STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS )

REGULATION, DIVISION OF )

ALCOHOLIC BEVERAGES AND )

TOBACCO, )

)

Petitioner, )

)

vs. ) CASE NO. 92-2054

)

201 WEST, INC., d/b/a )

CENTRAL CITY/CONGO CRAIG'S )

SAFARI, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Gainesville, Florida, before Robert T. Benton, II, Hearing Officer of the Division of Administrative Hearings on October 28, 1992. The parties filed proposed recommended orders on November 17, 1992. The attached appendix addresses proposed findings of fact by number.

APPEARANCES:

For Petitioner: Thomas A. Klein, Esquire

725 South Bronough Street Tallahassee, Florida 32399-1007

For Respondent: Sy Chadroff, Esquire

2700 S.W. 37th Avenue Miami, Florida 33133-2728

STATEMENT OF THE ISSUE

Whether the Division of Alcoholic Beverages and Tobacco (DABT) should take disciplinary action against respondent or its DABT license for the reasons alleged in the notice to show cause?

PRELIMINARY STATEMENT

By notice to show cause in DABT Case No. GA-11-91-0024, petitioner alleged that respondent, on or about September 7, 1991, "did sell, serve and/or allow the consumption of an alcoholic beverage on [the] licensed premises, by Amy L. Bruns, a person under the age of 21 years, contrary to Florida Statute 562.11" and in violation of a consent agreement "accepted on September 6, 1991"; that respondent, on or about October 12, 1991, "did sell, serve and/or allow the consumption of an alcoholic beverage on [the] licensed premises, by Kim M. Chiappara, a person under the age of 21 years, contrary to Florida Statute 562.11" and in violation of a consent agreement "accepted on September 6, 1991"; that respondent, on or about October 18, 1991, "did sell, serve and/or allow the

consumption of an alcoholic beverage on [the] licensed premises, by Dari A. Layne, a person under the age of 21 years, contrary to Florida Statute 562.11" and in violation of a consent agreement "accepted on September 6, 1991"; that respondent, on or about October 19, 1991, "did sell, serve and/or allow the consumption of an alcoholic beverage on [the] licensed premises, by Christopher Wisniewski, a person under the age of 21 years, contrary to Florida Statute 562.11" and in violation of a consent agreement "accepted on September 6, 1991"; that respondent, on or about October 19, 1991, "did sell, serve and/or allow the consumption of an alcoholic beverage on [the] licensed premises, by Kim C. Stampler, a person under the age of 21 years, contrary to Florida Statute 562.11" and in violation of a consent agreement "accepted on September 6, 1991"; that respondent's employee, Eric Frauman, sold an alcoholic beverage to Randy Gordon, then under the age of 21 years, on or about November 8, 1991, contrary to Florida Statute 562.11" and in violation of a consent agreement "accepted on September 6, 1991"; that respondent, on or about October 3, 1991, violated the same consent agreement by allowing under age members of Phi Sigma Sigma on the premises; and, finally, that respondent maintained a nuisance on its licensed premises. At hearing, the time during which a nuisance was alleged to exist was limited to the period from September 6, 1991, to November 30, 1991.

FINDINGS OF FACT

1. At all pertinent times, respondent 201 West, Inc. d/b/a Central City/Congo Craig's Safari, has held a quota license, No. 11-00259 4COP, authorizing it to sell alcoholic beverages at 201 West University Avenue, Gainesville, Florida.

   
   

2. On August 23, 1991, Craig Cinque, respondent's sole shareholder and officer, executed on respondent's behalf a consent agreement which petitioner accepted and filed on September 6, 1991, resolving administrative proceedings then pending. The consent agreement provides: "The second and third floors now known as 'Congo Craig's' shall not admit customers under 21 years of age for a period of two years "

   
   

   Underaged Patrons Apprehended

   
   

3. At eleven o'clock on a crowded Saturday night, September 7, 1991, five DABT officers entered Congo Craig's to check patrons' ages. DABT and other witnesses agreed that the bar had enough staff demanding proof from patrons of their ages as they entered, and that the lighting was adequate for this purpose.

   
   

4. The DABT officers checked a number of already admitted patrons' "ID's" themselves, and found a false one that a 20-year-old woman, Amy L. Bruns, whom they saw drinking draft beer, had used to gain admission. The Maryland driver's license described a woman of its bearer's height and weight, but depicted a blonde, not the brunette the officers accosted. Petitioner's Exhibit No. 3.

   
   

5. The next time DABT officers, again a contingent of five, discovered an under age patron at Congo Craig's was on October 12, 1991, another Saturday night when DABT and other witnesses agreed that the bar had enough staff checking patrons' ages as they entered, and that the lighting was adequate.

   
   

6. Kim M. Chiappara, then 20 years and eight months old, was sharing a pitcher of draft beer with her older sister and others when she was interrogated by the DABT officers that night. A search of her person turned up no false identification. She was not asked whether she had used any, or borrowed her sister's identification, to get by the bouncers.

7. The next Friday night DABT officers apprehended Dari A. Layne, who was born on October 27, 1972, at Congo Craig's shortly before midnight, as she was consuming a mixed drink. The "very good" counterfeit Pennsylvania driver's license she produced when asked for identification has her photograph, but lacks a holographic state stamp on the obverse and has a photocopied reverse, albeit duly laminated.

   
   

8. After midnight on the same foray, DABT officers discovered Kim C. Stampler, three months and a week shy of her 21st birthday, holding a clear plastic cup containing a purple liquid. She denied having false identification, but a DABT officer's search turned some up.

   
   

9. Also in the early hours of October 19, 1991, DABT officers arrested Christopher Wisniewski, an apparently intoxicated 16-year-old, whose father, also apparently intoxicated, only reluctantly admitted their relationship. Christopher, who was not asked what or whose identification, if any, he had used to get in, had a valid Florida driver's license on his person.

   
   

   Bar Tender Arrested

   
   

10. The personnel that respondent assigned to check patrons identification as they entered did not take their stations until five o'clock evenings, an hour after opening. Aware of this, the DABT dispatched Randy Gordon (a stout, older- looking 19-year-old, who has succeeded two out of three times in efforts of this kind at some ten other establishments) to Congo Craig's. He readily gained admission between four and half past on the afternoon of November 8, 1991, without being asked for identification.

    
    

11. The first customer of the evening, Randy asked Eric Frauman (who had agreed at the last minute to fill in for another bartender, and who ordinarily worked evenings when the bouncers, not the bartenders, are responsible for checking customers' identification) for a hamburger and a beer. Although he had been told to "card" everybody, Mr. Frauman neglected to ask young Mr. Gordon for identification.

    
    

12. The second customer that evening was Ernest Wilson, the special DABT agent responsible for paying five dollars an hour for Mr. Gordon's services. Mr. Wilson took the beer, and Mr. Gordon, who paid for both, got the hamburger, which he described as very good. Mr. Frauman, a graduate student hoping to work as an educational counselor, was arrested and eventually prosecuted criminally.

    
    

    Precautions Taken

    
    

13. Respondent is qualified as a responsible vendor, and was so certified during the time DABT made such certifications. All of the 18 employees respondent relies on for "security," those checking patrons' ages at night as well as the daytime bartenders and servers, are current with regard to the courses, tests and update meetings the responsible vendor program requires. Respondent's managers are current on requirements for managers.

    
    

14. At weekly meetings of the managers, underage drinking was a regular topic. A book depicting driver's licenses in various jurisdictions is kept on the premises, and respondent's employees who testified seemed knowledgeable on the subject. Employees responsible for checking patrons' ages are told to require, at least of anybody who looks younger than 45, a driver's license,

    military identification or a passport. Several repeat customers testified that they had invariably been "carded."

    
    

15. Although Congo Craig's can lawfully accommodate no more than 925 persons at any one time, the crowd "turns over" as the night wears on. From 35,000 to 45,000 patrons were on the premises between September 7, 1991, and November 18, 1991. During this period, DABT officers made several visits on which they failed to find a single patron under the age of 21. According to Kim Ehrich, who once worked at Congo Craig's, but now works elsewhere, Congo Craig's is probably the "strictest" bar in Gainesville, and does a more thorough job checking identification than the three other bars where she has worked in Gainesville.

    
    

    Willful Breach

    
    

16. A week or so before the party at Congo Craig's on October 3, 1991, Charlotte Olsen, then social chairperson for the Phi Sigma Sigma sorority, told somebody at Congo Craig's that some of the party-goers would be under 21 years of age. She offered the sorority's wrist bands to demarcate those old enough to drink legally, but Congo Craig's used its own instead.

    
    

17. Mr. Cinque was aware that underaged persons were expected to attend the party scheduled for the second and third floors, and decided to allow it, despite the consent agreement, in order to preserve "good will." About half of the 50 to 60 people at the party were under 21 years of age. He added staff, he testified, in an effort to stymie drinking by underaged attendees. This effort proved dramatically unsuccessful.

    
    

    Past Problems

    
    

18. DABT established (in aggravation of penalty only) that respondent has a long history of problems of the kind proven in this case, dating to when respondent's father owned the establishment. When Mr. Cinque worked as a manager, before he became the owner, DABT issued some ten orders to show cause alleging beverage law violations, most of which respondent admitted. Since the younger Mr. Cinque assumed ownership, DABT has filed eight additional orders to show cause, the first seven of which were consolidated and disposed of by the consent agreement accepted by DABT on September 6, 1991.

    
    

    CONCLUSIONS OF LAW

    
    

19. Since DABT referred respondent's hearing request to the Division of Administrative Hearings, in accordance with Section 120.57(1)(b)3., Florida Statutes (1992 Supp.), "the division has jurisdiction over the formal proceeding." Section 120.57(1)(b)3., Florida Statutes (1992 Supp.).

    
    

20. License revocation proceedings have been said to be "'penal' in nature." State ex rel. Vining vs. Florida Real Estate Commission, 281 So.2d 487, 491 (Fla. 1973); Kozerowitz vs. Florida Real Estate Commission, 289 So.2d

    391 (Fla. 1974); Bach vs. Florida State Board of Dentistry, 378 So.2d 34 (Fla. 1st DCA 1979) (reh. den. 1980). Strict procedural protections apply in disciplinary cases, and the prosecuting agency's burden is to prove its case clearly and convincingly. Ferris vs. Turlington, 510 So.2d 292 (Fla. 1987); Pic N' Save Central Florida, Inc. v. Department of Business Regulation, 601 So.2d

    245 (Fla. 1st DCA 1992). See Addington vs. Texas, 441 U.S. 426 (1979); Ferris vs. Austin, 487 So.2d 1163 (Fla. 5th DCA 1986); Anheuser-Busch, Inc. vs. Department of Business Regulation, 393 So.2d 1177 (Fla. 1st DCA 1981); Walker

    vs. State Board of Optometry, 322 So.2d 612 (Fla. 3rd DCA 1975); Reid vs. Florida Real Estate Commission, 188 So.2d 846, 851 (Fla. 2nd DCA 1966). A licensee's breach of duty justifies revocation only if the duty has a "substantial basis," Bowling vs. Department of Insurance, 394 So.2d 165, 173 (Fla. 1st DCA 1981) in the evidence, unless applicable statutes and rules create a clear duty, which the evidence shows has been breached.

    
    

21. Section 562.29(1), Florida Statutes (1989), authorizes the Division of Alcoholic Beverages and Tobacco to revoke or suspend a beverage license upon a showing of:

    
    

    1. Violation by the licensee or his or its agents, officers, servants, or employees, on the licensed premises . . . of any of the laws of the state or of the United States . . . or permitting another on the licensed premises

       to violate any of the laws of this state or of the United States, . . .

    2. Violation by the licensee of any laws of this state or any state or territory of the United States.

       
       

       Section 562.11, Florida Statutes (1991), forbids licensees' serving alcohol to anybody under 21 years of age, or permitting such persons to consume alcohol on the licensed premises. Section 561.11, Florida Statutes (1991), provides that duly adopted DABT orders shall have the force of law.

       
       

22. But respondent is properly held accountable for its employees' misconduct only if it or its alter ego, Mr. Cinque, was culpably responsible by reason of the owner's own negligence, intentional wrong doing or lack of diligence. Cohen v. Schott, 48 So.2d 154 (Fla. 1950); Pic N' Save Central Florida, Inc. v. Department of Business Regulation, 601 So.2d 245 (Fla. 1st DCA 1992); Heifetz v. Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, 475 So.2d 1277 (Fla. 1st DCA 1985); Trader Jon, Inc. v. State Beverage Department, 119 So.2d 735 (Fla. 1st DCA 1960). The present case differs from Pauline v. Lee, 147 So.2d 359 (2d DCA 1962) cert. den. 156 So.2d

    389 (Fla. 1963), where the court held:

    
    

    The persistence and practiced manner with which the solicitations [for prostitution] described by the state's witnesses were made is sufficient to permit a factual inference leading to the conclusion that such violations of law were either fostered, condoned or

    negligently overlooked by the licensee notwith- standing his absence from the premises on the dates in question.

    
    

    Id. at 364. But see Taylor v. State Beverage Department, 194 So.2d 321, 325 (2d DCA 1967) cert. den. 201 So.2d 464 (Fla. 1967). The evidence in Pauline v. Lee established five separate solicitations for prostitution by five different employees of the licensee.

    
    

23. In other cases involving open lewdness by licensees' employees, courts have upheld administrative orders charging licensees with knowledge. Golden Dolphin No. 2, Inc. v. State Division of Alcoholic Beverages and Tobacco, 403 So.2d 1372 (Fla. 5th DCA 1981) (several performances of show justified imputing

    knowledge to licensee, but evidence of obscenity held insufficient); G & B of Jacksonville, Inc. v. State Department of Business Regulation, Division of Beverage, 371 So.2d 1381 (Fla. 1st DCA 1979) (three topless female dancers engaged in "open, gross, lewd and lascivious behavior" at 139); G & B of Jacksonville, Inc. v. State Department of Business Regulation, Division of Beverage, 317 So.2d 139 (Fla. 1st DCA 1979) ("Six . . . employees engaged in similar but separate open and gross lewd acts with different patrons" at 140).

    
    

24. At least one District Court of Appeal has applied the Pauline v. Lee line of cases to drug dealing on licensed premises. In Lash, Inc. v. State Department of Business Regulation, 411 So.2d 276 (Fla. 3d DCA 1983), the "license revocation stemmed from narcotics violations on appellant's premises. The evidence established that on five occasions over a period of a week, undercover beverage agents purchased controlled substances from two of appellant's employees." 411 So.2d at 277. The Lash court concluded that a licensee's "simple negligence" justified revocation of a beverage license:

    
    

    Under Section 561.29(1), where the unlawful activity is committed by the licensee's agent, simple negligence is sufficient for revocation. Admittedly, the courts have refused to uphold revocations when the evidence showed only that on one occasion the licensee's employees violated the laws, and that the licensee otherwise took measures to comply with them. Where, however, the laws are repeatedly and flagrantly violated by the employees, an inference arises leading to the conclusion that such violations are either fostered, condoned or negligently overlooked by the licensee, notwithstanding his absence from the premises when the violations occur.

    
    

    Consequently, if the evidence supports the conclusion that the licensee failed to exercise ordinary care in the maintenance of the licensed premises or the supervision of his employees, he can be found negligent and his license revoked. . .

    
    

    Where the violations are, as here, committed in a persistent and recurring manner, consisting of more than one isolated incident, the courts have not hesitated to find that such violations were either fostered, condoned, or negligently overlooked by the licensee, even through he may have been absent at the time of the commission of such. . . In the present case, the recurring sales were made possible by appellant's failure to supervise the premises and his employees in a reasonably diligent manner, properly leading to the license revocation.

    
    

    When the Third District permitted the Division to infer in Lash that the licensee negligently overlooked the violations or failed to exercise ordinary care in the maintenance of the licensed premises or supervision of his employees, it did so on the premise that the drug transactions had been open and flagrant. Nothing about the violations here, aside from those that occurred at the sorority party, made them likely to come to Mr. Cinque's attention, even though he was usually present. "[T]he licensee is not an absolute insurer against violations of the law on his premises even when committed by or through his employees." Jones v. State Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, 448 So.2d 1109, 1111 (Fla. 1st DCA 1984).

    
    

25. Under the foregoing cases, respondent's license is not subject to discipline under Section 562.11, Florida Statutes (1991), for the rare and innocent insufficiencies in its conscientious and generally efficacious program to prevent underage drinking, a system shown to have failed in only about one in 5,000 cases. Whether these occasional lapses justify discipline under Section

    561.11, Florida Statutes (1991), is a closer question: one construction of the consent order is that respondent did become an absolute insurer of his employees' performance, assuming the risk of their misfeasance "voluntarily," rather than risking a less favorable outcome of the formal administrative proceeding that the consent order concluded. In any event, Mr. Cinque's decisions regarding the sorority party render respondent's license subject to disciplinary action.

    
    

26. Section 561.29(1)(c), Florida Statutes (1991), declares an alcoholic beverage license subject to suspension or revocation if a nuisance is maintained on licensed premises. The evidence adduced in the present case failed, however, to establish that respondent maintained a nuisance on its premises.

    
    

27. Respondent contends that DABT cannot suspend or revoke its license without running afoul of Section 561.701, et seq. Florida Statutes (1991). Specifically, Section 561.706, Florida Statutes (1992 Supp.), provides:

1. The license of a vendor qualified as a responsible vendor under this act may not be suspended or revoked for an employee's illegal sale or service of an alcoholic beverage to a person who is not of lawful drinking age or for an employee's engaging in or permitting others to engage in the illegal sale, use of, or trafficking in controlled substances, if the employee had completed the applicable training prescribed by this act prior to committing such

   violation, unless the vendor had knowledge of the violation, should have known about such violation, or participated in or committed such violation.

   No vendor may use as a defense to suspension or revocation the fact that he was absent from the licensed premises at the time a violation of the Beverage Law occurred if the violations are flagrant, persistent, repeated, or recurring.

2. The division shall consider qualification as a responsible vendor in mitigation of administrative penalties for an employee's illegal sale or service of an alcoholic beverage to a person who is not of lawful drinking age.

Immunity from suspension and revocation plainly does not extend so far as to protect respondent from the consequences of intentionally violating the consent order. Mr. Cinque, respondent's sole shareholder and officer, had full knowledge of and participated in the violation. For the same reasons, the violations of Section 561.11, Florida Statutes (1991), that took place at the sorority party also fall outside the statutory exemption.

RECOMMENDATION

It is, accordingly, RECOMMENDED:

That the Division of Alcoholic Beverages and Tobacco suspend respondent's license for ten (10) days.

DONE and ENTERED this 10th day of December, 1992, at Tallahassee, Florida.

ROBERT T. BENTON, II

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 11th day of December 1992.

APPENDIX TO RECOMMENDED ORDER

Petitioner's proposed findings of fact Nos. 1-21, 24, 25, 28, 29, 31, 34-

46, 50, 53-56 and 58 have been adopted, in substance, insofar as material.

With respect to petitioner's proposed findings of fact Nos. 22 and 23, it is not that easy to make out the eye color of the woman depicted on the license.

With respect to petitioner's proposed finding of fact No. 26, Ms. Chiappara did not testify at hearing; it is not clear what sworn statement is meant.

With respect to petitioner's proposed finding of fact No. 27, the evidence suggested that she used the counterfeit license to gain entry.

With respect to petitioner's proposed findings of fact Nos. 30 and 33, the method of entry was not proven, but there was speculation.

With respect to petitioner's proposed finding of fact No. 32, she was drinking a purple beverage.

With respect to petitioner's proposed finding of fact No. 47, she so testified.

Petitioner's proposed findings of fact Nos. 48, 49 and 59 are properly proposed conclusions of law.

Petitioner's proposed findings of fact No. 51 and 52 have been rejected as not established by the weight of the evidence.

With respect to petitioner's proposed finding of fact No. 57, the number of allegations is immaterial.

Respondent's proposed findings of fact Nos. 1-10 and 14-17 have been adopted, in substance, insofar as material.

With respect to respondent's proposed finding of fact No. 11, Mr. Frauman did not usually work the day shift.

With respect to respondent's proposed finding of fact No. 12, time constraints do not account for the failure to honor the consent order.

Respondent's proposed finding of fact No. 13 is properly a proposed conclusion of law.

COPIES FURNISHED:

Thomas A. Klein, Esquire 725 South Bronough Street

Tallahassee, Florida 32399-1007

Sy Chadroff, Esquire 2700 S. W. 37th Avenue

Miami, Florida 33133-2728

Donald D. Conn General Counsel The Johns Building

725 South Bronough Street Tallahassee, Florida 32399-1000

Richard W. Scully Director

Division of Alcoholic Beverages and Tobacco The Johns Building

725 South Bronough Street Tallahassee, Florida 32399-1000

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 consult with 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: 92-002054

Orders for Case No: 92-002054