STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

TOBACCO, )

)

Petitioner, )

)

vs. ) Case No. 97-3805

)

ARTHUR LEE JOHNSON, )

d/b/a FORT MEADE RESTUARANT )

AND LOUNGE, )

)

Respondent. )

)

RECOMMENDED ORDER

Upon due notice, William R. Cave, an Administrative Law Judge for the Division of Administrative Hearings, held a formal hearing in this matter on January 22, 1998, in Lakeland, Florida.

APPEARANCES

For Petitioner: Madeline McGuckin, Esquire

Department of Business and Professional Regulation

1940 North Monroe Street Tallahassee, Florida 32399-1007

For Respondent: Kenneth Glover, Esquire

505 Martin Luther King, Jr. Avenue Lakeland, Florida 33802

STATEMENT OF THE ISSUE

Should Respondent's Alcoholic Beverage License Number 63-04089 be revoked, suspended or otherwise disciplined?

PRELIMINARY MATTERS

By an Administrative Action dated May 9, 1997, and filed with the Division of Administrative Hearings (Division) on August 15, 1997, the Department of Business and Professional

Regulation, Division of Alcoholic Beverages and Tobacco (DABT) is attempting to revoke, suspend or otherwise discipline Respondent's Alcoholic Beverage License Number 63-040089. As grounds therefor, DABT alleges that Respondent: (a) on April 18, 1997, and April 26, 1997, did sell and give perspectively an alcoholic beverage packaged to go, for off-premises consumption, and on April 26, 1997, allowed an open container of beer to be carried out of the establishment for off-premises consumption in violation of Section 561.20(2)(a), Florida Statutes, and Rule

61A-3.0141, Florida Administrative Code; and (b) during the period of January 1997 through April 1997 failed to derive at least 51 per cent of its gross revenue from the sales of food and non-alcoholic beverages in violation of Section 561.230(2)(a), Florida Statutes, and Rule 61A-3.0141, Florida Administrative Code. Respondent denied the allegation contained in both counts of the Administrative Action and requested a formal hearing under Section 120.57(1), Florida Statutes. By letter dated August 13, 1997, DABT referred the matter to the Division for the assignment of an Administrative Law Judge and for the conduct of a formal hearing.

At the hearing, DABT presented the testimony of Cleveland Curtis McKenzie, Bobby Smith, Bobby Neil, Bradley Nelson, Brenda

Harris, Arthur Johnson, and Carl W. Swope, Jr. DABT's Exhibits Nos. 1 through 12 were received as evidence. Respondent testified on his own behalf and presented the testimony of Larry Fisher and Reginald Johnson. Respondent's Composite Exhibit

No. 1 was offered as evidence but after objection was rejected. Respondent then made a proffer of his Composite Exhibit One.

After further review of the record and the exhibit, Respondent's Composite Exhibit One is rejected.

A transcript of this proceeding was filed with the Division on February 6, 1998. On February 16, 1998, DABT filed an unopposed Motion for Extension of Time to File Proposed Recommended Order. An extension of time until March 6, 1998, was granted with the understanding that any time constraint imposed under Rule 28-5.404, Florida Administrative Code, was waived in accordance with Rule 60Q-2.031(2), Florida Administrative Code.

DABT timely filed its proposed recommended order under the extended time frame of March 6, 1998. The Respondent did not file a proposed recommended order with Division However, the Respondent did file a proposed recommended order with DABT on March 11, 1998. On March 26, 1998, DABT forwarded a copy of Respondent's proposed recommended order to the Division which was received on March 27, 1998.

FINDINGS OF FACT

Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made:

1. DABT is the division within the Department of Business and Professional Regulation charged with the responsibility of administering and enforcing the Beverage Law of the State of Florida.

2. At all times material to this proceeding, Respondent, operated as a sole proprietorship known as Fort Meade Restaurant and Lounge, located at 122 Fourth Street Southwest, Fort Meade, Florida. Respondent held a series SRX4COP Alcoholic Beverage License Number 63-04089, issued by DABT, which authorized Respondent to sell beer, wine, and liquor for consumption on the licensed premises in connection with the restaurant operation of Fort Meade Restaurant and Lounge. Respondent's beverage license did not authorize Respondent to sell any form of alcoholic beverage for consumption off of the licensed premises.

3. By letter dated February 10, 1997, the Fort Meade Police Department requested investigative assistance from DABT concerning an allegation that controlled substances were being sold at Respondent's licensed premises as well as another location unrelated to Respondent.

4. As a result of the request for assistance from the Fort Meade Police Department, DABT instituted an investigation concerning the complaint. In addition to assigning the complaint

   to a Special Agent, Cleveland McKenzie, DABT requested assistance from the Polk County Sheriff's Department.

5. At approximately 9:45 p.m. on April 18, 1997, Agent McKenzie, accompanied by Detective Bobby Neil, Polk County Sheriff's Office, entered Respondent's licensed premises, located at 122 Fourth Street Southwest, Fort Meade, Florida, in an undercover capacity.

6. While in Respondent's licensed premises on April 18, 1997, Agent McKenzie asked the person tending bar (bartender) for "a beer for the road." In response to Agent McKenzie's request, the bartender placed an unopened 12-ounce bottle of Budweiser beer in a paper bag and handed the bag, with the beer inside, to McKenzie who then paid for the beer and left the licensed premises without attempting to conceal the beer on his person and without being stopped by any person providing services on the licensed premises. Agent McKenzie and Detective Neil left the licensed premises at approximately 11:00 p.m.

7. Both Agent McKenzie and Detective Neil described the bartender as a stout, light-skinned, black male approximately 20 to 25 years of age. Neither Larry Fisher, manager of the licensed premises, nor Reginald Johnson, Respondent's adult son, fit this description. The person tending bar at the licensed premises on April 18, 1997, and April 26, 1997, was neither Larry Fisher nor Reginald Johnson, notwithstanding the testimony of

   Larry Fisher or Reginald Johnson to the contrary which I find lacks credibility.

8. At approximately 10:30 p.m. on April 26, 1997, Agent McKenzie and Detective Neil entered Respondent's licensed premises located at 122 Fourth Street Southwest, Fort Meade, Florida, in an undercover capacity

9. Before leaving the licensed premises on April 26, 1997, Agent McKenzie asked the bartender (the same individual tending bar while Agent McKenzie was in the licensed premises on April 18, 1997) for "a beer to go." The bartender placed an unopened 12-ounce bottle of Budweiser beer in a paper bag and handed the bag to Agent McKenzie. The bartender refused the offer of payment for the beer from Agent McKenzie's indicating that the beer was "on him."

10. Agent McKenzie and Detective Neil left the licensed premises at approximately 11:55 p.m. on April 26, 1997. Upon leaving the licensed premises, Agent McKenzie carried the unopened bottle of beer in the paper bag without any attempt to conceal the beer on his person. Likewise, upon leaving the licensed premises, Detective Neil carried a half-full opened bottle of beer which he had purchased earlier from the bartender without any attempt to conceal the bottle on his person.

11. In order to leave the licensed premises on April 26, 1997, Agent McKenzie and Detective Neil had to go pass two individuals who were providing services to Respondent's licensed

    premises. Neither of these individual, nor any other person providing services to Respondent's licensed premises on April 26, 1997, prevented Agent McKenzie or Detective Neil from leaving the licensed premises with the beer.

12. There was no evidence presented By DABT to show that while Agent McKenzie and Detective Neil were in Respondent's licensed premises on April 18, 1997, and April 26, 1997, that the bartender sold or gave any other customer an alcoholic beverage packaged to go or that any other customer left the licensed premises with an alcoholic beverage.

13. Respondent was not present in his licensed premises during the time that Agent McKenzie and Detective Neil were there on April 18, 1997, and April 26, 1997.

14. There is insufficient evidence to show that the bartender's action on April 18, 1997, and April 26, 1997, was the result of Respondent's negligence, intentional wrongdoing, lack of diligence, lack of training for the employees, or lack of notice to customers that any alcoholic beverage purchased had to be consumed on the licensed premises.

15. After the visits to the licensed premises on April 18, 1997, and April 26, 1997, Agent McKenzie concluded that there was no basis to the alleged complaint that controlled substances were being sold on the licensed premises.

16. The designation "SRX" identifies a beverage license issued to business which is to be operated as restaurant.

17. As a result of its investigation of Respondent's licensed premises on April 18, 1997, and April 26, 1997, DABT, as is its normal practice, examined the Respondent's licensed premises for continuing requirements applicable to special licenses such as a "SRX" license.

18. Respondent is an experienced business person with 15 years experience in operating licensee premises. Respondent knew at the time of obtaining the license at issue in May 1995 that he had an obligation to maintain records sufficient to demonstrate that Respondent met the 51 percent requirement in each bi-monthly period.

19. Respondent's Profit and Loss Statement for the months of January 1997, February 1997, March 1997, and April 1997, listed the total amount of revenue derived from the sale of food and non-alcoholic beverages and alcoholic beverages. However, this figure for alcoholic beverages was not supported by any daily records of sales. Respondent maintained no records as to the daily sales of alcoholic beverages on the licensed premises.

20. Although Respondent presented guest checks for the daily sales of food and non-alcoholic beverages, the total of these checks for each month in question did not support the Respondent's Profit and Loss Statement for each corresponding month.

21. Based on the Respondent's Profit and Loss Statement and other records furnished by Respondent for the months of January,

    February, March, and April 1997, the percentage of total gross revenue (sales of food, non-alcoholic beverages, and alcoholic beverages) derived from the sale of food and non-alcoholic beverages for the months of January 1997, February 1997, March 1997, and April 1997 was approximately 45 percent, 46 percent,

    46 percent, and 44 percent, respectively.

    
    

    CONCLUSIONS OF LAW

    
    

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

23. Sections 561.20(2)a)4., Florida Statutes, Statutes provide in pertinent part as follows:

(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. . .deriving at least 51 percent of its gross revenue from the sale of food and nonalcoholic beverages, however, no restaurant granted a special license on or after January 1, 1958, pursuant to general or special law shall operate as a package

store. . .Any license issued under this section shall be marked "Special," and nothing herein provided shall limit, restrict, or prevent the issuance of a special license for any restaurant. . . .

24. Rules 61A-3.0141(1), (2)(d), (3)(a)1.2.3.4., Florida

Administrative Code, provide in pertinent part as follows:

1) Special restaurant licenses in excess of the quota limitation set forth in subsection 561.20(1), Florida Statutes, shall be issued to otherwise qualified applicants for establishments that are bona fide restaurants

engaged primarily in the service of food and non-alcoholic beverages, if they qualify as special restaurant licenses as set forth in subsection (2) of this rule. 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. Qualifying restaurants must meet the requirements of this rule in addition to any other requirements of the beverage law. The suffix "SRX" shall be made a part of the license numbers of all such licenses issued after January 1, 1958.

1. Special restaurant licenses shall be

   issued only to applicants for licenses in restaurants meeting the criteria set forth herein.

   * * *

   (d) An applicant for an SRX license must either hold, or have applies for, the appropriate restaurant license issued by the Division of Hotels and Restaurants prior to issuance of the temporary SRX license. The restaurant must hold the appropriate restaurant license before it will be eligible for a permanent SRX license.

   * * *

2. Qualifying restaurants receiving a special restaurant license after April 18, 1972 must, in addition to continuing to comply with the requirements set forth for initial licensure, 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. . .for a period of 3

      years. . . .

   3. Since the burden is on the holder of the special restaurant license to demonstrate compliance with the requirements for the license, the records required to be kept shall be legible, clear, and in the English language.

3. The required percentage shall be computed by adding all gross sales of food, non-alcoholic beverages, and alcoholic beverages and thereafter dividing that sum into the total of the gross sales of food plus non-alcoholic beverages

1. Section 561.15(3), Florida Statutes, in pertinent part provides as follows:

   (3) This division may suspend or revoke the license under the Beverage Law of, or may refuse to issue a license under the Beverage Law to:

   * * *

   Any license issued to a person, firm, or corporation that would not qualify for the issuance of a new license may be revoked by the division. . . .

   
   

2. DABT is statutorily empowered to suspend or revoke an alcoholic beverage license, such as the one held by Respondent, based upon any of the grounds enumerated in Section 561.29(1)(a) and (g), Florida Statutes, which in pertinent part provides:

   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 licensed premises, or elsewhere while in the scope of employment, of any of the laws of this state. . . .

         * * *

         (g) A determination that any person required to be qualified by the division as condition

         for the issuance of the license is not qualified.

         
         

3. A literal reading of the language in Section 561.29(1), Florida Statutes, suggests that a licensee may have its license suspended or revoked based on a violation of state law committed by its agents, officers, servants, or employees on the licensed premises, regardless of the licensee's own personal fault or misconduct in connection with the unlawful activity. However, the courts of this state have consistently held to the contrary. Under the well-established case law, a licensee may be suspended or revoked pursuant to Section 561.29(1)(a), Florida Statutes, only if it is determined that the licensee is culpably responsible for the violations as a result of his own negligence, intentional wrongdoing, or lack of diligence. See Pic N' Save v. Department of Business Regulation, 601 So. 2d 245 (Fla. 1st DCA 1992) and the cases cited therein.

4. In a disciplinary proceeding, the burden is upon the regulatory agency to establish facts upon which its allegations of misconduct are based, Balino v. Department of Health and Rehabilitative Services, 348 So. 2d 349 (Fla. 1st DCA 1977). DABT must prove the material allegations of the Administrative Action by clear and convincing evidence. Department of Banking

and Finance, Division of Securities and Investor Protection v. Osborne Stern and Company et al., 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987). DABT has failed to met its burden as to Count I of the Administrative Action in that DABT failed to prove that Respondent was culpably responsible for the bartender's violation of the law as a result of the Respondent's own negligence, intentional wrongdoing, or lack of diligence. However DABT has met its burden as to Count II of the Administrative Action in that it has shown by clear and convincing evidence that Respondent failed to maintain food and non-alcoholic beverage sales at 51 per cent of the total revenues derived from food, non-alcoholic beverages, and alcoholic beverages during the period of January 1997 through April 1997.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, and a review of the penalty guidelines in Rule 61A-2.022, Florida Administrative Code, it is recommended that the Department enter a final order revoking Respondent's Alcoholic Beverage License, Number SRX4COP 63-04089

DONE AND ENTERED this 2nd day of June 1998, in Tallahassee, Leon County, Florida.

WILLIAM R. CAVE

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6947

Filed with the Clerk of the Division of Administrative Hearings this 2nd day of June, 1998.

COPIES FURNISHED:

Richard Boyd, Director

Division of Alcoholic Beverages And Tobacco

Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-0792

Linda Goodgame General Counsel Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32299-0792

Madeline McGuckin, Esquire Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-1007

Kenneth Glover, Esquire

505 Martin Luther King, Jr. Avenue Lakeland, Florida 33802

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: 97-003805

Orders for Case No: 97-003805