STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 83-1245

) UPTOWN, INC. d/b/a 100 WEST ) WASHINGTON, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this matter before Marvin

E. Chavis, duly designated Hearing Officer of the Division of Administrative Hearings, on July 22, 1983, in Orlando, Florida.

APPEARANCES

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

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

For Respondent: Mr. George Cooper

4627 Parma Court

Orlando, Florida 32811 ISSUES AND BACKGROUND

This case involves the issue of whether the Respondent's special restaurant license for the sale of alcoholic beverages should be suspended, revoked or otherwise disciplined for multiple violations of the beverage laws and rules relating to the operation of a licensed premises under a special-restaurant license. The Respondent is also charged with failure to maintain proper records and the unlawful purchase of alcoholic beverages after having been prohibited from doing so by the Division of Alcoholic Beverages and Tobacco.

At the formal hearing, the Respondent was represented by Mr. George Cooper, the president and 50 percent owner of the Respondent corporation. After proper inquiry, it was determined that Mr. Cooper was in fact a proper representative of the corporation. At the formal hearing, the Respondent requested an opportunity subsequent to that date to present evidence on its own behalf. The Respondent, as grounds for that motion, indicated that it had been attempting to retain counsel and had been unable to do so. It was stipulated and agreed by and between the Petitioner and the Respondent that the Petitioner would present its evidence at the formal hearing as scheduled and that following the hearing the Respondent would be given an opportunity if it desired at a subsequent

hearing time and date to present its evidence. Pursuant to this stipulation, it was ordered by the Hearing Officer that the Respondent submit in writing within

10 days of July 22, 1983, a request to schedule another hearing date if the Respondent desired to present further evidence. Respondent failed to file any written pleading and failed to notify the Hearing Officer as to whether further proceedings were necessary and whether Respondent in fact intended to present further evidence. On August 25, 1983, the undersigned Hearing Officer served upon the Petitioner and Respondent an Order to Show Cause as to why a Recommended Order should not be entered upon the evidence presented by the Petitioner at the previous hearing on July 22, 1983. That Order reflected that upon failure of the parties to file a pleading showing cause as to why such a Recommended Order should not be entered that the undersigned Hearing Officer would proceed to enter a Recommended Order based on the evidence presented at the July 22, 1983, hearing. Respondent was served by mail with a copy of that Order to Show Cause and failed to file any response to that Order. Therefore, this Recommended Order is being entered upon the evidence presented by the Petitioner and the cross examination of that evidence by the Respondent at the formal hearing.

FINDINGS OF FACT

1. At all times material to this proceeding the Respondent held beverage license number 58-01528, SRX, Series 4COP. This license was issued to licensed premises located at 100 West Washington, Orlando, Florida. This is a special restaurant license.

   
   

2. The above license expired on September 30, 1982, and was renewed for one year. The check given to the Division of Alcoholic Beverages and Tobacco in payment for the fees necessary to renew the license was deposited for collection by the Division and was returned dishonored for insufficient funds. The license was retrieved by the Division on November 8, 1982, and because the fee has not been paid the license remains in the possession of the Division. At the time the Respondent failed to make good on the check or to otherwise pay the renewal fee, there were charges pending against the Respondent's license. Respondent had been notified of pending charges of violation of the beverage laws prior to September 30, 1982.

   
   

3. On June 10, 1982, Beverage Officer Maria Lynn Scruggs visited the Respondent's licensed premises to conduct a routine special restaurant license inspection. Upon arriving at the licensed premises, Officer Scruggs requested the liquor and food invoices. One of the employees stated that there were no such invoices on the licensed premises. Walter Brown, vice-president of the Respondent corporation, stated that the Invoices were at the accountant's office. These invoices are required to be kept on the licensed premises for a period of 3 years and no permission had been obtained by Respondent to remove the invoices from the licensed premises.

   
   

4. During this routine inspection, Officer Scruggs was assisted by Beverage Officers Ken Rigsby and Ron Westcoat. After being unable to review invoices the three officers counted the chairs in the licensed premises and inspected the kitchen area. There was a total of 154 chairs on the licensed premises. In the kitchen, there was found to be an approximately one pound container of frozen fish, ten #10 cans of pork and beans, ten to twelve heads of lettuce, one 1 pound bag of french fries, approximately ten pounds of cooked chicken, and approximately four pounds of cooked pork ribs. The cook, Mr. John Burk, showed Officer Scruggs an invoice for the following items which had been ordered: roast beef, American cheese, two cucumbers, mayonnaise, and two hams.

   There was a salad bar set up near the bar with items such as onions, mushrooms, and bell peppers. There was less than a cup of each item.

   
   

5. An inspection of the silver and plates revealed that there were 113 plates, 24 coffee cups, and 25 water glasses. There was adequate silver as required under the beverage rules. At the time of this inspection, the licensed premises was not open for business. The liquor on premises could not be inventoried because the liquor cabinet was locked. This inspection took place from approximately 10:30 p.m. to 12:00 or 12:30 p.m.

   
   

6. Shortly after the June 10, 1983, inspection, the specific date being unknown, Officer Scruggs returned to Respondent's license premises to complete the inspection. Upon inspecting the liquor inventory, Officer Scruggs found that most of the bottles had ABC Liquor Stamps reflecting that the bottles of liquor had been purchased from another retailer. The Respondent at this time was on a "no sale" list which prohibited the licensee from purchasing alcoholic beverages from another retailer or wholesaler while on that list. Licensees who appear on the "no sale" list are placed there because of failure to clear a delinquent account within the specified time. The Respondent had been on the "no sale" list since October 14, 1981, and had been informed by letter on October 14, 1981, that it had been placed on the "no sale" list. The liquor which was inventoried by Officer Scruggs had recently been purchased from either ABC Liquors or Liquor World.

   
   

7. On this second visit, Officer Scruggs was able to review the Respondent's invoices for the period July 1981, through June 1982. These invoices revealed total sales of $193,566.99 during that period. Of that total, liquor sales represented $145,639.55 and food sales totaled $47,927.44. During the period July 1981 through June 1982, food sales accounted for 25 percent of Respondent's gross sales while alcoholic beverages accounted for 75 percent of its gross sales. The invoices as kept by the Respondent were not separated as required by the beverage rules and had to be separated prior to arriving at the above totals.

   
   

   CONCLUSIONS OF LAW

   
   

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

   
   

9. Pursuant to Florida Statute 561.29 (1981) the Division of Alcoholic Beverages and Tobacco is empowered to discipline licensee holding beverage licenses for violations of the beverage law or rules promulgated thereunder.

   
   

10. In the instant case, Count 1 of the Notice to Show Cause charges the Respondent with a violation of Rule 7A-3.14, Florida Administrative Code, which provides in relevant part:

    
    

    In addition to the record keeping requirements for purchase and sale of alcoholic beverages contained in these rules, the restaurant shall maintain a separate and complete record of all purchases and sales of food and non- alcoholic beverages which shall be maintained on the premises, or other designated placed approved by the Division, for period of three years.

    A violation of the above rule constitutes a violation of Section 561.29(1)(e), Florida Statutes (1981).

    
    

11. On June 10, 1982, the Respondent did not have the records required under the above rule on the licensed premises. These records according to Respondent's vice-president were at the Respondent's accountant's office. No approval had been obtained from the Division to maintain or keep these records at a place other than the licensed premises. When these records were subsequently produced by the Respondent, they were not separated as required by Rule 7A-3.14, Florida Administrative Code. Under these facts the Respondent is guilty of a violation of Rule 7A-314, Florida Administrative Code, and thus 561.29(1) Florida Statutes (1981)

    
    

12. Counts 2, 3, and 4 charge Respondent with violations of subparagraphs (3)(d) and (3)(e) of Rule 7A-3.15, Florida Administrative Code. Those two subparagraphs provide as follows:

    
    

    (d) The business is advertised and held out to the public to be a place where meals are prepared and served, space being provided with adequate kitchen and dining room equipment and having employed such number and kinds of employees for preparing, cooking and serving meals for guests; the primary operation of such restaurant shall be for the preparation, cooking and serving of meals and not for the sale of alcoholic beverages.

    
    

    (d) The restaurant shall be equipped with the necessary china and tableware and seating to handle the minimum seating special act.

    
    

    House Bill Number 1891, a Special Act relating to the City of Orlando and Orange County, Florida, provides that within the limits of Orlando and Orange County only those restaurants "having accommodations for service of 200 or more patrons at tables may qualify for a special restaurant license" such as the license involved in this case. House Bill 1891 is the special act referred to in subparagraph 3(e) quoted above.

    
    

13. In the instant case, the facts reveal that the Respondent did not have adequate seating, china, or tableware to serve 200 patrons. There was also inadequate food on the premises to serve 200 full course meals and with the additional food ordered but not delivered the food supplies would also not have been sufficient to serve 200 full course meals. These facts constitute violations of Rule 7A-3.15(3)(d) and (e) and thus a violation of Section 561.29(1)(e), Florida Statutes (1981).

    
    

14. Count 5 of the Notice to Show Cause charges Respondent with purchasing alcoholic beverages in violation of Florida Statute 561.42(5) which provides:

    
    

    Upon receipt by the division from

    the distributor of the notice of non- payment provided for by subsection (3),

    the division shall forthwith notify such delinquent vendor and all distributors in the state that no further purchases or sales of liquor by or to such vendor, except for cash,

    shall be made until good cause be shown by such vendor as hare to fore provided for. No liquor shall be purchased by such vendor or sold to him by any distributor, except for cash, from and after such notification by the division and until such cause be shown as is provided for in subsection (4). In the event no good cause be shown, then all further sales, for cash or credit are hereby prohibited after such declaration in writing by the division is sent to such vendor and distributors and until all delinquent accounts have been paid.

    
    

    Shortly after June 10, 1982, Officer Scruggs inventoried the liquor at the Respondent's licensed premises. At this time, the Respondent was on a "no sale" list and had been prohibited from purchasing alcoholic beverages from another retailer or wholesaler since October 14, 1981. The liquor on hand had been recently purchased from ABC Liquors or Liquor World. These purchases constitute violations of Section 561.42(5) and thus a violation of Section 561.29(1)(b), Florida Statutes (1981).

    
    

15. Under Count 6 of the Notice to Show Cause the Respondent is charged with violating Florida Statute 561.20(2)(a)3 (1981) and Rule 7A-3.15(3)(b). Section 561.20(2)(a)3 provides that in order to qualify for a special restaurant license, a licensee must derive at least 51 percent of its gross revenue from the sale of food and nonalcoholic beverages. Rule 7A-3.15(3), Florida Administrative Code sets forth the criteria for determining if the holder of a special restaurant license is in fact operating as a bone fide restaurant. Subsection (b) of Rule 7A-3.15(3) provides:

    
    

    The restaurant must derive at least

    51 percent of its gross revenue from the sale of food and nonalcoholic beverages,

    except those restaurants issued special restaurant licenses prior to April 18, 1972 which shall be required to derive

    at least 30 percent of its gross revenue from the sale of food and nonalcoholic

    beverages. The 51 percent or 30 percent shall be determined by taking the average monthly gross revenue of the sale of food and nonalcoholic beverages over a period

    of any calendar year.

    
    

    In the instant case, the Respondent fell substantially below the 51 percent requirement for the period duly 1981, through June 1982. The Respondent derived only 25 percent of its gross revenues for that period from the sale of food and nonalcoholic beverages. This constitutes a clear violation of Section 561.20(2)(a) 3, Florida Statutes (1981) and Rule - 7A-3.15(3)(b) Florida Administrative Code.

16. Penalty: License revocation is an extreme and drastic penalty which should be applied only in the most flagrant cases. Taylor v. State Beverage Department, 194 So.2d 321 (Fla. 2d DCA 1967). The majority of the charges in the instant case go to the question of whether Respondent maintained a bona fide restaurant operation in order to continue to qualify for its special restaurant license. See Department of Business Regulation, Division of Beverage v. Huddle, Inc., 342 So.2d 140 (Fla. 1977). The facts revealed that not only did Respondent fall well below the 51 percent of gross sales from nonalcoholic sales for a one year period, but failed to have the necessary seating, equipment, and food to serve the minimum 200 patrons. Respondent's willingness to purchase alcoholic beverages from another retaizzz1er while on the "no sale" list reinforces the conclusion that Respondent was not operating a bona fide restaurant as required under Section 561.20, Florida Statutes (1981), but was in fact using its restaurant and food sales as a mere pretext in order to obtain its beverage license and operate a bar. Under these circumstances, it is concluded that revocation of Respondent's special restaurant license is an appropriate remedy.

RECOMMENDATION

Based upon the foregoing findings of fact and conclusions of law it is RECOMMENDED:

That the Respondent's beverage license be revoked.

DONE and ORDERED this 28th day of September, 1983, in Tallahassee, Florida.

COPIES FURNISHED:

James N. Watson, Jr., Esquire Department of Business Regulation

725 South Bronough Street Tallahassee, Florida 32301

Mr. George Cooper 4627 Parma Court

Orlando, Florida 32811

MARVIN E. CHAVIS

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 September, 1983.

Mr. Jack Wallace Division of Alcoholic Beverages and Tobacco Post Office Box 17735 Orlando, Florida 32860

Docket for Case No: 83-001245

Orders for Case No: 83-001245