STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, DEPARTMENT OF ) BUSINESS REGULATION, DIVISION OF ) ALCOHOLIC BEVERAGES AND TOBACCO, )

)

Petitioner, )

)

vs. ) CASE NO. 77-2038

) DABT NO. 2-77-10A 1221 CLUB, 47-306 11C, 1221 )

Alabama Street, Tallahassee, ) Florida, Florida Voluntary ) Roadside Improvement Assoc., )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in the above captioned matter, after due notice, at Tallahassee, Florida, on January 31, 1978, before the undersigned Hearing Officer.

APPEARANCES

For Petitioner: Francis Bayley, Esquire

Department of Business Regulation The Johns Building

725 South Bronough

Tallahassee, Florida 32304

For Respondent: W. R. Phillips, Esquire

Post Office Box 594 Carrabelle, Florida 32322

ISSUE PRESENTED

Whether Respondent's beverage license should be suspended or revoked, or a civil penalty assessed, for alleged violations of Sections 562.13(3)(a)(1), and 561.20(7)(a)(3), 562.23, Florida Statutes and Rule 7A-3.19(2), Florida Administrative Code, pursuant to Section 561.29, Florida Statutes, as set forth in Notice to Show Cause issued by Petitioner.

FINDINGS OF FACT

1. The Florida Voluntary Roadside Improvement Association (Association) was incorporated in 1951 as a nonprofit corporation under the laws of the State of Florida by the Circuit Court of Leon County. The general objects of the Association as set forth in its certificate of incorporation are to develop and carry out a program of voluntary mutual cooperation among businesses occupying lands adjoining highways of Florida, highway users, and others concerning highway utilization. Petitioner has issued beverage licenses to the Association

   in several business names since 1969 at several locations in Tallahassee. In November, 1974, a Series 11-C beverage license (club license) was issued to the Association in the name of 1221 Club located at 1221 Alabama Street, Tallahassee, Florida. The license was in effect at the time of the alleged violations set forth in Petitioner's Notice to Show Cause and is presently held by the licensee. (Petitioner's Exhibits 1, 2, Testimony of Schoenfeld)

   
   

2. The Association has rented space in a building owned by Willie Bennett at 1221 Alabama Street for several years. When he first purchased the building some seven years ago, it was rented to Alberta Walker who was then operating a place of business known as the Psychedelic Shack under a beverage license issued by Petitioner. In October, 1974, on a plea of nolo contendere, she was sentenced to eight months in the Leon County Jail by the County Court of Leon County for a violation of the State Beverage Law and another offense. Her beverage license was cancelled in May, 1974. City utilities for 1221 Alabama Street have been supplied under a contract with Walker in the name of Psychedelic Shack since 1970. (Petitioner's Exhibits 6, 10, 12, Testimony of Bennett, Schoenfeld, Connell, Walker)

   
   

3. On June 3, 1977, Petitioner's beverage officer, Gary E. Sams, took a paid informant, Nathan Jones, to the vicinity of the 1221 Club and instructed him to enter the premises and attempt to become a member of the club and purchase alcoholic beverages there. Some 20 minutes later, Jones came out of the club and had a membership card. On several later occasions during the month of July, 1977, Jones purchased beer and vodka at the club from Walker who was tending the bar. Although Jones relied on a recent memorandum prepared by Sams to recall the precise dates of the beverage sales by Walker, his testimony concerning the incidents is deemed credible. (Testimony of Sams, Jones, Simmons, Respondent's Exhibit 1)

   
   

4. On July 14, 1977, Sams observed Walker go to the door of the club, insert a key and enter the premises. On July 18, he observed Walker take a key from her purse, give it to Theodore Simmons, who thereafter unlocked the door. On July 19, Sams served a subpoena duces tecum upon Walker at the club premises for cancelled checks and bank statements of her personal checking account during the period January through June, 1977. She expressed no objection to turning over the required documents and did so that day. Theodore Simmons, the president of the Association, voluntarily turned over checks from the Association banking account in the Second National Bank of Tallahassee, which were variously dated in May and June of 1977. Upon comparison of the two sets of checks, a handwriting expert employed by the Florida Department of Criminal Law Enforcement found that Walker had written many of the words and figures appearing on the face of the checks, but had not signed them. (Petitioner's Exhibits 7-9, Testimony of Sams, Deposition of McCarthy (Petitioner's Exhibit 13)

   
   

5. The bylaws of the Association provide that the membership committee inquires into the eligibility of applicants and submits findings to the board of directors who then vote on membership. The bylaws further provide that the treasurer of the organization shall have charge of the funds and deposit all monies in Association bank accounts, make disbursements, and maintain the books. In fact, two former treasurers of the Association resigned from their duties because they were given no functions to perform and never saw any books of the Association or handled any of its monies. Both individuals had become members of the Association by paying a $1.00 membership and were unaware as to whether any vote had ever been taken on their membership. Although at one time, the Association contemplated creating recreational facilities across the street from

   its premises, all that was accomplished was a clearing of land. Several times, the membership was solicited for funds to assist families of deceased members. The primary function of the club was social in nature. (Petitioner's Exhibit 3, Testimony of Dixie, Allen)

   
   

6. Both Theodore Simmons and Alberta Walker testified at the hearing. Simmons was president of the Association from 1975 until a few months ago. Walker has been a member since May of 1975. During the period that Simmons was president, the Association had officers but not a board of directors. The club did not have a paid manager or employee. The practice was for Simmons to make sales of beverages and snacks during the hours of operation, and sign checks prepared by Walker for payment of rent, supplies and other Association expenses. Although Walker was not a paid employee, she possessed keys to the establishment, kept the books, handled the monies and made the periodic deposits in the club bank accounts. Simmons was aware that Walker had been convicted of a beverage violation and testified that "I didn't start the club until she came out of jail." Although Simmons wasn't paid for his work at the club, if he needed money, he would routinely take some from the club receipts. Walker testified that Simmons was her "boy friend" for five years and that she spent a lot of time at the 1221 Club to be with him and because she was unemployed. She testified that she kept the books of the Association because Beverage Officer Sams had said in 1975 that it was all right to "work there" due to the fact that her criminal conviction had been for a misdemeanor; but that he told her in August, 1977, that a 1976 state law prohibited her working as a bartender, although she could continue to keep the books. At the hearing, Sams conceded that he had informed Walker that she could continue to maintain the books of the Association. Walker claimed that the reason the utilities for the premises remained in her name was that it would cost $300 to transfer the account to the 1221 Club. Her claimed reason for making the club bank deposits was that Simmons had no motor vehicle and that the bank was located on the route to her home. She admitted selling alcoholic beverages as a consequence of Sams telling her that she could work at the club. The reason she had a key to the premises was that the one used during her operation of the Psychedelic Shack still opened the lock on the door of the premises. Her reason for filling out checks for Simmons to sign was that he was nervous and a poor speller. (Testimony of Simmons, Walker, Sams)

   
   

   CONCLUSIONS OF LAW

   
   

7. Petitioner has charged Theodore Simmons as president of Respondent Association in two counts of violating the state beverage laws, and has lodged an additional two counts against the Association itself. Although any disciplinary action necessarily must be effected against the licensee only, to wit, the nonprofit incorporated association, no objection was made to the manner in which the charges were framed and they will be considered as attributable only to the Association itself. Administrative charges need not be worded with the specificity required in criminal proceedings. The charges are considered separately as follow:

   
   

   1. Alleged violation of subsection 562.12(3)(a)1, Florida Statutes. In that Alberta Walker was employed at the Association's licensed premises as a manager, person in charge, or as a bartender between May 19, 1977, and July 30, 1977, and that she is a person who has been convicted of a violation of the beverage laws within the past five years.

      The statutory provision reads pertinently as follows:

      
      

      (3)(a) It is unlawful for any vendor licensed under the beverage law to employ as a manager or person in charge or as a bartender any person:

      
      

      1. who has been convicted within the pest five years of any offense against the beverage laws of this state, the United States, or any other state.

         
         

         The term "conviction" shall include an adjudication of guilt on a plea of guilty or nolo contendere or for- feiture of bond when such person is charged with a crime. (Emphasis added)

         
         

8. It is not believed that the Association can be deemed a "vendor" within the meaning of the statute in view of the language employed in Section 565.02(4), unless the club is "used for the purpose of evading the payment of the license tax on vendors of such beverages." No proof was adduced that the club sold to anyone other than members, regardless of the fact that acquisition of such membership was predicated on payment of a nominal fee without the procedures specified under the bylaws. Aside from that deficiency, the evidence established that Alberta Walker was convicted of a violation of the state beverage law pursuant to a plea of nolo contendere on October 17, 1974. It was also shown that she acted as a bartender at Respondent's licensed premises during the period alleged. However, her claim that she was not an employee, but performed such services gratuitously, was not refuted. Although the term "employed" is not defined in the beverage statutes or rules, Petitioner's Rule 7A-3.17 defines the term "employee" as "a person who receives a salary or wages for services performed, for and in behalf of a licensee, under the exclusive control and direction of the latter." Accordingly, it is concluded that Petitioner has failed to establish that Walker was "employed" by the Association, and consequently, Respondent cannot be found to have violated subsection 562.12(3)(a)1.

1. Alleged violation of Section 565.23, Florida Statutes. In that Theodore Simmons did knowingly conspire with Alberta Walker to violate the beverage laws, specifically subsection 562.13 (3)(a)1. In view of the conclusion in subparagraph a above, it is further concluded that a violation of Section 562.23 has not been established.

   
   

2. Alleged violation of Rule 7A-3.19(2), Florida Administrative Code. In that Respondent does not have "any Bylaws which describe the current way in which you permit persons to become members of your club, which must be described by the Club's Bylaws and must have some relation to the object and purpose of the club."

   
   

   Rule 7A-3.19(2) provides pertinently as follows:

   
   

   7A-3.19 Club licenses. All clubs licensed under the beverage law must adhere to the following regulations:

   
   

   1. Such clubs must have a definite fixed method

      of electing persons to membership in the club; such method must be described by the club's by-

      laws and must have some relation to the object and purpose of the club.

      
      

      Respondent's bylaws set forth a definite method of electing members, i.e., investigation of eligibility by the membership committee and submission to the board of directors for approval. However, the evidence shows that there was no club board of directors in existence at the time of Petitioner's investigation and membership routinely was acquired by simply paying a $1.00 membership fee. Therefore, the actual method of electing members to membership at the time in question was not described in the bylaws. Accordingly, Respondent is chargeable with a violation of the stated rule and, consequently, is subject to disciplinary action under Section 561.29(1)(e).

      
      

3. Alleged violation of subsection 561.20(7)(a)(3), Florida Statutes. In that Respondent is not "operating a business as a nonprofit corporation devoted to promoting community, municipal, or county development, or any phase of community, municipal, or county development."

1. Subsection 561.20(7)(a)(3) dealing with club licenses provides in part as follows:

   
   

   (7)(a) . . . However, any licenses issued under this section shall be limited to:

   
   

   1. Nonprofit corporations or clubs devoted to promoting community, municipal, or county develop- ment or any phase of community, municipal, or county development;

   
   

   The above statutory provision is directed to the authority of licensing officials to issue licenses to qualified applicants. There is no requirement under that subsection concerning post-issuance operation of the particular corporation or club and it is not a statute that is proscriptive in nature.

   Although the evidence shows that Respondent has taken only token steps to carry out the chartered purposes of the Association and that, in fact, the group operates primarily as a social club, Petitioner's remedy, if any, must lie elsewhere.

   
   

2. The established rule violation is not considered to be of a serious nature. A civil penalty under Section 561.29(4) in the amount of $100 is deemed to be a sufficient penalty.

RECOMMENDATIONS

It is recommended that Petitioner impose a civil penalty against Respondent, Florida Voluntary Roadside Improvement Association, in the amount of

$100, pursuant to the authority granted under Section 561.29(1)(e) and (4), Florida Statutes, for violation of Rule 7A-3.19(2), Florida Administrative Code.

DONE and entered this 21st day of February, 1978, in Tallahassee, Florida.

THOMAS C. OLDHAM

Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Francis Bayley, Esquire Department of Business

Regulation

The Johns Building 725 South Bronough

Tallahassee, Florida 32304

W. R. Phillips, Esquire Post Office Box 594 Carrabelle, Florida 32322

Charles A. Nuzum, Director Division of Beverage

Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32304

Docket for Case No: 77-002038

Orders for Case No: 77-002038