23. McKenzie was a major source of drug trafficking on the premises. McKenzie described himself as a part-time employee of the premises. He was hired and paid by Neal Nielson, who was a regular employee, to fill in for him. When working, McKenzie had access to the storeroom and did various tasks, to include collecting money, checking identification, and filling up coolers. He advised Krause on February 21-22, 1990 to be careful about talking about drugs around Viola and Barbara LNU. On that night, McKenzie was not working and was not an employee of the licensed premises.

    
    

24. On February 24, 1990, a raid was conducted of the licensed premises by agents of several law enforcement agencies. During the raid, all of the customers and employees were forced to leave the premises where they were checked by narcotics dogs. The premises was then searched with the assistance of these dogs. This revealed a cache of drugs which were found in the area in which McKenzie had been working and several marijuana cigarette butts discovered in a spittoon in the pool playing area of the bar. No other drugs were found on the premises, customers, or employees.

    
    

25. There were no written policies on drug use or signs prohibiting it on the premises. T-I-50

    
    

26. The only regular, full-time employee who discussed drugs and drug use with agent Krause was "Annie" Curiel, who had worked at the bar for only five

    (5) weekends prior to her discussion on February 9, 1990. She warned Agent Krause not to talk about marijuana to Diana, the Manager.

    
    

27. The only drugs found by agents and law enforcement officers, using a drug-sniffing dog on February 24, 1990, the night the Emergency Suspension Order was served, were those belonging to Daniel "Dano" McKenzie and a few marijuana "roaches" in a spittoon near the pool table. Every patron and employee was searched by the drug-sniffing dog as they exited. A complete search of the premises, including storage areas above the bar, by the dog, turned up no illegal narcotics.

    
    

28. Agents Thompson and Green, in their surveillance van in the parking lot, did not witness, hear, or photograph any drug transaction during the entire operation, to include those in the parking lot. While agent Krause was wearing a body bug, it was not possible to hear clearly during business hours due to the noise and at no time did Thompson and Green hear any discussion of drugs. The bug was used mostly for Agent Krause's safety after closing.

    
    

29. All of the employees, with the exception of Investigator Krause, were aware of the licensee policy that drug use by employees would not be tolerated. The licensee had instructed the manager, Diana Kirkland, to fire a former employee, Denise, after a patron reported to bartender, Wanda Sampley, that the waitress was using cocaine in the bathroom. Most employees were aware that they would be fired if found to be using drugs or that patrons would be ejected and barred from the establishment if they were involved in drug activity.

    
    

30. Sheriff Jim Floyd reported that there were 97 calls to the Suwannee Lounge from February 24, 1989 until February 23, 1990, of which only 15 (or 15%) were related to drugs. Of the five (5) Series 8-COP licenses in his jurisdiction, two (2) are in the City of Trenton for which he has no statistics. The Suwannee Lounge is by far the largest licensed premises in his jurisdiction. The only other licensed premises for which he was able to provide statistics indicated that eight (8) drug arrests were made in the parking lot of the Santa

    Fe Lounge, another licensed premises, in one evening. The licensed premises is not charged for maintaining a nuisance for anything other than drug activity, as stated in Count 15 of the Order to Show Cause.

    
    

31. Licensee Richard Chase had requested uniformed Gilchrist County Deputies, to be paid by the licensee, inside his premises and in his parking lot as a deterrent to any violation of the law; however, Sheriff Jim Floyd denied the employees permission because of potential liability by the Sheriff's Department.

    
    

32. Licensee Richard Chase was aware of the Beverage Department's policy of revoking beverage licenses on premises where the owners or licensees were involved in the sale or possession of drugs. Licensee Chase had signed up for the voluntary Responsible Vendors Program, which went into effect on January 1st, of which training on handling illegal drug activities on the premises is a minor component.

    
    

33. On June 16, 1990, the building housing the licensed premises burned from unknown causes, leaving only the concrete block walls standing.

    
    

    CONCLUSIONS OF LAW

    
    

34. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes. The licensee of record on the dates in question was Bear Cap Investments, Inc., d/b/a Suwannee Lounge and Package, as reflected by the records of the Division of Alcoholic Beverages and Tobacco. The Department charges the licensee with violation of Section 561.29(1)(a) and (c), Florida Statutes.

    
    

35. Section 561.29(1)(a), Florida Statutes, authorizes the Division of Alcoholic Beverages and Tobacco to fine, revoke or suspend an alcoholic beverage license of any person upon a finding of:

    
    

    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, or 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 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. (emphasis supplied)

36. The facts reflect that the only direct conduct by an alleged employee which possibly violates the quoted statute was the sale by McKenzie of cocaine and marijuana to Krause, Drinkwater and West on February 22, 1990. McKenzie described himself as a part-time employee of the licensed premises to West; however, this was controverted by Chase, who stated that McKenzie filled in for the regular doorman on occasion at the regular doorman's request and was paid by the regular doorman. There is no evidence that on Thursday, February 22, 1990, McKenzie was functioning as the doorman. Additional evidence shows that the lounge did not employ a doorman on Thursday nights. McKenzie was not an employee of the licensee, and the first portion of this statute was not violated by his sale of controlled substances to West, Krause and Drinkwater.

    
    

37. There are no annotations on the second portion of Section 561.29(1)(a), emphasized above, which address permitting others to break the laws of Florida or the United States. However, the court in Bach v. Florida State Bd. of Dentistry, 378 So.2d 34 (1st DCA-1979) discusses this portion of the beverage statutes. The court points out that a literal meaning of the statute indicates that a beverage license could be revoked for a violation of law by an employee, irrespective of the licensee's personal fault. However, the court observes that the courts have refused to sustain revocations based upon a single occurrence of a violation. The courts have sustained disciplinary action only when there is a showing that laws were repeatedly and flagrantly violated by the employees. The court states in Bach, above, that an inference arose when there were repeated and flagrant violations by employees that the violations were fostered, condoned or negligently overlooked by the licensee. The court finally states: ". . . if evidence supported the conclusion that the licensee failed to exercise ordinary care in the maintenance of the licensed premises or the supervision of his employees, he could be found guilty of negligence and his license revoked."

    
    

38. If this is the standard for judging the conduct of employees, it is concluded that to show that the licensee fostered, condoned or negligently overlooked violations, one must show the licensee had knowledge of the conduct of patrons or failed to exercise ordinary care in managing the licensed premises or supervising employees. See Heifetz v. Dept. of Business Regulation, 475 So.2d 1277 (1st DCA-1985) and Golden Dolphin No. 2 Inc. v. State, Etc., 403 So.2d 1372 (5th DCA-1981).

    
    

39. There is no evidence of any misconduct by employees. There was no evidence that the licensee had knowledge of the illegal conduct of patrons. The licensee did not violate this portion of Section 561.29(1)(a), supra. The issue of exercising due care is discussed in relationship to maintaining a nuisance on the licensed premises.

    
    

40. The Department charges the licensee with maintaining a public nuisance in violation of Section 561.29(1)(c), Florida Statutes. Section 823.10, Florida Statutes, defines nuisance as:

    
    

    Any store, shop, warehouse, dwelling house, building, vehicle, ship, boat, vessel, or aircraft, or any place whatever, which is visited by persons for the purpose of unlawfully using any substance controlled under chapter 893, or any drugs as described in chapter 499, or which is used for the illegal keeping, selling, or delivering of the same shall be deemed a public nuisance.

    No person shall keep or maintain such public nuisance or aid and abet another in keeping or maintaining such public nuisance.

    
    

41. Similarly, Section 893.13(2)(a)5, Florida Statutes, makes it a violation of criminal law:

    
    

    to keep or maintain any store, shop, warehouse, dwelling, building, vehicle, boat, aircraft or other structure or place which is resorted to persons using controlled substances in violations of this chapter for the purpose of using these substances or which is used for keeping or selling them in violation of this chapter.

    
    

42. Marijuana and cocaine are defined as controlled substances by Section 893.03, Florida Statutes, and Section 893.13(1)(a), Florida Statutes, makes it unlawful for any person to sell a controlled substance.

    
    

43. The facts reveal that, of the ten incidents involving drugs on the premises, none involved employees or keeping drugs on the premises. Of the ten incidents, four occurred outside in the parking lot and of six were inside. Of the six which occurred inside, they all occurred in the bathrooms, bathroom hallway, or away from the bars and were done surreptitiously except the sale and delivery of drugs to West and Drinkwater at the bar on February 21-22, 1990. Of the six incidents which occurred inside, only Investigator Drinkwater's observations on Wednesday, February 7, 1990, arguably involved drug use.

    
    

44. Investigator Drinkwater observed three men leaning over what appeared to him to be cocaine; however, the substance was not seized and analyzed, and Drinkwater did not observe the men use the substance. This was the only indication of possible use in the lounge. Other testimony indicated that use in the lounge was "not cool," and that drugs were used outside by those who used drugs.

    
    

45. There remains only the allegations that drugs were sold on the premises. The testimony reflects that the drug sales were negotiated inside and outside the lounge, and with one exception, these transactions took place surreptitiously in the parking lot, the bathrooms, the hallway to the bathroom, and the darkened areas of the lounge. On February 21-22, 1990, "Dano" McKenzie, a patron, negotiated the sale and delivery of cocaine and marijuana to both Drinkwater and West who were sitting together at the main bar. During this transaction, the head bartender was present at the main bar; however, at the time of the transaction she was looking away from Drinkwater towards other customers. The bartender testified that she never heard or saw any drug sales or deliveries. Given the size of the bar and her performance of bartending duties, it cannot be concluded from the evidence that the bartender knew or should have known about the transaction which occurred bar.

    
    

46. Although there is evidence that the licensed premises was the locus for the sale and delivery of drugs, the term "used" indicates an involvement beyond merely being the place where the sale or delivery took place. "Used" is defined in Webster's New Collegiate Dictionary, 1975 Edition, as "employed in the accomplishment of something." Further, there is no evidence that the licensee knew about these acts, and the illegal "use" of the premises is not connected to the licensee.

47. The conduct observed and described by the agents reflects that drug sales and use were surreptitious and generally confined to the parking lot. The evidence reflects that Chase had asked the Sheriff about hiring off-duty deputies to police the interior and exterior of the premises. The Sheriff refused permission for his men to work at the licensee's premises when off duty because of concerns over liability for his officers. Patrols in the area were apparently difficult and unproductive because of the location of the premises on a county line and near a major highway. The unique location of the lounge and the inability or unwillingness of law enforcement agencies to patrol the premises adequately contributed greatly to the lawless behavior of the patrons.

    
    

48. The evidence does not support a finding that the licensee had knowledge of the sales or failed to exercise due care in managing the premises or supervising employees. The evidence indicates that neither the sheriff nor the licensee could adequately police the parking lot of the premises. The investigators found that employees and patrons stated and acted as though using drugs in the lounge was not permitted. Although drug sales took place in the parking lot and in the lounge, these transactions were surreptitious with the exception of the sales by McKenzie to West and Drinkwater which are discussed in detail above. In that single instance, based upon the facts presented, it cannot be concluded that the head bartender used less than due care in failing to observe the transactions mentioned. However, if one assumed that there was reason to believe that she should have known and was less than diligent, this would be only one incident in which such contact was demonstrated. The cases indicate that the conclusion that the licensee was not diligent will not be based upon one occurrence.

    
    

49. Having determined that the sales were surreptitious and not known to the licensee, and that the licensee was diligent, it is concluded that the Respondent licensee did not violate Section 561.29(1)(c), Florida Statutes.

RECOMMENDATION

Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is therefore, recommended that the charge against the licensee be dismissed.

RECOMMENDED this 24th day of September, 1990, in Tallahassee, Leon County, Florida.

STEPHEN F. DEAN

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 24th day of September, 1990.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-1194

Respondent's Proposed Findings of Fact

1. Adopted as paragraph 9.

2. Adopted as paragraphs 1, 6, 7 and 8.

3. Adopted as paragraphs 10 and 12.

4. Summary of evidence.

5. Adopted.

6. Adopted.

7. True, but irrelevant.

8. True, but irrelevant.

9. Adopted in part as paragraph 3; remainder is irrelevant.

10. Adopted as paragraph 33.

11. True, discussed in detail in different context.

12. True, discussed in detail in different context.

13. Adopted as paragraph 27.

14. Adopted as paragraph 28.

15. First sentence rejected as contrary to facts. Second sentence true but summarized.

16. Adopted as paragraph 24.

17. First sentence true but irrelevant. Second sentence, drug use by employees is discussed in detail.

18. Adopted and discussed in detail in Conclusions of Law.

19. Adopted as paragraph 22.

20. Adopted as paragraphs 22 and 23.

21. Adopted as paragraph 31.

22. Adopted as paragraph 32.

23. Adopted as paragraph 5.

24. Adopted as paragraphs 2 and 34.

Petitioner's Proposed Findings of Fact

1. Adopted as paragraph 1.

2. Adopted as paragraph 3.

3. Adopted as paragraph 13.

4. Adopted as paragraph 13.

5. Adopted as paragraph 13.

6. Irrelevant.

7. Adopted as paragraph 14.

8. Adopted as paragraph 15.

9. Adopted as paragraph 16.

10. Adopted as paragraph 17.

11. Adopted as paragraph 18.

12. The facts show that Krause showed Chase drugs and spoke to him about drugs when he was otherwise occupied and in ambiguous language. This does not establish that he was knowledgeable of violations occurring.

13. Adopted as paragraph 19.

14. Adopted as paragraph 24.

15. Adopted as paragraph 19.

16. Adopted as paragraph 19.

17. Adopted as paragraph 20.

18. Adopted as paragraph 20.

19. Adopted as paragraph 20.

20. Adopted as paragraph 21.

21. Adopted as paragraph 22.

22. Adopted as paragraph 22.

23. Adopted as paragraph 22.

24. Adopted as paragraph 23.

25. Rejected as hearsay.

26. First sentence true and adopted as paragraphs 26 and 30. Second sentence rejected as argument.

COPIES FURNISHED:

Leonard Ivey, Director

Division of Alcoholic Beverages and Tobacco

Department of Business Regulation The Johns Building

725 South Bronough Street Tallahassee, FL 32399-1000

Joseph A. Sole, Esq.

General Counsel

Department of Business Regulation 725 South Bronough Street Tallahassee, FL 32399-1000

Thomas A. Klein, Esq.

Department of Business Regulation 725 South Bronough Street Tallahassee, FL 32399-1007

Don Reid, Esq.

605 N.E. 1st Street, Suite E Gainesville, FL 32601

Docket for Case No: 90-001194

Orders for Case No: 90-001194