STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
STATE OF FLORIDA, DIVISION )
OF ALCOHOLIC BEVERAGES AND )
TOBACCO, )
)
Petitioner, )
)
vs. ) CASE NO. 80-1080
) DABT NO. 33314-A
BLAND CORPORATION, t/a )
GRACE'S PLACE, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, a hearing was conducted before Charles C. Adams, a Hearing Officer with the Division of Administrative Hearings, on July 17 and 18, 1980, in Room 702, Park Trammell Building, 1313 Tampa Street, Tampa, Florida.
APPEARANCES
For Petitioner: Mary Jo M. Gallay, Esquire
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
For Respondent: Arnold Levine, Esquire
725 East Kennedy Boulevard Tampa, Florida 33602
ISSUES
The matters presented for consideration concern the two-count Notice to Show Cause/Administrative Complaint filed by the Petitioner, State of Florida, Division of Alcoholic Beverages and Tobacco, against the Respondent, Bland Corporation, which trades as Grace's Place. Count One (1) of that Complaint alleges that beginning May 15, 1977, through November 16, 1979, the Respondent failed to disclose the names and addresses of persons interested directly or indirectly with its business for which a beverage license had been issued and that in doing so, the Respondent acted contrary to Section 561.17, Florida Statutes. More specifically, the Complaint alleges that one Grace Sherman had an undisclosed interest in the licensed premises. Count Two (2) of the Administrative Complaint alleges that the Respondent, on or about May 15, 1977, failed to comply with the order of the Director of the Division of Alcoholic Beverages and Tobacco dated April 15, 1977, in that Grace Sherman failed to divest her interest in the Respondent's beverage license and this was contrary to Section 561.11, Florida Statutes, and Section 561.29, Florida Statutes.
FINDINGS OF FACT
This action is here presented by way of a Notice to Show Cause/Administrative Complaint filed by the Petitioner, State of Florida, Division of Alcoholic Beverages and Tobacco, against the Respondent, Bland Corporation, which trades as Grace's Place, 2502 North Albany Avenue, Tampa, Florida. The terms and details of the allegations may be found in the issues statement of this Recommended Order.
The Petitioner, State of Florida, Division of Alcoholic Beverages and Tobacco, is a State agency charged with regulating those persons within the State of Florida who hold beverage licenses issued by the Petitioner. This responsibility includes the requirement that the Petitioner take administrative action against those licensees believed to have violated the terms and conditions of their 1icensurezzz. In pursuit of this responsibility, the allegations as set forth herein were brought against the Respondent, Bland Corporation, a Florida corporation, Beverage License Number 39-537, Series 4- COP.
The Bland Corporation held the subject beverage license in the beverage license year, October 1, 1976, through September 30, 1977, using the trade name, Ace Lounge. In the course of that year, the trade name was changed to Grace's Place and the Respondent has continued to do business under the name Grace's Place up to and including the time of the administrative hearing in this cause.
On April 15, 1977, the Corporation was solely owned by Darlene K. Cowans and was operating under the business name, Ace Lounge. At that time a stipulation and settlement was consummated between Ms. Cowans with the accompanying signature of the present counsel for the Respondent, Mr. Levine, and signed by the petitioner in the person of its Director. This stipulation and implementing order settled the pending administrative charges against the licensee.
The first charge related to an allegation that the Respondent had a person, namely, Grace Bland Sherman, who was directly or indirectly involved in the Respondent's business and that Mrs. Sherman had an undisclosed interest in that business, contrary to Section 561.17, Florida Statutes, and Rule 7A-2.14, Florida Administrative Code.
There was a second Count in that complaint document which alleged that the Respondent had relinquished management and control of the licensed premises to the same Mrs. Sherman, in contravention of Rule 7A-3.17, Florida Administrative Code.
The stipulation in its operative parts stated that the Respondent would pay a fifteen hundred dollar ($1,500.00) civil penalty within fifteen (15) days of the date of the stipulation or, upon failure to do so, an automatic suspension of fifteen (15) days would take effect. There was additional language in the stipulation for penalty which stated: "Licensee further agrees to the divesture[sic] of interest in this license of Grace Bland Sherman within thirty (30) days of receipt of this stipulation approved by the Director." (A copy of this Stipulation and the Statement of Charges may be found as the Petitioner's Composite Exhibit No. 4 admitted into evidence.)
In examining the latter provision within the Stipulation, the details of what the parties intended in effectuating the purposes of the divestiture of interest which Grace Bland Sherman might have in the license was not spoken to
by the Petitioner in the present hearing and the complaint allegations do not fill this void. (Grace Sherman is an individual who has been required to serve a probationary term in connection with a court disposition in the United States District Court, Middle District of Florida, which probation was concluded in February, 1980. The particular violation for which this probationary term was given to Grace Sherman was not shown in the course of the hearing.)
Grace Bland Sherman gave testimony and that testimony establishes that Mrs. Sherman was acting as a bookkeeper for the Respondent on April 15, 1977, and continued to serve in that capacity at the time of the hearing. Her duties included and now include daily bookkeeping, daily preparation of receipts, coordination of the payment of payroll taxes and sales taxes, and the preparation of bank deposits for the business.
Following the April 15, 1977, stipulation, Darlene K. Cowans, who was the sister of Grace Sherman, sold her 100 percent controlling interest in the Bland Corporation to Marlon Lewis, the son of Grace Sherman. Marlon Lewis paid Darlene K. Cowans five thousand dollars ($5,000.00) cash with a balance of seventy-eight thousand dollars ($78,000.00) due and owing to be paid from profits of the licensed premises in exchange for the control of the assets of the Corporation. A copy of the stock assignment may be found as Petitioner's Exhibit No. 5.
The stock assignment took place on June 14, 1977, and the Petitioner allowed Marlon A. Lewis to be substituted as the President, Secretary, Treasurer and owner of the Bland Corporation for purposes of the Corporation holding the subject beverage license. A copy of the application for change of name, officers and ownership, together with Certificate of Incumbency and Declaration of Stock Ownership and license investigation papers may be found as the Petitioner's Composite Exhibit No. 3 admitted into evidence.
The substitution of officers and ownership took place in 1977 and at the time of the hearing Marlon Lewis remained as the President, Director and owner of the Corporation, with Marjorie Lewis serving as Vice President and Treasurer, and Vedus McCray serving as the Secretary. The business is managed by Sallie M. Hubert. (Marlon Lewis has other employment and is not involved with the matters of routine management of the licensed premises.)
The principal operating bank account of the Corporation is conducted through the Southeast Bank of Tampa, in Tampa, Florida. Those persons listed above as officers and manager of the Corporation are empowered to write checks on the corporate account of the Respondent, together with Grace Sherman, the bookkeeper. A copy of the authorization for signatures may be found as Petitioner's Exhibit No. 6 admitted into evidence. Petitioner's Exhibit No. 36 admitted into evidence is a copy of other signature cards related to the operating account and the right to withdraw funds from corporate savings accounts.
Grace Sherman receives a salary from the Respondent and the Petitioner's Composite Exhibit No. 7 contains a number of salary checks issued on the above referenced Southeast Bank of Tampa account, for the period November 27, 1977, through September 26, 1979. Some of these checks here issued by Grace Sherman and some were issued by other individuals within the corporate organization.
There are several other checks in this series of exhibits. One of those checks is a ten dollar ($10.00) check written to the Secretary of the
State of Florida for the purpose of paying a filing fee for the 1978 Annual Report for Cowans Realty. The remaining two checks in this series relate to checks issued by Grace Sherman for the payment to the Tampa Bay Buccaneers, one of those checks indicating that it is for "Bucks tickets". Each of the two remaining checks is in the amount of three hundred twenty dollars ($320.00). No further explanation of the reason for expenditures related to the several checks was made during the course of the hearing.
The Bland Corporation pays for life insurance and medical insurance for the benefit of Marlon A. Lewis on policies issued by Bankers Life Company. These moneys for payment are deducted from the operating account of the Petitioner in the Southeast Bank of Tampa. A copy of the payment drafts and other matters related to the policies may be found as Petitioner's Composite Exhibit No. 8. Grace Sherman is the beneficiary of the life insurance policy.
The Respondent pays for a life insurance, disability and double indemnity policy for the benefit of Grace Sherman. This policy is with the Wabash Life Insurance Company and deductions are made from the aforementioned operating account to effectuate payment for the premiums. The beneficiary for the life insurance aspect of this policy is Marlon Lewis. A copy of the policy and premium payment drafts may be found as the Petitioner's Composite Exhibit No. 9 admitted into evidence.
In addition, the Corporation through the same operating bank account, pays for a medical policy for the benefit of Grace B. Sherman, including major medical of up to twenty-five thousand dollars ($25,000.00). A copy of the policy and bank drafts for payment may be found as Petitioner's Composite Exhibit No. 10 admitted into evidence. This policy is as issued by American States Insurance Company.
In the years 1977, 1978 and 1979, the Respondent employed the Bookkeepers Business Service Company to keep its books in the way of profit and loss statements. The arrangement for these services was made by Marlon Lewis and the routine coordination for these services was through Grace Sherman, the bookkeeper of the Corporation. The services continued until such time as the Bookkeepers Business Service Company unilaterally discontinued the service due to a management decision unrelated to any disagreement with the Respondent.
The profit and loss statements for the month of October, 1978, entered by the bookkeeping service and found in Petitioner's Composite Exhibit No. 11, do not reflect a two hundred dollar ($200.00) cash withdrawal from the Corporation's operating account in the Southeast Bank of Tampa. This check is written by Grace Sherman and indicates that the purposes were "quarters for weekend".
On November 28, 1977, Marlon Lewis, representing Bland Corporation on that date referred to as Bland, Inc., and Grace Sherman were granted a bank loan by Southeast Bank of Tampa for purposes of consolidating the personal debts of Marlon Lewis and Grace Sherman. This loan was issued to the Respondent, Bland Corporation, and seven thousand dollars ($7,000.00) of Marlon Lewis's personal debts and fourteen thousand eight hundred dollars ($14,800.00) of personal debts of Grace Sherman were retired. The amount of loan to the borrower, Bland Corporation, referred to as Bland, Inc., was twenty-one thousand eight hundred dollars ($21,800.00). The arrangement for the new loan obligated the Respondent Corporation to allow draws from its operating business account at the Southeast Bank of Tampa, in the amount of four hundred sixty-three dollars and nineteen cents ($463.19) for a period of sixty (60) months and in fact those drawals have
been made. The details of this financing and examples of debit charges to the operating account of the Respondent Corporation and the lending institution may he found in the Petitioner's Composite Exhibit No. 17 admitted into evidence.
On May 12, 1978, Bland Corporation in the person of Marlon A. Lewis with Grace Sherman as guarantors borrowed twenty-four thousand four hundred ninety-four dollars and sixteen cents ($24,494.16) for the purpose of purchasing a 1978 Mercedes Benz automobile. By this arrangement, the bank required security through the assignment of certain savings accounts which were the property of Grace Sherman. The automobile had been selected by Grace Sherman and a 1976 Cadillac automobile, which was her property, had been used in trade. At present, the automobile is primarily used by Grace Sherman. It is also used by the Respondent Corporation's manager and by the owner, Marlon Lewis. Petitioner's Exhibits Nos. 30 and 31 admitted into evidence are papers dealing with the purchase of the automobile from Precision Motor Cars of Tampa, Florida, and the Petitioner's Composite Exhibit No. 18 admitted into evidence is a copy of the promissory note and assignment of savings deposits and other matters related to the loan. The insurance on the Mercedes Benz automobile was initially written by Eastern Underwriters listing Grace Sherman as the insured as opposed to Bland Corporation, the true owner of the automobile; however, this problem occurred due to certain confusion in the office of Eastern Underwriters and was not due to any improper motives on the part of the members of Bland Corporation or Grace Sherman. The exhibits dealing with this insurance coverage may be found as Petitioner's Exhibits 32 through 35 admitted into evidence and Respondent's Exhibits 2 through 4 admitted into evidence.
On August 14, 1979, Sallie M. Hubert, the manager for the Respondent/Licensee, paid a twenty-five dollar ($25.00) membership fee in a private club, the Copper Door, and this membership was issued in the name of Grace Sherman. The check in payment may be found as Petitioner's Exhibit No. 25 admitted into evidence, and the membership card may be found as Petitioner's Exhibit No. 24 admitted into evidence.
Grace Sherman had prior to the time of the payment of the membership fees in the Copper Door paid for an individual membership in a private club known as the Cypress Club, and the amount of that payment was fifty dollars ($50.00). The check in payment may be found as Petitioner's Exhibit No. 26 admitted into evidence.
Both of the private club memberships mentioned above were drawn on the corporate account of the Bland Corporation referred to before and the purpose of those memberships was for the entertainment of Grace Sherman and Marlon Lewis.
Grace Sherman, at the insistence of Marlon Lewis, made arrangements to have Mrs. Sherman's mother's house fumigated and the payment on the installment contract which financed the fumigation service was made on the corporate account of the Bland Corporation and was subsequently reimbursed by Marlon Lewis. Exhibits dealing with this arrangement for service may be found as Petitioner's Composite Exhibits 27 and 28 admitted into evidence.
In the application form which is petitioner's Exhibit No. 3, in responding to the question related to the disclosure of the names of any of the persons directly or indirectly interested in his business, Marlon Lewis indicated "N/A". Therefore, Grace Sherman was not shown to have any direct or indirect interest in the license which was held naming Marlon Lewis as the primary officer and the owner of the Bland Corporation. Likewise, Grace Sherman was never required by the present ownership of the Respondent Corporation or by
any requirement of the agency proven herein, to register her fingerprints with the District Office of the Division of Alcoholic Beverages and Tobacco in connection with her association with the current principal in the license, Marlon Lewis.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action.
At the time of the hearing in this cause, ruling was reserved on the admissibility of certain Petitioner's exhibits. Having considered those exhibits at some length, Petitioner's Exhibits Nos. 8, 9, 10, 12, 27 and 28 are admitted. Petitioner's Exhibits Nos. 13, 14 and 16 are denied admission.
As part of its presentation, the Petitioner called as a witness John French Gordon, Jr., Federal Probation Officer, Middle District of Florida. Mr. Gordon was offered as a witness for the purpose of testifying to matters within the probation file of his former probationer, Grace Sherman. Specifically, the Petitioner wished to have this witness testify about the probation office's records of employment for Grace Sherman during her probationary term beginning in April, 1977, and ending in February, 1980, the latter date being the date of Ms. Sherman's successful completion of that probationary term.
Counsel for the Respondent Corporation, who was also counsel for Grace Sherman at the time of the criminal court action in the Federal District Court and who represented in the course of the hearing sub judice that he continued to be Mrs. Sherman's counsel, objected to the disclosure of the matters in the probation file. This objection was generally stated on the grounds that:
The probationer enjoys the protection
of "privileged" communication in those matters of discussion between the probationer and her Probation Officer, and
The file materials of the probation office are confidential and not subject to disclosure.
The necessary legal research materials for allowing a more complete argument on behalf of the parties and to afford the undersigned an opportunity to make an informed response to this objection were not available at the site of the hearing. Therefore, the matters within the probation file were given a theoretical preassigned exhibit number, Petitioner's Composite No. 19, and the parties were afforded ten (10) days from the date of the hearing within which time they would be allowed to submit memoranda in support of or in opposition to the objection to allowing those materials of the probation file into evidence in the administrative hearing. (The matters in the probation file were not marked in the course of the hearing.) The parties were further instructed to the effect that if the matters within the probationary file were admitted into evidence, they would be allowed to be received as a post-hearing exhibit with provision that a copy be provided to the Respondent, of those employment records which Mrs. Sherman had filed with the probation department during the time of her probationary term.
The parties have submitted their memoranda on the question of the admissibility of Petitioner's Composite Exhibit No. 19, after allowing the Petitioner until August 5, 1980, to offer its reply to the Respondent's post- hearing Motion to suppress. 1/
The Respondent, in refining its argument, has alluded to Rule 4.12, as amended, Local Rules of the United States District Court, Middle District of Florida, which in pertinent part states:
(c) The person shall otherwise disclose, copy, reproduce, deface, delete from or add to any report within the purview of this rule; and all copies of any such report obtained from the Probation Officer pursuant to subsection (b) of this rule must be re- turned to the Probation Officer immediately following sentencing. Further, no confi- dential records of this Court maintained by the Probation Office, including presentence and probation supervision records, shall be sought by any applicant except by written petition to the Court establishing with particularity the need for specific infor- mation believed to be contained in such records. Then a demand for disclosure of such information or such records is made by way of subpoena or other judicial process
served upon a Probation Officer of this Court, the Probation Officer may file a petition seeking instruction from the Court with respect to the manner in which he should respond to such subpoena or such process.
This provision classifies the probation supervision records, such as the records in question here, as being confidential records which may not be disclosed without first applying to the United States District Court, Middle District of Florida, by written petition establishing the need for the specific information believed to be in those records and gaining the permission of the Court to gain the disclosure of the contents of the file. There has been no showing during the course of this hearing that any application was made to the Federal Court either before the administrative hearing or subsequent to the administrative hearing. Consequently, the Hearing Officer would be without authority to order the disclosure of the employment records in the absence of the permission of the United States District Court, Middle District of Florida, and the Respondent's objection to the admission of the Composite Exhibit No. 19 is sustained.
Having established by its objection that the Petitioner is not entitled to have its Composite Exhibit No. 19 admitted as evidence, the Respondent further argues that all evidence presented in the course of the administrative hearing should be suppressed. Specifically, the Respondent contends that the evidence was obtained in pursuing those leads provided by the "confidential informant", John French Gordon, Jr., the Probation Officer, whom the Petitioner sought to have testify about matters of the probation of Grace Sherman, his probationer, and to present through those matters of the confidential file of the same Mrs. Sherman, which information from Gordon was obtained in violation of Rule 4.12, as amended, Local Rules of the United States District Court, Middle District of Florida. The Respondent further argues that the information sought from Gordon, having been pursued contrary to the language in the aforementioned Rule, it was obtained improperly and illegally and was tainted, and therefore, the fruits of that illegally obtained evidence and in
addition any succeeding evidence obtained by the Petitioner based on leads provided by Gordon must be suppressed and excluded from this hearing.
While it would appear from the evidence of record that no application was made to the United States District Court, Middle District of Florida, seeking the approval of that Court to allow Gordon to testify and to present matters within Grace Sherman's probation file, in violation of Rule 4.12, as amended, Local Rules of the United States District Court, Middle District of Florida, this does not ensure to the benefit of the current Respondent to the extent that the Hearing Officer should suppress and exclude all evidence presented in behalf of the Petitioner in this cause.
The only evidence which is subject to exclusion is that evidence excluded in the ruling in paragraph three (3) to these Conclusions of Law, for reasons as stated in that determination. The fact that Grace Sherman might be entitled to relief from action which might be taken against her on the basis of information produced as a result of unauthorized testimony by the Probation Officer or disclosures of the contents of the probation file, does not create an advantage for the present Respondent. The so-called "fruit of the poisonous tree" doctrine is not vicarious. It does not extend beyond the protection of that person or persons within the immediate ambient of the act of impropriety. It is not their constitutional rights which have been infringed on and are protected. Those against whom this information would be used in a collateral proceeding may not claim this constitutional protection and thereby suppress and exclude the evidence. For reasons as expressed, the Motion to Suppress is hereby denied.
Count One (1) of the Notice to Show Cause/Administrative Complaint accuses the Respondent of failing to disclose the name and address of Grace Sherman, a person whom the Petitioner claims had an undisclosed interest in the Respondent Corporation which was either direct or indirect in nature and which pertained to tide business as licensed by the Petitioner. The Petitioner further alleges that this violation occurred on or about May 15, 1977, up to and including November 16, 1979, and that it is contrary to the provisions of Section 561.17, Florida Statutes. The specific provision within that sect5on which arguably might apply to the facts in this cause is that provision which states:
(1) Any person, before engaging in the business of manufacturing, bottling, distri- buting, selling, or in any way dealing in alcoholic beverages, shall file, with the district supervisor of the district of the division in which the place of business for which a license is sought is located, a sworn application in duplicate on forms provided
to the district supervisor by the division. Prior to any application being approved, the division may require the applicant to file a set of fingerprints on regular United States Department of Justice forms for himself and for any person or persons interested directly or indirectly with the applicant in the busi- ness for which the license is being sought, when so required by the division. If the applicant or any person interested with the applicant either directly or indirectly in
the business is not qualified, the applica- tion shall be denied by the division.
In analyzing the language of that subsection, the purpose of the subsection is to create standards for licensure which protect the public and insure the integrity of the alcoholic beverage industry. It does not apply to those persons who have already qualified and been granted a beverage license. The only provision in those sections of Chapter 561, Florida Statutes, which is retroactive in its scope is that provision in Subsection 561.15(3), Florida Statutes, which would allow the agency to revoke a license previously issued to an entity who on a prior occasion had lost its beverage license due to revocation. 2/ These facts do not exist in this dispute. Consequently, the Petitioner is without jurisdiction to act under the stated authority of Section 561.17, Florida Statutes, in taking enforcement action against the license previously issued to an entity which has not had its license revoked and the violation asserted in Count One (1) has not been proven.
Moreover, even if jurisdiction to regulate an individual who now holds a beverage license is vested in the Petitioner, it has failed to establish those grounds for refusal to license as set forth in the operative part of the stated provision, i.e., Subsection 561.17(1), Florida Statutes.
There are two potentialities within that subsection which advance a theory of license penalty. The first of those provisions states that the agency may require the applicant, in this case Marlon Lewis, or persons interested directly or indirectly in the license, theoretically Grace Sherman, to file a set of fingerprints on regular United States Department of Justice forms. This would be necessary prior to license approval. There was no testimony to the effect that a general or specific requirement exists to the effect that those persons with a direct or indirect interest must file their fingerprints in the face of the language of the statute which allows discretion in this decision by the agency, it must be presumed, for these purposes, that the agency did not intend to make such requirement of fingerprinting Grace Sherman.
The second possibility for denying the current owners, directors and officers the privilege of conducting their business under the current beverage license deals with that phrase in Subsection 561.17(1), Florida Statutes, which rejects those applications' wherein the applicant or any other person who holds a direct or indirect interest in the business of the applicant would not be qualified to be granted a beverage license. Section 561.15, Florida Statutes, sets forth those grounds for disqualification. 3/
Although the facts as related in this Recommended Order show that Grace Sherman has a direct interest in the business of the Respondent at the licensed premises located at 2502 North Albany Avenue, Tampa, Florida, the Petitioner has failed to prove that either Marlon Lewis or Grace Sherman is deficient in any of the necessary qualifications for licensure. It is not enough to show that Grace Sherman was placed on probation by the United States District Court, Middle District of Florida, for an offense of an undisclosed nature. Consequently, the evidence presented on this subject is insufficient to prove that Grace Sherman lacks good moral character; has been convicted within the last five years of offenses dealing with beverage laws of the several jurisdictions; has been convicted within the last five years in the several jurisdictions of the specific offenses designated in the statute; has been convicted within the last fifteen years of a felony within the several jurisdictions or has had a beverage license revoked in the sense of affiliation as set forth in Subsection 561.15(3), Florida Statutes. Consequently, even if
the Hearing Officer's conclusion related to the jurisdiction of the Petitioner to proceed under the guise of Section 561.17, Florida Statutes, should be rejected, there is insufficient proof in this case for the Petitioner to prevail in its claim for disciplinary action grounded on that provision of law.
The second Count in this Notice to Show Caused Administrative Complaint states that on or about May 15, 1977, the Respondent failed to comply with the Director's order dated April 15, 1977, in that the Respondent did not cause Grace Sherman to divest her interest in the beverage license. The authority for this Count is Section 561.11, Florida Statutes,, which generally identifies the powers and authority of the Division and Section 561.29, Florida Statutes, which is a statement of violations and penalties related to license holders.
Subsection 561.11(1), Florida Statutes, grants the Division the power to enter administrative orders to carry out the purposes of the Beverage Law and further states that these orders when adopted in accordance with Chapter 120, Florida Statutes, shall have the full force and effect of law.
The stipulation and implementing order of the Director dated April 15, 1977, which is found as a part of Petitioner's Composite Exhibit No. 4 is an administrative order within the meaning of this subsection and it was entered in accordance with Chapter 120, Florida Statutes, and has the force and effect of law. Reading Subsection 561.11(1), Florida Statutes, in para meteria with Subsection 561.29(1)(b), Florida Statutes, which grants authority to the Division to revoke or suspend or impose a civil penalty against a licensee for a violation by the licensee or if a corporation, a corporate officer, of the laws of the State of Florida, it is held that if the Respondent has been shown to violate the terms of the stipulation and implementing order alluded to, then this is a violation of Subsection 561.29(1)(b), Florida Statutes, and the Respondent would be held to answer to the penalties set forth in the same section.
The focus of the Petitioner's claims is that statement within the stipulation which says, "Licensee further agrees to the divesture[sic] of interest in this license of Grace Bland Sherman within thirty days from receipt of this stipulation approved by the Director". This clause constitutes the only proof on the part of the Petitioner through this prosecution to specifically establish what they expected Grace Bland Sherman to divest herself of. Mrs. Sherman continued to operate as an employee of the Corporation in the same fashion as she had done prior to the stipulation and even though her involvement in the Corporation has expanded since April 15, 1977, as shown in the facts of this Recommended Order, it cannot be said that the Respondent Corporation failed to meet the terms and conditions of the stipulation and implementing order.
This determination is reached because it is not known what was contemplated for divestiture specifically, other than the conclusion to be reached by a literal reading of the divestiture clause. This examination leads to the conclusion that Grace Bland Sherman was to surrender any economic or managerial control of the licensed premises. The evidence presented does not show that Mrs. Sherman had such economic and managerial control during the thirty days following the entry of the Director's order dated April 15, 1977, ergo, there wad no proof of failure to divest.
The expansion of the economic interest of Grace Bland Sherman in the licensed premises came at a time subsequent to the thirty-day period for divestiture and was highlighted by the act of consolidating her obligations and
those of Marlon Lewis, to be paid back by the Respondent's corporate funds. The details of this arrangement are set out in Petitioner's Composite Exhibit 17.
When these facts as related above are considered in conjunction with the fact that the agency, knowing that Marlon Lewis was the son of Grace Sherman and having an opportunity to make whatever in-depth inquiry would be deemed necessary and appropriate prior to allowing Marlon Lewis to become the owner, primary corporate officer and director; nonetheless allowed this substitution of principals for purposes of the beverage license, it is concluded that the Petitioner has failed to prove Count Two (2) to the Notice to Show Cause/Administrative Complaint.
Upon the consideration of the facts in this matter and in view of the conclusions of law reached, it is RECOMMENDED that the charges against the licensee be DISMISSED. 4/
DONE AND ENTERED this 18th day of August, 1980, in Tallahassee, Florida.
CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings
101 Collins Building Tallahassee, Florida 32301 (904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 18th day of August, 1980.
ENDNOTES
1/ The parties were allowed to offer memoranda on the question of the admissibility of the matters in the probation file of Grace Sherman. The Petitioner filed a memorandum dated July 25, 1980, and that same date requested an extra seven (7) days to file additional matters pertaining to the admission of the materials referred to herein.
The Respondent filed a memorandum dated July 24, 1980, on the subject of its objection to the admissibility of the matters of the probation file and a separate Motion to Suppress the entire body of evidence presented by the Petitioner in the course of its presentation. This Motion to Suppress had not been raised in the course of the hearing. Under those circumstances, Chapter 28-5, Florida Administrative Code, grants the Petitioner an opportunity to respond to that motion, if it so desires.
Having reviewed the Petitioner's request for additional time to offer a further argument on the evidentiary determinations related to the probation file and having allowed the Respondent sufficient time to offer any opposition to that request and the Respondent having offered no opposition, an order was entered on August 4, 1980, granting the Petitioner until 5:00 p.m., August 5, 1980, to offer those additional matters in argument.
(The contents of the August 4, 1980, order were relayed to the offices of counsel for the parties in the person of Petitioner`s counsel and Respondent`s counsel`s secretary. This was accomplished on the date of the entry of the order.)
The Respondent`s counsel communicated with the Hearing Officer on that date and stated that the Respondent had not received the Motion for Extension of Time to file additional matters and, consequently, was not in a position to offer its opposition. The solution to this problem was developed by allowing the Respondent`s counsel to request the Hearing Officer for additional time to respond to the Petitioner's supplemental memorandum argument on the question of the admissibility of the probation file, should subsequent argument be offered by the Petitioner. By way of a follow-up, counsel for Respondent wrote the undersigned with a copy of that correspondence directed to the Petitioner's counsel. The letter stated that if counsel for the Petitioner responded by way of supplement to the argument on admissibility of the contents of the probation file which had been offered by the Respondent, then the Respondent would request the Hearing Officer to disregard that argument or if it were to be considered, that the Respondent be granted seven (7) days to file a reply.
The time for making known its supplement passed and the Petitioner failed to offer any other argument which supplements its original argument related to the admissibility of the contents of the probation file. The only additional materials offered by the Petitioner is its response to the post-hearing Motion to Suppress made in behalf of the Respondent and this is not a supplement to the argument offered on the question of the admissibility of the probation file.
Instead, it is an action in keeping with the Petitioner's right to reply to a motion by the opposing party. Therefore, it was not deemed necessary to afford the Respondent further an opportunity to offer argument on the question of the admissibility of the matters of the probation file.
2/ "(3) The division may refuse to issue a license under the Beverage Law to any person, firm, or corporation whose license under the Beverage Law has been revoked or to any corporation, an officer of which has had his license under the Beverage Law revoked, or to any person, who is or has been an officer of a corporation whose license has been revoked under the Beverage Law. Any license issued to a person, firm, or corporation prohibited from obtaining such license, under the Beverage Law, may be revoked by the division."
3/ "561.15 Licenses; qualifications required.--
Licenses shall be issued only to persons of good moral character, who are not less than 18 years of age. Licenses to corporations shall be issued only to corporations whose officers are of good moral character and not less than 18 years of age. There shall be no exemptions from the license taxes herein provided to any person, association of persons or corporation, any law to the contrary notwithstanding.
No license under the Beverage Law shall be issued to any person who has been convicted within the last past 5 years of any offense against the beverage laws of this state, the United States, or any other state; who has been convicted within the last past 5 years in this state or any other state or the United States of soliciting for prostitution, pandering, letting premises for prostitution, keeping a disorderly place, or illegally dealing in narcotics; or who has been convicted in the last past 15 years of any felony in this state or any other state or the United States; or to a corporation, any of those officers shall have been so convicted. The term "conviction" shall include an adjudication of guilt on a plea of guilty or nolo contendere or the forfeiture of a bond when charged with a crime."
And footnote 2/, supra.
4/ The parties were granted an opportunity to present post-hearing Findings of Fact, Conclusion of Law and Recommendations in keeping with Section 120.57, Florida Statutes. The Respondent availed itself of this opportunity and its proposals have been reviewed prior to the entry of this order and to the extent
that the proposals are consistent with this Recommended Order, they have been utilized. To the extent that the proposals are inconsistent with this Recommended Order, they are hereby rejected.
COPIES FURNISHED:
Mary Jo M. Gallay, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
Arnold Levine, Esquire
725 East Kennedy Boulevard Tampa, Florida 33602
| Issue Date | Proceedings |
|---|---|
| Aug. 18, 1980 | Recommended Order sent out. CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Aug. 18, 1980 | Recommended Order | No proof presented that the person whose interest in the corporation was challenged was disqualified. Dismiss. |
