STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 81-501

) DABT NO. 81A-52 PALACE BAR AND LOUNGE, INC., )

d/b/a PALACE BAR, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a hearing was conducted before Charles C. Adams, a Hearing Officer with the Division of Administrative Hearings. The time of hearing was May 11 and 12, 1981, and the hearing site was the Ernest R. Graham Building, 1350 N. W. 12th Avenue, Miami, Florida.

APPEARANCES

For Petitioner: Harry F. X. Purnell, Esquire

General Counsel

Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

and

Daniel C. Brown, Esquire Deputy General Counsel

Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

For Respondent: Larry Rogovin, Esquire

1175 North East 125th Street North Miami, Florida 33161

ISSUES

This case involves the consideration of a Notice to Show Cause/Administrative Complaint by the State of Florida, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco against Palace Bar and Lounge, Inc.

Specifically, it is alleged in Count I that between January 16, 1981, and January 29, 1981, the Palace Bar and Lounge, while licensed under the beverage laws of the State of Florida, in the person of the corporation or by its agent, servant and/or employee did maintain a place, to wit: the licensed premises at 6970 N. W. 17th Avenue, Miami, Dade County, Florida, which is resorted to by

persons using controlled substances for the purpose of using these controlled substances, to wit: cannabis and cocaine, or which place is used for keeping or selling them, in violation of Subsection 893.13(2)(a)5., Florida Statutes, and Subsection 561.29(1)(a), Florida Statutes. It is further alleged by Count II that between January 16, 1981, and January 29, 1981, the Respondent, Palace Bar and Lounge, Inc., as a licensee under the beverage laws of the State of Florida, or its agent, servant and/or employee did keep or maintain a public nuisance on its licensed premises, to wit: maintaining a building or place which is visited by persons for the purpose of unlawfully using substances controlled under Chapter 893, Florida Statutes, as amended, or which is used for the illegal keeping, selling or delivering or same, contrary to Section 823.10, Florida Statutes, and Subsection 561.29(1)(c), Florida Statutes.

FINDINGS OF FACT

1. This case is presented for consideration pursuant to Subsection 120.57(1), Florida Statutes, following administrative charges brought by the Petitioner, State of Florida, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, against Palace Bar and Lounge, Inc., d/b/a Palace Bar. The details of those charges are as set forth in the Issues statement to this Recommended Order. The formal hearing in this cause was conducted on May 11 and 12, 1981. The Recommended Order is being entered in furtherance of that hearing and after granting the parties an opportunity to offer memoranda of law, proposed findings of fact, conclusions of law and recommendations, and in keeping with the schedule designed to effectuate that opportunity.

   
   

2. The State of Florida, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco is a regulatory agency within the State of Florida, which has among its functions, the licensure of individuals who sell alcoholic beverages in the State of Florida and the responsibility to discipline those several licensees, should the licensees violate the underlying regulatory statutes and rules.

   
   

3. Respondent, Palace Bar and Lounge, Inc., d/b/a Palace Bar, is the holder of and held a valid beverage license on all dates in question in the Administrative Complaint. Specifically, Palace Bar is the holder of license No. 23-479, Series 4-COP, which allows the sale of alcoholic beverages for consumption off premises. The licensed premises is located at 6970 N. W. 17th Avenue, Miami, Dade County, Florida.

   
   

4. The facts in this case reveal that James P. Bates, Sergeant with the Division of Alcoholic Beverages and Tobacco, went to the licensed premises on January 12, 1981, at approximately 8:00 P.M. The purpose of this visit was a pre-surveillance inspection. While at the bar, Bates spoke with a bartender identified as "Miss Frances." This particular bartender was blind.

   
   

5. During the course of the conversation with Frances, Officer Bates inquired of Frances on the subject of the possibility that Bates might purchase "reefer," meaning the controlled substance marijuana, in the bar. Frances replied that he could not point out anyone selling "reefer" specifically, but all that all that was necessary on Bates' part to obtain "reefer" was to ask around the licensed premises.

6. Officer Bates returned to the licensed premises in the early morning hours of January 17, 1981, with the express purpose of attempting to buy marijuana in the licensed premises. While there, Bates spoke with Frances again and asked where he could buy "reefer." The response by Frances was as before, in that he indicated that the officer should inquire around the licensed premises. To that end, Officer Bates spoke to a customer identified as "Red" who also, upon being asked about the purchase of marijuana, told Bates that he could ask around the licensed premises about the purchase of "reefer." This same customer indicated that the management did not allow the sale of marijuana in the bar.

   
   

7. On January 17, 1981, on this particular visit, Sergeant Bates saw a person in the licensed premises who was dressed in a uniform. (This individual was located in the package store which is the locale where the alcoholic beverages were being sold for consumption off premises. The bar area is separate from the package store and customers bring the alcoholic beverages that they have purchased from the package store into the bar area where they may purchase mixers from the bartender to be used with the alcoholic beverages which they purchased separately.)

   
   

8. Sergeant Bates made an additional visit to the licensed premises on January 29, 1981, and this was the first occasion of visits in which he saw the bar manager, Theodore Ferguson, Jr.

   
   

9. On January 16, 1981, Beverage Sergeant Allen F. Nash, went to the licensed premises in an undercover capacity to ascertain if drugs could be purchased in the licensed premises. He arrived at around 1:45 A.M. and remained until approximately 2:50 A.M. in the licensed premises. No purchases were made in the licensed premises, but upon leaving the building at approximately 2:50 A.M., and while just outside the doorway, the officer encountered a man who was advertising that he had drugs for sale. Officer Nash inquired of the individual what was for sale and the man responded that he had "bags" meaning bags of marijuana. A deal was struck and Officer Nash bought a $7.00 bag of marijuana from the subject. The marijuana was a controlled substance.

   
   

10. On January 20, 1981, Sergeant Nash returned to the licensed premises at approximately 11:55 P.M. At that time, he was in the company of another Beverage Officer, Phyllis Williams. The officers entered the bar area and took a seat at the bar proper.

    
    

11. At around 1:15 A.M., on January 21, 1981, Nash spoke with an unidentified male patron and asked if that individual knew where he could get some "reefer." The patron indicated that he had $3.00 "bags" for sale. In turn, Nash told the man to give him two "bags" and a purchase of the controlled substance marijuana was made for a price of $6.00. The exchange of money and marijuana was made at the bar proper at a level above the bar. The same bartender, Frances, was behind the bar on this occasion. (Nash did not observe any uniformed security guards on the premises.)

    
    

12. At around 1:50 A.M. on January 21, 1981, while Officers Nash and Williams were seated at the bar, a different male approached them and Nash asked this individual if he had marijuana. That individual replied that he had "joints and bags" meaning different increments of marijuana. Officer Williams asked how much the man would charge and he replied that the cost would be $7.00 for a "bag." She purchased two separate "bags" of marijuana for a total cost of

    $14.00 and the individual gave her a complimentary marijuana cigarette. This

    form of marijuana purchased was a controlled substance. The purchase was made at the bar and at a level above the bar.

    
    

13. The two officers left the licensed premises around 2:00 A.M. on January 21, 1981, and as they walked out the door, they overheard an individual say that cocaine was for sale and that "I've got the best girl in the world." Officer Williams asked the individual for two "caps" of cocaine. The individual indicated that the price was $10.00 a "cap" and that he only had one "cap." She paid him $20.00. He gave her the "cap" that he had and went back in the licensed premises and returned with the second "cap." The so called "caps" were in tinfoil packs and contained the substance cocaine which is a controlled substance.

    
    

14. Sergeant Nash returned to the licensed premises on January 24, 1981. He entered the bar area and while there, saw an elderly man in a security guard uniform cleaning up, that is, mopping and sweeping. Although Officer Nash was there for the purpose of seeing if he could purchase controlled substances while operating in an undercover capacity, he did not make purchases in the bar proper. Officer Nash did make a purchase outside the licensed premises approximately four (4) feet from the door and this purchase was made around 2:40

    A.M. The purchase was made from a man who had individual marijuana cigarettes and who sold Nash five marijuana cigarettes, which were controlled substances.

    
    

15. Officers Nash and Williams went to the licensed premises in the early morning hours of January 28, 1981, for purposes of attempting to purchase narcotics while operating in an undercover capacity. At that time, they were unsuccessful in making those purchases.

    
    

16. The officers returned to the licensed premises in the evening hours of January 28, 1981, at around 9:30 P.M. When they approached the front door of the licensed premises, a man who was approximately four (4) feet from the front door, stated that he had "joints" for sale for a dollar. This meant marijuana cigarettes for $1.00 each. Two other people were standing with this individual when the officers approached. The officers purchased five marijuana cigarettes from the man for the price of $5.00. The marijuana was a controlled substance.

    
    

17. Once the officers went inside, on the evening of January 28, 1981, and while at the bar proper, a man approached Officer Williams and said that he had marijuana for sale. Officer Williams purchased ten marijuana cigarettes, a controlled substance, for a price of 10.00, which the man extracted from a clear plastic bag. Part of this transaction occurred at the level above the bar. At that time, a woman was behind the bar serving as bartender. No uniformed security guards were seen on this visit.

    
    

18. During all of the transactions that took place in the licensed premises involving Officers Nash and Williams, no covert acts were taken on the part of the sellers to keep employees of the licensee from seeing those activities. No employees of the licensee took part in any of the sales either in the licensed premises or immediately outside the building. On all occasions, the bar was crowded and noisy. The two officers did not observe other sales of narcotics being made while in the licensed premises and while there on January 28, 1981, in the early morning hours, they were asked to move away from the door and this request was made by a security guard. The officers never made purchases from the same individual twice.

19. On January 21, 1981, Beverage Officers Redis Thompson and Eddie Alford went to the licensed premises. They arrived at approximately 11:30 P.M., entered the building and sat at the bar in the center portion. Three men were at the southern extreme of the bar smoking and one of those individuals left the group and approached Officer Thompson. At that juncture, the man asked Thompson if he wanted to buy some "smoke." This meant marijuana. Thompson asked him what he had and the individual took out a cellophane packet containing marijuana cigarettes. Thompson asked him how much they cost and the individual replied that it was one dollar. At that point, Thompson purchased twenty (20) marijuana cigarettes, a controlled substance for a price of twenty dollars.

    
    

20. In the early morning hours of January 22, 1981, while at the bar, the two officers were approached by an individual identified as "Larry." "Larry" indicated that he had some "good coke" and "grass." These terms referred to mean cocaine and marijuana. Thompson indicated that he would like to buy some cocaine and did purchase cocaine from the individual "Larry" for the price of

    $10.00. This cocaine is a controlled substance. Officer Alford also purchased cocaine on this occasion from a man identified as "Spider" who sold Alford three containers of cocaine for a price of $25.00. This cocaine is a controlled substance. The transactions with "Larry" and "Spider" took place at the bar area at a level above the bar. This same individual "Spider," consumed a portion of the cocaine by "snorting," that is, ingesting the material through his nostrils.

    
    

21. On January 28, 1981, at around 1:00 A.M., Officers Thompson and Alford entered the licensed premises and went to the bar and took their seats. The same man identified as "Larry" came over to them and asked if they wanted some "smoke." This meant marijuana. "Larry" produced marijuana cigarettes and charged Thompson five dollars for five marijuana cigarettes, a controlled substance.

    
    

22. On this occasion, no security guards were observed at the licensed premises by either of the officers.

    
    

23. While the two officers were in the licensed premises on the occasions mentioned, the premises ware crowded and noisy. Employees of the licensed premises did not participate in any of the drug transactions, which took place during the visits, ranging from forty minutes to two hours.

    
    

24. On January 29, 1981, a search was conducted on the licensed premises related to action by the Petitioner and this search did not reveal the presence of any form of narcotics.

    
    

25. As mentioned before, the bar manager, during the time in question, was one Theodore Ferguson, Jr. In keeping with the policies of the ownership, certain signs have been posted in the licensed premises calling to the attention of the patrons the management policy against the delivery or sale of drugs, the use of drugs and the fact that management could prosecute and hold those persons liable who violated these conditions. Notwithstanding these prohibitions, one of the employees of the bar "Miss Frances" made mention to Sergeant Bates the matter of the availability of controlled substances in the licensed premises.

26. Ferguson identified a management policy to ask people who have drugs to leave the premises and grounds around the premises and the efforts to call law enforcement to assist in this undertaking. Employees of the bar wear identification tags and there are security guards who report to Ferguson if drug violations or loitering is observed on the part of patrons. At the time of the investigation, some of the security guards had green caps with shields and green shirts and pants. Other security guards were in street clothes and this group constituted the majority of security personnel.

    
    

27. In the past, patrons have been asked to leave for violating the prohibitions against loitering or drug usage, possession or sale and the authorities have been called.

    
    

28. The security guards are instructed to inspect the parking lot as well as the inside of the licensed premises. Nonetheless, there were times in January, 1981, during the pendency of the investigation referred to in this matter, in which the number of desired security guards and the number to which the licensee had stipulated with the Petitioner would be provided as security, were not available. See Petitioner's Composite Exhibit No. 1. (This stipulation settled a complaint by the Petitioner against the licensee for nuisance activities at the premises, wherein patrons were suspected of using narcotics at the licensed premises, and wherein the stipulation incorporated terms of a stipulation between the Respondent's owners and the Dade County, Florida, State Attorney's Office.)

    
    

29. The problem with having sufficient numbers of security guards was due to a high turnover. There was other difficulty related to maintaining the security guards in uniform due to removal of the uniforms by former security guards and the fact that the uniforms did not fit replacement security guards. As a result, at some point in the January, 1981, time period, Ferguson made the decision to put all security guards in street clothes, with the exception of one uniformed security guard.

    
    

30. Ferguson, as bar manager, is routinely at the bar for a period of 12 to 14 hours a day, as much as 20, and at times has worked 30 hours straight. When he is absent from the bar, it is ordinarily between the hours of 5:00 P.M. and 11:00 P.M.

    
    

31. Since January 29, 1981, ownership has taken steps to provide all security guards with uniforms which are constituted of shirts with the word "security" written on them.

    
    

32. During January, 1981, Ferguson established through his testimony that the security personnel also fulfilled custodial functions in the licensed premises.

    
    

33. Ownership of the licensed premises has left the management of the licensed premises in the period January, 1981, in the hands of Ferguson and visits by ownership to the licensed premises were infrequent and not ordinarily at a time when the bar was having its peak business cycle.

    
    

    CONCLUSIONS OF LAW

    
    

34. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action.

35. At the conclusion of the Petitioner's case-in-chief, the Respondent moved to dismiss this action. At that point, ruling on the motion was reserved pending the entry of this Recommended Order. Upon consideration of the facts presented through the Petitioner's case-in-chief, the Respondent's motion to dismiss is DENIED.

    
    

36. The Respondent took certain discovery depositions of employees of the Petitioner, namely Jimmie Powell and Kenneth A. Ball. Respondent, in the course of the hearing, requested that certain excerpted portions of those prehearing depositions be allowed as testimony in this cause. Those excerpts are identified in the transcript of record of the hearing. Ruling on the admissibility of those excerpted portions of the testimony was reserved. Having read those excerpts, the excerpted portions of the depositions are hereby admitted as a part of the record in this hearing, in the same fashion as if the testimony had been given at the hearing as opposed to the deposition process.

    
    

37. By Count I of the Administrative Complaint/Notice to Show Cause, the Petitioner accuses the Respondent, in the period January 16, 1981, through January 29, 1981, of maintaining its licensed premises as a place to be resorted to by persons using controlled substances, namely cannabis (also known as marijuana), and cocaine. This purportedly violates Subsection 893.13(2)(a)5., Florida Statutes, 1/ and through that violation makes the owner liable by its acts or those of its agent, servant and/or employee, and culpable under the terms and conditions of Subsection 56l.29(1)(a), Florida Statutes.

    
    

38. There is no question that between January 16, 1981, and January 29, 1981, the licensed premises were resorted to by patrons who sold controlled substances to allow others to use the controlled substances as evidenced by the numerous sales and occasional use in the premises. The licensee did not openly condone this activity on the part of its patrons. Therefore, the licensee cannot be guilty of direct participation in maintaining the licensed premises for the aforementioned purposes, and likewise, there has been no showing that the licensee had direct knowledge of the patrons' activities. Consequently, to find that the licensee was culpably responsible for the alleged violation of Subsection 893.13(2)(a)5., Florida Statutes, there must be competent substantial evidence to demonstrate that the licensee, by its negligence or lack of diligence, allowed the licensed premises to be "resorted to by persons using controlled substances in violation of this chapter for the purpose of using these substances." See also G & B of Jacksonville, Inc. v. State of Florida, 366 So.2d 877 (Fla. 1st DCA 1979).

    
    

39. In considering the question of the liability of this licensee, it is recognized that the licensee is not the absolute insurer against violations committed on its licensed premises. See W. C. Woodberry v. State Beverage Department, 219 So.2d 47 (Fla. 1st DCA 1969). Nevertheless, the owners of the license may not take the point of view that it suffices to hire a full-time manager and expect that the manager's actions protect the owner from vicarious responsibility for the violations in the licensed premises. The steps taken by the owner to insure against drug-related crimes in the licensed premises and to protect against usage of that licensed premises as a haven for drug transactions were not adequate to relieve the licensee from accountability for these violations. The licensee has been negligent and has failed to use the necessary diligence in protecting against these violations. This is particularly true in view of the stipulation process referred to in the Petitioner's Composite Exhibit No. 1, which in answer to similar charges placed against the licensee by the Petitioner, the licensee agreed, as a condition of probation for alleged public nuisance on its part, to comply with the stipulation entered into in the

    Circuit Court of the Eleventh Judicial Circuit, in and for Dade County, Florida, Case No. 78-13073 (24), between the State of Florida, State Attorney's Office for that Judicial Circuit and the owners of the corporation in which in recognition of the problems in the licensed premises, the licensee promised to take certain steps to alleviate drug-related crimes. A focal point within that stipulation was the provision for uniformed security guards in given numbers, to be employed at certain times at the licensed premises, which the licensee did not comply with during the alleged periods of violation in the present case.

    This failure to comply is indicia of negligence and lack of due diligence on the part of the licensee. Moreover, even assuming the fact that the licensee had not been previously alerted to the existing drug-related problems in the premises by the episode leading to the aforementioned stimulation, the facts in the present matter, standing alone, would lead to the conclusion that the licensee has not taken necessary steps to prohibit the licensed premises from being used as a place for the users and purveyors of controlled substances, and for that reason the licensee is negligent and not sufficiently diligent. The placement of signs and controls through a third party on-premises manager does not achieve the necessary standard of care on the part of this licensee. As a consequence, and in the face of the violation of Subsection 893.13 (2)(a)5., Florida Statutes, the licensee is guilty of a violation of Subsection 561.29(1)(a), Florida Statutes, and subject to the penalties set forth in that section.

    
    

40. Count II in the Administrative Complaint/Notice to Show Cause alleges that the licensee in its person, by its agent, servant, and/or employee kept or maintained the licensed premises as a public nuisance through the maintenance of that building or place to be visited by persons for the purpose of unlawfully using controlled substances in violation of Chapter 893, Florida Statutes, or which is used for the illegal keeping, selling or delivering of those controlled substances, contrary to Section 823.10, Florida Statutes, 2/ and thereby violating Subsection 561.29(1)(c), Florida Statutes. The time of this alleged violation was between January 16, 1981, and January 29, 1981.

    
    

41. For reasons as discussed in considering Count I, the licensee was negligent and failed to exercise due diligence at the licensed premises and for that reason is responsible for a violation of Section 823.10, Florida Statutes, in that the licensed premises are deemed to be a "public nuisance" within the meaning of that law. Likewise, for reasons as previously discussed, the violation of Section 823.10, Florida Statutes, constitutes a nuisance on the licensed premises within the meaning of Subsection 561.29(1)(c), Florida Statutes, and the licensee is held to the penalties associated with such a violation.

Having considered the facts of this case, the conclusions of law reached, the prior history of this license, and the argument of counsel, it is

RECOMMENDED:

That the beverage license held by Palace Bar and Lounge, Inc., for purposes of doing business as Palace Bar at 6970 N. W. 17th Avenue, Miami, Dade County, Florida, License No. 23-479, Series 4-COP be revoked. 3/

DONE and ENTERED this 10th day of June, 1981, in Tallahassee, Florida.

CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 10th day of June, 1981.

ENDNOTES

1/ (2)(a) It is unlawful for any person:

5. To keep or maintain any store, shop, warehouse, dwelling, building, vehicle, boat, aircraft, or other structure or place which is resorted to by persons using controlled substances in violation of this chapter for the purpose of using these substances, or which is used for keeping or selling them in violation of this chapter.

2/ Places where controlled substances are illegally kept, sold, or used, declared a public nuisance. Any store, shop, warehouse, dwelling house, building, vehicle, ship, boat, vessel, aircraft, or any place whatever, which is visited by persons for the purpose of unlawfully using any substance controlled under chapter 893 or any drugs as described in chapter 500, or which is used for the illegal keeping, selling, or delivering of the same, shall be deemed a public nuisance. No person shall keep or maintain such public nuisance or aid and abet another in keeping or maintaining such public nuisance.

3/ The Petitioner has offered a memorandum of law and the Respondent has offered a post-hearing brief by which certain suggested facts are offered and disposition recommended, and these matters have been considered prior to the entry of this Recommended Order. To the extent that the aforementioned items are consistent with the Recommended Order, they have been utilized. To the extent that the matters are not consistent with this Recommended Order, they are hereby rejected.

COPIES FURNISHED:

Harry F. X. Purnell, Esquire General Counsel

Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

Daniel C. Brown, Esquire Deputy General Counsel

Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

Larry Rogovin, Esquire

1175 North East 125th Street North Miami, Florida 33161

Docket for Case No: 81-000501

Orders for Case No: 81-000501