vs. ) CASE NO. 81-573
ALTON BEVERAGES, INC. )
Respondent. )
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William E. Williams, held a public hearing in this cause on March 26, 1981, in Miami, Florida. The transcript of the final hearing was filed with the Division of Administrative Hearings on April 5, 1981.
For Petitioner: Harold F. X. Purnell, Esquire
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
By Notice to Show Cause dated March 6, 1981, the Department of Business Regulation, Division of Alcoholic Beverages and Tobacco ("Petitioner") charged Respondent, Alton Beverages, Inc., trading as Mayflower Lounge ("Respondent") with 8 counts of violations of various portions of Chapters 893 and 561, Florida Statutes. Thee first 6 counts of the Notice to Show Cause alleged that agents, servants or employees of Respondent made unlawful sales or deliveries of controlled substances to agents of Petitioner. Counts 7 and 8 of the Notice to Show Cause alleged that the licensed premises was used as a place for keeping or selling controlled substances and, therefore, constituted a nuisance in violation of law.
At the final hearing, Petitioner called Lewis J. Terminello as its only witness. Respondent called Sam Hill Rosen, Christine Wilson, John Wilson, Robert W. Lenning, Pamela Pabon and Cheryl Cox as its witnesses. Respondent offered Respondent's exhibits Numbers 1 through 5, inclusive, each of which was received into evidence.
In addition, at the final hearing Respondent filed a Motion to Disqualify, seeking to remove Charles Nuzum, Director of the Division of Alcoholic Beverages and Tobacco, from further participation in this proceeding by virtue of his entry of an emergency order of suspension prior to the final hearing in this cause. The matters raised in this motion are outside the jurisdiction of the Division of Administrative Hearings, but said motion is forwarded to petitioner with this Recommended Order for appropriate disposition.
Finally, at the final hearing Petitioner, by stipulation of counsel for Respondent, was allowed to amend counts 7 and 8 of the Notice to Show Cause to allege the applicable period of time material to this proceeding to be from February 21, 1981, until March 7, 1981.
Respondent, Alton Beverages, Inc., trading as Mayflower Lounge, holds Division of Alcoholic Beverages and Tobacco License Number 23-2043, Series 4- COP. Respondent conducts its business pursuant to said license at 17IG Alton Road, Miami Beach, Dade County, Florida.
At all times material hereto Sam Rosen was the sole corporate officer and shareholder of Alton Beverages, Inc. In addition, at all times material to this proceeding, Robert L. Pyle was the night manager for Respondent's licensed premises at the aforementioned address. During the time periods alleged in the Notice to Show Cause, that is, from February 21, 1981 through March 7, 1981, Dottie Turner, Laura Kimberly, Mona Castro, Sandra Timmsen and Deborah Sutcliff were dancers at the licensed premises, and were "agents" of Respondent.
In the early morning hours of February 21, 1981, an undercover officer in Petitioner's employ was introduced by a confidential informant to Robert L. Pyle, the night manager on duty at Respondent's licensed premises. Shortly after that introduction, the undercover officer purchased a quantity of cocaine from Pyle for $50.00, the sale and delivery of which substance took place on the licensed premises, while Pyle and the officer were seated at a table in the lounge portion of the premises.
During the evening hours of February 21, 1981, Petitioner's undercover officer returned to the licensed premises. While seated at a table with Dottie Turner, a topless dancer in the employ of Respondent, Turner mentioned to the undercover officer that she was going outside "to smoke a joint." Thereupon, the undercover officer asked if he could purchase a "joint" from her, and she advised that she would "roll one" for him for one dollar. Thereafter, Turner went outside the licensed premises, subsequently returned to the table, and gave one marijuana cigarette to the undercover officer in exchange for one dollar.
Later on the evening of February 21, 1981, the undercover officer made a second purchase of cocaine for $50.00 from Pyle, Respondent's night manager. Again, the purchase ant exchange of this cocaine took place on the licensed promises while the officer and Pyle were seated at a table in the bar.
While still in the licensed premises on February 21, 1981, the undercover officer asked for, and obtained, a second marijuana cigarette from dancer Dottie Turner at no cost.
On February 23, 1981 the undercover officer again returned to the licensed premises where he spoke with Dottie Turner. On this occasion another purchase of a marijuana cigarette for one dollar from Dottie Turner was accomplished, with the negotiation for and delivery of the cigarette occurring on the licensed premises. After delivery of the marijuana cigarette, the undercover officer inquired of Turner concerning the purchase of a larger quantity of marijuana. The undercover officer was advised by Turner that if he would give her the money for an ounce of marijuana she could purchase it for him and bring it to the licensed premises for delivery. When the undercover officer refused to part with the money prior to delivery, Turner advised him that he would have to come to her apartment to make the purchase. Subsequently, on February 25, 1981, the undercover officer went to Turner's apartment, some distance from the licensed premises, and purchased one ounce of marijuana for
$30.00.
On February 25, 1981, the undercover officer returned to the licensed premises. On this date, he met with Robert L. Pyle, the night manager, and requested to purchase one quarter-ounce of cocaine. While the undercover officer and Pyle were seated in the Manager's office on the licensed premises, Pyle advised the undercover officer that he could arrange the purchase of that amount of cocaine for $500.00. Pyle further advised the undercover officer that he would have to go upstairs to get the cocaine and would return shortly. Thereupon both the undercover officer and Pyle left the Manager's office, and the undercover officer resumed a seat in the lounge portion of the licensed premises. Shortly thereafter, Pyle returned, and, while seated at a table with the undercover officer and Deborah Sutcliff, one of Respondent's topless dancers, exchanged with the undercover officer the one quarter-ounce of cocaine for $500.00 in currency.
As previously indicated, the address of the licensed premises is 1716 Alton Road, Miami Beach. This address consists of the first floor of a two- story concrete block structure. The first floor is leased by Respondent from the building owner, Sam Berlin. The second floor of the structure was leased from the building owner by Robert L. Pyle, the night manager, and several of the dancers and other employees of Respondent for use as apartments.
At all times material hereto, access to the apartments on the second floor could be had either by way of an exterior stairway in the rear of the building, or through a door in the interior of the licensed premises opening on an interior stairway. This interior door was used frequently by the dancers to access their apartments, and was used by Pyle on at least one of the occasions when the undercover officer purchased cocaine as hereinabove described. The sketch appearing on or attached to Respondent's license does not show the second floor of the two-story structure as being contained within the licensed premises and, indeed, does not show the interior door giving access to the second floor, although the record in this proceeding establishes that the door was present when Petitioner's agent made the sketch of the premises to attach to Respondent's license. There is no showing in this record that the interior door and stairway were ever used by anyone other than persons making their residence on the second floor. The upstairs portion of the building was never used for storage or for any other purpose connected with the operation of the licensed premises. Finally, there is no showing in this record that Respondent bad, or attempted to exercise, any dominion or control over the second floor of the building.
On March 7, 1981, pursuant to a search warrant, law enforcement officers, including Petitioner's undercover officer, conducted a raid of the licensed premises. One of Respondent's dancers was found to be in possession of in excess of 10 grams of cocaine in her purse on the licensed premises. In addition, a quantity of marijuana was found near the bar and a yellow change purse containing a cocaine kit and spoon were found in the Manager's office.
In the upstairs area where several of Respondent's employees lived, another of Respondent's dancers was found to be in possession of a controlled substance, Diazepam, and a bartender In Respondent's employ was found to be in possession of Diazepam as well as a small quantity of marijuana. Still another dancer was found to be in possession of a quantity of marijuana in her apartment, while Robert Pyle's bedroom in the upstairs area contained Diazepam and assorted narcotics paraphernalia including a cocaine user's kit, knives and scales. In addition, in the general living area of the upstairs, there was assorted narcotics paraphernalia including large heating elements; boxes and plastic jugs and bags containing different cocaine cutting agents such as procaine; an automatic plastic wrapping machine; a large-size scale; test tubes; and two bags containing cocaine.
Respondent does not deny that the aforementioned activities occurred, but instead defends against the allegations or the Notice to Show Cause, as amended, by contending that the corporate licensee, through its sole officer and shareholder, Sam Hill Rosen, took every reasonable precaution to guard against such activity occurring on the premises. Respondent contends, Petitioner admits, and the record herein clearly establishes that Mr. Rosen was not "directly involved" nor did he have personal knowledge of the activities occurring on the licensed premises. Respondent asserts that in an attempt to prevent legal activity from occurring on the licensed premises, it posted signs in conspicuous places, such as the dancers' dressing room, and gave written instructions to employees announcing its policy of prohibiting drugs, other than prescription drugs, from being used or sold on the licensed premises. Violation of this employment policy, according to Respondent, resulted, on occasion, in immediate dismissal of employees. Additional Policies allegedly adopted by Respondent to guard against illegal activity included prohibiting dancers from leaving the licensed premises to go outside while they were working, and subjecting all employees to periodic "shakedown searches". There was also some indication in the record that Respondent reserved the right to subject its employees to polygraph tests. Finally, Respondent also asserts that, acting through its principal, Mr. Rosen, the premises was periodically checked while Mr. Pyle was on duty to assure that no violations of law were occurring.
Accepting Respondent's representation that the aforementioned policies were established on the premises, the record in this proceeding clearly establishes that to the extent that these policies did exist they were more honored in the breach than in the observance. For example, of those employees of Respondent who were called to testify at the final hearing in this proceeding, none of them had been administered a polygraph examination, none had had their persons or belongings searched while working on the licensed premises, and they had observed Mr. Rosen on the premises during the evening hours at best "infrequently". Mr. Rosen's failure to adequately supervise the licensed premises is corroborated by the fact that on February 23, 1981, when Petitioner's undercover officer was on the licensed premises, Mr. Pyle, the night manager, was off duty, and Mr. Rosen, who managed the licensed premises during other portions of the day, was not present. In addition, on at least one occasion, one of Respondent's dancers observed Pyle on the licensed premises in possession of both cocaine and pep pills, the latter of which, according to
Pyle, were used in case ". . . some of the girls came into work and weren't quite up to doing their performance."
The record in this proceeding fails to establish that any agent, employee or patron of Respondent was ever observed using illegal drugs or narcotics inside the licensed premises. In addition, the record clearly establishes that Respondent has never previously been cited by and law enforcement agency, regulatory or governmental body for narcotics law violations of any nature.
Both Petitioner and Respondent have submitted proposed findings of fact for consideration by the Hearing Officer in this proceeding. To the extent that those findings of fact have not been incorporated in this Recommended Order, they have been rejected as either being irrelevant to the subject matter of this proceeding, or as not having been supported by the evidence.
CONCLUSIONS OF LAW
The Division of Administrative Hearing's has jurisdiction over the subject matter of, and the parties to, this proceeding. Section 120.57(1), Florida Statutes.
Section 561.29(1), Florida Statutes, provides, in part, as follows:
The [Division of Alcoholic Beverages and Tobacco] is given full power and authority to revoke or suspend the license of any person holding a license under the Beverage Law, when it is determined or found by the division upon sufficient cause appearing of:
Violation by the licensee or his or its agents, officers, servants, or employees, on the licensed premises, or elsewhere while in the scope of employment, of any of the laws of this state . . ., or engaging in or permitting disorderly conduct on the licensed premises, or permitting another on the licensed premises to violate any of the laws of this state. . .
* * *
(c) Maintaining a nuisance on the licensed premises. (Emphasis added.)
Section 893.13(1)(a), Florida Statutes, makes it ". . . unlawful for any person to sell, manufacture, or deliver, or possess with intent to sell, manufacture, or deliver, a controlled substance."
"Cannabis", or "marijuana", and "cocaine" are controlled substances identified in Sections 893.03(1)(c)3 and Section 593.03(2)(a)4, Florida Statutes, respectively.
Sale, manufacture or delivery of marijuana or cocaine, or possession with intent to sell, manufacture or deliver marijuana or cocaine, is a second- degree felony. Section 893.13(1)(a)1, Florida Statutes.
Section 823.10, Florida Statutes, provides as follows:
Any store, shop, . . . building, . . . 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. (Emphasis added.)
Section 593.13(2)(a)5, Florida Statutes, makes it unlawful for any person:
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.
Section 561.01(11), Florida Statutes, defines the term "licensed premises" to mean:
. . . not only rooms where alcoholic beverages are stored or sold by the licensee, but also all other rooms in
the building which are so closely connected therewith as to admit of free passage from drink parlor to other rooms over which the licensee has some dominion or control and shall also include all of the area embraced within the sketch, appearing on or attached to the application for the license involved and designated as such on said sketch, in addition to that included or designated by general law. (Emphasis added.)
In G & B of Jacksonville, Inc. v. Department of Business Regulation,
371 So.2d 138, 139 (Fla. 1 DCA 1979), the Court held that, while the holder of a license to sell alcoholic beverages
is not an insurer that an agent or servant will not in any particular violate any law of the State of Florida, such licensee nevertheless has a duty to exercise reasonable care and diligence to see that the licensed place of business is conducted in a lawful manner and that its employees do not violate any of the laws of the State of Florida. We have here a record that presents several acts as charged on the part of three separate employees. We are not here
presented with a single isolated occurrence. . . . If a licensee does not maintain sufficient intelligence with reference to activities at his or its licensed premises so as to know that two or more of its employees are engaged in such
activity as was herein established, then such licensee must be held to have been lacking in reasonable diligence in the proper management of its licensed premises.
Further, in G & B of Jacksonville, Inc. v. Division of Beverage, 371 So.2d 139, 140 (Fla. 1 DCA l97) the Court held that where violations of law occurred on two different days in a "persistent and practicod" manner, a licensee could not ". . . remove itself from responsibility not being present on the premises or by claiming ignorance of the repeated violations."
The record in this proceeding clearly establishes the violations alleged in Paragraphs 1 through 6 of the Notice to Show Cause, as amended, relating to the sale and/or delivery of controlled substances on the licensed premises by Robert Lee Pyle and Dottie Susan Turner. The record further establishes that the sale and delivery of these controlled substances occurred as a result of Respondent's failure to exercise reasonable care and diligence to assured that activities conducted on the licensed premises would not in any way violate the laws of the State of Florida. The "practiced and persistent" manner in which these violations occurred could have been prevented by Respondent's adherence to its own professed policies as detailed in the Findings of Fact section of this Order. The multiple offenses committed by both Pyle and Turner on several dates, together with Respondent's conduct in failing to adequately supervise the licensed premises, clearly establish the violations alleged in Paragraphs 1 through 6 of the Notice to Show Cause, as amended.
The record in this proceeding also clearly establishes that Respondent's "licensed premises" consists of only the first floor of the building in which Respondent's business is located. Section 561.01(1), Florida Statutes; see also, Boynton v. State, 64 So.2d 536 (Fla. 1953). Nevertheless, the facts of record clearly establish that the "licensed premises", even when construed to include only the first floor, was used for the delivery and/or sale of controlled substances in violation of Sections 823.10, 893.13(2)(a)5, and 561.29(1)(c), Florida Statutes, as alleged in Paragraphs 7 and 8 of the Notice to Show Cause, as amended.
In light of the nature of the offenses charged and proven herein, the vicarious nature of Respondent's rest possibility therefor, the fact that Respondent has never previously been charged with any narcotics law violations, and in further consideration of the fact that , ". . . outright revocation of a beverage license is a most serious and drastic penalty, even in a flagrant case
. . . . Taylor v. State Beverage Department, 194, So.2d 321, 329 (Fla. 2 DCA 1967) it is
That a Final Order be entered by the State of Florida, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, suspending the license of Alton Beverages, Inc. for a period of 90 days from the date of final agency action with regard to the violations alleged and established in Paragraphs 1 through 8 of the Notice to Show Cause, as amended.
Recommended this 6th day of May, 1981, in Tallahassee, Florida.
WILLIAM E. WILLIAMS
Filed with the Clerk of the Division of Administrative Hearings this 6th day of May, 1981.
Harold F. X. Purnell, Esquire General Counsel
