DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION, DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO,
vs.
Case No. 14-4671
Respondent.
On February 9, 2015, Administrative Law Judge John D. C. Newton, II, of the Division of Administrative Hearings heard this case by video teleconference at locations in Tallahassee and
Sarasota, Florida.
For Respondent: Paul F. Grondahl, Esquire
Paul F. Grondahl, P.A. 2017 Manatee Avenue West
On September 4, 2014, the Department issued an Administrative Complaint charging El Tucanazo with five violations of the laws governing sale of alcoholic beverages. El Tucanazo disputed the charges and requested a formal hearing. On October 9, 2014, the Department referred this matter to the Division of Administrative Hearings to conduct the hearing. The hearing was scheduled for January 6, 2015. The Department was permitted to file its First Amended Administrative Complaint.
The parties filed a Joint Motion for Continuance which was granted. The hearing was rescheduled for February 9, 2015, and conducted as scheduled.
The Department presented the testimony of Bryan Brummett, Manuel Gallego, Christine Gazard, and Casey Simon. Department Exhibits C, F (jointly with El Tucanazo), G, I, and K were admitted into evidence. El Tucanazo presented the testimony of Daniel Camargo and Josefina Mondragon. El Tucanazo's Exhibits 1,
4 through 6 and 8 through 10 were admitted into evidence.
A Transcript was ordered and filed on March 12, 2015. The parties moved for and were granted an extension of time for filing proposed recommended orders. The parties timely filed their proposed recommended orders. The parties' proposals have been considered in preparation of this Recommended Order.
Based on the evidence presented at the final hearing and the entire record of this proceeding, the following Findings of Fact are made:
El Tucanazo holds Florida alcoholic beverage license BEV3910423, Type SRX. This is a business selling food, non- alcoholic beverages, and alcoholic beverages. At all times material to this matter, Daniel Camargo has been the owner and president of El Tucanazo.
Mr. Camargo opened El Tucanazo in 2010. At first,
El Tucanazo operated under the authority of a license that permitted only sales of beer and wine. Approximately two years after opening, Mr. Camargo changed the El Tucanazo license to a type SRX. This type permits the sale of all alcoholic beverages, including liquor. Florida statutes and rules of the Department permit liquor sales under this license if the licensee satisfies a number of criteria broadly crafted to ensure that alcohol sales are an adjunct to food sales at a full-service restaurant.
The Department maintains that El Tucanazo's licensed premises are only the area inside of the building. It produced only hearsay evidence to prove this contention. That is not sufficient to support a finding of fact. § 120.57(1)(c), Fla. Stat.
Florida Administrative Code Rule 61A-3.0141(2)(a)1., which establishes criteria for holders of SRX licenses, specifically provides that the required square footage of licensed premises "shall not include any space contained in an uncovered or not permanently covered area adjacent to the premises." Rule 61A-3.0141(2)(a)2. requires the premises’ square footage to "be contiguous and under the management and control of a single licensed restaurant establishment." Consequently, the licensed premises of El Tucanazo could not have included a food service or preparation area in the parking lot.
About a year or a year and one-half after opening,
Mr. Camargo began operating El Tucanazo under the fictitious name "Club 674." He registered the fictitious name with county authorities. He did not inform the Department of the change.
El Tucanazo is open from roughly 6:00 p.m. to 4:00 a.m., Fridays and Saturdays. El Tucanazo employs a security company to provide guards to protect the business during the nights that it is open.
Tacos are the only food served at El Tucanazo. The tacos are made of tortillas, meat, onions, cilantro, cheese and a sauce. Customers may add lettuce and pico de gallo, a condiment made of tomatoes, pepper, and onions. El Tucanazo also serves alcoholic and non-alcoholic beverages.
Department agents, Bryan Brummett and Casey Simon, began an investigation of El Tucanazo in response to a complaint from the Hillsborough County Sheriff's Office.
They inspected El Tucanazo on August 15, 2014. At
8:00 p.m., El Tucanazo was not open. When they returned at 10:30 p.m., it was open. El Tucanazo was charging an entrance fee.
Pre-poured tequila shots were lined up on the bar available to customers. Mr. Camargo claimed that he gave
three-to-four free shots of tequila to each customer. He said he did this several times a month.
There were also several bottles of liquor at the bar.
Customers were consuming alcoholic beverages.
The tables and chairs were arranged along the sides of the room with a large open space. The evidence does not prove whether the seating was sufficient or insufficient to serve 150 persons "full course meals" at tables at one time.
The establishment was arranged as a dance hall, not a restaurant. A disc jockey was present to provide music.
There was no food for sale or available inside El Tucanazo for customers. There were no customers consuming food inside El Tucanazo.
There was a food service and preparation area outside the premises. It was rudimentary, consisting of basically a stack of bricks with a cooktop on them. The cooking equipment
outside was warm and showed signs of use and food preparation. A few people were eating outside.
In contrast, the kitchen inside the licensed premises did not show signs of food preparation. It was dark and empty. No food was being prepared. None of the cooking surfaces showed signs of use. None were hot. There was no food odor. Freezers contained nothing but ice. The coolers did not contain food items. Save for a single wrapper from a package of meat and a spent food container, the kitchen waste cans contained nothing indicating recent food preparation. The clear and convincing credible evidence proves no one had prepared food in the kitchen on the day of the inspection or the recent past.
Mr. Camargo's explanation for the condition of the kitchen was not credible, was contradictory, and was in conflict with observed facts. He said that he prepared food around
6:00 p.m., usually finishing in half-an-hour to an hour. He said the food was then kept warm for nine hours until El Tucanazo closed. Mr. Camargo also said El Tucanazo stopped serving food inside around 10:30 p.m. or 11:00 p.m. and that he took the remaining food outside to be sold. Mr. Camargo also said that meat being grilled outside was El Tucanazo's food offering.
The agents arrived around 8:00 p.m., well before 10:30 p.m., and there was no food being served or even available inside. If Mr. Camargo had been telling the truth about food
preparation, prepared food, kept warm, would have been available in the premises.
Inside and outside there was no sign of lettuce, tomatoes, cilantro, or other vegetables or fruits. The agents asked Mr. Camargo to provide evidence of vegetables and other items used in El Tucanazo's food offering. He produced none.
At the conclusion of the August 15, 2014, inspection, Agent Brummett issued a Record of Inspection to El Tucanazo. It required El Tucanazo to provide: (1) all food and alcohol sales receipts; (2) all invoices for food and alcohol purchases;
(3) all employee records; (4) all account invoices for utilities; and (5) all checking account information for the months April through July 2014.
El Tucanazo timely produced all of the requested records that it maintained for the time period to the Department's auditing unit.
El Tucanazo is a cash only business. It uses one cash register for food sales and one for alcohol sales. It keeps only handwritten receipts or "guest checks." Multiple orders are recorded on a "guest check" until it is full. These handwritten receipts are the only sales records El Tucanazo keeps. They are not dated.
Once a week Josefina Mondragon arranges the receipts.
She totals the information by month and uses them for regular
business purposes including reporting sales for sales tax purposes and calculating the tax due. These summaries are admissible as evidence under the Records Of Regularly Conducted Business Activity hearsay exemption created by section 90.803(6)(a), Florida Statutes. This is an accurate sample of
a summary:
April 1-30, 2014 FOOD SALES $3,529.00
ALCOHOL SALES $1,899.00 TOTAL SALES $5,428.00 TOTAL TAX SALES $379.96
LATE SALES [tax fee] $50.00
El Tucanazo maintained similar summaries for the months April, May, June, and July of 2014. The summaries do not report any sales of non-alcoholic beverages. The underlying documents were not placed in evidence. This made it impossible to test the accuracy of the summaries on this record. The underlying documents were available to the Department, however, if it had chosen to test the accuracy of the summaries.
Examples of the guest checks from which Ms. Mondragon prepared her summaries were admitted into evidence. Without
Ms. Mondragon to explain the notations on the checks, they cannot be used to determine the amount of food sales. In addition, because they are undated, they do not indicate the month of the food and alcohol sales recorded. The guest checks provided do not indicate any sales of non-alcoholic beverages. The only
alcohol sales that they indicate are beer sales, despite the fact that El Tucanazo offers spirits for sale and had bottles available on August 15, 2014, when the agents conducted their inspection.
The clear and convincing evidence proves that
El Tucanazo does not maintain clear records of all gross retail sales of food, non-alcoholic beverages, and alcoholic beverages.
El Tucanazo keeps the receipts for food and beverage purchases. They show purchases of, in addition to the taco ingredients described above, orange juice, Sprite, chicken breasts, tuna, celery, broccoli, eggs, Cheetos, Fritos, pizza, corn, breakfast cereal, chocolate milk, turkey, sliced ham, chewing gum, shrimp, other seafood, milk, Red Bull, and lemon juice. None of these items are items that El Tucanazo claims to
sell.
The receipts lead to one of two conclusions. The first
is that Mr. Camargo was wrong when he testified with certainty about the food items sold at El Tucanazo. The second is that the receipts combine home and business purchases with no way on this record to reasonably distinguish one from the other. In either scenario, the clear and convincing evidence proved that
El Tucanazo did not maintain clear records of all purchases of food and non-alcoholic beverages.
The only records El Tucanazo maintains of its alcohol purchases are the stubs from its checkbook and receipts from its beer wholesaler, Pepin Distributing Company. For the period April through July 2014, check stubs show that El Tucanazo made nine purchases from Pepin. The receipts indicate only seven purchases. The fact that these records cannot be reconciled is clear and convincing evidence that El Tucanazo does not maintain clear records of all its alcoholic beverage purchases.
El Tucanazo purchases liquor from a distributor whose name includes "Southern." There is no record of purchases from “Southern” or that El Tucanazo otherwise purchased liquor during the April through June period. This is inconsistent with
Mr. Camargo's testimony that El Tucanazo ran specials several times per month offering customers three-to-four shots, each free of charge, and the presence of liquor bottles at the bar. The absence of purchase records combined with the Mr. Camargo's testimony and the presence of liquor bottles at El Tucanazo is clear and convincing evidence that El Tucanazo does not maintain clear records of all its alcoholic beverage purchases.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. §§ 120.569 and 120.57(1), Fla. Stat.
The Department is an arm of the state agency charged with licensing, regulating, and enforcing Florida's alcoholic beverage and tobacco laws. It may revoke or suspend beverage licenses for violations of state statutes and rules.
§ 561.29(1), Fla. Stat.
The Department bears the burden to establish the allegations in the complaints by clear and convincing evidence. See Ferris v. Turlington, 510 So. 2d 292, 294 (Fla. 1987); Pic
'N' Save Cent. Fla., Inc. v. Dep't of Bus. & Prof'l Reg., Div. of Alcoholic Beverages & Tobacco, 601 So. 2d 245, 249 (Fla. 1st DCA
1992). The clear and convincing evidence standard:
[R]equires that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the testimony must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact the firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established.
Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983).
Issue A. Failure to Produce Records Within Ten Days-- Count 1
The First Amended Administrative Complaint charged
El Tucanazo with violation of section 561.29(1)(j). That statute requires the holder of a license under section 561.20(1) to
produce records for inspection within ten days of receiving a written request for them.
The Department concedes in its proposed order that El Tucanazo is licensed under section 561.20(2)(a) and that section 561.29(1)(j) does not apply to El Tucanazo. If it did,
the Department did not prove a violation by clear and convincing evidence.
Issue B. Failure to Derive at Least 51 Percent of Gross Revenue from Food and Non-Alcoholic Beverage Sales--Count 2
Section 561.20 provides for special licenses, such as the one El Tucanazo holds. Section 561.20(2)(a)4. makes eligibility for a special license dependent upon a "restaurant having 2,500 square feet of service area and [being] equipped to serve 150 persons full course meals at tables at one time, and deriving at least 51 percent of its gross revenue from the sale of food and nonalcoholic beverages." The Department argues that El Tucanazo did not meet the requirement to derive 51 percent of its revenue from sales of food and non-alcoholic beverages. Rule 61A-3.0141(3)(a), which implements the statute, repeats the statutory requirement. It also imposes requirements for keeping "legible, clear" records of gross revenues from sales of alcoholic beverages, non-alcoholic beverages, and food. It also requires "legible, clear" records of purchases of alcoholic beverages, non-alcoholic beverages, and food. The clear and
convincing evidence proved that El Tucanazo guest checks were not the "clear" records required by rule 61A-3.0141(3)(a). The Department argues that since its rule places a burden on the licensee to demonstrate compliance with the law, the absence of clear records proves a violation of the 51-percent requirement.
Accepting this argument amounts to impermissibly shifting the burden of proof from the Department to El Tucanazo, as recognized by the Department’s Final Order in Department of Business and
Professional Regulation v. Club Manhattan Bar and Grill, LLC, Case No. 11-2805 (Fla. DOAH Sept. 23, 2011; DBPR Oct. 26, 2011).
The Department did not prove by clear and convincing evidence that El Tucanazo did not comply with the 51-percent requirement.
Issue C. Serving Intoxicating Beverages After Food Service Hours Ended--Count 3
Section 561.20(2)(a) forbids a special license holder from serving intoxicating beverages after the hours of food service. The clear and convincing evidence proved that
El Tucanazo was serving alcoholic beverages in its licensed premises when food service was not available. El Tucanazo's argument that the food for sale in the parking lot satisfies the requirement fails because of the prohibition against licensed premises including an uncovered area. Fla. Admin. Code
R. 61A-3.0141(2)(a)1.
Rule 61A-2.022 establishes the penalty guidelines that the Department will routinely impose. The guideline penalty for failing to meet the minimum requirements to hold a special license under section 561.20 calls for a $1,000 civil penalty and revocation of the license without prejudice to obtain any other type of license, but with prejudice to obtain the same type of special license for five years. This penalty is appropriate in this case. The violation goes to the core of the legislative intent for the special restaurant licenses to be available only to restaurant operations primarily serving food and non-alcoholic beverages. Dep't of Bus. & Prof'l Reg., Div. of Alcoholic Beverages & Tobacco v. Huddle, Inc., 342 So. 2d 140, 142 (Fla.
1st DCA 1977).
Issue D. Serving Alcoholic Beverages After Service of Full Course Meals Has Stopped--Count 4
The clear and convincing evidence proved that El Tucanazo was selling alcoholic beverages when there was no food service available on the premises. Ineluctably, it was also serving alcoholic beverages after service of full-course meals had ended. Therefore, there is no need to address El Tucanazo's argument that the component ingredients of a taco meet the definition of full-course meal in rule 61A-3.0141(3)(d), which requires a salad or vegetable, an entree, a beverage, and bread.
Rule 61A-2.022 establishes the penalty guidelines that the Department will routinely impose. The guideline penalty for failing to meet the minimum requirements to hold a special license under section 561.20 calls for a $1,000 civil penalty and revocation of the license without prejudice to obtain any other type of license, but with prejudice to obtain the same type of special license for five years. This penalty is appropriate in this case because the violation goes to the core of the rationale for a special license. Dep't of Bus. & Prof'l Reg., Div. of Alcoholic Beverages & Tobacco v. Huddle, Inc., supra.
Issue E. Failure to Give Notice of Name Change-- (Count 5)
Section 561.33(2) requires a licensee, like
El Tucanazo, to give the Department 30 days' written notice of changing the name of the licensed place of business. Clear and convincing evidence proved that El Tucanazo changed its name to Club 674 without giving the Department notice.
Rule 61A-2.022 sets out the penalty guidelines that the Department will routinely impose. The guideline penalty for a violation of section 561.33 calls for a $500 civil penalty for the first offense. This is an appropriate penalty in this case.
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner, Department of Business
and Professional Regulation, Division of Alcoholic Beverages and Tobacco, impose a $2,000 penalty and revoke the license of Respondent, El Tucanazo Bar and Grill, Inc., without prejudice to El Tucanazo obtaining any other type of license, but with prejudice to El Tucanazo obtaining the same type of special license for five years for Counts 3 and 4 and impose a $500 penalty on El Tucanazo for Count 5.
Leon County, Florida.
JOHN D. C. NEWTON, II
Filed with the Clerk of the Division of Administrative Hearings this 28th day of May, 2015.
1/ All statutory references are to Florida Statutes (2014), unless otherwise noted.
William N. Spicola, General Counsel Department of Business and
Paul F. Grondahl, Esquire Paul F. Grondahl, P.A.
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.
