vs. ) CASE NO. 81-1005
Respondent. )
Pursuant to Notice, the Division of Administrative Hearings, by its Hearing Officer, DONALD R. ALEXANDER, held a final hearing in the above matter on April 20, 1981, in Miami, Florida.
For Petitioner: Daniel C. Brown, Esquire
Lane S. Abraham, Esquire 808 Greater Miami Federal
By Notice to Show Cause dated February 10, 1981, Petitioner, Division of Alcoholic Beverages and Tobacco, required Respondent, N.K., Inc., d/b/a Tobacco Road, to show cause why its alcoholic beverage license No. 23-733:4-COP should not be revoked or suspended and/or a civil penalty imposed for the following alleged violations: (1) maintaining between January 13, 1981, and January 29, 1981, a place ". . .resorted to by persons using controlled substances for the purpose of using these controlled substances, to wit: cannabis, methaqualone (quaaludes), and cocaine, or which place is used for keeping or selling them in violation of FS 893.13(1&2)(a&c) within FS 561.29(1)(a)", and (2) maintaining a "public nuisance" on the premises between January 13, 1981, and January 29, 1981, by ". . .maintaining a building or place which is visited by persons for the purpose of unlawfully using substances controlled under Chapter 893. . .or which is used for illegal keeping, selling, or delivering of same, contrary to FS 823.10 and FS 561.29(1)(d)." 1/
Respondent disputed the allegations of fact in the Notice to Show Cause and requested a formal hearing pursuant to Section 120.57(1), Florida Statutes. The matter was forwarded to the Division of Administrative Hearings by the Petitioner on April 8, 1981, and a Hearing Officer was requested to be assigned
to conduct the hearing. By Notice of Hearing dated April 9, 1981, a final hearing was scheduled for April 20, 1981, in Miami, Florida. In scheduling this matter on less than fourteen days notice, both parties waived the 14-day notice requirement contained in Section 120.57(1)(b)2, Florida Statutes.
At the final hearing, Petitioner called Carmen V. Gonzalez, Katheryn Brock, Debra Thompson, Patrick M. Roberts and Robert R. Jones as its witnesses and offered Petitioner's Exhibits 1-7; all were received into evidence except Exhibit 5, on which a ruling was reserved. Respondent called Louis J. Terminello, Robert R. Jones, Carmen V. Gonzalez, Patrick M. Roberts, Ken Clark, Ira Margolius, Tom W. Ross and Neil Katzman as its witnesses and offered Respondent's Exhibits 1-3, each of which was received into evidence.
The transcript of hearing was filed on June 12, 1981. Proposed findings of fact and conclusions of law were filed by the Petitioner on April 27 and by the Respondent on June 18, 1981, and were considered by the undersigned in the preparation of this order. Findings of fact not included in the preparation of this order were not considered relevant to the issues, were not supported by competent and substantial evidence or were considered immaterial to the results reached.
The issue herein is whether Respondent's alcoholic beverage license should be revoked or suspended or whether a civil penalty should be imposed for the alleged violations set forth in the Notice to Show Cause.
At all times relevant hereto, N.K., Inc., d/b/a Tobacco Road, held alcoholic beverage license number 23-733:4-COP authorizing it to sell alcoholic beverages at 628 South Miami Avenue, Miami, Florida.
The establishment in question is located in the downtown area of Miami, Florida. It provides both a food and beverage service to its patrons. The bar's hours of service are from 9:00 a.m. until 5:00 a.m. daily. The kitchen is generally open from late in the morning until 3:00 p.m. and from between 5:00 and 8:00 p.m. until 4:00 or 5:00 a.m. each day.
The lounge has two floors. The first floor has a bar, restaurant and outdoor patio. Entertainment is provided primarily by a disc jockey. The second floor is accessed by an interior stairway from the first floor and contains a bar and stage. The upstairs is patterned after a speakeasy from prohibition days, and features live theater performances and entertainment provided by a live jazz band.
The clientele of Tobacco Road may be characterized as "mixed". During the daytime hours, it is frequented by many business and professional persons from the downtown area who partake of both meals and drinks. At night the crowd tends to be more younger and middle class although it is still an admixture of all ages, occupations and classes. The bar is located four blocks from the "tent city" where the City of Miami housed large numbers of Cuban refugees in 1980. Some refugees have frequented the Tobacco Road on occasion.
The Petitioner received unidentified complaints regarding the possible sale or use of drugs in a number of Miami area lounges, including Tobacco Road. This prompted visits by undercover beverage agents to the licensed premises in January, 1981, to ascertain whether such complaints were true.
On or about January 13, 1981, at approximately 10:20 p.m., Officers Mignolet and Gonzalez, two female beverage agents, visited the Tobacco Road in an undercover capacity to investigate whether narcotics were being sold on the premises. In the parking lot, they met two white male patrons named Carlos and Mark who were just leaving in their automobile and engaged them in a brief casual conversation. The officers then entered the lounge and seated themselves at the bar on the first floor. Carlos and Mark returned to the bar shortly thereafter and sat next to Mignolet and Gonzalez. The conversation turned to narcotics and after a period of time, Mark reached into his pocket and pulled out two tablets which he handed to Gonzalez. A laboratory analysis later established these tablets to be methaqualones (Petitioner's Exhibit 2). When the delivery occurred, Chris (Christopher Najdul), a bartender, was in the bar well directly in front of the beverage officers. Seated nearby were "a few other" patrons. The lighting in the area was described as "dim". After being handed the tablets, Gonzalez showed Chris the tablets in her hand. However, Chris did not say anything to acknowledge that he had seen the transaction.
This was the fourth visit to the licensed premises by the two agents but represented the first time they were successful in obtaining a controlled substance despite repeated efforts to do so.
On or about January 23, 1981, at approximately 12:40 a.m., Officers Brock and Thompson, two female beverage agents, visited the premises of Respondent in an undercover capacity to ascertain whether narcotics were being sold. After seating themselves at the center of the bar on the first floor, they engaged in a conversation with a white male patron named Armando Garcia. The agents asked it they could obtain some "ludes" (methaqualones). Garcia said he could obtain some "grass" (marijuana) from upstairs and temporarily left the bar. He later returned without any drugs. He then went outside the premises to his car, obtained two tablets, returned to the bar, seated himself between Brock and Thompson, and passed one each into their hands. The officers briefly examined the tablets and then placed them into their pocketbooks. Subsequent laboratory tests revealed the tablets were methaqualones (Petitioner's Exhibit 3).
On or about January 24, 1981, Officers Brock and Thompson again visited the licensed premises of Tobacco Read at about 1:00 a.m. After seating themselves at the bar they were immediately approached by Armando Garcia, the same patron who had given them two methaqualones the previous evening. After approximately 15 minutes, Brock and Garcia moved to a booth away from the bar where Garcia gave her a tablet. Thompson then joined them at the booth, and Garcia set a tablet on the table for Thompson. The transaction was not observed by any employee or patron. Shortly afterwards, the agents returned to the bar where Garcia joined them. At approximately 2:10 a.m., Garcia passed a tablet hand to hand to Thompson, and swallowed another himself. When the latter delivery occurred, the bartender, Peter Aitken, was working behind the bar well but did not verbally acknowledge seeing the transaction. A laboratory analysis subsequently revealed the three tablets were methaqualones (Petitioner's Exhibit 4).
On January 25, 1981, at approximately 12:15 a.m. Officers Roberts and Jones, two male beverage agents, visited the Tobacco Road in an undercover capacity to ascertain whether controlled substances could be obtained. After seating themselves at the bar, they began a casual conversation with a male patron at the bar named Lance concerning the possible purchase of drugs. They left the bar and went to the stairway between the first and second floors were Roberts asked Lance if there were any "ludes" around. Lance replied he had one for $3.00. Roberts handed Lance $3.00 and received a tablet. Laboratory tests subsequently revealed the tablet given to Officer Roberts was a methaqualone (Petitioner's Exhibit 6). When the transaction occurred, several other patrons were ahead of Roberts on the stairway. Prior to this delivery, Roberts and Jones had visited the premises on at least two other occasions but were unsuccessful in obtaining a controlled substance.
On or about April 25, 1981, at approximately 12:30 a.m., while on the licensed premises, Officer Marrero, a male beverage agent, met a Latin male patron who offered to sell some marijuana. Officer Jones accompanied Marrero and the patron to the men's restroom where, in a bathroom stall, Marrero bought five suspected marijuana cigarettes from the patron for $5.00. No other patrons or employees were present when the sale occurred. Subsequent tests performed by the laboratory confirmed the cigarettes were in fact marijuana (Petitioner's Exhibit 7).
On or about January 28, 1981, Officers Brock and Thompson visited the licensed premises of Tobacco Road in an undercover capacity and seated themselves next to Peter Aitken, who was off-duty that evening, and who appeared to be in an intoxicated state. Peter left the premises with Thompson to go to his automobile to smoke a marijuana joint. The automobile was parked on a public street in front of the lounge. Although Thompson was ultimately able to purchase a bag of marijuana from Peter for $35, the transaction occurred off the licensed premises and was beyond the dominion and control of the licensee.
The corporate owner of Tobacco Road is Neil Katzman, a former police officer with the City of Miami. Prior to purchasing Tobacco Road, he owned and operated a licensed lounge and package store.
Katzman takes an active role in the management of the lounge, including such diverse activities as maintenance work, greeting customers, occasionally tending bar and taking inventory. However, because of the long hours of operation (9:00 a.m. - 5:00 a.m. daily) it is impossible for him to be on the premises at all times. For this reason, he has hired a manager to whom he recently delegated authority to hire and fire employees.
Katzman has a strict policy of employees not using or distributing illegal drugs. Violation of this rule results in immediate dismissal of the errant employee. Prospective employees are personally counseled on the no-drug policy of the management before they are hired and are reminded of this policy periodically. Polygraph tests have been given since 1978 to employees, including the manager, to determine whether they use or sell drugs, have stolen money, given away free drinks or engaged in any other prohibited activities. They are specifically asked if they have sold or delivered drugs on the premises, and whether they have seen other employees do so. "Numerous" employees have been fired as a result of taking such tests. Indeed, Chris Najdul, a bartender, was fired a week before the undercover operations were made known to Katzman for admitting to the use of narcotics on the premises.
The no-drug policy of management has been effective. This is evidenced by the fact that no drugs were obtained from employees during the period in question despite numerous efforts by undercover agents to purchase narcotics from them. It is also a strict policy of the Respondent that if patrons are seen with narcotics on the premises, they are asked to leave. Katzman himself periodically checks the restrooms and patio to see if patrons are using illegal drugs.
Other than the deliveries and sales described above, the undercover agents did not witness any employee or patron using, selling or in possession of any suspected narcotic on the licensed premises.
Respondent has never been cited or warned about any beverage law violation in this or any previous establishment.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Section 120.57(1), Florida Statutes.
Subsection 561.29(1), Florida Statutes, enumerates the grounds on which the Petitioner may suspend or revoke a license. As is pertinent here, they include, inter alia:
(1)(a) Violation by the licensee or his or its agents, officers, servants, or employees, on the licensed premises, while in the scope of employment,. . .permitting another on the licensed premises to violate any of the laws of this state. . .
(1)(c) Maintaining a nuisance on the licensed premises.
Section 823.10, Florida Statutes, provides in part that:
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 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.
Cannabis or marijuana, and methaqualones are defined as controlled substances in Sections 893.03(1)(c)3 and 893.03(2)(c)5, Florida Statutes. Their sale, manufacture or delivery is prohibited by Section 893.13(1)(a), Florida Statutes.
Section 893.12(2)(a)5, Florida Statutes, provides that: (1)(a) It is unlawful for any person:
5. To keep or maintain any store, shop. . . building. . .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.
Count I charges Respondent with having maintained his licensed premises as a place ". . .which is resorted to by persons using controlled substances for the purposes of using these controlled substances, to wit: cannabis, methaqualone (quaaludes), and cocaine, or which place is used for keeping or selling them in violation of FS 893.13(1&2)(a&c) within FS 561.20(1)(a)."
The section of Chapter 893 upon which Petitioner relies does not exist, and it is assumed it is a typographical error. Presumably, Petitioner was referring to Section 893.13(2)(a)5, Florida Statutes, which generally prohibits the activity described in Count I.
Section 893.13(2)(5)5 prohibits two specific activities: (1) the maintaining of premises that are ". . .resorted to by persons using controlled substances in violation of this chapter for the purpose of using these substances. . ." (Emphasis added) and (2) the maintaining of premises that are ". . .used for keeping or selling them (controlled substances) in violation of this chapter." (Emphasis added) The first activity clearly requires that the licensed premises in question be resorted to by persons for the purpose of using illegal narcotics. With the exception of one occasion on January 24, 1981, when Officer Thompson observed a patron (Armando Garcia) swallow a tablet which was suspected of being a methaqualone, there was no evidence that the licensed premises were used for this purpose. Indeed, the testimony established that the undercover agents did not witness any employee or patron using any suspected narcotic at the lounge.
The statute also prohibits a licensee from maintaining the premises for the purpose of keeping controlled substances. The term "keeping" is not defined in Chapter 893 but a commonly accepted meaning of the term is to take care, custody or charge of, to retain, or to have and hold. There is no evidence whatsoever to support a finding that the licensed premises were used by the licensee for the purpose of keeping illegal narcotics. Accordingly, this portion of the statute has no application to the factual situation herein.
Finally, a licenses may not maintain the premises for the purpose of selling controlled substances in violation of Chapter 893. The statute is silent as to a minimum number of sales necessary to fall within the purview of the law. However, judicial decisions on the subject suggest a "persistent" or "recurring" pattern of activity is required, G & D of Jacksonville, Inc. v. State of Florida, 388 So.2d 877, 878 (Fla. 1st DCA 1979), so as to permit a factual inference that such violations were either fostered, condoned or negligently overlooked by the licensee. Pauline v. Lee, 147 So.2d 359, 364 (Fla. 2nd DCA 1962). Here, despite repeated efforts by undercover agents on numerous occasions to purchase drugs from both employees and patrons, they were successful on only two occasions. One was a sale of five marijuana joints inside a bathroom stall unobserved by any other patron or employee, while the second was a hand to hand exchange of a single methaqualone tablet on a stairway. These two isolated instances standing alone do not constitute a "persistent" or "recurring" pattern of conduct so as to warrant a finding that the Tobacco Road is an establishment used for the purpose of selling controlled substances. Therefore, the charge in Count I should be dismissed.
In its post-hearing Memorandum of Law Petitioner suggests that a violation of Section 561.29(1)(a), Florida Statutes, has occurred by reason of employees of the licensee having permitted another on the licensed premises to violate the laws of the State. This specific charge was not included in the Notice to Show Cause, and need not be considered. Even if it had been timely raised, it is without merit. The evidence discloses that only on one occasion did an employee apparently witness an illegal transaction and then there was no verbal acknowledgment by the employee that he had actually seen the act. A single transgression by an employee is insufficient to support a finding of a persistent or recurring activity as defined by the courts. Pauline v. Lee, supra at 364. That being so, culpable negligence or lack of diligence may not be imputed to the licenses. G & B of Jacksonville, Inc., supra at 878.
Count II charges Respondent with having maintained a public nuisance as defined by Section 823.10, Florida Statutes, in that Respondent allegedly maintained a place visited by persons for the purpose of unlawfully using controlled substances, or which was used for the illegal keeping, selling or delivering of same. In simplest terms, it is charged that the licensed premises of Tobacco Road were used by patrons on a regular basis for the transfer or delivery of controlled substances under Chapter 893.
The evidence reveals that there were indeed five separate transfers or deliveries of narcotics on the licensed premises. However, with one apparent exception, there was no participation in, or knowledge of, the illicit activities by the licensee and its employees. To that extent, the case herein may be distinguished from Pauline v. Lee, supra, Torch Club v. Keating, 174 So.2d 746 (Fla. 2nd DCA 1965), G & B of Jacksonville, Inc., supra, and G & B of Jacksonville, Inc., v. State of Florida, 371 So.2d 139 (Fla. 1st DCA 1979), where the licensees, through negligence or lack of diligence, had failed to maintain sufficient knowledge and supervision of their errant employees who were visibly engaged in illegal activities with patrons or undercover agents. But the fact that no employees were engaged in illegal activities does not excuse the licensee from using reasonable care to insure that the drug laws are observed on the licensed premises. However, the standard of care which the Division seeks to impose would place a most difficult and burdensome task upon the licensee, and if observed, would conceivably require the implementation of preventive measures not reasonably expected of a licensee. The illegal transactions herein were not open and notorious in nature. They included several hand to hand deliveries in a bar whose lighting was described by Officer Gonzalez as being "dim", an exchange at a booth away iron the bar, a sale inside a bathroom stall and a hand to hand delivery on a stairway, all of which involved only patrons. To argue that Katzman should have monitored and detected these transactions is laudable, but to conclude that he was culpably negligent in failing to do so is incorrect. It is indisputed that Katzman was unaware of the illegal activities that were occurring on the premises, and with one exception, the employees were not at fault. There being no intentional wrong- doing, it is then incumbent upon the Division to show that Katzman was either negligent or failed to exercise reasonable care and diligence in his control of the premises. G & B of Jacksonville, Inc., supra. The evidence discloses that Katzman took all reasonable and prudent steps necessary to adequately control the premises. These included (1) a stated policy prohibiting the use, sale or possession of any narcotic on the premises, (2) initial and continuing counseling of employees concerning this rule, (3) the dismissal of a number of employees who violated this policy, (4) periodic polygraph tests of employees, and (5) a policy of requiring customers found using narcotics to immediately leave the premises.
In summary, where the stated policies of management towards illegal activities by employees have been shown to be effective, and illicit acts involving patrons are done in such a manner as to render them immune from reasonable observation by management, it must be concluded that respondent exercised reasonable care and diligence in supervising his premises and to insure that the laws of the State were followed. Therefore, it is concluded that there is insufficient evidence to establish that the Tobacco Road was a public nuisance within the meaning of this statute, and the charge in Count II should be dismissed.
Petitioner offered Exhibit 5, which is Laboratory Report Number 301728, and confirms that a bag of suspected marijuana purchased by Officer Thompson from Peter Aitken, an off-duty bartender, was indeed a controlled substance. A ruling on the admissibility of that exhibit was reserved in light of objections made by Respondent.
The transaction occurred in Aitken's automobile parked on a public street outside the lounge. As such, it was not on the licensed premises as defined by Subsection 561.01(11), Florida Statutes, and was beyond the dominion and control of the licensee. Therefore, the objection to the receipt in evidence of Laboratory Report Number 301728 is hereby sustained.
Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Counts I and II of the Notice to Show Cause be DISMISSED. DONE and ORDERED this 6th day of July, 1981, in Tallahassee, Florida
DONALD R. ALEXANDER
Filed with the Clerk of the Division of Administrative Hearings this 6th day of July, 1981.
1/ The reference to Subsection 561.29(1)(d) in Count II is obviously a typographical error and it is assumed the Division was referring to Subsection 561.29(1)(c), which proscribes the activity referred to in the Notice to Show Cause.
Daniel C. Brown, Esquire 725 South Bronough Street Tallahassee, Florida 32301
Seymour Chadroff, Esquire and Lane S. Abraham, Esquire
