Judges: CHARLES C. ADAMS
Agency: Department of Business and Professional Regulation
Latest Update: May 23, 1980
Summary: Whether or not on or about October 28, 1976, investigation revealed that the Zig Zag Bar, Inc., d/b/a Zig Zag Pub, failed to notify in writing, the Division of Beverages, of its change of name, 30 days in advance of such change, contrary to s. 561.33, F.S. Whether or not on or about November 4, 1976, investigation revealed that the Zig Zag Bar, Inc., d/b/a Zig Zag Pub, did fail to submit and certified copy of the minutes of the stockholders' meeting, changing corporate officers, to the Division
Summary: Whether or not on or about October 28, 1976, investigation revealed that the Zig Zag Bar, Inc., d/b/a Zig Zag Pub, failed to notify in writing, the Division of Beverages, of its change of name, 30 days in advance of such change, contrary to s. 561.33, F.S. Whether or not on or about November 4, 1976, investigation revealed that the Zig Zag Bar, Inc., d/b/a Zig Zag Pub, did fail to submit and certified copy of the minutes of the stockholders' meeting, changing corporate officers, to the Division of Beverages, in violation of Rule 7A-2.07, F.A.C. Whether or not on or about November 12, 1976, investigation revealed that the Zig Zag Bar, Inc., d/b/a Zig Zag Pub, had entered into an agreement with one Billy Gene McKinney, which agreement relinquished all or part of the management and control of the licensed premises contrary to Rule 7A-3.17, F.A.C.Respondent changed name, officers without notice and didn`t file copy of minutes and had unauthorized manager. Stay 20 days suspension for compliance
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vs. ) CASE NO. 77-1254
Respondent. )
Pursuant to notice, a hearing was held before Charles C. Adams, a Hearing Officer with the Division of Administrative Hearings, at 8405 Northwest 53rd Street, Lindsley Building, Wing B, Second Floor, Koger Executive Center, Miami, Florida at 9:00 A.M., August 17, 1977.
For Respondent: Richard M. Knowles
The Zig Zag Bar, Inc. is the holder of license number 23-2702, series 2-COP, held with the State of Florida, Division of Alcoholic Beverages and Tobacco. This license is held to do business under the name Zig Zag Pub, located at 800 Alibaba Avenue, Opa-Locka, Florida.
This case arises on the basis of an investigation conducted by Agent James P. Bates, State of Florida, Division of Alcoholic Beverages and Tobacco. On October 19, 1976 Agent Bates received information from an unidentified confidential informant that the Zig Zag Pub had been sold or leased to one Billy McKinney, a convicted felon. Having received that information, Bates took action to determine whether the Respondent, Zig Zag Bar, Inc. had entered into an agreement with Billy McKinney, which agreement possibly would have relinquished all or part of the management and control of the licensed premises contrary to Rule 7A-3.17, F.A.C.
One aspect of the investigation, was the review of the records maintained by the Division of Alcoholic Beverages and Tobacco to determine if Bill McKinney was listed as one of the officers of the subject corporation. This record examination took place in October or November, 1976. This search did not show Bill McKinney being listed as a corporate officer. The corporate officers listed were Phyllis Charlene Henry, President, Sigride Kienle Sowell, also known as Sigride Kienle, Vice-President and Richard M. Knowles, Secretary- Treasurer.
Agent Bates went to thee location of the Zig Zag Pub, at 800 Alibaba Avenue, Opa-Locka, Florida, on October 28, 1976. When he arrived he discovered an advertising sign in the front of the licensed premises reflecting the name "Bill's Place". On October 28, 1976 the records of the Petitioner indicated the official name of the licensed premises was Zig Zag Pub. This prompted Agent Bates to make a further inquiry into the true status of the licensed premises, on the subject of ownership and control.
Agent Bates checked with the City of Opa-Locka, Florida and discovered that Bill McKinney had completed a questionnaire for an operating license to be held with the City of Opa-Locka, Florida. The license was issued to Zig Zag Pub in the name of Richard M. Knowles; however, the questionnaire application was completed by Bill McKinney who indicated that he was the owner-operator. This information is shown in Petitioner's Exhibits number 1 & number 2 admitted into evidence. Petitioner's Exhibit 1 is the questionnaire and Petitioner's Exhibit number 2 is the city license. Agent Bates also ascertained that Bill McKinney had obtained a water permit from the City of Opa-Locka for the benefit of the licensed premises.
In the course of his investigation, Bates talked to Phyllis Charlene Henry, the named President of the Zig Zag Pub, Inc. Ms. Henry stated that the Zig Zag Pub, Inc. still maintained control of the licensed premises, even though the operating manager and Vice-President Sigride Kienle Sowell had left, leaving McKinney as the manager.
Bates went to the licensed premises on November 12, 1976 and found Bill McKinney working behind the bar. McKinney explained that he was the manager of the licensed premises. In checking the business records of the licensed premises, a lease agreement was discovered which was signed between McKinney and Richard M. Knowles as an officer with the Zig Zag Pub, Inc. This lease agreement was a two year agreement with an option for McKinney to become a full partner in
the corporation known as Zig Zag Pub, Inc. The agreement also authorized Bill McKinney to take full control to operate the business under the present licenses, one of those licenses being the license being held with the State of Florida, Division of Alcoholic Beverages and Tobacco. Petitioner's Exhibit number 3, admitted into evidence is the business contract spoken of. Agent Bates also discovered a number of checks written on an account of Bill McKinney which pertained to expenses of the Zig Zag Pub, Inc. Some of these checks are found in Petitioner's Composite Exhibits number 4 & number 5. Petitioner's Exhibit number 6 is a ledger showing expenditures of the business and reflects entries which correspond to the checks found in Petitioner's Composite Exhibit number 4. Petitioner's Exhibit number 7, admitted into evidence, is a composite exhibit containing invoices that are reflected in the ledger and shows that the invoices were made out to Bill's Place, and paid by the Zig Zag Pub or Bill McKinney. Petitioner's Exhibit number 8, admitted into evidence, is a receipt for a water bill charged to the licensed premises and paid by Bill McKinney.
In following up the explanation of the sign found on the outside of the licensed premises, showing the name to be "Bill's Place," an invoice was located in the records. This invoice is Petitioner's Exhibit number 9, admitted into evidence, and shows that the sign had been delivered August 21, 1976. Another exhibit showing the connection of Bill Kinney to the licensed premises is a health inspection form made in the name of "Bill's Place" for the licensed premises and acknowledged by Bill McKinney. This is reflected in Petitioner's Exhibit number 10, admitted into evidence. Finally, there is a letter from the law firm of Bergstresser and DuVal, which indicates a request for payment of the November, 1976 rent due from the licensed premises under terms of a lease entered into by the principles of Zig Zag Bar, Inc. This letter is addressed to Bill McKinney, and is Petitioner's Exhibit number 11, admitted into evidence.
While in the licensed premises on November 12, 1976, Agent Bates discussed McKinney's position with the Zig Zag Bar, Inc. McKinney indicated that he had been the manager since June, 1976. In an effort to determine McKinney's position in the corporation of Zig Zag Bar, Inc., Bates inquired of the Secretary of State, State of Florida. A teletype message was forward to Agent Bates indicating that the corporation had been cancelled for nonpayment of corporate fees. However, this message indicated that the last named officers were shown as Phyllis Charlene Henry, President, Sigride Kinele, Vice President and Richard M. Knowles as Secretary-Treasurer. This is reflected in Petitioner's Exhibit number 13, admitted into evidence. On November 19, 1976, the corporation was reinstated upon the payment of its fees. At the time the corporation was reinstated it listed Phyllis C. Henry, President, Kathlene McKinney as Vice-President and Richard M. Knowles as Secretary-Teasurer. Kathlene McKinney is the wife of Bill McKinney. Petitioner's Exhibit number 14, admitted into evidence are the documents showing the reinstatement of corporation and indicates the named officers. The Petitioner had not been made aware of the change of officers, nor received a certified copy of the stockholders' meeting held by the Zig Zag Bar, Inc., which changed the corporate officers.
After discovering the change in the corporate officers, Agent Bates met with Richard Knowles and Knowles stated that Sigride Kienle Sowell had been removed as manager and McKinney had been brought in to salvage the Zig Zag Bar, Inc., from its financial difficulties in the licensed premises. Knowles was instructed that he could take action to rectify the problem that he was having and gain compliance with the laws and rules of the State of Florida, Division of Alcoholic Beverages and Tobacco.
At the date of hearing, Bill McKinney was still acting as the operator of the licensed premises, and the Zig Zag Bar, Inc., had not filed a certified copy of the minutes of the stockholders' meeting changing the corporate officers, to those reflected in the November 19, 1976 reinstatement of the corporation with the Secretary of State of Florida. Furthermore, the name displayed on the sign in front of the licensed premises was "Bill's Place," and not Zig Zag Bar.
After concluding his investigation, Agent Bates related his findings to his superiors and this led to the filing of the notice to show cause which is the subject of this hearing. The notice to show cause contains three counts. The first of those counts alleges that on October 28, 1976, it was shown that the Zig Zag Bar, Inc., d/b/a Zig Zag Pub had failed to notify in writing, the State of Florida, Division of Alcoholic Beverages and Tobacco of its change of name in 30 days in advance of such name change, contrary to s. 561.33, F.S. Specifically, s. 561.33(2) , F.S. states:
"no licensee may change the name of his place of business without first giving the Division 30 days' notice in writing of such change."
In fact, the name was effectively changed from Zig Zag Pub to "Bill's Place" as discovered on October 28, 1976 and the Petitioner had not been notified 30 days in advance of such change. The Petitioner still has not been notified of such change.
The second count of the notice to show cayuse alleges that on or about November 4, 1976 it was discovered that Zig Zag Bar, Inc. d/b/a Zig Zag Pub failed to submit a certified copy of the minutes of the stockholders' meeting changing corporate officers, to the State of Florida, Division of Alcoholic Beverages and Tobacco in violation of Rule 7A-2.07, F.A.C. The pertinent provision of the Rule, is Rule 7A-2.07(2), F.A.C., which states the following:
"If any corporation holding a beverage license shall change corporate officers, such corporation shall within 10 days of such change submit a certified copy of the minutes of the stockholders'
meeting at which the change in officers was effected to the district office of the district of the Division of Beverage wherein the license held by such corporation is located."
The Respondent had changed the Vice-President in its corporation from Sigride Kienle Sowell to Kathlene McKinney, sometime prior to November 19, 1976, as evidenced by their filing with the Secretary of State of Florida. After making this change they failed to submit a certified copy of the minutes of the stockholders' meeting changing the corporate officer to the State of Florida, Division of Alcoholic Beverages and Tobacco within the allotted 10 day requirement. This change still has not been submitted.
The third count in the notice to show cause was an allegation that the investigation on November 12, 1976, revealed that the Zig Zag Bar, Inc., d/b/a Zig Zag Pub, entered into an agreement with Billy Gene McKinney which agreement relinquished all or part of the management and control of the licensed premises and alleged that this was contrary to Rule 7A-3.17, F.A.C. Rule 7A-3.17, F.A.C. contains this language:
"All business conducted on the licensed premises under the beverage law shall be managed and controlled at all times by the licensee managed by or his authorized employee or employees.
The term "employee," as used herein, shall mean a person who received a salary or wages for services performed, for and in
behalf of a licensee, under the exclusive control and direction of the latter. It does not
include a lessee, and independent contractor or any person employed by collateral agreement to independently manage and control the said business on the licensed premises.
Indicia for determining whether a purported managerial contract conforms to this rule are as follows:
The licensee must retain control of the operation of the business.
Salary or wages must be paid by the licensee to the manager or employee for conduct of the business under the ultimate direction of the former.
Social Security and workmen's compensation coverage must be paid and accounted for by the licensee.
The licensee must be responsible for all debts of the business and legally entitled to all incomes therefrom. All alcoholic beverages for the business must be purchased in the licensee's behalf and under the license covering the premises.
The licensed premises must be operated for
all purposes in the name of the licensee or his legal trade name as distinguished from the name or names of any other person or persons.
The licensee must be responsible for all conduct of the business and the license involved must be subject to suspension and revocation for any
illegal acts committed on the premises or under the beverage law.
Complete ultimate authority for the hiring and dismissal of all employees on the premises must rest with the licensee.
The licensee must be primarily responsible for the rent, utilities and insurance covering the
premises, and all other incidental expenses occasioned in the operation of the business.
The licensee must remain at all times responsible for the maintenance and proper operation of equipment on the premises.
The contract must contemplate the formation
of the relationship of principal and agent between the licensee and the employee within the limits defined and implied by the contract.
A contract wherein the so-called employee or manager pays a fixed sum to the licensee whether from
net profits or not would not create the employer/employee relationship as contemplated by the rule.
Any agreement woven in such language so as to clothe or disguise the true character of a contract either as a lease or a managerial contract will be shorn in order to effect the intent and
purpose of the law and rule in this regard. The Pole Star which will guide the Division in determining whether or not a purported agreement is a bona fide managerial contract as distinguished from a
lease will depend upon who has ultimate overall control and direction of the licensed premises under the terms of the agreement."
In reflecting on the requirements contained in the Rule and comparing it to the facts shown in this case, it is clear that the Respondent has failed to comply with Rule 7A-3.17, F.A.C.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction in this cause.
An examination of the facts shown establishes that on October 28, 1976 the Zig Zag Bar, Inc., d/b/a Zig Zag Pub, had failed to notify in writing, the Division of Alcoholic Beverages and Tobacco, of its change of name 30 days in advance of such change contrary to s. 561.33, F.S., thereby subjecting the Respondent to the penalties contained in s. 561.29, F.S.
An examination of the facts shown indicate that the Zig Zag Bar, Inc., d/b/a Zig Zag Pub, had changed a corporate officer sometime prior to November 19, 1976 and had failed to submit a certified copy of the minutes of the stockholder's meeting changing the corporate officers to the State of Florida, Division of Alcoholic Beverages and Tobacco, in violation of Rule 7A-2.07,
F.A.C. thereby subjecting the Respondent to the penalties contained in s. 561.29, F.S.
An examination of the facts shown indicates that on or about November 12, 1976 and specifically, in June, 1976, the Zig Zag Bar, Inc., d/b/a Zig Zag Pub, had entered into an agreement with one Bill McKinney which agreement relinquished all or part of the management and control of the licensed premises contrary to Rule 7A-3.17, F.A.C. thereby subjecting the Respondent to the penalties contained in s. 561.29, F.S.
It is recommended that the Director of the Division of Alcoholic Beverages and Tobacco suspend license number 23-2702, for a period of 20 days, but that such suspension be withheld for 15 days from the date of the recommended order to: (1) allow Bill McKinney to try to transfer the license number 23-2702 into his name and control; or allow the Respondent to make him an officer, stockholder, or employee entitled to operate the licensed premises; or allow the Respondent to remove him as the manager and operator of the licensed premises;
(3) haven't been complied with the suspension shall take effect. This recommendation does not consider the acceptability of Bill McKinney as a transferee of the license held with the Division of Alcoholic Beverages and Tobacco or the propriety of the name change; nor does it address the question of possible future violations.
DONE AND ENTERED this 29th day of August, 1977, in Tallahassee, Florida.
CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304
Richard M. Knowles Secretary- Treasurer Zig Zag Pub
