DEPARTMENT OF BUSINESS AND ) PROFESSIONAL REGULATION, DIVISION ) OF ALCOHOLIC BEVERAGES )
vs. ) Case No. 97-2843
Respondent. )
Pursuant to notice, a formal hearing was held in this case on June 20, 1997, in Miami, Florida, before J. D. Parrish, a designated Administrative Law Judge of the Division of Administrative Hearings.
Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco
For Respondent: Louis J. Terminello, Esquire
Whether Respondent committed the violations alleged in the Emergency Order of Suspension and Notice to Show Cause and, if
so, what penalty should be imposed.
On June 12, 1997, the Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco (Department) issued an Emergency Order of Suspension and Notice to Show Cause that charged the Respondent, Marsbar of Kendall, Inc., doing business as Marsbar (Marsbar), with multiple violations of Section 561.29, Florida Statutes. More specifically, the Department alleged Respondent had maintained a public nuisance as it had been visited by persons using, selling, or delivering illegal or controlled substances. Respondent contested the allegations and the matter was scheduled for formal hearing.
At the hearing, Petitioner presented testimony from Detective Evelyn Fernandez, a Metro-Dade police officer; Detective James Robertson, also a Metro-Dade police officer; and Douglas Bartelt, the Department's Special Agent. Its exhibits identified by the letters A through G were admitted into evidence.
The Respondent presented testimony from Special Agent Bartelt; Howard Newman, a chiropractic physician who patronized Respondent's club; Scott Miller, the manager for Café Iguana; John Capizzi, a forensic fraud examiner employed by Respondent; Steven Caputi, the director of administration for the Respondent's management company; Bradshaw Lotspeich, an attorney who patronized the Respondent's club; Gus Solano, a consulting
engineer who designs lighting systems and tested the lighting at the Respondent's club; Zaira Mesa, a patron of Respondent's club; Joe Delaney, an officer for and shareholder in the Respondent company; Mark E. Vasu, president and chairman of the company that manages the Respondent's club; and Shannon Miller, the director of operations for Respondent's management company and a shareholder in Respondent. Respondent's exhibits numbered 2 through 12 were admitted into evidence.
A transcript of the proceeding has not been filed. The parties have filed Proposed Recommended Orders which have been considered in the preparation of this order.
The Petitioner is the state agency charged with the responsibility of regulating licensed alcoholic beverage establishments.
At all times material to the allegations in this case, the Respondent, Marsbar of Kendall, Inc., doing business as Marsbar, held alcoholic beverage license number 23-00706 which is a series 4-COP license.
At all times material to the allegations in this case, Marsbar was located at 8505 Mills Drive, R-2, in Miami, Dade County, Florida.
At all times material to the allegations in this case, the following persons were officers and/or shareholders of the Respondent corporation: Mark Vasu, Shannon Miller, David
Lageschulte, Gerald Joe Delaney, and Henry Long. Others having a direct or indirect interest in the company are: Bonnie M. Vasu, Carole W. Vasu, Paul Lynch, Jonathan G. Delaney, and Douglas Long.
Prior to the issuance of the Emergency Order of Suspension which is at issue in this proceeding, the Department conducted an investigation of alleged acts of recurring, illegal narcotic activity on the licensed premises.
In furtherance of such investigation, Special Agent Bartelt, Detective Fernandez, and Detective Robertson entered the licensed premises in an undercover capacity for the purpose of purchasing illegal substances. In this regard Special Agent Bartelt observed the two detectives as they attempted to acquire illegal substances from persons within the licensed premises.
The investigation at Marsbar began on April 5, 1997, and was concluded on June 12, 1997. In total, the detectives made eight purchases of a substance which was later tested and determined to contain cocaine. Respondent did not object to, nor dispute the accuracy of, the lab reports received into evidence which confirmed the substances contained cocaine.
As to the purchase which occurred on April 5, 1997, Detective Robertson approached a male bathroom attendant and represented to him that "Anthony" had sent him. He then asked the attendant for drugs and, by implication in the language of such transactions, requested cocaine. The attendant referred him
to a patron of the bar who he described as a man in a black shirt with a black cap.
Detective Robertson attempted to locate the patron as he had been described and even asked a security person if he had seen the male. When the security person denied having seen any drug dealers, Detective Robertson went back to the attendant for clarification who then pointed out an individual known in this record as "Juan."
After transferring $20.00 to Juan, Detective Robertson received a small plastic bag containing less than one-half gram of cocaine. Upon receipt of the bag, Detective Robertson held the bag at approximately waist level and "flicked" it to verify the amount of the contents. This was done in an inconspicuous manner and simulated the procedure the detective felt was used by drug purchasers to examine the amount of the substance being procured. Although this transaction took place eight or ten feet from a bartender, there is no evidence that the transaction was witnessed by any person other than those participating in the buy.
On April 19, 1997, Detective Fernandez went to the female restroom attendant and asked for drugs. After being advised to return later, Detective Fernandez observed an unknown male hand the attendant a plastic bag. In exchange for $25.00, the attendant then delivered a plastic bag containing approximately one-half gram of cocaine to Detective Fernandez.
Although Detective Fernandez observed a bartender enter and exit the restroom during the events described in this paragraph, there is no evidence that the bartender observed any or part of the transactions which took place.
On May 8, 1997, or the early morning of May 9, 1997, Detective Robertson again approached the male bathroom attendant at Marsbar and requested drugs. On this occasion the attendant, in exchange for $20.00, sold the detective approximately one-half gram of cocaine in the men's restroom. Although there were other patrons of the bar within the restroom, there is no evidence that any of them witnessed the transaction.
On May 9, 1997, Detective Fernandez also sought to purchase drugs through the female restroom attendant. Although there were numerous patrons entering and exiting the facility, there is no evidence that anyone observed Detective Fernandez exchange $25.00 for approximately one-half gram of cocaine which was delivered in a small plastic bag.
On May 16, 1997, Detective Fernandez purchased two bags of cocaine for $30.00 each from the female restroom attendant following the same procedure described above. Again, there is no evidence that anyone in or near the restroom observed the transactions.
Detectives Fernandez and Robertson went to Marsbar again on May 30, 1997 for the purpose of purchasing illegal drugs. Using the same methods described above, Detective
Fernandez was unable to purchase cocaine on this date.
Detective Robertson, however, after beginning a conversation inside Marsbar, was able to purchase cocaine in the parking lot outside the club. This transaction resulted from contact made with a club patron known in the record as "Alex." This individual and the female restroom attendant introduced Detective Robertson to another patron known in this record as "Al" who later delivered the cocaine in the parking lot. Another male, "Manolito" in this record, approached Al and demanded cocaine he had allegedly been sold but had not received. Conversation regarding the pending sales took place in the licensed club, but it is unknown whether any employee of Marsbar heard the nature of the transactions discussed. A presumably drunken outburst from one bar patron suggests he understood a drug transaction was being discussed. It is undisputed that the actual exchange took place off the licensed premises.
Finally, on June 12, 1997, Detective Fernandez returned to Marsbar and for $30.00 was able to purchase approximately one- half gram of cocaine. This purchase, like the others by Detective Fernandez, was through the female restroom attendant and occurred in or near the restroom facility. There is no evidence anyone observed the transaction.
At all times material to the allegations of this case, Marsbar was a popular club which was well attended on the nights of this investigation. The audio system for the club, though
especially dominating on the dance floor, distributed music throughout the licensed premises.
As to the lighting system for the club, at all times material to this investigation, it would have been set at its lowest levels of illumination throughout the licensed premises. Consequently, only the restrooms would have been well lit.
At all times material to the allegations of this case, the restroom attendants were not employees of Marsbar or its management company but were contract personnel through a third party valet service operated by David Cook. Marsbar paid Cook to provide restroom attendants. This contract was terminated on June 13, 1997, when Respondent learned of the attendants' alleged involvement in the illegal transactions described above.
Further, Marsbar notified Cook of its intention to assist in the prosecution of such individuals.
Marsbar is managed by a company known as Chameleon Concepts. In order to effectively identify and minimize potential losses for Marsbar, Chameleon Concepts contracted with a company whose purpose was to audit operations to ensure the overall integrity of the business operation.
This auditor, a forensic fraud examiner, was to identify losses or potential losses due to fraud, embezzlement, policy or procedure violations, or other improprieties. Thus, effective October 1, 1996, Marsbar was voluntarily being reviewed by an independent company for potential improprieties. The
auditor for the company, John Capizzi, found no violations of policy, alcoholic beverage rules, or regulations.
Prior to the investigation of this case, Marsbar employees have been required to participate in responsible vendor programs.
Marsbar management routinely conducts meetings wherein responsible vendor practices are discussed.
Marsbar and Chameleon Concepts have developed written employee handbooks and policies which specifically admonish employees regarding illegal substances on the licensed premises.
Marsbar employees and managers are instructed to advise the management of any suspected illegal substances on the licensed premises.
In the past, Marsbar has participated in campaigns designed to retain false identification used by suspected underage drinkers to gain entrance to licensed premises.
The testimony of Mr. Vasu, regarding efforts of the company to comply with all rules or regulations of the Department, has been deemed credible and persuasive regarding Marsbar's position on illegal drug transactions. Management would not condone or allow illegal drug sales if they were known to it.
None of the officers or shareholders of Marsbar were aware of the illegal drug transactions occurring on the licensed
premises.
Cocaine is a controlled substance, the sale of which is prohibited by Florida law.
None of the purchases described herein were of such a nature or were so conspicuously transacted that a reasonable person would have known illegal sales were taking place.
None of the patrons of the club who testified for Respondent were aware that illegal drug sales took place within the licensed premises.
Neither of the detectives making the purchases acted in a flagrant or open manner. Moreover, neither of the detectives attempted to verify whether or not bartenders, security guards, or managers employed by Marsbar were aware of the restroom attendants' illegal activities.
In addition to selling illegal drugs, the restroom attendants handed out towels to club patrons and offered for sale personal toiletry items at tables maintained within the restroom. For a club patron to have money to purchase such items or tip the attendant would be reasonable.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.
Section 893.13, Florida Statutes, provides, in pertinent part:
(1)(a) Except as authorized by this chapter and chapter 499, it is unlawful for any person to sell, manufacture, or deliver, or possess with intent to sell, manufacture, or deliver, a controlled substance. * * *
(2)(a) Except as authorized by this chapter and chapter 499, it is unlawful for any person to purchase, or possess with intent to purchase, a controlled substance.
* * *
(7)(a) It is unlawful for any person:
* * *
5. To keep or maintain any store, shop, warehouse, dwelling, building, vehicle, boat, aircraft, or other structure or place which is resorted to by persons using controlled substances in violation of this chapter for the purpose of using these substances, or which is used for keeping or selling them in violation of this chapter.
Section 561.29, Florida Statutes, provides, in part:
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:
Violation by the licensee or his or its agents, officers, servants, or employees, on the licensed premises, or elsewhere while in the scope of employment, of any of the laws of this state or of the United States, or violation of any municipal or county regulation in regard to the hours of sale, service, or consumption of alcoholic beverages or license requirements of special licenses issued under s. 561.20, or engaging in or permitting disorderly conduct on the licensed premises, or permitting another on the licensed premises to violate any of the laws of this state or of the United States. A conviction of the licensee or his or its agents, officers, servants, or employees in any criminal court of any violation as set
forth in this paragraph shall not be considered in proceedings before the division for suspension or revocation of a license except as permitted by chapter 92 or the rules of evidence.
Violation by the licensee or, if a corporation, by any officers thereof, of any laws of this state or any state or territory of the United States.
Maintaining a nuisance on the licensed premises.
Rule 61A-2.022, Florida Administrative Code, sets forth the penalty guidelines which are imposed upon alcoholic beverage licensees who are supervised by the Department. For violations of Section 561.29(1)(c), which is maintaining a nuisance, the first occurrence penalty recommended is revocation of the license. Similarly, for any violation of Chapter 893, Florida Statutes, the penalty recommended is revocation. The rule further contemplates that the violations were occurring in an "open and notorious manner on the licensed premises."
In this case the Department bears the burden of proof to establish, by clear and convincing evidence, the allegations against this Respondent. Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).
It is concluded that the actions complained of, the sale of illegal substances such that the premises constitutes a public nuisance, have not been established by clear and convincing evidence. The actions were not committed in an open and notorious manner but were intended to be inconspicuous. Moreover, the restroom attendants, while technically agents of
the licensee, were not trained nor controlled by Marsbar management. No evidence supports a finding that any Marsbar owner or manager knew or should have known of the activities conducted by the third party contract personnel.
As a responsible vendor, this employer has made reasonable efforts to train its employees and to enforce a policy that would avoid this type of violation. To that end it has an outside auditor and regular management meetings to discuss potential losses to the company which result from this type of breach of the rules.
This Respondent cannot be an absolute insurer against violations and cannot control the conduct of all persons within its licensed premises. Management neither fostered nor condoned the acts which occurred on its premises during the investigation.
Finally, this Respondent was not negligent in its efforts to comply with beverage laws. Managers, who were trained and advised regarding company policy, were on the premises. No manager observed or could have observed the transactions which took place. Without some knowledge of the transactions, management had done everything reasonably expected of them to avoid this type of issue.
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 dismissing the Emergency Order of Suspension.
DONE AND ENTERED this 23rd day of July, 1997, in Tallahassee, Leon County, Florida.
J. D. PARRISH Administrative Law Judge
Filed with the Clerk of the Division of Administrative Hearings this 23rd day of July 1997.
Louis J. Terminello, Esquire Chadroff, Terminello & Terminello 2700 Southwest 37th Avenue
Lynda L. Goodgame, General Counsel Department of Business and
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.
