STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF ALCOHOLIC )

BEVERAGES AND TOBACCO, )

)

Petitioner, )

)

vs. ) Case No. 97-4443

)

KENT N. STRAUSS d/b/a )

KENT'S NORTHSIDE LOUNGE )

AND RESTAURANT, )

)

Respondent. )

)

RECOMMENDED ORDER

Notice was provided and on March 9 and 20, 1998, and on April 24, 1998, a formal hearing was held in this case.

Authority for conducting the hearing is set forth in Sections 120.569 and 120.57, Florida Statutes. The hearing location was the office of the Division of Administrative

Hearings, Tallahassee, Florida. The hearing was conducted by Charles C. Adams, Administrative Law Judge.

APPEARANCES

For Petitioner: Miguel Oxamendi, Esquire

Todd Cottrill, Law Intern Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-1007

For Respondent: Daniel S. Dearing, Esquire

5044 Brill Point

Tallahassee, Florida 32312

STATEMENT OF THE ISSUE

Should the Petitioner impose discipline against Respondent, holder of an alcoholic beverage license, for violations of laws pertaining to that license?

PRELIMINARY STATEMENT

Petitioner brought an administrative action against Respondent accusing Respondent of violating laws pertaining to his alcoholic beverage license. Respondent answered the administrative action and requested an administrative hearing to contest the factual allegations. The case was then forwarded to the Division of Administrative Hearings for assignment of an administrative law judge to conduct a formal hearing.

In support of its case, Petitioner presented as witnesses Lieutenant Fred H. Mills, Jr.; Daniel S. Miller; Detective Louis Donaldson; Raul Morales; Sergeant Anthony Drinkwater; Alan Wayne Davis, Jr.; and Gordon C. Chesney.

Petitioner's exhibit 1 was not admitted. Petitioner's exhibits 2 through 11 were admitted, to the extent explained in the hearing transcript. Petitioner's exhibit number 11 containing material that had been identified as cocaine was not maintained by the undersigned for the reason that no facility existed in the offices of the Division of Administrative Hearings to secure that exhibit. The exhibit was returned to Petitioner for safekeeping. This arrangement was not opposed by the attorneys representing the parties. Respondent testified in his

own behalf. He presented as witnesses Officer Gilda Carol Goodman; Robert H. Strauss; Dr. Fredrick W. Bell; Dr. Bernard Sliger; Samuel H. Lewis, Esquire; Jack Tully; Ernest James Kearney; Officer Kevin Taylor; and Lieutenant Mills.

Respondent's exhibits 1 through 3 were admitted.

The hearing transcript was filed on May 16, 1998. Both parties submitted proposed recommended orders. Those proposed recommended orders have been considered in preparing the recommended order.

FINDINGS OF FACT

1. At times relevant to the inquiry Respondent held alcoholic beverage license no. 47-00190, series 4COP, issued by Petitioner. This license allowed Respondent to sell alcoholic beverages at the licensed premises known as Kent's Northside Lounge and Restaurant, located at 1133 Thomasville Road, Tallahassee, Florida. Respondent was the sole holder of that license. Respondent continues to hold the license.

2. Beginning January 1997, and ending April 25, 1997, Petitioner, together with other law enforcement agencies, conducted an investigation of the licensed premises to determine if violations of law involving illegal narcotics were occurring. While involved in this investigation, Petitioner also investigated alleged violations involving tobacco.

3. On January 7, 1997, Gordon Chesney entered the licensed premises. He was acting in the capacity of a paid law

   enforcement undercover operative. He was not a sworn law enforcement officer. Once in the bar he made the acquaintance of a person identified as "Wild Bill." Wild Bill refers to Bill Ferris, Respondent's bartender. Chip Kirby, another bartender, was also in the licensed premises. When Chesney introduced himself to Ferris, Chesney wanted to know "where the action is" in town. In conversation Chesney asked Ferris "Does it ever snow down here?" This reference was a slang term for cocaine. Ferris responded that "it would snow in a few days." This comment referred to the availability of cocaine. Chesney told Ferris he would like to get some "snow."

4. After their initial meeting, Chesney telephoned Ferris at the bar. Ferris told Chesney to come to the bar. Chesney returned to the bar at around 6:30 p.m. on January 9, 1997. Once in the bar Chesney made contact with Ferris. Ferris took Chesney over to a booth in the premises. At this time there were customers in the bar, approximately ten to fifteen people. The other bartender, Kirby, was also in the premises. Respondent was not in the premises. Ferris referred to "she is not here yet," meaning the person who was supposed to deliver cocaine to Ferris. Ferris then invited Chesney to the bathroom in the premises. Chesney showed Ferris money he had brought to purchase cocaine. Ferris indicated that there wasn't enough money. Chesney promised to bring more money later. Chesney went away from the premises to obtain more money and returned to the bar at around

   8:30 p.m. When Chesney first arrived at the bar on January 9, 1997, Ferris had not been on duty as a bartender. When Chesney returned to the bar, Ferris was on duty. When Chesney returned, he told Ferris that he was ready. Ferris replied that "she" would be here any minute. A girl then came into the bar. Ferris talked to her. Ferris then came to a booth and invited Chesney to go outside with Ferris. While at the booth, Ferris asked Chesney if he had the rest of the money. They went outside.

   Chesney gave money to Ferris. The money given to Ferris was in addition to the money which Chesney had given Ferris in the bathroom. Ferris gave Chesney a small baggie containing what was taken to be cocaine. The exchange of additional money and the baggie was made right outside the door of the premises. Chesney turned over the item that he had purchased from Ferris to Officer Kevin Taylor of the Tallahassee Police Department. In turn Detective Louis Donaldson of that department took custody of the item.

5. On January 15, 1997, Chesney returned to the bar. His purpose was to obtain additional cocaine. Once in the bar Chesney contacted Ferris. Ferris was working behind the bar at the time. Chesney told Ferris he wanted to "get a quarter." This refers to a quantity of cocaine. Ferris told Chesney that "she will be here any minute." Chesney waited about half an hour. Then a girl came in the back door and talked to Ferris. Then Ferris went back to an area of the bar which is a

   restaurant. In about five minutes Ferris came out with a Styrofoam soup cup. He said "here is your soup." Chesney said "okay." Chesney gave Ferris $300 and walked out of the bar. On this occasion Respondent was in the premises seated at a table behind Chesney. That location was about eight feet from Chesney's location. Other people were seated with the Respondent. On this occasion music was playing. Sometimes the music was loud. Sometimes the music was not loud. Chesney cannot recall whether the music was loud during conversations held with Ferris concerning the purchase of the cocaine. But the conversation between Chesney and Ferris was in a normal tone.

   Once outside of the premises, Chesney turned his purchase over to an officer. Again Detective Donaldson took custody of the item.

6. Detective Donaldson prepared a property receipt for those items seized on January 9 and 15, 1997, that were purchased by Chesney. The items were temporarily held in custody by the Tallahassee Police Department. Those items were then forwarded to and tested by the Florida Department of Law Enforcement, who having analyzed the items, discovered the presence of cocaine.

7. On January 22, 1997, Chesney reentered the licensed premises with Officer Alan Wayne Davis, Jr., who worked for the Petitioner in an undercover capacity. Chesney introduced Davis to Ferris. Ferris was working as a bartender at that time. Specifically Ferris was serving beer and mixed drinks, and taking money. Because Davis was acting in an undercover capacity, he

   did not tell Ferris that he, Davis, was a law enforcement officer. Davis never revealed his position as a law enforcement officer to any persons who were the subject of the investigation. In pursuit of his undercover role, Davis told Ferris that he was a member of a motorcycle club. On this date a conversation held in a normal tone involved the subject of cocaine. This refers to a conversation between Davis and Ferris.

8. Davis returned to the bar alone on January 23, 1997. He contacted Ferris who was working as a bartender. They discussed a prior cocaine deal between Ferris and Chesney in a normal tone.

9. On January 23, 1997, Davis met Samuel H. Lewis at the bar. Davis was introduced by Ferris. Lewis was taking bets on the upcoming Superbowl football game. The bets were premised upon placing projected scores on a paper square for a cost of one dollar. The winner was to be determined by the individual who placed the bet and guessed the total score. The game was a game of chance, not skill. Davis gave Lewis five dollars to participate in the betting pool. An envelope of bets containing fifty-seven dollars was available when Lewis began to collect bets. Lewis received about twenty additional signatures (twenty dollars) in the bar representing individual bets. The overall pool had one hundred squares. Respondent was not at the bar on January 23, 1997, when the football pool was held.

10. On January 23, 1997, Davis met Robert Strauss, Respondent's son. Robert Strauss was an employee at the bar. In

    conversation Davis was asked what kind of business he was in. Davis responded that he was in the business of making money. Before Davis met Robert Strauss, Ferris had asked Davis if Davis sold cigarettes, in that, as Ferris described the matter, Robert Strauss was always looking for a good price on cigarettes. Davis had answered Ferris in the affirmative. This led to the introduction to Robert Strauss. Conversations about cigarettes were open, in normal tones. In discussion Robert Strauss asked Davis if the cigarettes that Davis had for sale had stamps on them. Davis replied in the affirmative. On the other hand, Davis commented to Robert Strauss that the cigarettes were "so hot that you could feel it." Davis intended by his remarks to indicate that the cigarettes that he had were stolen. That intent would create the most likely inference to be gained from Davis' remarks. Davis did not indicate that he was a licensed wholesale cigarette distributor on that occasion or any other occasion. Through conversation Davis and Robert Strauss arrived at a price of eight dollars a carton for cigarettes, a price below the expected value of that merchandise. Robert Strauss asked Davis to bring him a case of cigarettes next Wednesday.

    Davis agreed to that request.

    
    

11. When Robert Strauss made the overture to Davis concerning the purchase of cigarettes, Davis was not in control of cigarettes. To further the investigation, Petitioner purchased cigarettes from a wholesaler, SuperValue Warehouse.

    Petitioner caused stamps to be attached to those cigarettes. Those stamps were out of circulation and not involved in normal commerce. By this attachment, the impression that was created was that the cigarettes were properly stamped. The cigarettes were then turned over to Davis to be used in furtherance of the investigation.

12. In a later conversation between Ferris and Davis on January 23, 1997, the subject of cocaine was discussed. This conversation took place in the bar. Davis told Ferris that he might want cocaine at a later time. Ferris invited Kirby into the conversation. Kirby tried to tell Davis what a good deal Kirby and Ferris could get Davis on some "coke." This refers to cocaine. At that point in time, Kirby was working at the bar. The price discussed was $750 for a half ounce of cocaine. Kirby indicated that the cocaine would be available Friday and that Davis could come back and purchase the cocaine from Kirby and Ferris. The conversation about cocaine was openly stated.

13. Davis returned to the bar on January 29, 1997. Davis made contact with Ferris who was tending bar, and had a conversation about Davis' failure to purchase cocaine, causing Ferris and Kirby to be "stuck with the coke," trying to sell it to someone else. This conversation was held in a normal tone of voice. Robert Strauss was not at the bar on that occasion. Nonetheless, Ferris told Davis that, Robert, referring to Robert Strauss, wanted to purchase cigarettes. Ferris indicated he

    would contact Robert Strauss and return to purchase cigarettes from Davis. Ferris then made a telephone call. Ferris then purchased cigarettes from Davis for $100 in return for twelve cartons of Winstons. Those cigarettes sold by Davis on this occasion, and on other occasions, were the cigarettes that Petitioner had placed the out-of-date stamps on, after obtaining the cigarettes from the wholesaler SuperValue Warehouse.

14. Davis returned to the licensed premises on February 5, 1997. While at the bar, Robert Strauss walked out of another part of the bar and yelled to Davis, "Hey, cigarette man, I will be right out." Robert Strauss was approximately twenty feet away from Davis when he made those remarks. Respondent was sitting in one of the booths of the bar at the time. On this visit to the bar, Davis engaged in a conversation with Ferris. Ferris was not on duty at that time. Then Davis spoke with Robert Strauss. Robert Strauss asked Davis what type of cigarettes Davis had brought. Davis replied that he had brought thirty cartons of Marlboro Lights and a Phillieblunt box full of cigars. Robert Strauss asked if the price of the cigarettes was still eight dollars a carton. Davis said yes. The cigarettes were delivered from Davis to Robert Strauss across the counter after Davis obtained the cigarettes from his vehicle. At that time patrons were at the bar. Robert Strauss paid Davis $240 for the cigarettes from the cash register at the bar, by openly handing Davis the money. Robert Strauss then took the cigarettes to a

    back portion of the premises. Davis purchased one pack of Marlboro Lights back from Robert Strauss for a price of three dollars out of the cigarettes that had just been sold from Davis to Robert Strauss. On this date, Davis also told Robert Strauss that the cigarettes "were so hot that they wouldn't even have to be lit," in conversation concerning the purchase of additional cigarettes beyond that point in time. At the bar, Davis then engaged in a conversation with Ferris about cocaine in a normal tone.

15. Davis returned to the bar on February 12, 1997. At that time Ferris was working behind the bar, Robert Strauss was also on the premises in the kitchen area. Davis told Robert Strauss that he had thirty cartons of Winstons. Robert Strauss told Davis he would give Davis five dollars per carton for all thirty. They agreed. Davis sold Robert Strauss thirty cartons for five dollars each. Davis brought the cigarettes in from his car in a large box and placed them on the edge of the bar in making the exchange. Twelve to fifteen patrons were in the licensed premises. Robert Strauss took the money to pay for the cigarettes from a bank bag near the cash register. The transaction was openly conducted. On that same date Davis discussed with Ferris the purchase of cocaine while Ferris was working behind the bar. The amount discussed was an ounce. To facilitate the purchase, Ferris gave Davis his work and home telephone numbers; these included the number for the bar.

16. Davis returned to the bar on February 19, 1997. Davis contacted Ferris who was working as a bartender. Patrons were in the bar at that time. Ferris asked Davis if Davis had brought the cigarettes for Robert Strauss. Kirby came over to Davis and asked if Davis was still looking to get an ounce, referring to the purchase of cocaine. Davis said yes. Davis gave Kirby

    $1,400 in cash in furtherance of a purchase. Kirby counted the money while at the bar without attempting to disguise his activities. Kirby put the money in his pocket and went to the business phone in the premises and made a call. Kirby then returned and told Davis he couldn't contact his main supplier, but that he had another source he could get it from who was in the bar. This discussion was held in a regular tone of voice. Kirby left the bar and then returned. Davis was instructed to follow Kirby and Ferris to a back room. Davis followed them to a storage room. Kirby then pulled a bag out of his shirt represented to be cocaine. Davis weighed the substance on scales. While this transaction took place, the parties were concealed by a door. The substance weighed approximately an ounce. When Davis left the licensed premises, he turned the substance over to a case agent for the Drug Enforcement Administration (DEA). On the same day, Davis sold Robert Strauss thirty cartons of cigarettes delivered to Ferris after Robert Strauss handed Ferris $100 to give to Davis. Davis delivered the cigarettes in a box from the trunk of his vehicle and placed them

    on the top of the bar during the exchange. Robert Strauss had obtained the money from a bank bag.

17. On February 25, 1997, Ferris paged Davis. Davis called Ferris and Ferris told Davis he would give Davis an ounce of cocaine for $1,320. Davis said he wanted three ounces. An arrangement was made to meet on February 27, 1997, at the bar to carry out the transaction.

18. On February 27, 1997, Davis returned to the bar in the company of a law enforcement officer, Agent Scirpan of the DEA. Davis met with Ferris after walking in the bar. Ferris told Davis to follow him outside. Ferris questioned Davis concerning the possibility that Davis was a cop or affiliated with law enforcement. Davis did not acknowledge his status as a law enforcement officer. They then went to Ferris' truck to count the money that would be used in purchasing cocaine. Respondent was seated at a table in the premises when Davis and Ferris left the premises to go to Ferris' truck. The truck was located by the side of the bar. Davis gave Ferris $4,000. They then went inside the bar. Ferris made a telephone call from the business phone in the premises. Ferris then exited the bar. While in the bar, Davis observed a girl sitting at the bar rolling what appeared to be a cannabis cigarette, known by its appearance to Davis to be cannabis, based upon his experience as a law enforcement officer. Robert Strauss was there at that time two to three feet away. Robert Strauss made no attempt to confront

    the patron concerning this practice. Davis ordered a pack of Marlboro Lights from the bartender and paid for them. To get the cigarettes, Respondent had to produce the keys to the storage room to obtain the cigarettes purchased. The cigarettes that Davis purchased bore the out-of-date stamp involved with the cigarettes that Davis had sold to Robert Strauss. On that same date an unidentified white male came in offering to sell cartons of cigarettes. The unidentified male was trying to sell cigarettes for ten dollars a carton. At that time Respondent had left the bar. Later Ferris returned to the bar and asked Davis to go outside with him. They got in Davis' car and rode around the block. Ferris gave Davis approximately three ounces of a substance as part of the arrangement to purchase cocaine. This item was turned over to a DEA agent.

19. On March 6, 1997, Davis called Kirby at the bar and ordered an ounce of cocaine. The tone of the conversation was normal.

20. On March 7, 1997, Davis went to the bar and contacted Kirby. Kirby was working. Kirby said the deal was off because of a death in the family. Kirby told Davis that they could talk later about doing one or two "keys" of coke. A "key" refers to a kilo of cocaine. This conversation was held in a normal tone of voice across the bar.

21. On March 17, 1997, Davis called Ferris at the business phone number Ferris had given Davis. The call was about

    purchasing more cocaine. The phone number used was the number for the licensed premises. An arrangement was made to purchase cocaine of an undisclosed amount on the following Wednesday.

22. On the following Wednesday, which was March 19, 1997, Davis returned to the bar and met with Ferris. Ferris was concerned about the rumor that there was an undercover officer working inside the bar. Davis did not acknowledge his undercover capacity in this conversation. It was decided to wait awhile before the parties did any more business. However, there was a conversation between Davis and Kirby in which Kirby said they could go to Miami and pick up cocaine. This conversation was in a normal tone of voice. As Davis was starting to leave, Robert Strauss approached Davis and asked Davis to bring back some cigarettes when Davis returned.

23. On April 7, 1997, Davis called Ferris and discussed the purchase of one ounce of cocaine on the following Wednesday.

    This call was made to the telephone within the licensed premises. An agreement was made to purchase an ounce of cocaine, the cost of which was not determined.

24. On April 16, 1997, Davis called the licensed premises and spoke with Kirby about the purchase of an ounce of cocaine. Then Davis went to the licensed premises and contacted Kirby who was working behind the bar. Kirby told Davis that the purchase of cocaine would cost $1,400 an ounce. This conversation was conducted in an open manner. Then Robert Strauss walked out from

    the back of the bar and asked Davis if Davis "had any hot cigarettes to sell." Davis said "they were all in the trunk." Robert Strauss followed Davis out to Davis' vehicle. In the trunk there were ten cartons of Camels and ten cartons of Marlboro Lights. Robert Strauss carried the cigarettes back into the bar in a box. Robert Strauss put the cigarettes up, went over to the cash register and obtained $100 which was given to Davis. The reference to putting the cigarettes up means that Robert Strauss took them to the storage room. Robert Strauss told Davis that he would buy more cigarettes if Davis would bring them to Robert Strauss. The transaction concerning the purchase of the cigarettes was made with no attempt to conceal the activity. Then Ferris came in and took over Kirby's assignment at the bar. Kirby then sat down next to Davis at the bar. They discussed the purchase of a key of coke, meaning a kilo of cocaine. They discussed that if that amount was broken down, the cost for an ounce would be $700. The purchase was to be made in Miami. This conversation was conducted openly. Davis and Kirby went outside and Davis gave Kirby $1,400 to purchase a smaller amount of cocaine. Kirby returned to the bar. Davis and Kirby then went to Davis' vehicle. Davis took the substance that had been offered as cocaine. This transaction took place after they drove away from the bar. Again, that substance was turned over to an agent with the DEA.

25. On April 22, 1997, Davis called the bar and spoke to Kirby. They discussed the purchase of another ounce of cocaine for the next day.

26. On April 23, 1997, Davis returned to the bar after arranging with Kirby, through a telephone call, to come to the bar. Kirby was tending the bar. Kirby and Davis discussed a cocaine deal. Kirby told Davis that basically all suppliers were sold out of cocaine. Kirby told Davis that some people were offering to sell for as much as $1,600 an ounce. This conversation took place at a little table next to the bar. Patrons were in the premises at that time. The conversation was held in a normal tone. Eventually Kirby told Davis that he had found someone that lives at the Gulf who could get an ounce of cocaine for $1,450. That price was agreed upon. After a person drove up, Kirby commented, "There's my man." At that moment Davis gave Kirby the money. Kirby counted the money. Kirby left the bar and returned. Kirby told Davis to go with Kirby to Kirby's van. They got in the van and drove around the block. Kirby gave Davis an ounce of a substance which was tendered as cocaine. That substance was turned over to an agent of the DEA.

27. Davis returned to the bar on April 24, 1997. He met with Kirby who was tending bar. They discussed the purchase of cocaine. Kirby said he had an ounce of cocaine to sell and asked Davis if he wanted to purchase the cocaine. Davis agreed to purchase the cocaine for $1,400. Davis gave $1,400 to Kirby

    across the counter. Kirby told Davis to follow him to a bathroom. In the bathroom Kirby handed a substance in aluminum foil to Davis, represented to be cocaine. The substance was turned over to an agent of the DEA. On the same date, Kirby and Davis discussed making a trip to Miami to purchase cocaine, and what it would cost Davis if Kirby delivered the cocaine from Miami, as opposed to Davis and Kirby going to Miami to obtain the cocaine. A price of $32,000 for a kilo of cocaine was discussed. This conversation was held in an open manner.

28. On April 25, 1997, the Tallahassee Police Department served a search warrant on the licensed premises looking for illegal drugs. Petitioner's agency was also involved in the search. During the search, underneath the bar on the right-hand side, an item was discovered, which through a field test revealed the presence of cocaine. The item was wrapped in tin foil. The tin foil was readily visible when standing behind the bar. In addition cigarettes were seized. The item that tested as cocaine in the field test was turned over to the resident agent in charge for the DEA.

29. At the time the search was made on April 25, 1997, Petitioner was investigating the purchase of cigarettes from a non-wholesaler, as well as its interest in the sale of illegal narcotics. On that date, the Petitioner seized the cigarettes that Davis had sold to Respondent's employees. The cigarettes

    Davis sold had never had taxes remitted to the state of Florida based upon a wholesale transaction.

30. Respondent identified that Kirby and Ferris were part- time bartenders who worked at night. Ferris also worked a Saturday day shift. Ordinarily a shift change to the night shift occurred at 6:00 p.m. Ferris had been a customer of the bar before being hired. Before being hired, Kirby was referred to Respondent by Respondent's friends.

31. Respondent identified that Robert Strauss was more or less the supervisor in charge at the premises when the Respondent was not there. Robert Strauss cooked at the bar a couple of days a week. Robert Strauss was involved with purchasing supplies for the bar. Respondent indicated that Robert Strauss' duties in purchasing during the time in question involved the purchase of cigarettes.

32. Beyond the time of the investigation described, within the last six months prior to the hearing, two employees had been dismissed for suspected drug use. This did not include Messrs. Ferris and Kirby. The dismissal of the other employees was made by Respondent.

33. Respondent's day at the bar runs usually from 7:30 or 8:00 a.m. to 6:00 p.m.

34. Prior to the events described in the facts, Respondent did not have a policy for his establishment concerning activity involving narcotics. Subsequent to the investigation, there is a

    written policy prohibiting employee activities involving narcotics.

35. Respondent has no written policies advising his employees what the employees should do if they observe persons engaging in illegal narcotic activities. Respondent says that he explains to his employees verbally that if anyone discusses narcotics at the bar "they are out."

36. Respondent has video cameras to monitor activities in the bar.

37. The manner in which Robert Strauss solicited Davis for the purchase of cigarettes, Davis sold the cigarettes, and Respondent's employees sold the cigarettes obtained from the SuperValue Warehouse, creates the inference of impropriety by Robert Strauss and other employees affiliated with Respondent's licensed premises. The inference of impropriety is to the exclusion of any other inference to be gained from the conduct. The inference is that the cigarettes were not part of ordinary commerce and had questionable origins. Under the circumstances, it would be appropriate for an ordinary law-abiding person to suspect that the cigarettes which Davis presented to Robert Strauss and others in the premises, as solicited by Robert Strauss, were stolen. Davis billed the cigarettes as outside the bounds of ordinary commerce when describing the cigarettes as "hot." Davis also identified that the cigarettes were being purchased at a price that was more than a good bargain. The

    price helped in creating the appearance that the cigarettes were not part of legitimate commerce.

38. As stated, the substances purchased by Chesney on January 9 and 15, 1997, were cocaine. The substance found during the search of the premises on April 25, 1997, was cocaine.1

    CONCLUSIONS OF LAW

    
    

39. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action in accordance with Sections 120.569 and 120.57, Florida Statutes.

40. Through an administrative action, Petitioner intends to impose discipline against Respondent's alcoholic beverage license. To that end, Petitioner has made these allegations:

    COUNT #1

    
    

    On January 9, 1997 you, Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT,

    (sic) your agent(s), servant(s), or employee(s), to wit: Bill Ferris did violate Florida Statutes 893.13(1)(a), within Florida Statute 561.29(1)(a) by the felony sale and/or delivery of cocaine to Tallahassee Police Department informant (TWODOG).

    COUNT #2

    
    

    On January 15, 1997 you, Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT,

    (sic) your agent(s), servant(s), or employee(s), to wit: Bill Ferris did violate Florida Statute 893.13(1)(a), within Florida Statute 561.29(1)(a) by the felony sale and/or delivery of cocaine to Tallahassee Police Department informant (TWODOG).

    COUNT #3

    On February 19, 1997 you, Kent N. Strauss d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT,

    (sic) your agent(s), servant(s) or employee(s), to wit: Chip Kirby did violate Florida Statute 893.13(1)(a), within Florida Statute 561.29(1)(a) by the felony sale and/or delivery of cocaine to the Division of Alcoholic and Tobacco Special Agent Rusty Davis.

    
    

    COUNT #4

    
    

    On February 27, 1997 you, Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT,

    (sic) your agent(s), servant(s), or employee(s), to wit: Bill Ferris did violate Florida Statute 893.13(1)(a), within Florida Statute 561.29(1)(a) by the felony sale and/or delivery of cocaine to Division of Alcoholic and Tobacco Special Agent Rusty Davis.

    COUNT #5

    
    

    On April 16, 1997 you, Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT, (sic)

    your agent(s) servant(s), or employee(s), to wit: Chip Kirby did violate Florida Statute 893.13(1)(a), within Florida Statute 561.29(1)(a) by the felony sale and/or delivery of cocaine to Division of Alcoholic and Tobacco Special Agent Rusty Davis.

    COUNT #6

    
    

    On April 23, 1997 you, Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT, (sic)

    your agent(s) servant(s), or employee(s), to wit: Chip Kirby did violate Florida Statute 893.13(1)(a), within Florida Statute 561.29(1)(a) by the felony sale and/or delivery of cocaine to Division of Alcoholic and Tobacco Special Agent Rusty Davis.

    COUNT #7

    
    

    On April 24, 1997 you, Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT, (sic)

    your agent(s) servant(s), or employee(s), to wit: Chip Kirby did violate Florida Statute 893.13(1)(a), within Florida Statute 561.29(1)(a) by the felony sale and/or delivery of cocaine to Division of Alcoholic and Tobacco Special Agent Rusty Davis.

    COUNT #8

    
    

    On January 23, 1997 you, Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT,

    (sic) your agent(s) servant(s), or employee(s), did allow patron Samuel H. Louis to unlawfully engage in gambling activities, to wit: set up, promote and play at a game of chance, whereby participants wagered upon the outcome or results of professional ballgame on January 26, 1997 (SUPERBOWL) and upon said wager, the participants became entitle to a change (sic) to win a thing of value, to wit:

    U.S. Currency, contrary to Section 849.11, within 561.29(1)(a), Florida Statutes.

    COUNT #9

    
    

    On January 29, 1997 you, Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT,

    (sic) your agent(s) servant(s), or employee(s), to wit: Robert Strauss did unlawfully purchase stolen property to wit:

    12 cartons of Winston Cigarettes from Special Agent Rusty Davis, contrary to Section 812.019, within 561.29(1)(a), Florida Statutes.

    
    

    COUNT #10

    
    

    On February 5, 1997 you, Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT,

    (sic) your agent(s) servant(s), or employee(s), to wit: Robert Strauss did unlawfully purchase stolen property to wit:

    30 cartons of Marlboro Lights Cigarettes from Special Agent Rusty Davis, contrary to Section 812.019, within 561.29(1)(a), Florida Statutes.

    
    

    COUNT #11

    
    

    On February 12, 1997 you, Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT,

    (sic) your agent(s) servant(s), or employee(s), to wit: Robert Strauss did unlawfully purchase stolen property to wit:

    30 cartons of Winston Cigarettes from Special Agent Rusty Davis, contrary to Section 812.019, within 561.29(1)(a), Florida Statutes.

    
    

    COUNT #12

    
    

    On February 19, 1997 you Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT,

    (sic) your agent(s) servant(s), or employee(s), to wit: Robert Strauss did unlawfully purchase stolen property to wit:

    30 cartons of Salem Lights Cigarettes from Special Agent Rusty Davis, contrary to Section 812.019, within 561.29(1)(a), Florida Statutes.

    
    

    COUNT #13

    On February 27, 1997 you Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT,

    (sic) your agent(s) servant(s), or employee(s), to wit: Robert Strauss did unlawfully purchase stolen property to wit:

    15 cartons of Winston Cigarettes from Special Agent Rusty Davis, contrary to Section 812.019, within 561.29(1)(a), Florida Statutes.

    
    

    COUNT #14

    
    

    On April 16, 1997 you Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT, (sic)

    your agent(s) servant(s), or employee(s), to wit: Robert Strauss did unlawfully purchase stolen property to wit: 15 cartons of Winston Cigarettes from Special Agent Rusty Davis, contrary to Section 812.019, within 561.29(1)(a), Florida Statutes.

    COUNT #15

    
    

    On January 29, 1997, you Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT,

    (sic) your agent(s) servant(s), or employee(s), did unlawfully purchase Cigarettes from other than a Licensed cigarette wholesale dealer for the purpose of resale, contrary to Section 210.15(h), within 561.29(1)(a), Florida Statutes

    COUNT #16

    
    

    On February 5, 1997 you Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT,

    (sic) your agent(s) servant(s), or employee(s), did unlawfully purchase Cigarettes from other than a Licensed cigarette wholesale dealer for the purpose of resale, contrary to Section 210.15(h), within 561.29(1), Florida Statutes.

    COUNT #17

    
    

    On February 12, 1997 you, Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT,

    (sic) your agent(s) servant(s), or employee(s), did unlawfully purchase Cigarettes from other than a Licensed

    cigarette wholesaler dealer for the purpose of resale, contrary to Section 210.15(h), within 561.29(1)(a), Florida Statutes.

    COUNT #18

    
    

    On February 12, 1997 you, Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT,

    (sic) your agent(s) servant(s), or employee(s), did unlawfully purchase Cigarettes from other than a Licensed cigarette wholesaler dealer for the purpose of resale, contrary to Section 210.15(h), within 561.29(1)(a), Florida Statutes.

    COUNT #19

    
    

    On February 19, 1997 you Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT,

    (sic) your agent(s) servant(s), or employee(s), did unlawfully purchase Cigarettes from other than a Licensed cigarette wholesale dealer for the purpose of resale, contrary to Section 210.15(h), within 561.29(1)(a), Florida Statutes.

    COUNT #20

    
    

    On February 27, 1997 you Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT,

    (sic) your agent(s) servant(s), or employee(s), did unlawfully purchase Cigarettes from other than a Licensed cigarette wholesaler dealer for the purpose of resale, contrary to Section 210.15(h), within 561.29(1)(a), Florida Statutes.

    COUNT #21

    
    

    On April 16, 1997 you Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT, (sic)

    your agent(s) servant(s), or employee(s), did unlawfully purchase Cigarettes from other than a Licensed cigarette wholesaler dealer for the purpose of resale, contrary to Section 210.15(h), within 561.29(1)(a), Florida Statutes.

    
    

    COUNT #22

    
    

    On February 5, 1996, you Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT,

    (sic) your agent(s) servant(s), or employee(s), did offer to sell non-tax paid

    Cigarettes on Licensed premises, contrary to Section 210.18(1), Florida Statutes.

    COUNT #23

    
    

    On February 27, 1996, you Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT,

    (sic) your agent(s) servant(s), or employee(s), did offer to sell non-tax paid Cigarettes on Licensed premises, contrary to Section 210.18(1), Florida Statutes.

    
    

    COUNT #24

    
    

    On April 23, 1996, you Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT, (sic)

    your agent(s) servant(s), or employee(s), did offer to sell non-tax paid Cigarettes on Licensed premises, contrary to Section 210.18(1), Florida Statutes.

    
    

    COUNT #25

    
    

    On April 25, 1997 you Kent N. Strauss, d/b/a Kents Northside Lounge and Restaurant, licensed under the beverage laws, your agents servants, or employees did possess, for purpose of resale, non-Florida-tax paid cigarettes, to wit: 636 packs of: non-tax paid cigarettes on your licensed premises, contrary to section 210.18(1), within 561.29(1)(a), Florida Statutes.

    COUNT #26

    
    

    That you, Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTRAURANT, (sic)

    Licensed under the beverage laws, between January 9, 1997 and the date of service of this Notice to Show Cause have maintained the licensed premises as a place resorted to by persons using controlled substances in violation of Chapter 893, F.S. or for the purpose of using said substances or which is used for keeping or selling the same in violation of Chapter 893, F.S. and Florida Stature (sic) 893.13(2)(a)5. And Florida Statute 561.29(1)(a).

    COUNT # 27

    
    

    That you, Kent N. Strauss, d/b/a Kents Northside Lounge and Restaurant, licensed

    under the beverage laws, between January 9, 1997 and the date of service of this Notice to Show Cause have maintained a public nuisance on your licensed premises, to wit: a place or building which is visited to by persons for the purpose of unlawfully using, keeping, selling, and/or delivering controlled substances in violation of Chapter 893, F.S., the same being in violation of:

    
    

    1. Florida Statute 823.10 and Florida Statute 561.29(1)(c);

       
       

    2. Florida Statute 823.01 and Florida Statute 561.29(1)(a).

    
    

    COUNT #28

    
    

    On April 25, 1997, you Kent N. Strauss, d/b/a KENTS NORTHSIDE LOUNGE AND RESTAURANT, your

    agent(s) servant(s), or employee(s), did unlawfully possess on your Licensed premises approximately an eighth of an ounce of cocaine located under the bar area, contrary to Section 893.13(1)(a), within 561.29(1)(a), Florida Statutes

41. To sustain the prosecution, Petitioner must show by clear and convincing evidence that Respondent is guilty of the violations alleged. Pic n' Save v. Division of Alcoholic Beverages and Tobacco, 601 So. 2d 245 (Fla. 1st DCA 1992). Respondent's culpability may be demonstrated by proof of his intentional wrongdoing, negligence or lack of diligence in the conduct of the business licensed by Petitioner. His culpability may be shown if Respondent fostered, condoned, or negligently overlooked conduct of his employees. Respondent is not the absolute insurer of the actions of his employees, but repeated, flagrant, and reoccurring conduct by the employees, which violates the law in a persistent and practiced manner, makes the

    Respondent culpable. The conduct of Respondent's employees is to be judged on balance, not in relation to an isolated incident of a violation of law by the employee(s). Pauline v. Lee, 147 So.

    2d 359 (Fla. 2d DCA 1962); Taylor v. State Beverage Department,

    
    

    194 So. 2d 321 (Fla. 2nd DCA), cert. den. 201 So. 2d 464 (Fla. 1967); Jones v. Division of Alcoholic Beverages and Tobacco, 448 So. 2d 1109 (Fla. 1st DCA 1984); and Pic n' Save supra.

42. The employee conduct here violates the law, as detailed and Respondent is accountable for that conduct and his own. The employee conduct was flagrant, persistent, reoccurring and done in a practiced manner. Respondent's conduct was negligent and lacked diligence.

43. Section 561.29(1)(a), Florida Statutes, in pertinent part states:

    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 her 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 permitting another on the licensed premises to violate any of the laws of this state or of the United States. . . .

44. Counts 1 through 7 accuse Respondent of a violation of Section 561.29(1)(a), Florida Statutes, by acts of its employees selling cocaine in violation of Section 893.13(1)(a), Florida

    Statutes. Respondent is accountable for his employees' acts associated with counts 1 and 2 for their sale of cocaine.

    Respondent is not culpable in counts 3 through 7, in that the substance involved in the sales by his employees was not proven to be cocaine.

45. Count 8 accuses Respondent of violating Section 561.29(1)(a), Florida Statutes, by allowing Samuel H. Lewis to engage in a game of chance by lot, in violation of Section 849.11, Florida Statutes; this is in relation to the Superbowl betting pool. It was not shown that Respondent's agents, officers, servants, or employees were involved in the football pool. It was not shown that Respondent was aware of the football pool on January 23, 1997. The activity that was shown was in relation to the patron Samuel Lewis. It has not been shown that Respondent violated Section 561.29(1)(a), Florida Statutes, by actions of his agents, officers, servants, or employees or through Respondent's permitting another person on the licensed premises to violate Section 849.11, Florida Statutes. Therefore the violation in count 8 has not been proven.

46. Counts 9 through 14 accuse Respondent of violation Section 569.29(1)(a), Florida Statutes, through acts of his employee, Robert Strauss, unlawfully purchasing stolen property, cigarettes, in violation of Section 812.019, Florida Statutes. The latter provision makes it a crime to traffic in, or endeavor to traffic in property known or property that a person knows or

    should know, was stolen. The facts are sufficient to show that Robert Strauss endeavored to traffic in stolen property. State v. Skinner, 397 So. 2d 389 (Fla. 1st DCA 1981). This transpired in a setting contemplated by Section 812.028, Florida Statutes, in which defenses against the manner in which the property was presented to Robert Strauss are not available to Robert Strauss. Respondent is culpable for Robert Strauss' actions. Respondent is guilty of the violations set forth in counts 9 through 14.

47. In association with the purchase of the cigarettes by Robert Strauss, Respondent is also alleged to have violated Section 561.29(1)(a), Florida Statutes, by Robert Strauss violating Section 210.15(1)(h), Florida Statutes, specifically that Robert Strauss purchased the cigarettes other than from a licensed cigarette wholesale dealer for purposes of resale. These accusations are found in counts 15 through 21.

    Section 210.15(1)(h), Florida Statutes, only allows cigarettes to be purchased for retail purposes from a person holding a wholesale dealer permit. Robert Strauss violated that provision. Respondent is accountable for Robert Strauss' violations.

    Respondent has committed the violations alleged in counts 15 through 21 through acts of his employee, Robert Strauss.

48. Counts 22 through 25 allege that Respondent violated Section 561.29(1)(a), Florida Statutes, by actions of his employees offer to sell non-tax paid cigarettes in violation of Section 210.18(1), Florida Statutes. The actions of the

    employees were willful attempts to defeat tax imposed by Chapter 210, Florida Statutes. Respondent is accountable for those actions of his employees. It has been shown that

    Respondent committed the violations alleged in counts 22 through 25.

49. Count 26 accuses Respondent of violation of Section 561.29(1)(a), Florida Statutes, by maintaining the licensed premises as a place resorted to by persons using

    controlled substances or for purposes of using the substances or which is used for keeping or selling them, in violation of Section 893.13(2)(a)5., Florida Statutes. That count is intended to refer to a violation of Section 893.13(7)(a)5., Florida Statutes, when read in the context of Chapter 893, Florida Statutes. Respondent, is responsible for the violations at Section 893.13(7)(a)5., Florida Statutes, through the actions of his employees, even in the absence of proof that some of the substances sold as alleged cocaine were, in fact, cocaine.

50. Count 27 accuses Respondent of maintaining a public nuisance on the licensed premises in that he maintained a building which is visited by persons for purposes of using, keeping, selling, and/or delivering controlled substances in violation of Chapter 893, Florida Statutes. This is alleged to be a violation of Section 823.10, Florida Statutes, and

    Section 561.29(1)(c), Florida Statutes. Section 561.29(1)(c), Florida Statutes, speaks to violations by maintaining a nuisance

    on the licensed premises. Section 823.10, Florida Statutes, is more specifically related to the maintenance of a public nuisance in association with controlled substances or drugs. Respondent has violated both statutes. Respondent is also accused in this count with the violation of Section 823.01, Florida Statutes, generally describing a nuisance as constituting an annoyance to the community or injury to the health of the citizens or corruption of public morals. As with the other violations in this count, Respondent has violated Section 823.01, Florida Statutes, and by that violation violated Section 561.29(1)(a), Florida Statutes, by the acts of his employees. Again these findings are made having in mind that some items that were purchased as cocaine were not adequately proven to be cocaine.

51. Count 28 alleges that Respondent or his employees unlawfully possessed cocaine in the bar area in violation of Section 893.23(1)(a), Florida Statutes, thereby violating Section 561.29(1)(a), Florida Statutes. Although it was not shown that Respondent possessed cocaine in violation of Section 893.13(1)(a), Florida Statutes, the location of the cocaine creates the inference that someone in his employ

    possessed that cocaine and, as with other counts, based upon the facts found, Respondent is accountable and has committed the violation alleged in count 28.

52. In consideration of the appropriate penalty to be imposed, it is clear that Respondent had not taken meaningful

steps to protect against drug-related activities by his employees prior to the instances described in the fact finding. Respondent had not engaged in activities that would entitle him to be recognized as a responsible vendor under Section 561.705, Florida Statutes, as that would exempt Respondent from suspension or revocation for the violations. The exemption described pertains to that exemption found in Section 561.706, Florida Statutes.

RECOMMENDATION

Based upon the findings of fact and conclusions of law, it is recommended that a final order be entered finding Respondent in violation of counts 1, 2, and 9 through 28, and finding that Respondent did not violate counts 2 through 8, and that imposes a penalty of revocation of license number 47-00190, series 4COP.

DONE AND ENTERED this 17th day of June, 1998, in Tallahassee, Leon County, Florida.

CHARLES C. ADAMS

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) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 17th day of June, 1998.

ENDNOTE

1/ Unlike the circumstances immediately described, insufficient nexus was established concerning the items purchased by Officer Davis, alleged to be cocaine and the confirmation that they were cocaine. Not every link in the chain-of-custody is necessary; however, the link in the chain concerning the DEA, through its field agents, who purportedly arranged for the items to be tested, is critical. That link is missing in this record. Other than inadmissible hearsay, necessary to be relied upon to find a fact, there is no evidence that the items purchased by Davis were transmitted for analysis to determine if they contained cocaine. That form of hearsay may not be relied upon, for fact finding, in that it is not an exception found within Section 90.803, Florida Statutes. See Section 120.57(1)(c), Florida Statutes. The problem with the chain-of-custody in relation to the items purchased by Davis is not one of the probability or likelihood of tampering with the evidence. The issue is more fundamental.

Without establishing the participation of the DEA field agents in the chain-of-custody, beyond receipt of the items from Davis, one does not reach the question of the probability or likelihood that the evidence has been tampered with. Cridland v. State, 693 So. 2d 720 (Fla. 3d DCA 1997); Dodd v. State, 537 So. 2d 626 (Fla. 3d DCA 1988); McElveen v. State, 440 So. 2d 636 (Fla. 1st DCA 1983); Stunson v. State, 228 So. 2d 294 (Fla. 3d DCA 1969); and Peek v. State, 395 So. 2d 492 (Fla. 1980), cert. denied 101 S. Ct. 2036

(1981).

COPIES FURNISHED:

Miguel Oxamendi, Esquire Todd Cotrill, Law Intern Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-1007

Daniel S. Dearing, Esquire 5044 Brill Point

Tallahassee, Florida 32312

Richard Boyd, Director

Division of Alcoholic Beverages and Tobacco

Department of Business and Professional Regulation

1940 North Monroe Street Tallahassee, Florida 32399-0792

Lynda L. 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: 97-004443

Orders for Case No: 97-004443