STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BERNARD T. SCHMOKER, )

)

Petitioner, )

)

vs. ) CASE NO. 90-5853

) 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 January 23, 1991, in Fort Pierce, Florida.

APPEARANCES

For Petitioner: Dennis E. LaRosa, Esquire

Dennis E. LaRosa, P.A. 1901 Welby Way

Tallahassee, Florida 32308

For Respondent: Nancy C. Waller, Esquire

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

STATEMENT OF THE ISSUE

Whether Petitioner is entitled to apply for a new quota liquor license in Martin County, Florida.

PRELIMINARY STATEMENT

Petitioner participated in the March 29, 1990, random drawing for the selection of a quota liquor license that became available in Martin County, Florida. As a result of the drawing, Respondent sent to Petitioner on April 6, 1990, a "Notice of Selection" that he was entitled to apply for the quota license, but that he must do so within 45 days of the notification. The Notice of Selection was mailed by certified mail, return receipt requested, to Respondent at the address he listed with the Respondent. The Notice of Selection was not received by Petitioner and the certified mailing containing the Notice of Selection was returned to Respondent. Petitioner did not apply for the license within the time frames stated in Respondent's notice. On June 27, 1990, Respondent sent to Petitioner a "Notice of Disapproval" by certified

mail at the same address as the prior mailing. Petitioner received the Notice of Disapproval and timely filed this action to challenge Respondent's intended action to disallow Petitioner to apply for the quota license.

At the formal hearing, Petitioner testified on his own behalf and presented the additional testimony of one witness, Mr. L. B. Schoenfeld, Bureau Chief of Respondent's Bureau of Licensing and Records. Petitioner presented eight exhibits, each of which was accepted into evidence. Respondent presented additional testimony from Mr. Schoenfeld and presented three exhibits, each of which was accepted into evidence. At Respondent's request, official recognition was taken of Rule 7A-2.017(5), and (6)(a), Florida Administrative Code, and of Sections 561.17-561.20, Florida Statutes.

No transcript of the proceedings has been filed. At the request of the parties, the time for filing post-hearing submissions was set for more than ten days following the hearing. Consequently, the parties waived the requirement that a recommended order be rendered within thirty days after the transcript is filed. Rule 22I-6.031, Florida Administrative Code. Rulings on the parties' proposed findings of fact may be found in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Prior to March 29, 1990, Respondent duly advertized to the public that it intended to conduct a random selection drawing for quota liquor licenses that had become available in Martin County, Florida, by virtue of the county's growth in population as authorized by the provisions of Chapter 561, Florida Statutes.

   
   

2. Petitioner timely filed a complete "Preliminary Application For New Quota Alcoholic Beverage License", the form that was necessary to participate in this drawing for the Martin County license. Petitioner listed as his address 1522 44th Street, West Palm Beach, Florida 33407. The application was accepted by Respondent and Petitioner was assigned a number.

   
   

3. Petitioner's number was one of the ones selected by the random drawing. On April 6, 1990, a letter addressed to Petitioner with the heading "Notice of Selection" was prepared by Respondent and signed by Mr. L. B. Schoenfeld in his capacity as Chief, Bureau of Licensing and Records, Division of Alcoholic Beverages & Tobacco. This letter, referring to Mr. Schmoker's application for one of the licenses in Martin County, provided, in pertinent part, as follows:

   
   

   We are pleased to advise that you are one of the preliminary applicants selected in the drawing for an available liquor license in the county as referenced above. When an applicant is selected in a drawing, Florida law requires the selectee to file an appli- cation for a "grant" of the license or an application for the "issuance" of the license. The application for the "grant" of the license deals only with the qualifica- tions of the applicant and those persons listed on the application. The application for "issuance" of the license deals not

   only with qualifications, but includes among other things the location to be licensed.

   Having been selected and pursuant to

   561.19(2), Florida Statutes and 7A-2.017, Florida Administrative Code, you must file a full and complete application for the "grant" or a full and complete application for "issuance" of the license within 45 days of the date of this letter. Failure to file a complete application for the "grant" or "issuance" of the license within such 45 day period will be deemed as a waiver of your right to file for the new quota license.

   * * *

   Please bear in mind that you must file either application within 45 days of the date of this letter, which is calculated to be

   May 21, 1990. We urge you to move forward promptly in order to save time necessary to process the application and complete the investigative process. ...

   
   

4. This letter was addressed to Petitioner and mailed to him by certified mail, return receipt requested, on April 6, 1990, at "1522 44th Street, West Palm Beach, Fl 33407", the address he had listed on his application.

   
   

5. The Notice of Selection letter was not received by Petitioner. The original letter in the original mailing envelope was returned to Respondent on May 1, 1990. The markings on the envelope by the U.S. Post Office indicate that delivery was attempted on April 9 and April 18, 1990. The markings further indicate that the letter was ordered to be returned to sender by the Northwood Station, West Palm Beach, Florida, on April 24, 1990, with the explanatory notation that the certified mailing had been "Unclaimed".

   
   

6. Respondent made no effort to determine the reasons for the nondelivery because its policy is to rely on postal service for delivery of the notice. There were approximately 11,000 applications received by Respondent for all of the new quota licenses that had become available throughout the State. Of these, approximately 120 notices of selection, similar to the April 6, 1990, letter to Petitioner, were mailed by Respondent. Between 5 and 35 of these notices of selection were returned to Respondent by the U.S. Post Office as being undeliverable.

   
   

7. The address listed on Petitioner's application is a single family detached dwelling at which Petitioner has resided since 1972. Petitioner works out of his home and receives his mail by home delivery at the address he gave. When Petitioner is not at home, he has his brother-in-law check his mail. Petitioner checked his mail on a daily basis during April 1990.

   
   

8. On June 5, 1990, Respondent mailed to Petitioner at "1522 44th Street, West Palm Beach, Fl 33407", by U.S. Mail, a letter notifying Petitioner of Respondent's intent to deny his entitlement to apply for the new quota liquor license in Martin County. This letter gave Petitioner until June 15, 1990, to show cause why an order of denial should not be entered. No timely response was received by Respondent to its letter of June 5, 1990.

   
   

9. On June 27, 1990, Respondent mailed to Petitioner at "1522 44th Street, West Palm Beach, Fl 33407", by certified mail, return receipt requested, a "Notice of Disapproval". This mailing was received and signed for by someone other than Petitioner.

10. On July 23, 1990, Petitioner visited the offices of Respondent in Tallahassee, Florida. During this visit, Petitioner requested an administrative hearing, pursuant to Section 120.57, Florida Statutes, to contest the denial of his entitlement to apply for the quota license and he provided Respondent with the following address: "4937 Windward Avenue, Tequesta, Fl 33455". This is the address of a friend of Petitioner at whose residence Petitioner sometimes received mail. On July 30, 1990, Respondent sent to Petitioner an "Order on Informal Proceedings and Notice of Informal Hearing" by certified mail, return receipt requested, at the address in Tequesta, Florida. This certified mailing was subsequently returned to Respondent as being unclaimed.

    
    

11. The U.S. Postal Service's Form PS 1510 can be used by a member of the public to request that the Postal Service determine why a certified mailing was undeliverable. There was no evidence that either party attempted to use that form in this case.

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over this matter. Section 120.57(1), Florida Statutes.

    
    

13. Section 561.19, Florida Statutes, provides, in pertinent part, as follows:

    
    

    (2)(a) When beverage licenses become available by reason of an increase in the population of a county ... the division, if there are more applicants than the number of available licenses, shall provide a method of double random selection by public drawing to determine which applicants shall be considered for issuance of licenses. ...

    1. All drawing results shall be exempt from the provisions of s. 119.07(1), except that the persons selected in the drawing are to be disclosed to the public. ...

    2. Subject to this selection process, an applicant shall, after a drawing is held, have 45 days from the date the division mails the notice of selection to file an applica- tion on forms provided by the division and if such applicant is found qualified by the Beverage Law, a license shall be granted. ...

       
       

14. Rule 7A-2.017, Florida Administrative Code, provides, in pertinent part, as follows:

    
    

    (5) ... The division will notify by certi- fied mail those applicants whose priority number is within the number of available quota licenses. Such notification will be sent to the address listed in the application and shall notify the applicant of their entitlement to apply for a new quota liquor license. Should the division be unsuccessful in perfecting the mailing of such notice at

    the address listed on the application, the division shall have no further responsibility in notifying the applicant of their entitlement to apply for a quota liquor license.

    (6)(a) All applicants in the drawing whose number corresponds with the available number of quota liquor licenses shall file a full and complete application for a new quota liquor license, following their selection in the drawing. Such applications, instruc- tions, and other forms required are available from the District Field Office having juris- diction over such county and must be filed within 45 days of the date the division mails the notice of selection.

    (6)(b) ... Failure to file an application within such 45-day period shall be deemed a waiver of the applicant's right to file for a quota liquor license.

    
    

15. Respondent has the authority to adopt rules pertinent to its administration of Chapter 561, Florida Statutes. See, Section 561.11, Florida Statutes. Respondent followed the procedures it has established by Rule 7A- 2.017, Florida Administrative Code, for the notification of the applicants whose priority number is within the number of quota licenses available as chosen by the random drawing.

    
    

16. An agency's interpretation of its rules and governing statutes will not be overturned unless the interpretation is clearly erroneous. Health Quest Corporation, et al. v. Department of Health and Rehabilitative Services and Arbor Health Care Co., et al., 11 FALR 5427 (1989), ABC Liquors, Inc. v. Department of Business Regulation, 397 So.2d 696 (Fla. 1st DCA 1981); Department of Insurance v. Southeast Volusia Hospital District, 438 So.2d 815 (Fla. 1983).

    
    

17. The burden is on Petitioner to establish his entitlement to apply for the Martin County quota license. Astral Liquors, Inc. v. Department of Business Regulation, 432 So.2d 92 (Fla. 3d DCA 1983).

    
    

18. Petitioner argues that the notification procedures are inadequate and fail to meet constitutional standards. A constitutional attack on the provisions of Section 561.19(2)(c), Florida Statutes, which requires, in pertinent part, that "... an applicant shall, after drawing is held, have 45 days from the date the division mails the notice of selection to file an application ..." may only be brought in a court of competent jurisdiction. See,

    10 Fla. Jur. 2d, Constitutional Law, Section 47. A challenge to Respondent's Rule 7A-2.017, Florida Administrative Code, should have been brought pursuant to Section 120.56, Florida Statutes. The Amended Petition For Hearing, which requests a hearing pursuant to Section 120.57, Florida Statutes, does not properly frame a challenge to the validity of the Rule on constitutional grounds or on the grounds that the Rule is an invalid exercise of delegated legislative authority.

    
    

19. Respondent's decision that Petitioner had waived his right to apply for the quota license was based on its interpretation and application of Section 561.19(2)(c), Florida Statutes, and of Rule 7A-2.017, Florida Administrative Code. Petitioner failed to establish that Respondent's interpretation and

application of this statute and rule were clearly erroneous. Consequently, Respondent's decision that Petitioner is not entitled to apply for the quota liquor license should be sustained.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered which finds that Bernard T. Schmoker is not entitled to apply for a new quota liquor license in Martin County, Florida.

RECOMMENDED in Tallahassee, Leon County, Florida, this 28th day of February, 1991.

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 28th day of February, 1991.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-5853

The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioner.

1. The proposed findings of fact in paragraphs 1, 3, 5, and 9 are adopted in material part by the Recommended Order.

2. The proposed findings of fact in paragraphs 2, 6, 11, and 12 are rejected as being subordinate to the findings made.

3. The proposed findings of fact in the first sentence of paragraph 4 are rejected as being subordinate to the findings made. The proposed findings of fact in the second and fourth sentences of paragraph 4 are adopted in material part by the Recommended Order. The proposed findings of fact in the third sentence of paragraph 4 are rejected as being contrary to the greater weight of the evidence.

4. The proposed findings of fact in paragraphs 7, 8, and 10 are rejected as being subordinate to the findings made or as being unnecessary to the conclusions reached.

5. The proposed findings of fact in paragraph 13 are rejected because the Petitioner's testimony about that telephone call lacked certainty as to when the call was made and to whom Petitioner spoke. Further, the proposed findings of fact in paragraph 13 are rejected as being unnecessary to the conclusions reached.

6. The proposed findings of fact in paragraph 14 are rejected as being unnecessary to the conclusions reached.

The following rulings are made on the proposed findings of fact submitted on behalf of the Respondent.

1. The proposed findings of fact in paragraphs 1 and 3-6 are adopted in material part by the Recommended Order.

2. The proposed findings of fact in paragraph 2 are rejected as being contrary to the greater weight of the evidence and to the finding that the envelope reflected two attempts at mailing, not three.

3. The proposed findings of fact in paragraph 7 are rejected as being unnecessary to the conclusions reached.

COPIES FURNISHED:

Nancy Waller, Esquire Department of Business

Regulation

725 Bronough Street

Tallahassee, Florida 32399-1007

Dennis E. LaRosa, Esquire 1901 Welby Way

Tallahassee, Florida 32308

Leonard Ivey, Director

Division of Alcoholic Beverages and Tobacco

Department of Business Regulation The Johns Building

725 South Bronough Street Tallahassee, Florida 32399-1007

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS:

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 90-005853

Orders for Case No: 90-005853