STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, ) DIVISION OF ALCOHOLIC BEVERAGES ) AND TOBACCO, )

)

Petitioner, )

)

vs. ) CASE NO. 94-5433

) WAREHOUSE LIQUORS, III, d/b/a ) LAKE AVENUE LIQUORS, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in this case in Tampa, Florida on October 5, 1994, before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Thomas A. Klein, Esquire

Richard D. Courtemanche, Jr., Esquire Department of Business and

Professional Regulation

Division of Alcoholic Beverages and Tobacco 1940 North Monroe Street

Tallahassee, Florida 32399-0792

For Respondent: Michael Kwasin, President

Warehouse Liquors III 4023 Gandy Boulevard

Tampa, Florida 33611 STATEMENT OF THE ISSUES

The issue for consideration in this hearing is whether Respondent's 3-PS alcoholic beverage license No. 39-00582, for the license premises known as Lake Avenue Liquors, located at 2209 E. Lake Avenue in Tampa, should be disciplined because of the matters alleged in the Notice to Show Cause issued herein.

PRELIMINARY MATTERS

On September 27, 1994, John J. Harris, Director of the Department's Division of Alcoholic Beverages and Tobacco, issued a Notice to Show Cause to the Respondent herein as to why its liquor license should not be disciplined because of the matters cited in the 11 counts of misconduct cited herein, which alleged that Respondent's employees either sold narcotics on the licensed premises or allowed narcotics to be sold thereon, and allowed the premises to be

kept as a place for the sale of narcotics, all in violation of various subsections of Chapters 561 and 893, Florida Statues. That same day, based on the matters alleged in the Notice to Show Cause, the Department also issued an Emergency Order of Suspension of Respondent's license, thereby advising him of his right to a prompt and speedy administrative hearing on the merits of the Notice to Show Cause on October 5, 1994. By letter dated October 3, 1994, Respondent requested hearing and this hearing followed.

At the hearing, Petitioner presented the testimony of Perry C. Harvey, Jr., Tampa City Councilman for the district in which the offending facility is located; Ruth Welch and Ruby Kennedy, both residents of the area in which the facility is located and situate across the street from it; Lt. Rick Duran, Sergeant George Mcnamara, Corporal Scott Middleton and Corporal Eric J. Diaz, all of the Tampa Police Department; and James T. Hargrett, Jr., State Senator for the District in which the facility and complainants reside and himself a property owner and business owner in the area. Petitioner also introduced Petitioner's Exhibits 1 and 2.

Respondent testified in his own behalf and presented the testimony of Jacquelyn R. Hall, his employee at the facility; Officer Rudolph Garrett, Jr., of the Tampa Police Department; Penny Kennedy, General Manager of Warehouse Liquors, III; and Willie Mae Knox, a resident of the area in which the facility is located. Respondent also introduced Respondent's Exhibits A and C through G. Respondent's Exhibit B was offered but not admitted.

No transcript of the proceedings was furnished. Counsel for Petitioner submitted post hearing Proposed Findings of Fact which have been ruled upon in the Appendix to this Recommended Order. Respondent made no post-hearing submittal.

FINDINGS OF FACT

1. At all times pertinent to the issues herein, the Department of Business and Professional Regulation's Division of Alcoholic Beverages and Tobacco, (Division), was the state agency responsible for regulation the wholesale and retail sales of alcoholic beverages in Florida. Respondent, Warehouse Liquors, III d/b/a Lake Avenue Liquors, held 3-PS liquor license 93-00582, for its retail liquor store located at 209 E. Lake Avenue in Tampa.

   
   

2. The parties stipulated that the facts as alleged in paragraphs 1 - 18 of the Emergency Order of Suspension issued in this case on September 27, 1994, and Counts 1 through 11 of the Notice to Show Cause of even date are correct, and may be incorporated herein as Findings of Fact of the Hearing Officer. They are as follows:

   
   

   1. On or about April 29, 1991, Tampa City Councilman, Perry Harvey, notified the licensee's President and sole officer, Michael Kwasin, Jr., by letter, of specific public nuisance problem associated with his operation of the licensed premises. Mr. Kwasin was also given a corrective action plan to follow which included working with the Tampa Police Department, (TPD), to remedy the problem.

      
      

   2. In addition, TPD Sergeant G. Kelly contacted the licensee, through Mr. Kwasin, by telephone on several occasions in an effort to have him address the public nuisance complaints from the police Citizens Advisory Committee, made up of community leaders and city officials, relative to the licensed premises.

      In addition, citizens who reside in the surrounding neighborhood have met with Mr. Kwasin to voice their complaints about the drug dealing and safety problems related to his operation.

      
      

   3. Notwithstanding the repeated notices of misconduct in and around his facility given to Mr. Kwasin, the records of TPD reflect numerous complaints, incident reports and arrests associated with the licensed premises.

      
      

   4. On or about April 16, 1994, Special Agents, (SA), Hamilton and Murray went to the licensed premises as a part of an ongoing narcotics investigation. While at the premises, SA Murray observed patrons in the possession of "crack" cocaine.

      
      

   5. On or about May 19, 1994, SA Hamilton spoke with Mr. Kwasin regarding drug and loitering problems at the licensed premises. Nonetheless, TPD continued to receive complaints about the drug activity on the premises from citizens of the neighborhood.

      
      

   6. On or about June 2, 1994, SA's Hamilton, Zedell and Akins returned to the premises and while there, Zedell observed several male patrons, some of whom were conducting drug transactions, loitering in front of the licensed premises.

      
      

   7. Again, on or about July 21, 1994, SA's Maggio and Zedell returned to the licenses premises where Zedell observed patrons conducting drug transactions right in front.

      
      

   8. On or about August 25, 1994, SA's McKenzie and Zedell returned to the licensed premises and went inside where they met with the two female employees of the licensee and a male patron to arrange a purchase of marijuana. Zedell handed the male patron ten dollars and received, in exchange, a small plastic package of a substance which, when later analyzed, was determined to be marijuana.

      
      

   9. On or about August 26, 1994, SA's McKenzie and Zedell again returned to the licensed premises where Zedell observed patrons conducting drug transactions out in front. After one transaction, a patron went inside. When the agents went inside, they met with an employee, Lori, who asked the previously mentioned male patron if he had any marijuana. Thereafter, McKenzie got change from Lori from which he gave the patron ten dollars in exchange for a small plastic package containing a substance later analyzed and found to be marijuana.

      
      

   10. On or about September 1, 1994, SA's McKenzie and Zedell again returned to the licensed premises. While there they were approached by a male patron and solicited to buy marijuana. This patron thereafter directed McKenzie inside the premises to conduct the transaction because, he indicated, there were two police cars in the area. While inside, in front of employee, Lori, McKenzie gave the patron ten dollars for a small plastic bag of a substance later analyzed and determined to be marijuana.

       
       

   11. Again, on or about September 2, 1994, McKenzie and Zedell returned to the licensed premises where they observed several male patrons loitering outside. Just outside the door, McKenzie met with one of the male patrons to whom he gave ten dollars in return for a small bag containing a substance later analyzed and determined to be marijuana.

   12. On or about September 7, 1994, McKenzie and Zedell went back to the licensed premises where they were approached outside by a male patron regarding the sale of marijuana. McKenzie and the patron went inside where McKenzie handed him ten dollars in exchange for a small package containing a substance later analyzed and found to be marijuana.

       
       

   13. Later that same day, McKenzie and Zedell were again approached by the same patron regarding a sale of marijuana. McKenzie and the patron entered the premises where McKenzie again handed him ten dollars in exchange for a small plastic package containing a substance later analyzed and determined to be marijuana. This transaction was witnessed without interference by a male employee of the establishment.

       
       

   14. Again, that same day, Zedell met for a third time with that patron and gave him ten dollars in exchange for which he received a small plastic bag containing a substance later analyzed and found to be marijuana.

       
       

   15. On September 9, 1994, McKenzie and Zedell returned to the licensed premises where they were approached by another patron, different from all the previous patrons mentioned, who offered to sell them marijuana. They went with that patron inside the licensed premises where, in the presence of Respondent's employee, Jackie, McKenzie handed the patron ten dollars in exchange for which he received a small plastic bag containing a substance later analyzed and determined to be marijuana.

       
       

   16. On September 12, 1994, McKenzie and Zedell again went to the licensed premises where they were approached by yet another patron, a female this time, who offered to sell them marijuana. Again, as with prior patrons, they went inside the licensed premises where, in the presence of and with the concurrence of Respondent's employee, Lori, McKenzie handed the patron ten dollars in exchange for which he received a small plastic bag containing a substance which was later analyzed and determined to be marijuana.

       
       

   17. Two days later, on September 14, 1994, McKenzie and Zedell again went to the licensed premises where they were approached by several male patrons who were competing with one another to sell marijuana. All these patrons displayed small packages of purported marijuana and followed McKenzie into the licensed premises. Two of the patrons got into an argument about what was described as marijuana being openly displayed on the counter. Nonetheless, while inside the premises, McKenzie gave one of the patrons ten dollars in front of Jackie for which he received in return a small plastic bag containing a substance which was later analyzed and determined to be marijuana.

       
       

3. Respondent's President, Mr. Kwasin, on the other hand, while not denying the details of the reported drug transactions which reportedly took place on the premises, denied ever being advised by his employees, the police, or his neighbors, that the situation was as bad as reported. His employee, Jacqueline Hall, (Jackie), in testimony at the hearing, indicated there was no room for drugs in the store because Mr. Kwasin has made it clear he doesn't want them there. She indicated management has also tried to get rid of the pushers outside the store as well and has cooperated with the police in all efforts to clean up the area. In her opinion, the primary responsibility lies with the police.

   
   

4. Ms. Hall noted that she and Mr. Kwasin have gone to neighborhood meetings and have tried to implement the suggestions give by the police and others in an effort to cut down drug activities. There are only two employees

   at the store, she and Lori, and she has heard from law enforcement and others in the area that Respondent's policies on drugs are effective. According to her, the police have indicated that Respondent is doing all that can be done, and his efforts are appreciated. Ms. Hall has lived in that area all her life and she knows who the drug dealers are. They have come onto the licensed premises, but when they try to sell drugs inside, she sends them out. She denies having ever seen Lori selling drugs on the premises. Her testimony is patently incredible.

   
   

5. Nonetheless, some law enforcement officers feel Respondent is being cooperative and trying to solve the drug problem. According to TPD Officer Garrett, who has spoken with Respondent Kwasin about the problem on many occasions, there has never been an instance where Kwasin has not cooperated fully with him, and Kwasin has sought suggestions from him on how to curb the drug traffic in the area.

   
   

6. Respondent's general manager, Ms. Kennedy, has worked with him for about eight years. Approximately three years ago, the company put out a policy seeing to operate a drug-free work place. All employees are given copies of this policy. Earlier this year, Respondent's worker's compensation carrier provided her with new information to use to promote a drug free environment, which called for mandatory drug testing of employees and signed affidavits of non-use required from each employee. These new procedures have not been implemented as yet, however.

   
   

7. Ms. Kennedy knows that Mr. Kwasin goes to the licensed premises in question each day, seven days a week. She also sees him at the location where she works, at least four hours a day the six days a week she is there. They have frequently discussed, prior to their implementation, anti-drug policies and procedures which Mr. Kwasin has brought back with him from training sessions at the IBD conventions he attends. He recognizes it to be in his best interests to conform to a no-drug policy in his stores.

   
   

8. Ms. Kennedy is available to all Respondent's employees 24 hours a day, either at work, or on call at home. All employees go through a training program on anti-drug activity, but the drug testing and the anti-drug affidavits have not yet been implemented.

   
   

9. Mr. Kwasin believes his efforts to curb drug activity in and around Lake Avenue Liquors had brought the problem under control. When Sgt. Hamilton spoke with him in May, 1994, he added more external lights and found that within a week of installation, all bulbs were broken. He replaced them four times, finally installing another type of bulb which is not so easily broken. He has tried to work with the police and even suggested they send in an undercover agent to work in the store as a clerk. This was not done, however. He has tried to enlarge the peep hole through which in-store activity could be monitored, but this was resisted by his employees who felt it placed them in increased danger of bodily harm.

   
   

10. Mr. Kwasin claims he tried every way he knew to reduce the drug activity in the area because he knew it was a liability. He has taken pictures of the drug activity going on in the area outside his facility and contends they show open and unfettered drug sales going on without any interference by police. He tried to solicit suggestions from the police but nothing he tried helped. He thought his presence at the store would reduce drug dealing and when he was present, it was usually quiet.

11. All of this related to drug activity outside the store, however. Mr. Kwasin claims to have had no knowledge at all that any drug activity was going on inside the store. He was told by his employees that they were doing what the could do and that no problem existed. It was only recently he found that his two female employees were being flattered by the male patrons who then could do what they wanted on the premises.

    
    

12. Respondent now has a plan for new employees which includes "responsible vendor training" on anti-drug policies and procedures at the company headquarters and at the store. He had thought his prior policy was enough since no liquor was sold over the bar. At Respondent's Gandy Boulevard store, where liquor is sold by the drink, he has implemented such training, and will implement it at Lake Avenue Liquors. He will also repair and place into operation a video monitor which has been installed but not working for the past year, and he will manage the licensed premises personally until he gets proper, qualified employees in place, and he will monitor the closely after that.

    
    

13. In short, Mr. Kwasin contends there was a tremendous breakdown in communications between him and the police and his neighbors, but denies there is any reason to fear being in the area at night. He claims he has been there at night many times. He admits his previous written policies have not worked with the employees he had. He admits his video system didn't work, and he admits that neither Jackie nor Lori was checked out on anti-drug training or tested.

    
    

14. Notwithstanding Mr. Kwasin's denials of knowledge that any problem regarding drug sales existed inside the premises, Senator James T. Hargrett, Jr., who has lived in the area of the licensed premises for many years and who passes it frequently, has received numerous complaints from residents about the area, and as a property owner, he has made considerable effort to insure his properties are in compliance with all requirements of the law. He has observed the area at all hours and has worked with the police regarding it.

    
    

15. Senator Hargrett believes Respondent could have done more to thwart the drug trafficking in the area. If the Senator suspected drug activity inside the premises, he would have gotten rid of those who were engaged in illegal activity; he would have worked more closely with the police; and he would have worked to get rid of loiterers.

    
    

16. Lake Avenue Liquors has a very poor reputation in the surrounding community. It is not responsive to the neighbors' concerns about illegal activity. This facility constitutes a definite problem compared with other businesses in the neighborhood and seems to suffer from owner neglect. In Hargrett's opinion, it is incumbent upon anyone in business to supervise and audit what goes on in his business establishment and to be aware of any illegal activity. This was not done here, he feels, and this absence of proper supervision has resulted in the creation of a nuisance in the community.

    
    

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this case. Section 120.57(1), Florida Statutes.

    
    

18. Under the provisions of Section 823.10, Florida Statutes, any store, shop or building which is visited for the purpose of unlawfully using any substance controlled under Chapter 893, or which is used for the illegal keeping, selling or delivery of such substance is deemed to be a public

    nuisance. In addition, Section 813.13(2)(a)5, of the statutes makes it unlawful to keep or maintain any store, shop, warehouse, dwelling or building which is resorted to by any persons using controlled substances in violation of Chapter 893.

    
    

19. Under the provisions of Section 561.29(1)(c), Florida Statutes, the alcoholic beverage license of any licensed premises where a public nuisance is carried on is subject to suspension or revocation.

    
    

20. In the instant case, there can be little doubt the misconduct alleged in the Notice to Show Cause, relating to the use and sale of marijuana in and around the licensed premises took place as indicated, and that the licensed premises is a nuisance within the meaning of Sections 823.10 and 561.29(1)(c). The question for resolution is whether the licensee knew or should have known about the misconduct going on on his licensed premises, and, if so, whether he took adequate measures to stop it from continuing.

    
    

21. Respondent, Kwasin, categorically denied being aware of the involvement of his employees in the proscribed activities shown to have transpired on the licensed premises, and claimed he reasonably could not have known of the activity. However, the misconduct was blatant, and there was little evidence to show that the Respondent's efforts, through education or dictate, were substantial or effective.

    
    

22. The holder of a liquor license is not an absolute insurer against violations of the law, committed by his employees, on his premises. However, when it is seen that the misconduct of a licensee's employees is continuing and persistent, the inference may be drawn that the licensee either fostered, condoned or negligently overlooked that misconduct, notwithstanding his absence from the premises at the time of the misconduct. Pic N' Save v. Division of Alcoholic Beverages and Tobacco, 601 So.2d 245, 251-252 (Fla. 1DCA 1992).

    
    

23. Where, as here, there is substantial evidence to show flagrant, persistent and recurring violations, the trier of fact may infer that the licensee failed to supervise the premises in a reasonably diligent manner and, thus, was culpable. Simmons v. Division of Alcoholic Beverages and Tobacco, 465 So.2d 578, 580 (Fla. 1DCA 1985); Lash v. Division of Alcoholic Beverages and Tobacco, 411 So.2d 276 (Fla. 3DCA 1982).

    
    

24. The Division seeks to revoke the Respondent's license supporting its proposed action by a reference to the penalty guidelines promulgated in Rule

    61A-2.022, F.A.C.. This rule provides for revocation when the licensee fosters, condones, or negligently overlooks the sale, delivery, or possession of controlled substances by employees on the licensed premises. Here the evidence fails to establish that Mr. Kwasin either fostered or condoned his employees' misconduct, but clearly it shows his negligence and that his failure to properly supervise his establishment and his employees led to the creation of a nuisance on the premises. This subjects his license to discipline.

    
    

25. No evidence was presented of any previous disciplinary action having been taken against the licensee or his license, yet the magnitude and the flagrancy of this misconduct supports revocation.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore:

RECOMMENDED that the alcoholic beverage license number 39-00583, series 3- PS, issued to Respondent, Warehouse Liquors III, Inc., d/b/a Lake Avenue Liquors, be revoked.

RECOMMENDED this 17th day of November, 1994, in Tallahassee, Florida.

ARNOLD H. POLLOCK

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 17th day of November, 1994.

APPENDIX TO RECOMMENDED ORDER

The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case.

FOR THE PETITIONER:

1. - 18. Accepted and incorporated herein.

19. - 29. Not Proposed Findings of Fact but restatements of the testimony of witnesses. They are, however, accepted as accurate restatements of the testimony as they support the findings made herein.

FOR THE RESPONDENT:

No submittal by Respondent.

COPIES FURNISHED:

Thomas A. Klein, Esquire

Richard D. Courtemanche, Jr., Esquire Department of Business and

Professional Regulation Division of Alcoholic Beverages

and Tobacco

1940 North Monroe Street Tallahassee, Florida 32399-1007

Michael Kwasin, Jr., pro se Lake Avenue Liquors

4023 Gandy Boulevard

Tampa, Florida 33611

John J. Harris Acting Director

Division of Alcoholic Beverages and Tobacco

1940 North Monroe Street Tallahassee, Florida 32399-1007

Jack McRay General Counsel

Department of Business and Professional Regulation

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 consult with the agency which will issue the Final Order in this case concerning its rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency which will issue the Final Order in this case.

Docket for Case No: 94-005433

Orders for Case No: 94-005433