vs. )
Respondent. )
Case No. 01-3014T
Upon due notice, a hearing was held on October 2, 2001, in Gainesville, Florida, before Diane Cleavinger, a duly-assigned Administrative Law Judge of the Division of Administrative Hearings.
For Petitioner: Robert M. Burdick, Esquire
For Respondent: Gary S. Edinger, Esquire
Is the Notice of Violation against Respondent valid; and if valid, may the Department of Transportation require that the allegedly offending signs be removed?
This proceeding was initiated by the filing of requests for a formal hearing by Respondent Café Erotica, Dare to Bare Adult Toys/Great Food, Exit 94, Inc. (Exit 94), pursuant to
Section 120.57(1), Florida Statutes, in response to a Notice of Violation issued by the Florida Department of Transportation (DOT) for the erection of an allegedly illegal sign. The case was referred to the Division of Administrative Hearings.
At the hearing, DOT presented the oral testimony of three witnesses and introduced five exhibits into evidence.
Respondent presented the oral testimony of two witnesses and introduced nine exhibits into evidence.
After the hearing, Petitioner and Respondent filed Proposed Recommended Orders on November 1, 2001, and October 31, 2001,
respectively.
On June 7, 2001, DOT issued Notice of Violation 10B ST 2001 412, against a billboard sign located adjacent to Interstate 95 (I-95), approximately 1.3 miles north of the intersection of I-95 and U.S. Highway 1 at Exit 92. The notice alleged that the sign violates Chapter 479, Florida Statutes, in that it is unpermitted. DOT contends that the sign advertises for the Café Erotica restaurant, a business establishment not located on the same premises as the sign, and that there is no
visible business occurring on the premises where the sign is located.
I-95 is part of the Interstate Highway System. The sign is located within 660 feet of the nearest edge of the right-of-way of I-95 and can be seen without visual aid by motorists of normal visual acuity traveling on I-95.
The sign is a "permanent" one and has never been permitted by DOT. Exit 94 has not applied to DOT for a sign permit for the subject sign or paid any sign permit fees for it. No sign permit has been issued to any entity for the sign.
The sign displays the words "Café Erotica/We Dare to Bare/Adult Toys/Great Food/Exit 94, Inc." The phrases on the sign are displayed on two stacked faces without the slashes.
The letters are all capitalized; the size of the letters and the paint colors of yellow and black call the viewer's attention to the phrases, "CAFE EROTICA," "WE DARE TO BARE," "ADULT TOYS," "GREAT FOOD," and "EXIT 94." The words "WE DARE TO BARE" and "EXIT 94" are in very large black type and cover most of the two faces of the sign. The phrases "CAFÉ EROTICA," "ADULT TOYS," "GREAT FOOD," and the abbreviation "INC.," are the phrases smallest in size, located at the very top left, middle right, middle left and bottom right of the sign. All the small phrases are in black type and are relatively inconspicuous compared with the rest of the sign.
There are no addresses, telephone numbers, arrows, or other identifying information on the sign.
Respondent, Cafe Erotica, We Dare to Bare, Adult Toys/Great Food, Exit 94, Inc., is a Florida corporation. It was incorporated in 1998. At all times material, Café Erotica, We Dare to Bare, Adult Toys/Great Food, Exit 94, Inc., has been a corporation in good standing with the Florida Department of State, which has registered and approved its corporate name pursuant to Section 607.0401, Florida Statutes. Asher G. Sullivan, Jr., a/k/a Jerry Sullivan, is incorporator, president, shareholder, and director of Respondent. Mr. Sullivan chose the name of the company because the words and phrases "get your attention," are memorable, and are words and phrases
Mr. Sullivan has used a lot over the years to advertise for the Café Erotica.
Exit 94 does not sell food or adult toys. It does not offer dancers for public viewing. The business of Exit 94 is the development of hunting and fishing camps on various pieces of property it owns or leases in Florida and Georgia.
Café Erotica of Florida, Inc., d/b/a Café Erotica (Café Erotica), is a Florida corporation which holds the license and owns the assets of the Café Erotica restaurant. Jerry Sullivan also is president, shareholder, and owner of Café Erotica.
Exit 94 leases the land where the sign is located from James Grady Wainright, the owner of the property. The rental property consists of approximately ten acres. The lease was signed on April 20, 2001. The annual rent is $3000.00 per year. Mr. Wainright has received all the rent for 2001 from
Mr. Sullivan. Mr. Sullivan was reimbursed by Respondent shortly after he paid the rent to Mr. Wainright.
The stated purpose of the lease is the construction and maintenance of a hunting and fishing camp. The lease also authorizes Exit 94 to erect advertising signs on the property, states that any such signs will remain the property of Exit 94, forbids Mr. Wainright from obstructing the highway view of such signs, and grants Exit 94 permission to remove any vegetation that may obstruct the view of such signs.
Mr. Wainright originally contacted Mr. Sullivan about leasing the property because he was interested in obtaining income from having a sign on his property. However, his interest resulted in the current hunting and fishing camp lease.
The Café Erotica restaurant is a 24-hour per day, full-service restaurant which features dancers clad in bathing suits and which sells adult toys.
The Café Erotica restaurant is located at 2620 State Road 207 (SR 207), at the intersection of SR 207 and the exit 94 off-ramp from I-95. The real property owned by Café Erotica is
not contiguous to the subject real property owned by Exit 94. The real property owned by Exit 94, which is the subject of DOT's Notice of Violation, is approximately nine miles from the Café Erotica restaurant.
Mr. Sullivan makes the advertising decisions for Café Erotica. In the past, Café Erotica has advertised "we dare to bare," "adult toys," and "exit 94" on other billboards located adjacent to I-95 in St. Johns County. Until about two weeks before the hearing of this matter, Café Erotica maintained a billboard at the café that displayed the words "PRIVATE DANCES," "GREAT FOOD," and "ADULT TOYS."
At the time of hearing the billboards at Café Erotica now include words disparaging of the Department.
Café Erotica does not own any interest in the subject sign and no citizen testified that the sign had caused him/her to patronize Café Erotica. However, given the similarity of the corporate name of Exit 94 to advertising used by Café Erotica and the location of Café Erotica at Exit 94, it is likely that Respondent's corporate advertising could also be interpreted as intended for Café Erotica and therefore be of incidental benefit to Café Erotica. On the other hand, the sign is intended to advertise Exit 94's hunting and fishing camps. In short,
Mr. Sullivan and his corporations receive a dual benefit from the sign at issue here.
Exit 94 lists addresses and locations other than the subject property as its business address(es) for various purposes. Mr. Sullivan's and Exit 94's main business address and office is on SR 206 off Exit 93 on I-95. Exit 94 maintains no office or telephone on the subject property.
Jerry Sullivan has directed all activity on the Exit 94 property. His son is a licensed hunting and fishing guide. Jerry Sullivan anticipates creating, maintaining, and
charging people for the privilege of using the subject property as a fishing and hunting camp with guide services, if desired, provided by his son. He also intends to reward employees and clients of his various enterprises with free privileges at the camp. Currently, Exit 94's only revenues have been payments from other companies owned by Mr. Sullivan or his wife for use of the hunting and fishing camps maintained by Exit 94. The company has operated at a loss since its inception. The loss is made up by Mr. Sullivan as is needed.
There is no public access to the property Exit 94 leases from Mr. Wainright. The property is accessible by going through property owned by a timber company. The closest exit off I-95 to get to the property is Exit 92, where U.S. Highway 1 intersects with I-95. As of the hearing of this matter, Exit 94 was not operating a fishing camp open to the public on the property leased from Mr. Wainright. However, such a public
enterprise is not required in order for Exit 94 to be a legitimate business.
The parties do not dispute the fact that there is a pond on the subject property. The evidence varied as to the size and quality of the pond with the lower estimate by the Department at 1/2 to 3/4 of an acre and the higher estimate of two acres provided by the landowner. Respondent estimated the size of the pond to be slightly less than two acres.
The pond was not stocked with fish, but did have some fish present. Respondent has ordered special hybrid bream to stock the pond for "catch and release" by Respondent's customers and guests. The property was not stocked with game animals, although such stocks would not be necessary for hunting since wild game including turkey, boars, and ducks are already present. There was also one very ramshackle deer blind on the property. There were no public restrooms, offices, or facilities to clean game on the premises. No fishing equipment was available for purchase. A small trailer was located on the premises. The trailer was placed there and is owned by
Mr. Wainright. It is unknown if the trailer is available for overnight lodging. However, the trailer is not necessary for the property to function as an overnight camp and no witness testified to having camped overnight on the subject property. Petitioner routinely distributes corn for seeding the woods for
deer and other game. Given the location of the subject property, game attraction is certainly feasible.
Bill Harry showed DOT personnel around the subject property.
The Department's witness, Tom Simmons, was generally critical of the quality of the hunting and fishing facilities. While there were no people using the pond during his brief inspection, Mr. Simmons has no personal knowledge as to whether people actually hunted or fished on the property at any other time.
The Department's representative acknowledged that he saw feed corn scattered on the property for use in luring wildlife to the premises.
Exit 94 holds an occupational license from
St. Johns County as a "fish camp." In issuing this license, the county accepted Exit 94's designation of its business.
Exit 94 has applied for a "fish farm" license from the Florida Game and Freshwater Fish Commission.
Exit 94 produced invoices sent to clients for hunting and fishing privileges on the subject property, corresponding checks in payment, and tax returns.
Exit 94 is a legitimate business. It is in the business of providing and developing hunting and fishing camps
for use as directed by Exit 94. No reason was demonstrated to pierce the corporate veil of Exit 94.
The sign located on the property at issue here only and primarily contains the name of the corporation and is exempt from the general sign permitting requirements. Therefore, the Notice of Violation should be dismissed.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this cause. Section 120.57(1), Florida Statutes, and Chapter 479, Part III, Florida Statutes.
DOT contends that the sign does not advertise the business of Exit 94 and that, therefore, the sign cannot be an "on-premises" sign, but are, in fact, "off-premises" advertisements for Café Erotica, and so must be permitted by DOT, for a fee, or removed by the sign owner. Respondent maintains that the sign is related to Exit 94's, business on the subject property which Exit 94 leases and is using and developing as a fishing and hunting camp.
The remedy sought in this case is not a "penal" one as contemplated by the recent case of Chancellor Media Whiteco Outdoor v. Department of Transportation, 2001 W.L. 201517, 26 Fla. L. Weekly D627 (Fla. 5th DCA March 2, 2001), because there is no sign permit to revoke. However, the effect is the same in
that DOT seeks to deny Respondent Exit 94 the right to use its own personal property on its own real property. Accordingly, this case involves a valuable economic property right, and DOT should be held to the higher burden of proof established in that case of "clear and convincing evidence." However, even if DOT merely has the duty of going forward and proving each violation by a preponderance of the evidence, it cannot prevail. See Florida Department of Transportation v. J.W.C., Co. Inc., and the Department of Environmental Regulation, 396 So. 2d 778 (Fla. 1st DCA 1981).
Section 479.01(17), Florida Statutes, provides, in pertinent part,
"Sign" means any combination of structure and message in the form of an outdoor advertising sign, display, device, figure, painting, drawing, message, placard, poster, billboard, advertising structure, advertisement, logo, symbol, or other form, whether placed individually or on a V-type, back-to-back, side-to-side, stacked, or double-faced display or automatic changeable facing, designed, intended, or used to advertise or inform, any part of the advertising message or informative contents of which is visible from any place on the main-traveled way.
Section 479.01(6), Florida Statutes, provides,
"Erect" means to construct, build, raise, assemble, place, affix, attach, create, paint, draw, or in any other way bring into being or establish; but it does not include any of the foregoing activities when performed as an incident to the change of
advertising message or customary maintenance or repair of a sign.
Section 479.07(1), Florida Statutes, provides,
Except as provided in Sections 479.105(1)(e) and 479.16, a person may not erect, operate, use or maintain, or cause to be erected, operated, used or maintained, any sign on the State Highway System outside an incorporated area or on any portion of the interstate or federal-aid primary highway system without first obtaining a permit for the sign from the department and paying the annual fee as provided in this section. For purposes of this section, "on any portion of the State Highway System or on any portion of the interstate or federal-aid primary system" shall mean a sign located within the controlled area which is visible from any portion of the main-traveled way of such system.
Section 479.01(4), Florida Statutes, defines "controlled area" to mean "660 feet or less from the nearest edge of the right-of-way of any portion of the State Highway System, interstate, or federal-aid primary system. "
Section 479.150(1), Florida Statutes, provides,
Any sign which is located adjacent to the right-of-way of any highway on the State Highway System outside an incorporated area or adjacent to the right-of-way on any portion of the interstate or federal-aid primary highway system which sign was erected, operated, or maintained without the permit required by Section 479.07(1) having been issued by the department, is declared to be a public nuisance and a private nuisance and shall be removed as provided in this section.
An exemption from the permitting requirements of Section 479.07(1), Florida Statutes, exists for "on-premises" signs as defined in Section 479.16(1), Florida Statutes.
Section 479.16(1), Florida Statutes, provides in pertinent part:
The following signs are exempt from the requirement that a permit be obtained under the provisions of this chapter but are required to comply with the provisions of Section 479.11(4)-(8):
Signs erected on the premises of an establishment, which signs consist primarily of the name of the establishment or which identify the principal or accessory merchandise, services, activities, or entertainment sold, produced, manufactured, or furnished on the premises of the establishment and which comply with the lighting restrictions under department rule adopted pursuant to Section
479.11(5), . . . . (emphasis added)
The burden to establish an exemption falls upon the party seeking to establish the exemption, in this case, Exit 94. See Florida Department of Transportation v. J.W.C. Co. Inc., and the Department of Environmental Regulation, supra.
to:
Section 479.02(1), Florida Statutes, provides for DOT
Administer and enforce the provisions of this chapter and the agreement between the state and the United States Department of Transportation relating to the size, lighting, and spacing of signs in accordance with Title I of the Highway Beautification Act of 1965 and Title 23, United States
Code, and federal regulations in effect as of the effective date of this act.
23 C.F.R. Section 750.709 regulates on-property or on-premises advertising and provides in pertinent part:
(a) A sign which consists solely of the name of the establishment or which identifies the establishment's principal or accessory products or services offered on the property is an on-property sign. . . .
* * *
(d) Signs are exempt from control under 23
U.S.C. Section 131 if they advertise
activities conducted on the property on which they are located. . . . State laws or regulations shall contain criteria for determining exemptions. These criteria may include:
A property test for determining whether a sign is located on the same property as the activity or property advertised; and
A purpose test for determining whether a sign has as its sole purpose the identification of the activity located on the property or its products or
services . . . .
The criteria must be sufficiently specific to curb attempts to improperly qualify outdoor advertising as "on-property" signs, such as signs on narrow strips of land contiguous to the advertised activity when the purpose is clearly to circumvent 23
U.S.C. Section 131.
However, the quoted federal statute and regulations urged by DOT only permit state laws and state regulations to contain criteria, including a property test and a purpose test,
sufficiently specific to "curb attempts to improperly qualify outdoor advertising on 'on-property' signs, such as a sign on narrow strips of land contiguous to the advertised activity when the purpose is clearly to circumvent 23 U.S.C. Section 131."
In Florida's regulatory scheme, any such tests to determine that a corporation's purpose is clearly to circumvent the law would have to either clearly appear in the statute or be promulgated by DOT as rules under Chapter 120, Florida Statutes.
There are no DOT rules providing further tests to determine when a purpose exists to circumvent the law. The sole criteria for the exemption are contained in Section 479.16(1), Florida Statutes cited above.
In this case, the corporate name of the signs' owner may not make any logical sense for a hunting and fishing camp as far as DOT is concerned, and DOT may correctly speculate that it has some incidental value to Mr. Sullivan's other corporations, but denial of use of a duly-registered corporate name is not DOT's prerogative. A corporation has a right to use the full corporate name approved by the Department of State. The use of the name on a sign has been specifically exempted from permitting requirements when it is contained in an on-premises sign.
In light of the corporate books and materials provided by Exit 94 and other evidence in this case, Exit 94 is a
legitimate corporation. The evidence does not demonstrate any legitimate reason to "pierce the corporate veil" or to determine that Exit 94 is a bogus or fraudulent "front" for something else. Many individuals hold ownership and managerial interests in more than one corporation and exercise those interests to the mutual benefit of more than one corporation while limiting their personal liability. The law permits this use of a corporate shield. DOT asserts that 23 U.S.C. Section 131 and 23 C.F.R. Sections 750.704 and 750.709 permit piercing of the corporate veil whenever necessary to "curb attempts to improperly qualify outdoor advertising as 'on-property signs'." 23 U.S.C.
Section 131(c). See also 23 C.F.R. Section 750.704. However, as noted earlier, these federal regulations do not provide DOT with any power outside what is provided by the Florida Statutes and regulations adopted thereunder.
While DOT witnesses may consider the wild game on the subject property to be inferior, scarce, or non-existent, may consider the equipment inferior, and may consider the location poor, these opinions do not refute Exit 94's evidence establishing that a pond exists and is being developed and stocked; that the property has been legally licensed for a camp; that an application for a fishing farm has been made; that a deer stand has been erected; and that people have actually hunted there, been billed, and have paid Exit 94 for the
privilege of using its property for hunting. The fact that there remains a great deal more to do to get the camp project out of the red and showing a profit does not preclude an exemption for an on-premises sign, although the length of time the property will be "in development" and the validity of the steps already taken toward creating or expanding a fully- functioning business entity should be weighed. See the Final Order in Department of Transportation v. Florida Roadmaster Inn Services, Corp., DOAH Case No. 91-4785T (Recommended Order March 24, 1992; Final Order June 1, 1992), affirmed in Roadmaster Inn Services, Corp. v. Department of Transportation, 621 So. 2d 435 (Fla. 1st DCA 1993), distinguishing Harrison v. Department of Transportation, 349 So. 2d 720 (Fla. 1st DCA 1977), decided under a previous statute and rejecting the proposition that intent to develop a business in the future, without more, is sufficient cause to invoke the on-premises exemption. Herein, it was shown that significant activity toward establishing a business activity on the property has
already occurred and that such activity has in fact taken place. Therefore, Respondent has demonstrated that it is entitled to an exemption from permitting for its on-premises sign and the Notice of Violation should be dismissed.
That the Department of Transportation enter its final order finding Café Erotica, We Dare to Bare, Adult Toys/Great Food, Exit 94, Inc., not guilty of having an unpermitted sign and dismissing the Notices of Violation against it.
DONE AND ENTERED this 20th day of December, 2001, in Tallahassee, Leon County, Florida.
Filed with the Clerk of the Division of Administrative Hearings this 20th day of December, 2001.
Robert M. Burdick, Esquire Department of Transportation 605 Suwannee Street
Gary S. Edinger, Esquire
James C. Myers, Clerk of Agency Proceedings Department of Transportation
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.
