STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND ) PROFESSIONAL REGULATION, DIVISION ) OF ALCOHOLIC BEVERAGES AND )

TOBACCO, )

)

Petitioner, )

)

vs. ) CASE NO. 94-4810

) RODI ENTERPRISES CORPORATION, ) d/b/a LA FERROLANA SUPERMARKET, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William J. Kendrick, held a formal hearing in the above-styled case on December 13, 1994, in Miami, Florida.

APPEARANCES

For Petitioner: Miguel Oxamendi, Esquire

Department of Business

and Professional Regulation

1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399-1007

For Respondent: Henry A. Lopez-Aguiar, Esquire

3445 Northwest 7th Street Miami, Florida 33125

STATEMENT OF THE ISSUE

At issue is whether respondent committed the offense alleged in the administrative action and, if so, what disciplinary action should be taken.

PRELIMINARY STATEMENT

By an administrative action dated August 2, 1994, petitioner charged that respondent violated the provisions of Section 210.18(1), Florida Statutes, by offering to sell unstamped cigarettes. In response, Respondent filed a timely request for hearing disputing the allegations set forth in the administrative action, and the matter was referred to the Division of Administrative Hearings for the assignment of a Hearing Officer to conduct a formal hearing pursuant to Section 120.57(1), Florida Statutes.

At hearing, petitioner called Leonard H. Del Monte and Alfonso Rosell as witnesses, and its exhibits 1-4 were received into evidence. Respondent called Rolando Nunez as a witness, and the parties stipulated to the testimony that would have been offered by Ovilio Reyes, who was present at hearing. Respondent offered no exhibits.

The transcript of hearing was not ordered. Accordingly, the parties were granted ten days from the date of hearing to file proposed recommended orders. Petitioner elected to file such a proposal, and the proposed findings of fact contained therein are addressed in the appendix to this recommended order.

FINDINGS OF FACT

The offense

1. At all times pertinent hereto, respondent, Rodi Enterprises Corporation d/b/a La Ferrolana Supermarket, held alcoholic beverage license number 23-00094, series 2-APS, for the premises located at 3380 N.W. 7th Street, Miami, Florida. Rolando Nunez is an owner and president of the licensee.

   
   

2. On July 22, 1994, Leonard Del Monte, an investigator employed by the Division of Alcoholic Beverages and Tobacco, entered the licensed premises to conduct a routine inspection. At that time, Inspector Del Monte discovered nine packages of Benson & Hedges Menthol 100's cigarettes in a display rack over the counter, each of which bore a fraudulent tax indicia and on which the excise tax had not been paid as required by law. Each cigarette package contained twenty individual cigarettes, and such packages, considering their location, were obviously offered for sale to the general public.

   
   

3. Apart from the nine packages of untaxed Benson & Hedges Menthol 100's, Inspector Del Monte discovered no other untaxed cigarettes on the premises, which, at the time, contained approximately 300 other packages of cigarettes, as well as approximately 300 cartons of cigarettes, for sale to the general public. Indeed, this is the first occasion in over fifteen years of operation that respondent has ever been cited with a violation, and the first time Inspector Del Monte has ever discovered a violation in the fourteen or fifteen years he has been inspecting the premises.

   
   

   The reason for the offense

   
   

4. Ovilio Reyes is a long-time customer of respondent, and purchased a carton of Benson & Hedges Menthol 100's from a vendor who sells, among other things, cigarettes from a lunch truck outside the factory where he works. Since he did not like the menthol taste, Mr. Reyes prevailed upon Mr. Nunez, an owner and president of petitioner, to exchange the nine packages that remained from the carton he had purchased for nine packages of Winston cigarettes.

   
   

5. Mr. Nunez noted the stamp on the bottom of the packages, assumed it was valid, and agreed to the exchange. Thereafter, Mr. Nunez placed the packages in the display rack for resale.

   
   

6. Having considered the proof, Mr. Nunez' testimony that he believed the packages to carry an appropriate stamp and that he had no intention of selling untaxed cigarettes is credited. Indeed, had Mr. Nunez thought the stamp was a forgery, it is doubtful that he would have placed them in the display rack so that the stamp was plainly visible to a customer or, in this case, an inspector standing at the counter. Moreover, for the untrained, a cursory glance at the

   stamp would not raise a suspicion as to its validity. It is only when one is apprised, as through the proof in this case, that a tax indicia must be stamped in purple ink as opposed to the black ink used on the subject packages, that the stamp was not affixed evenly on the bottom of each package as it should be, that the stamps used are slightly longer than the standard stamp, that the scallops or ornamental edge around the rectangular stamp did not match the scallop of a valid indicia, and that the subject packages, upon close inspection, contained the phrase "Tax No," as opposed to the proper phrase "Tax Paid," that one would have cause to suspect the legitimacy of the stamp in question. Notable, petitioner has not shown by rule or otherwise that it has advised its licensees in general or respondent in particular of the factors that should be considered in assessing the authenticity of a tax indicia.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings. Section 120.57(1), Florida Statutes.

   
   

8. According to Section 561.29, Florida Statutes:

   
   

   1. The division is given full power and authority to revoke or suspend the license of any person holding a license under the Beverage Law, when it is determined or found by the division upon sufficient cause appearing of:

      1. Violation by the licensee or his or its agents, officers, servants, or employees, on the license premises, or elsewhere while in the scope of employment of any of the laws of this state or of the United States . . .

         * * *

         (3) The division may impose a civil penalty against a licensee for any violation mentioned in the Beverage Law, or any rule issued pursuant thereto, not to exceed $1,000 for violations arising out of a single transaction. If the licensee fails to pay the civil penalty, his license shall be suspended for such period of time as the division may specify. The funds so collected as civil penalties shall be deposited in the state General Revenue Fund.

         
         

9. Pursuant to Section 210.18(1), Florida Statutes, it is unlawful for any person to possess for the purpose of sale, to sell or to offer for sale "unstamped packages of cigarettes."

   
   

10. An "unstamped package of cigarettes" is defined by Section 210.01(18), Florida Statutes, as follows:

    
    

    "Unstamped package" or "unstamped cigarettes" means a package on which the tax required by

    this part has not been paid, regardless of whether or not such package is stamped or marked with the indicia of any other taxing authority, or a package on which there has been affixed a counterfeit or fraudulent indicium or stamp.

11. Also pertinent to this case, Section 210.06, Florida Statutes, provides:

    
    

    1. Every dealer within or without the state shall affix or cause to be affixed to such package or container of such cigarettes, stamps, evidencing the payment of the tax imposed by virtue of this part before such cigarettes are offered for sale

       or use or consumed or before they are otherwise disposed of in the state.

    2. Each retail dealer shall open such box, carton or other container of cigarettes prior to exposing for sale or selling such cigarettes and examine the packages contained therein for the purpose of ascertaining whether or not the said packages have affixed thereto the proper tax stamp. If unstamped or improperly stamped packages of cigarettes are discovered, the retail dealer shall immediately notify the dealer from whom said cigarettes were purchased. Upon such notification, the dealer from whom said cigarettes were purchased shall replace such unstamped or improperly stamped packages of cigarettes with those upon which stamps have been properly affixed, or immediately affix thereto the proper amount of stamps.

    3. Whenever any cigarettes are found in the place of business of any such retail dealer, or in the possession of any other person without the

       stamps affixed, the presumption shall be that such cigarettes are kept in violation of the provisions of this law.

       
       

       Respondent was a "retail dealer" within the meaning of section 210.06. Section 210.01(7), Florida Statutes.

       
       

12. Here, the proof is clear and convincing that respondent, by possessing unstamped packages of cigarettes for the purpose of sale, violated the provisions of Section 210.18(1), Florida Statutes, and is therefore subject to disciplinary action under Section 561.29, Florida Statutes.

    
    

13. In fashioning an appropriate penalty under the facts of this case, due consideration must be given to petitioner's penalty guidelines, as established by Rule 61A-2.022, Florida Administrative Code.

    
    

14. Pertinent to this case, the penalty guideline for a first occurrence violation of Section 210.18, Florida Statutes, involving possession of less than

500 packs of nontax cigarettes for purposes of resale is a $500.00 civil penalty and payment of the excise tax. Given, however, that respondent only possessed nine packs of nontax cigarettes, the innocent manner in which they were acquired, and the lack of any previous disciplinary history in over fifteen years of operation, the usual penalty should be reduced to $50.00, and payment of the excise tax. Rule 61A-2.022(5), Florida Administrative Code (allowing deviation from the guidelines upon mitigating circumstances).

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be rendered finding respondent guilty of the

offense as charged, and directing respondent to pay a $50.00 civil penalty and the excise tax of $3.59. 1/

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 4th day of January 1995.

WILLIAM J. KENDRICK

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 4th day of January 1995.

ENDNOTE

1/ An excise tax of 39.9 cents per pack is applicable to the subject cigarettes. Section 210.02(3)(b), Florida Statutes.

APPENDIX

Petitioner's proposed findings of fact are addressed as follows:

1. Adopted in paragraph 1.

2. Adopted in paragraph 2.

3-6. Addressed in paragraph 6.

1. Unnecessary detail.

2. Addressed in paragraph 6.

3. Addressed in paragraph 2, otherwise unnecessary detail.

4. Addressed in paragraphs 4 and 5.

COPIES FURNISHED:

Miguel Oxamendi, Esquire Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-1007

Henry A. Lopez-Aguiar, Esquire 3445 NW 7th Street

Miami, Florida 33125

Jack McRay General Counsel

Department of Business

and Professional Regulation Suite 60

1940 North Monroe Street Tallahassee, Florida 32399-0792

John J. Harris, Acting Director Division of Alcoholic Beverage and

Tobacco

Department of Business

and Professional Regulation Suite 60

1940 North Monroe Street Tallahassee, Florida 32399-0792

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: 94-004810

Orders for Case No: 94-004810