STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 96-5599

) B & K RESTAURANT, INC., d/b/a ) NIPPER'S RESTAURANT, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on April 1, 1997, at West Palm Beach, Florida, by video teleconference before Errol H. Powell, a duly designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Miguel Oxamendi

Assistant General Counsel Department of Business and

Professional Regulation Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-1007

For Respondent: Arthur Barakos, President

B & K Restaurant, Inc., d/b/a Nipper's Restaurant

21069 Military Trail

Boca Raton, Florida 33486-1043

STATEMENT OF THE ISSUES

The issue for determination is whether Respondent committed the offenses set forth in the administrative complaint and, if so, what action should be taken.

PRELIMINARY STATEMENT

By a two-count Administrative Action dated October 9, 1996, the Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco (Petitioner) charged B & K Restaurant, Inc., d/b/a Nipper's Restaurant (Respondent) with: Count 1 -- violating Subsections 561.20(2)(a)4 and 561.29(1)(e), Florida Statutes, and Rule 61A-3.0141(3)(a)1 and 2, Florida Administrative Code, by failing to maintain separate records for gross retail sales of food and non-alcoholic beverages and gross retail sales of alcoholic beverages; and Count 2 -- violating Subsections 561.20(2)(a)4 and 561.29(1)(e), Florida Statutes, by failing to maintain seating to accommodate the minimum seating capacity of 150 seats at tables. Respondent disputed the allegations of fact and requested a formal hearing. On November 27, 1996, this matter was referred to the Division of Administrative Hearings.

At hearing, Petitioner presented the testimony of two witnesses and entered one exhibit into evidence. Respondent testified on his own behalf, presented the testimony of one witness, and entered no exhibits into evidence.

A transcript of the hearing was not ordered. The parties

submitted proposed findings of fact which have been considered in this recommended order.1 Although the time for filing post- hearing submissions was set for ten days following the hearing, Respondent filed its proposed findings of fact beyond the ten-day time period. Petitioner did not file a pleading in opposition to the filing and consideration of Respondent's proposed findings of fact.

FINDINGS OF FACT

1. At all times material hereto, B & K Restaurant, Inc., d/b/a Nipper's Restaurant (Respondent) held Alcoholic Beverage, Special Restaurant License No. 60-02856 SRX (SRX License). Respondent's SRX License was issued on July 7, 1988.

2. Respondent's SRX License requires Respondent to maintain, among other things, 2,500 square feet of serving area, a minimum of 150 seats for seating, and 51 percent of gross revenue from food and non-alcoholic beverages sales.

3. Respondent has a president, Arthur Barakos, who is a 51 percent shareholder.

4. On September 30, 1996, a special agent of the Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco (Petitioner) performed an SRX License inspection of Respondent.

5. Petitioner's agent requested Barakos to produce, among other things, Respondent's last three months of alcohol and food records, z-tapes,2 guest receipts, and ledger books, if any. He

   was unable to produce the requested records, indicating that his accountant had possession of them.

6. Petitioner's agent reminded Barakos that, as a requirement of the SRX License, the records must be maintained on Respondent's premises. She informed him that she would return at a later date to review the requested records.

7. On October 8, 1996, Petitioner's agent returned to Respondent to perform the SRX License inspection. She requested to review the same records. As before, Barakos informed Petitioner's agent that he did not have the requested records.

8. Barakos indicated to Petitioner's agent that the only records that he maintained were guest checks which had credit card charges; he did not maintain other guest checks or z-tapes. Further, he indicated that his procedure was to copy the information from z-tapes and guest receipts on separate sheets of paper, referred to as sales sheets, and to provide his accountant with the sales sheets.

9. Respondent's accountant performs a "compilation" on a monthly basis of monthly sales from information provided to her by Barakos. Monthly, the accountant meets with Barakos and obtains from him sales sheets showing daily receipts and total sales per day for the entire month. Also, Barakos provides the accountant with bank statements, purchase orders, stubs from guest checks with credit card charges and, occasionally, z-tapes. At times, the accountant obtains some of the information over the

   telephone from Barakos. She inputs the information from the sales sheets on computer. From the information provided, the accountant totals the daily receipts and computes sales tax. Afterwards, she returns to Barakos all of the items that he provided to her.

10. The accountant is unable to verify or certify the accuracy of the monthly sales records.

11. At the inspection, Barakos did provide Petitioner's agent with sales sheets. However, the sales sheets failed to differentiate between food and alcoholic beverages.

12. Without the requested records which are the original documentation, no verification of food and alcohol revenue could be made by Petitioner's agent. Therefore, she was unable to determine whether 51 percent of Respondent's gross revenue was from food and non-alcoholic beverages sales.

13. Further, regarding maintaining past records, Barakos had maintained his almost nine years of records, including z- tapes, in boxes located in a shed. He discarded the boxes of records after they got wet and became moldy, not believing that he would ever be audited by Petitioner. Barakos discarded the records without improper motive. Because he had discarded the records, Barakos was unable to produce them to Petitioner's agent.

14. At no time material hereto did Petitioner receive from Respondent a request to maintain its records at a location other than on Respondent's premises.

15. Additionally, at the inspection, Petitioner's agent inspected Respondent's seating. She found Respondent not to be in compliance with the required minimum seating of 150 seats, having only 125 seats. Barakos indicated that he would add the additional seats without delay to bring Respondent into compliance.

16. Further, Petitioner's agent inspected Respondent's square footage. She found Respondent to be in compliance with the minimum square footage requirement of 2,500 square feet.

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and the parties thereto, pursuant to Subsection 120.57(1), Florida Statutes.

18. License revocation proceedings are penal in nature. The burden of proof is on Petitioner to establish the truthfulness of the allegations in the administrative complaint by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987); Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (Fla. 1st DCA 1977).

19. Section 561.20, Florida Statutes, provides in pertinent part:

    (2)(a) No such limitation of the number of licenses as herein provided shall henceforth prohibit the issuance of a special license to:

    
    

    * * *

    
    

    4. Any restaurant having 2,500 square feet of service area and equipped to serve 150 persons full course meals at tables at one time, and deriving at least 51 percent of its gross revenue from the sale of food and nonalcoholic beverages . . . Any license issued under this section shall be marked "Special," . . . .

    Respondent's license was issued as a exception to the quota license limitation.

20. Rule 61A-3.0141, Florida Administrative Code, provides in pertinent part:

    1. Special restaurant licenses must

       continually comply with each and every requirement of both subsections (2) and (3) of this rule as a condition of holding a license. . . The suffix "SRX" shall be made a part of the license numbers of all such licenses issued after January 1, 1958.

       
       

    2. Special restaurant licenses shall be issued only to applicants for licenses in restaurants meeting the criteria set forth herein.

       
       

       * * *

       
       

       (b) [A] qualifying restaurant must have accommodations for the service and seating of

       150 or more patrons at tables at one time.

       1. The tables and seating must be located within the floor space provided for in paragraph (2)(a) [2,500 or more square feet] of this rule.

       2. The tables must be of adequate size to accommodate the service of full course meals in accordance with the number of chairs or other seating facilities provided at the table.

          
          

       3. Seating at counters used to serve food shall be included in the minimum seating requirements.

       
       

       * * *

       
       

    3. Qualifying restaurants receiving a special restaurant license after April 18, 1972 must, . . . also maintain the required percentage, as set forth in paragraph (a) or

       (b) below, on a bi-monthly basis. Additionally, qualifying restaurants must meet at all times the following operating requirements:

       
       

       (a) At least 51 percent of total gross revenues must come from retail sale on the licensed premises of food and non-alcoholic beverages. . .

       
       

       1. Qualifying restaurants must maintain separate records of all purchases and gross retail sales of food and non-alcoholic beverages and all purchases and gross retail sales of alcoholic beverages.

          
          

       2. The records required in subparagraph (3)(a)1 of this rule must be maintained on the premises, or other designated place approved in writing by the division for a period of 3 years and shall be made available within 14 days upon demand by an officer of the division. The division shall approve written requests to maintain the aforementioned records off the premises when the place to be designated is the business office, open 8 hours per work day, . . . of a

       . . . accountant; . . . located in the State of Florida; and . . . precisely identified by complete mailing address.

21. Petitioner has demonstrated by clear and convincing evidence that Respondent violated Subsection 561.20(2)(a)4 and

    Rule 61A-3.0141(3)(a)1 and 2 by failing to maintain separate records for purchases and gross retail sales of food and non- alcoholic beverages and purchases and gross retail sales of alcoholic beverages and by failing to maintain minimum seating of

    150 seats.

    
    

22. Section 561.29, Florida Statutes, provides in pertinent part:

    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:

       
       

       * * *

       
       

       (e) Violation by the licensee, or, if a corporation, by any officer or stockholder thereof, of any rule or rules promulgated by the division in accordance with the provisions of this chapter . . . , or a violation of any such rule or law by any agent, servant, or employee of the licensee on the licensed premises or in the scope of such employment.

23. Petitioner has demonstrated by clear and convincing evidence that Respondent violated Subsection 561.29(1)(e) by violating Rule 61A-3.0141(3)(a)1 and 2.

24. Regarding penalty, Section 561.29, Florida Statutes, provides further in pertinent part:

    (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. . . .

    
    

    * * *

    
    

    (5) The division may suspend the imposition of any penalty conditioned upon terms the division should in its discretion deem appropriate.

    
    

25. Rule 61A-2.022, Florida Administrative Code, provides the penalty guidelines for violations and provides that, for a violation of Section 561.20, "failure to meet the minimum qualifications of a special license," the penalty is a $1,000 civil penalty and revocation of the license without prejudice to obtain any other type license, but with prejudice to obtain the same type of special license for 5 years.

26. Factors which should be considered in this situation is that Respondent has been licensed for almost nine years without any history of a disciplinary action; that Respondent did maintain records over the years, but that they were discarded, with no improper motive, shortly before the inspection on September 30, 1996; and that Barakos was ready, willing, and able to add the additional 25 seats without delay.

RECOMMENDATION

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

RECOMMENDED that the Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco enter a final order:

1. Imposing a $1,000 civil penalty against B & K Restaurant, Inc., d/b/a Nipper's Restaurant; and

2. Revoking the Alcoholic Beverage Special Restaurant License of B & K Restaurant, Inc., d/b/a Nipper's Restaurant, i.e., License No. 60-02856 SRX without prejudice to obtain any other type license, but with prejudice to obtain another SRX special license for 5 years, with the revocation being suspended under terms and conditions that the Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco deems appropriate.

DONE AND ENTERED this 16th day of June, 1997, in Tallahassee, Florida.

ERROL H. POWELL

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 16th day of June, 1997.

ENDNOTES

1/ Respondent's proposed findings of fact contains some facts for which no evidence was presented at hearing, and those unsupported facts are not considered in this recommended order.

2/ A Z-tape is a tape in the cash register which contains a record of the current day's food and alcohol sales.

COPIES FURNISHED:

Miguel Oxamendi Senior Attorney

Department of Business and Professional Regulation

1940 North Monroe Street Tallahassee, Florida 32399-1007

Arthur Barakos, President 21069 Military Trail

Boca Raton, Florida 33486.

Cpt. Debbie Beck

400 North Congress Avenue, Suite 150 West Palm Beach, Florida 33401

Richard Boyd, Director Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792

Lynda Goodgame, 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 within 15 days from the date of 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: 96-005599

Orders for Case No: 96-005599