STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WASH & DRY VENDING COMPANY, )

)

Petitioner, )

)

vs. ) CASE NO. 82-524

) DIVISION OF ALCOHOLIC BEVERAGES ) AND TOBACCO, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly- designated Hearing Officer, R. L. Caleen, Jr., held a formal hearing in this case on March 31, 1982, in Miami, Florida.

APPEARANCES

For Petitioner: Lawrence H. Rogovin, Esquire

1175 Northeast 125 Street North Miami, Florida 33161

For Respondent: James N. Watson, Jr., Esquire

725 South Bronough Street Tallahassee, Florida 32301

ISSUE PRESENTED

Whether petitioner's application for a wholesale cigarette dealer's permit should be granted, or denied on the ground that two of its corporate officers lack good moral character.

BACKGROUND

On February 10, 1982, petitioner Wash & Dry Vending Company ("Applicant") requested an administrative hearing on the decision of respondent Division of Alcoholic Beverages and Tobacco ("DABT") to deny its application for a wholesale cigarette dealer's permit. DABT's decision was based on its finding that "two of the owners [of Applicant are] not believed to be of good moral character."

DABT referred this case to the Division ,of Administrative Hearings on February24, 1982. Hearing was thereafter set for March 31, 1982.

At final hearing, Applicant called Marlene Kantor, Jay Rossin, Robert J. Randall, and Eugene Milgram; it offered Petitioner's Exhibit 1/ Nos. 1 through

5 into evidence, each of which was received. DABT called no witnesses but offered Respondent's Exhibit 1/ Nos. 1 and 2 into evidence, each of which was received.

By April 9, 1982, the parties filed posthearing proposed findings of fact and conclusions of law.

Based on the evidence presented at hearing, the following facts are determined:

FINDINGS OF FACT

1. In November, 1981, Applicant corporation applied to DABT for a wholesale cigarette dealer's permit. (P-1.)

   
   

2. Applicant is owned by Marlene Kantor (50 percent) and Eugene and Charlotte Milgram (50 percent). Marlene Kantor is the president and chief executive officer; Eugene Milgram is the secretary-treasurer. (Testimony of Milgram, Kantor; P-1.)

   
   

3. In January, 1982, DABT disapproved Applicant's permit application on the ground that two of the owners lacked good moral character. By letter dated February 12, 1982, DABT explained:

   
   

   The basis for the denial under moral char- acter is that these two individuals [Eugene and Charlotte Milgram] are corporate officers in a beverage licensed establishment which has had its beverage license revoked. (P-4.)

   
   

   The parties agree that, in all other respects, Applicant is qualified for the requested wholesale cigarette dealer's permit. (Prehearing Stipulation; P-2, P- 3, P-4.)

   
   

4. In 1981, Eugene and Charlotte Milgram were stockholders and corporate officers of a licensed alcoholic beverage establishment known as the Palace Bar and Lounge, Inc., d/b/a Palace Bar ("Palace Bar" or "licensee") located in Miami, Florida. In that year, DABT instituted an administrative action against Palace Bar for alleged violations of the Beverage Law, Chapter 561, Florida Statutes. By Final Order dated July 2, 1981, in State of Florida Department of Business Regulation, Division of Alcoholic Beverages and Tobacco v. Palace Bar and Lounge, Inc., d/b/a Palace Bar, DOAH Case No. 81-501, DABT revoked the alcoholic beverage license of Palace Bar on the ground that it was negligent and failed to exercise due diligence by not taking necessary steps to prohibit illicit drug activity on the premises. The order indicates that several illicit drug transactions occurred between undercover agents and patrons of the bar during a 13-day period; that none of the transactions exceeded $25; that the licensee did not condone this activity; that measures (although subsequently proved inadequate) had been taken to prevent drug activity on the premises; that there was no showing that the licensee participated in or had direct knowledge of the patrons' illicit drug activities; and that owners of the licensee-- whose visits to the premises were infrequent--left the management of the licensed premises (during the period in question) in the hands of its full-time bar manager. This DABT order has been appealed to the Third District Court of Appeal. (R-2, P-5.)

   
   

5. Since 1966, Eugene Milgram has owned and operated Wash & Dry Vending Company, a company which owns and maintains laundry equipment in apartments and institutions. He and Charlotte Milgram, his wife, have reputations in the Miami area as honest people. Business loans which they have obtained have been timely repaid; because of their good record, Barnett Bank of South Florida would, if

   requested, extend to them an unsecured line of credit of up to $500,000. (Testimony of Randall, Rossin, Milgram.)

   
   

6. During the years the Milgrams operated the Palace Bar and Wash & Dry Vending Company, they complied with all federal and state tax reporting requirements. Internal Revenue Service audits of their tax records did not reveal any significant deficiencies. (Testimony of Rossin.)

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. Section 120.57(1), Fla. Stat. (1981).

   
   

8. Section 210.15(c), Florida Statutes (1981), provides that a wholesale cigarette dealer permit "shall be issued only to persons of good moral character." Id.

   
   

9. Identical statutory language used in the Beverage Law, Section 561.15(1) , Florida Statutes, was construed in Zemour, Inc. v. State Division of Beverage, 347 So.2d 1102, 1105 (Fla. 1st DCA 1977):

   
   

   Moral character, as used in this statute [the Beverage Law] , means not only the ability to distinguish between right and wrong, but the character to observe the difference; the observance of the rules of right conduct, and conduct which indi- cates and establishes the qualities gen- erally acceptable to the populace for positions of trust and confidence. An isolated unlawful act or acts of indis- cretion wherever committed do not neces- sarily establish bad moral character.

   
   

   Further, the court cited with approval the holding of white v. Beary, 237 So.2d

   263 (Fla. 1st DCA 1970):

   
   

   What constitutes good moral character is a matter to be developed by facts, .

   
   

   Zemour, supra at 1103.

   
   

10. In licensing cases, the burden is upon the applicant to demonstrate its entitlement to the requested permit. See, Rule 28-6.08(3), F.A.C.; Department of Transportation v. J.W.C. Company, Inc., 396 So.2d 778 (Fla. 1st DCA 1981) . Here, Applicant has met this burden. The evidence is uncontroverted that Eugene and Charlotte Milgram have earned reputations as honest and trustworthy citizens of the community. The revocation of the Palace Bar alcoholic beverage license does not establish otherwise. As owners of the beverage licensee, they neither condoned, had knowledge of, nor participated in illicit drug activity on the premises; they were simply negligent in not more closely supervising the licensed premises. Under such circumstances, negligence cannot be translated into a lack of good moral character.

    
    

11. The proposed findings of fact submitted by the parties which are incorporated in this Recommended Order are adopted; otherwise, they are rejected

as unnecessary to resolution of the issues presented or unsupported by the evidence.

RECOMMENDATION

Based on the foregoing, it is RECOMMENDED:

That the requested wholesale cigarette dealer's permit be issued.

DONE AND RECOMMENDED this 15th day of April, 1982, in Tallahassee, Florida.

R. L. CALEEN, JR. 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 15th day of April, 1982.

ENDNOTE

1/ Petitioner's and Respondent's Exhibits will be referred to as "P- ," and "R- ," respectively.

COPIES FURNISHED:

Lawrence H. Rogovin, Esquire Captain John Harris 1175 Northeast 125 Street Division of Beverage

North Miami, Florida 33161 1350 Northwest 12 Avenue

Miami, Florida 33136

James N. Watson, Jr. , Esquire

Department of Business Charles A. Nuzum, Director Regulation Division of Alcoholic

725 South Bronough Street Beverages and Tobacco Tallahassee, Florida 32301 725 South Bronough Street

Tallahassee, Florida 32301

Docket for Case No: 82-000524

Orders for Case No: 82-000524