STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. )

) SHAHIR CORP., d/b/a DUNBAR ) LIQUOR, )

)

Respondent. )

Case No. 04-0643

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on July 21, 2004, in Fort Myers, Florida, before Lawrence P. Stevenson, a duly-designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Michael J. Wheeler, Esquire

Department of Business and Professional Regulation

Northwood Center, Suite 6 1940 North Monroe Street

Tallahassee, Florida 32399-2202

For Respondent: Harold F. X. Purnell, Esquire

Rutledge, Ecenia, Purnell & Hoffman, P.A.

Post Office Box 551

Tallahassee, Florida 32302-0551

STATEMENT OF THE ISSUES

Whether Respondent's license should be revoked for the reasons stated in the Administrative Action.

PRELIMINARY STATEMENT

On June 27, 2003, the Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco (the "Division"), filed a one-count Administrative Action against Shahir Daghara Corporation, d/b/a Dunbar Liquors ("Dunbar Liquors"). The Division charged Dunbar Liquors as follows: "On or about Thursday, June 26, 2003, a Final Order of Revocation was entered against License No. 46-04643,

Series 3-PS. The corporation holding such license is Barghouthi Enterprises, Inc., d/b/a Fowler Liquor Store ("Fowler Liquors"). Barghouthi Enterprises, Inc., has as its officers, Samir Barghouthi and Shahir Daghara. Pursuant to [Subsection 561.15(3), Florida Statutes (2003)], as a result of the Final Order of Revocation, neither subject is now qualified to hold an alcoholic beverage license issued by the State of Florida." Fowler Liquors disputed the allegations of fact in the Administrative Action and requested a hearing. This matter was referred to the Division of Administrative Hearings ("DOAH") on February 20, 2004, and scheduled for hearing on April 30, 2004. Two continuances were granted, and the hearing was held on

July 21, 2004.

At the hearing, the Division presented the testimony of Agent Brian D. Sauls of the Fort Myers office of the Division and the rebuttal testimony of Captain Tania Pendarakis, district supervisor for the Fort Myers office of the Division. The Division's Exhibits 1 through 3 were admitted into evidence.

Dunbar Liquors presented the testimony of Horace Moody, president of the Beverage Law Institute and former chief of enforcement for the Division. Dunbar Liquors offered no exhibits.

The one-volume Transcript of the hearing was filed on August 12, 2004. The Division filed its Proposed Recommended Order on August 18, 2004. Dunbar Liquors filed its Proposed Recommended Order on August 19, 2004.

FINDINGS OF FACT

Based on the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made:

1. At all times material hereto, Shahir Daghara Corporation, d/b/a Dunbar Liquors, was licensed by the Division, having been issued License No. 46-04408, Series 3-PS. The license permits Dunbar Liquors to sell alcoholic beverages at its premises located at 3637 Martin Luther King, Jr. Boulevard, No. 101, Fort Myers, Florida.

2. Shahir Daghara is the sole corporate officer and shareholder of Shahir Daghara Corporation.

3. The Division introduced the license file for Fowler Liquors, which formerly held License No. 46-04643, Series 3-PS. This file was also introduced in Department of Business and

   Professional Regulation, Division of Alcoholic Beverages and Tobacco v. Barghouthi Enterprises, Inc., d/b/a Fowler Liquor

   Store, Case Nos. 03-0217 and 03-0431 (DOAH June 5, 2003), the consolidated cases in which Fowler Liquors' license was revoked for repeated sales to minors. As to Mr. Daghara's relationship to Fowler Liquors, the following findings were made by the undersigned:

   1. In mitigation, counsel for Fowler Liquors argued that license revocation would be unfair because Samer Barghouthi is no longer involved in the operation of the business, having signed over his interest to his uncle, Shahir Daghara. Counsel contended that Mr. Daghara acted to remove Samer Barghouthi from the premises of Fowler Liquors as soon as he learned that

      Mr. Barghouthi was making sales to underage persons.

      
      

   2. This contention is not credible. The two sales that are the subject of these proceedings occurred nearly one month after the murder of Mr. Cubello, which was widely known to have occurred after Mr. Cubello purchased alcoholic beverages in Fowler Liquors. The two sales also occurred after Mr. Barghouthi had been interviewed by Captain Pendarakis about sales of alcoholic beverages to minors. Moreover, Officer Cecil Pendergrass of the Fort Myers Police

      Department testified that Samer Barghouthi was still working at Fowler Liquors on

      July 1, 2002, two weeks after his arrest for selling alcoholic beverages to Justin Bender.

      
      

   3. There is no record evidence that Mr. Barghouthi transferred his interest in the business to Mr. Daghara. At most, the Division's files indicate that at some point, Fowler Liquors represented to the Division that Mr. Daghara had taken a 49

      percent interest in the business. The file also contains an undated "Current Licensee Update Data Sheet" on which Samer Barghouthi's name is crossed through, but Fowler Liquors offered no sworn testimony to explain the significance of this document.

      
      

   4. Further, even if Mr. Daghara did take over the business, there is no evidence that he took any steps to remove Mr. Barghouthi from the premises of Fowler Liquors, or did anything else to address the problem of selling alcoholic beverages to minors. (Emphasis added.)

      
      

4. The underscored language referenced a license application filed by Samer Barghouthi that named Mr. Daghara as a 49 percent stockholder. The undersigned found this insufficient to establish Fowler Liquors' claim that Mr. Daghara had taken over the business at the time Mr. Barghouthi was making illegal sales to minors. In any event, Mr. Daghara's ownership status was irrelevant to the revocation decision because there was no evidence that his ownership interest had any impact on the alcoholic beverage sales to minors at Fowler Liquors.

5. In reviewing the Fowler Liquors file in the instant proceeding, the undersigned noted a Division form titled "Personal Data for Partner-Officer-Stockholder" that had been completed by Mr. Daghara himself on March 14, 2000, and bore his notarized signature. On this form, Mr. Daghara himself stated that he was a 49 percent shareholder of Fowler Liquors.

6. Mr. Daghara was present at the hearing in the instant proceeding and had every opportunity to testify in explanation of his relationship to Fowler Liquors. He chose not to testify. The undersigned draws no inference from Mr. Daghara's silence, aside from the fact that it leaves the Division's version of events as the only record evidence in this proceeding.

7. It is found that Mr. Daghara owned 49 percent of the stock of Fowler Liquors at the time that a Final Order of Revocation was entered by the Division. Mr. Daghara's ownership interest was his only proven involvement.

   CONCLUSIONS OF LAW

   
   

8. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and the parties thereto pursuant to Section 120.569 and Subsection 120.57(1), Florida Statutes (2003).

9. License revocation proceedings and proceedings involving the levying of administrative fines are penal in nature. The burden of proof is on the Division to establish by

   clear and convincing evidence the truthfulness of the allegation in the Administrative Action. Department of Banking and Finance, Division of Securities and Investor Protection v.

   Osborne Stern and Company, 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

10. Section 561.15, Florida Statutes (2003), provides in pertinent part:

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

    
    

    * * *

    
    

    (b) Any corporation if an officer, director, or person interested directly or indirectly in the corporation has had her or his license under the Beverage Law revoked or has abandoned her or his license after written notice that revocation or suspension proceedings had been or would be brought against her or his license. . . .

    
    

11. Respondent contends that the Division is collaterally estopped from claiming that Mr. Daghara was an owner of Fowler Liquors, where the earlier disciplinary action resulted in a finding of fact that there was "no record evidence that

    Mr. Barghouthi transferred his interest in the business to

    
    

    Mr. Daghara." However, the Division in the instant proceeding does not contend that Mr. Barghouthi transferred his interest in Fowler Liquors to Mr. Daghara. In the instant case, the Division contends that Mr. Daghara was a 49 percent stockholder

    in Fowler Liquors. No definitive finding on that point was made in the previous case: "At most, the Division's files indicate that at some point, Fowler Liquors represented to the Division that Mr. Daghara had taken a 49 percent interest in the business." The Division's position in the instant proceeding is not inconsistent with the findings of the earlier case.

12. The Division's interpretation of Subsection 561.15(3)(b), Florida Statutes (2003), is that Mr. Daghara, unquestionably an "officer, director or person interested directly or indirectly" in Dunbar Liquors, may have his license revoked by virtue of the Final Order of Revocation regarding Fowler Liquors. Thus, the decisive issue is whether Mr. Daghara should be considered to have been a "licensee" of Fowler Liquors by virtue of his minority ownership interest in that business.

13. Subsection 561.15(3), Florida Statutes (2003), is a penal statute. "It is well established that penal statutes and highly regulatory laws are subject to strict construction and may not be extended by interpretation." Department of Business and Professional Regulation v. Calder Race Course, Inc., 724 So. 2d 100, 104 (Fla. 1st DCA 1998). The undersigned concludes that under the circumstances of this case, revocation of Dunbar Liquors' license would constitute an unwarranted extension of Subsection 561.15(3)(b), Florida Statutes (2003).

14. The sole basis for this revocation is that Mr. Daghara was a minority shareholder in Fowler Liquors at the time its license was revoked. There was no evidence that Mr. Daghara participated in the sale of alcoholic beverages to minors.

    There was no evidence that Mr. Daghara exercised any control over the day-to-day business of Fowler Liquors. There was no evidence that he was an officer or director of Fowler Liquors.

15. Based on the record, Mr. Daghara's sole involvement in Fowler Liquors was a non-controlling financial investment. The Division has provided no limiting principle for the proposition it apparently supports in this case: that a passive, minority stockholder in a licensee's business thereby becomes a "licensee" himself, shares culpability for the actions of the persons running the business, and may be disqualified from later obtaining a license under Subsection 561.15(3)(a), Florida Statutes (2003).

16. The Division provided no case law or legislative history to demonstrate that the statute was intended to confer "licensee" status on stockholders who had no proven knowledge of or involvement in the acts that caused the original revocation. Even where a person's licensee status is not in question, the Division has in the past exercised its discretion in favor of persons not involved in wrongdoing. See Department of Business

Regulation, Division of Alcoholic Beverages v. Orlando and

Loretta Mulkey, d/b/a Sonny's Service Center, Case No. 88-0545 (DOAH May 20, 1988) (licensee given leave to obtain a license in her own name, where revocation was caused by bad acts of her

co-licensee and evidence established that she was unaware of those acts).

RECOMMENDATION

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

RECOMMENDED that the Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco, enter a final order dismissing the Administrative Action against Shahir Daghara Corporation, d/b/a Dunbar Liquors.

DONE AND ENTERED this 2nd day of September, 2004, in Tallahassee, Leon County, Florida.

LAWRENCE P. STEVENSON

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 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 2nd day of September, 2004.

COPIES FURNISHED:

Harold F. X. Purnell, Esquire Rutledge, Ecenia, Purnell

& Hoffman, P.A. Post Office Box 551

Tallahassee, Florida 32302-0551

Michael J. Wheeler, Esquire Department of Business and

Professional Regulation Northwood Centre, Suite 6 1940 North Monroe Street

Tallahassee, Florida 32399-2202

Peter Williams, Director Division of Alcoholic Beverages

and Tobacco

Department of Business and Professional Regulation

1940 North Monroe Street Tallahassee, Florida 32399-0792

Leon Biegalski, General Counsel Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-2202

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: 04-000643

Orders for Case No: 04-000643