STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 81-2769

) C.S.G., INC., d/b/a THE ARENA, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Tampa, Florida on May 26, 1982, before the Division of Administrative Hearings and its duly appointed Hearing Officer,

1. T. Carpenter. The parties were represented by:

   
   

   For Petitioner: John A. Boggs, Esquire

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

   
   

   For Respondent: Paul Antinori, Jr., Esquire

   601 East Twiggs Street Tampa, Florida 33602

   
   

   This matter arose on Petitioner's Administrative Complaint/Notice to Show Cause issued against Respondent, which alleges the following:

   
   

   1. On or about December 3, 1980, you, C.S.G., Inc., licensed under the beverage laws, during the application process, failed to disclose the names and addresses of person interested directly or indirectly

      with you in the business for which your beverage license was issued, contrary to

      F .S. 561.17, more specifically, the interest of CHARLES PITISCI and OLGA PITISCI.

      
      

   2. On or about December 3, 1980, you C.S.G., Inc., licensed under the beverage laws, and/or your servant, agent or employee,

      to wit; SAM FERRARA, JR., during the application process, did willfully and knowingly make a false entry in a record received under the beverage law, to wit; Personal Questionnaire [sic] (DBR 710-L) which failed to disclose the names of all persons, firms or corporations connected

      directly or indirectly with your business, more specifically, the interest of P & O, Inc., CHARLES PITISCI and OLGA PITISCI,

      contrary to F.S. 562.45.

      
      

   3. On or about December 3, 1550, you, C.S.G., Inc., licensed under the beverage laws,

      and/or your agent, servant or employee to wit; SAM FERRARA, JR., during the application process, did make a false statement, which he did not believe to be true, under oath, not in an official proceeding, contrary to, F.S. 537.012(1).

      
      

   4. On or about December 3, 1980, you, C.S.G., Inc., licensed under the beverage laws, and/or your agent, servant or employee, to wit; SAM FERRARA, JR., during

      the application process, did falsely swear to a material statement, which you signed

      under oath or affirmation, including,

      but not limited to, the names and addresses of the owners of the licensee or applicant, contrary to F.S. 559.791.

      
      

   5. On or about December 3, 1980, you C.S.G., Inc., licensed under the beverage laws, and/or your agent, servant or employee, to wit; SAM FERRARA, JR., during the

      application process, did knowingly make a false statement in writing with the intent to mislead a public servant in the per formance of his official duty, contrary to F.S. 537.06.

      
      

   6. On or about February 17, 1951, you, C.S.G., Inc., licensed under the beverage laws, failed to disclose the names and addresses of persons interested directly or indirectly with you in the business for which your beverage license was issued, contrary

to F.S. 561.17, more specifically Use interest of CHARLES PITISCI and EUGENE O'STEEN.

The parties submitted proposed findings of fact and conclusions of law. To the extent these proposed findings have not been adopted or otherwise incorporated herein, they have been rejected as irrelevant or inconsistent with the evidence.

FINDINGS OF FACT

1. Respondent, C.S.G., Inc., d/b/a The Arena, holds alcoholic beverage license no. 62-427, Series 4-COP. The licensed premises is located at 4469 49th Street North, St. Petersburg, Florida. During the period relevant to this proceeding, Sam I. Ferrara, Jr. was the sole officer and stockholder of C.S.G, Inc.

2. On November 19, 1980, prior to Ferrara's purchase of the C.S.G., Inc., Eugene O'Steen submitted a license application for transfer of alcoholic beverage license no. 62-427, from Edward Mickler, Jr. to C.S.G., Inc., showing O'Steen as the sole corporate officer and stockholder of C.S.G., Inc., and Ferrara as the manager. O'Steen's license application was not accepted as the application end accompanying documentation were incomplete. The initial application included a lease for the licensed premises signed by O'Steen over the whited-out signature of Sam I. Ferrara, Jr., dated October 9, 1980.

   
   

3. O'Steen had negotiated the purchase of beverage license no. 62-427 from Edward Mickler, Jr., for $78,500. O'Steen intended to fund the purchase with a

   $2,000 down payment from personal assets and a $76,500 loan from the Central Bank of Tampa. However, O'Steen voluntarily withdrew his application on November 26, 1980, due to the possible filing of criminal charges which could have resulted in denial of the application.

   
   

4. On the same day that O'Steen withdrew his application, Ferrara initiated a new application for transfer of alcoholic beverage license no. 62-

427. Ferrara's application was also in the name of C.S.G., Inc. showing Ferrara as the sole corporate officer and stockholder of this corporation.

1. On December 2, 1980, Ferrara advised Petitioner's Beverage Officer Maggio that he, Ferrara, had negotiated the same contract to purchase beverage license no. 62-427, as had O'Steen. Said beverage license was to he purchased by Ferrara (C.S.G., Inc.) for a total of $78,500. A deposit of $2,000 had been made and a balance of $76,500 was due at closing on purchase of this license.

   
   

2. Ferrara further advised that he (C.S.G., Inc.) was obtaining an $80,000 loan from the Central Dank of Tampa to finance the purchase of the beverage license and that he (C.S.G., Inc.) was obtaining a $20,000 loan from Attorney Matthews to reimburse O'Steen for remodeling expenses incurred on the licensed premises.

   
   

3. On December 3, 1980, Ferrara submitted a personal questionnaire (PX-10) listing finances concerning the license application as follows:

   
   

   Central Bank of Tampa $80,000

   Eugene O'Steen - [Crossed through] $20,000 John Matthews - $20,000

   
   

4. On December 3, 1980, Ferrara provided Beverage Officer Maggie with a completed license application (PX-9) together with a letter of commitment for a loan to C.S.G., Inc. in the amount of $80,000 signed by Orlando Garcia, President of the Central Bank of Tampa. This letter was dated December 3, 1980 (PX-1)

   
   

5. On December 3, 1980, Ferrara was questioned by Beverage Officer Maggie as to the completeness and accuracy of his license application (PX-9) and his personal questionnaire (PX-10) Ferrara advised Maggie on that date that both referenced documents were complete and accurate. Additionally, on the same date, Maggie reviewed with Ferrara his answers to all questions and both of the referenced documents. Ferrara's answers contained in the referenced documents were sworn and made under oath.

6. Section 7 of Ferrara's license application (PX-9) reads:

   
   

   List below the names of all those connected, directly or indirectly, in the business for which the license is sought: (This includes partner(s), spouse, director(s), stockholder(s), chief executive, limited and general partner(s), corporation(s), or any form of entity which is connected with the business.

   
   

   Name office (if corporation) or other title if any.

   
   

   Nature of interest including stock percentage.

   
   

7. In response to this question, on his license application (PX-9), Ferrara identified himself as President, Secretary, Treasurer and 100 percent stockholder. No other person or entity was listed as interested directly or indirectly.

   
   

8. Subsequent to December 3, 1980, Beverage Officer Maggio transmitted Ferrara's license application (Px-9) and related documentation to Petitioner's Tallahassee office with a recommendation that the application be approved.

   
   

9. Thereafter, on December 5, 1980, C.S.G., Inc. was issued a temporary beverage license. The permanent beverage license, number 62-427, Series 4-COP, was issued on January 7, 1981.

   
   

10. On December 1, 1980, prior to the letter of commitment from the Central Bank of Tampa (PX-1), and Ferrara's submission of his license application (PX-9) and personal questionnaire (PX-10), and also prior to Ferrara's oral statements to Beverage Officer Maggio, the Central Bank of Tampa issued a loan closing statement (PX-8) concerning C.S.G., Inc.'s (Ferrara)

    $80,000 loan.

    
    

11. This loan closing statement (PX-8) reflected an $80,000 loan to C.S.G., Inc. and P & O, Inc. jointly, not solely to C.S.G., Inc. as indicated in the loan commitment letter (PX-1), Ferrara's oral statement, and Ferrara's license application (PX-9). Said loan closing statement reflected collateral for this loan which included beverage license no. 62-427, Series 4-COP (C.S.G., Inc. license) and an alcoholic beverage license held by P & O, Inc.

    
    

12. On December 5, 1980, a bank note, number 55-25549 (PX-6) was executed in the amount of $80,000 with C.S.G., Inc. and P & O, Inc. as co-makers. This note was signed by Ferrara on behalf of C.S.G., Inc., and by Charles and Olga Pitisci on behalf of P & O, Inc. Said note (PX-6) corresponds to the loan closing statement dated December 1,1980 (PX-8).

    
    

13. Pursuant and subsequent to the execution of the bank note discussed above (PX-6), a cashier's check, number 312768 (Px-3), was drawn on the Central Bank of Tampa and issued December 5, 1980 to C.S.G., Inc. and P & O, Inc. jointly, in the amount of $70,278.25. This cashier's check represented the proceeds from the loan generated on bank note 55-25549 (PX-6). These proceeds were deposited in the Central Bank of Tampa to the account of C.S.G., Inc.

14. On December 5, 1980, a separate cashier's check (PX-2) number 312502 was issued by the Central Bank of Tampa payable to Edward Mickler, Jr in the amount of 576,500. Funds for this check came from C.S.G., Inc.'s account. The purpose of this check (PX-2) was to pay the balance of the purchase price due on beverage license no. 62-427.

    
    

15. On December 5, 1980, another cashier's check (PX-4) number 312503 was issued by the Central Bank of Tampa in the amount of 52,775.25, to C.S.G., Inc. This check represented the balance of the loan proceeds from the Central Bank to P & O, Inc. and C.S.G., Inc. jointly (See PX-2 and PX-6).

    
    

16. Collateral pledged as security for said loan (PX-6) includes real property of P & O, Inc., a beverage license of P & O, Inc., the beverage license of C.S.G, Inc., together with certain equipment of C.S.G., Inc. P & O, Inc. and C.S.G., Inc. executed a mortgage to the Central Bank of Tampa to secure said lean (PX-6) and the Central Bank of Tampa, effective December 5, 1980, insured said lean in the amount of 575,000 as evidenced by a fund mortgage form (Px-5)

    
    

17. Neither C.S.G., Inc., the Central Bank of Tampa nor Ferrara in his oral statements to Petitioner's representative, disclosed the fact that P & O, Inc. was a co-maker of the $50,000 loan (PX-6) from the Central Bank of Tampa, or that P & O, Inc. had pledged real property and a beverage license as collateral for said loan.

    
    

18. At all times pertinent to this procedure, P & O, Inc. was owned by Charles Pitisci, Olga Pitisci and Carlten O'Steen. At all times pertinent Charles Pitisci, Olga Pitisci and Eugene O'Steen were corporate officers of P & O, Inc.

    
    

19. The testimony of Ferrara and Eugene O'Steen established that a close personal relationship existed between Ferrara and the owners of P & O, Inc. Ferrara's testimony established that the Central Hank of Tampa demanded additional security, and that P & O, Inc. principals cosigned the note as a personal favor to Ferrara and not to obtain an interest in the licensed business. This evidence was not rebutted by Petitioner.

    
    

20. Ferrara did not believe he was under any duty to disclose the role of the Pitiscis and P & O, Inc. with respect to the Central Bank of Tampa loan since he did not believe they had acquired any direct or indirect interest in C.S.G., Inc. or beverage license no. 62-427.

    
    

    CONCLUSIONS OF LAW

    
    

21. Section 561.17, Florida Statutes, requires an applicant for an alcoholic beverage license to disclose, on request by Petitioner, the name of any person directly or indirectly interested in the application. Petitioner's application form submitted and sworn to on behalf of Respondent by Ferrara requires such disclosure. Any material misrepresentation in this regard is a false statement in violation of Sections 559.791, 562.45, 837.012 and 837.06, Florida Statutes. Such violation is a basis for license revocation. Section 561.29, Florida Statutes.

22. The evidence herein did not establish what interest, if any, P & O, Inc. and/or the Pitiscis held or acquired in the licensed business. In proceedings such as this which involve penal statutes, violation may not be found as problematic evidence. Bowling v. Department of Insurance, 394 So.2d 165, 172 (Fla. 1st DCA 1981). The mere loan of credit does not by itself establish any direct or indirect interest within the meaning of the above cited provisions. See Westerman v. Shell's City, Inc., 265 So.2d 43 (Fla. 1972).

    
    

23. Since there was no interest in the licensed business beyond that shown in Respondent's sworn application, there can be no finding of failure to disclose. Therefore, Respondent is not guilty of perjury, false swearing, making a false official statement or material misrepresentation.

RECOMMENDATION

From the foregoing findings of fact and conclusions of law, it is RECOMMENDED:

That Petitioner enter a final order dismissing the Administrative Complaint/Notice to Show Cause.

DONE and ENTERED this 28th day of June, 1982 at Tallahassee, Florida.

R. T. CARPENTER, 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 28th day of June, 1982.

COPIES FURNISHED:

John A. Beggs, Esquire Department of Business Regulation

725 South Bronough Street Tallahassee, Florida 32301

Paul Antineri, Jr., Esquire 601 E. Twiggs Street Tampa, Florida 33602

Charles A. Nuzum, Director Division of Alcoholic Beverages

and Tobacco Department of Business Regulation

725 South Bronough Street Tallahassee, Florida 32301

Gary R. Rutledge, Secretary Department of Business Regulation

725 South Bronough Street Tallahassee, Florida 32301

Docket for Case No: 81-002769

Orders for Case No: 81-002769