STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

In re: Revocation or Suspension ) of License, or Assesment of )

Penalty against FYK Corporation ) CASE NO. 75-1522

d/b/a Sun City Motel, License ) BEVERAGE CASE NO. 8-75-88-A No. 23-1355 )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated hearing officer, K. N. Ayers, held a public hearing in the above styled cause on September 10, 1975 at Miami, Florida.

APPEARANCES

For Petitioner: Charles Tunnicliff, Esquire

Johns Building

725 South Bronough Street, Room 210 Tallahassee, Florida

For Respondent: Charles Yanvers, Morris H. Kantzler, and

Israel Paris

17375 Collins Avenue Miami Beach, Florida

1. By Notice to Show Cause served prior to July 29, 1975, the Director, Division of Beverage, Department of Business Regulations, seeks to revoke, suspend, or assess a penalty against license No. 23-13555, issued to FYK Corporation of 17375 Collins Avenue, Miami Beach, Florida. The grounds for such action against said license are predicated upon allegations (1) that on or about May 28, 1975 licensee entered into an agreement with Lee Paris a/k/a Israel Paris, which relinquished all or part of the management and control of the license premises contrary to rule 7A-3.17FAC; and (2) that on or about May 28, 1975 licensee failed to keep malt beverage and wine beverage invoices on file at the licensed premises as required by rule 7A-4.45FAC.

   
   

2. On May 28, 1975 beverage agents Pfitzenmaier and Ilic visited the Sun City Lounge on a routine inspection. No malt or wine records were available; and the bar maid on duty called Mr. Paris who, when he appeared shortly thereafter, brought with him the desired records. He stated that they had been kept at his home. No evidence was presented that permission to keep records off the premises had ever been requested from or granted by the Director, Division of Beverage.

   
   

3. With respect to the allegation that the Sun City Lounge is operated under a lease agreement in violation of rule 7A-3.17FAC some 21 exhibits were admitted into evidence without objection and testimony was presented by agents Pfitzenmaier and Ilic, Messers. Yanvers, Paris, and Kantzler. Paris was hired to manage the Sun City Motel Lounge and the Argosy Lounge next door. Yanvers and Kantzler are the principal. owners of both motels (83 1/3 percent of outstanding stock of FYK Corporation). An oral agreement was made with Paris to

   manage the bars in both motels. Here only the agreement respecting the Sun City Motel Lounge is involved.

   
   

4. In order to facilitate accounting for the various motel operations, several checking accounts were established. One was for the lounge at Sun City and Paris was the only one authorized to write checks against this account. He paid for all bar supplies, paid all employees, including himself, remitted state sales taxes, Social Security taxes, and unemployment compensation owed to the motel who held the tax number for all activities at the motel. Profits after expenses were remitted to the corporation. Two checks that were admitted into evidence were marked "rent" in a block on the left side of the checks. All parties involved stated that this notation was erroneous as the payment was for bar profits being remitted.

   
   

5. Although Paris did the hiring and firing, Yanvers, who managed the Sun City Motel, retained the right to fire employees of the lounge, including Paris. On several occasions he exercised this right with respect to lounge employees. Paris was paid a weekly salary and the oral agreement provided he would get a bonus of all profits exceeding $5,000 per year. Since this profit figure was never reached, Paris received only his weekly salary. All parties testified that the ultimate control of the lounge operation was retained by the licensee and at no time was it their intention to lease the lounge or relinquish control of the lounge other than the daily operational control exercised by Paris pursuant to the management contract.

   
   

   CONCLUSIONS OF LAW

   
   

6. After reviewing the evidence in the light of the indicia for determining if the agreement is a bona fide management contract as listed in rule 7A-3.17FAC, I find the preponderance of the evidence points toward a management contract. No evidence was submitted that the licensee had relinquished control. Salaries and wages were paid by the manager from the income of the lounge, but Social Security, Workmen's Compensation, etc. were remitted to the appropriate agency by the licensee. All lounge purchases were paid from the bank account in the name of Sun City Motel Cocktail Lounge. All evidence submitted indicated licensee retained ultimate authority with respect to hiring and firing, but rarely exercised it. No fixed sum payment by the manager was shown. No evidence was submitted to contradict the testimony of the principal owners that they retained ultimate control over the operation of the lounge.

   
   

7. All parties herein involved have operated other businesses licensed by the Beverage Department, and acknowledged that they are familiar with the proscription regarding lease of license or relinquishing of control by the licensee, and at no time did they ever intend to, or did, relinquish overall control over the licensed premises. Although exhibits 21 - 23 more resemble the payment of a debt than as profits from the business, there was no evidence to rebut the testimony that these payments constitute profits from the lounge.

   
   

8. From the foregoing it is concluded that the licensee is not guilty of violation of rule 7A-3.17FAC, and that the licensee is guilty of violation of rule 7A-4.45FAC by failure to maintain beer and wine invoices on the premises. It is therefore,

RECOMMENDED that the licensee, FYK Corporation d/b/a Sun City Motel, be fined $100 for failure to maintain malt beverage and wine beverage invoices on the premises as required by rule 7A-4.45FAC.

ENTERED this 25th day of September, 1975 in Tallahassee, Florida.

K. N. AYERS, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Charles Tunnicliff, Esquire Charles Yanvers

Morris Kantzler Israel Paris

Docket for Case No: 75-001522

Orders for Case No: 75-001522