STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 83-1855

)

ROBERT PAULEY, d/b/a )

TREEHOUSE SALOON, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal administrative hearing was conducted in this matter on June 16, 1983, in West Palm Beach, Florida. The following appearances were entered:

For Petitioner: Harold F. X. Purnell, Esquire

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

For Respondent: Albert R. Wilber, Jr., Esquire

315 Third Street, Suite 301 West Palm Beach, Florida 33401

On or about June 8, 1983, the Director of the Division of Alcoholic Beverages and Tobacco, Department of Business Regulation, entered an emergency order suspending the alcoholic beverage license of Robert Pauley, d/b/a Treehouse Saloon. The Respondent requested an immediate post-suspension hearing. The hearing was scheduled as set out above.

The Petitioner called the following witnesses at the hearing: Frank Comisso, the District Supervisor of the Petitioner's District 10; J. Thomas Pintacuda, the Chief Forensic Chemist employed with the Palm Beach County Sheriff's Department; and John T. Slavin, an agent employed with the Palm Beach County Sheriff's Department. The Respondent testified as a witness on his own behalf. Petitioner's Exhibits 1 through 4 and Respondent's Exhibits 1, 2, 3, 5, and 7 were offered into evidence and received. Respondent's Exhibit's 4 and 6 were identified but did not become a part of the record.

The parties have submitted post-hearing legal memoranda which include proposed findings of fact and conclusions of law. The proposed findings and conclusions have been adopted only to the extent that they are expressly set out in the Findings of Fact and Conclusions of Law which follow. They have been otherwise rejected as not supported by the evidence, contrary to the better weight of the evidence, irrelevant to the issues, or legally erroneous.

ISSUES

The issues to be resolved in this proceeding are whether the Respondent has committed violations of Florida statutes pertaining to alcoholic beverage licenses, and, if so, what penalty should be imposed. The Petitioner contends that Respondent violated the provisions of Sections 561.29(1)(a) and (c) by condoning and/or negligently overlooking trafficking in illegal, controlled substances on his licensed premises. The Respondent contends that he took all reasonable steps to prevent any unlawful activities from occurring on his licensed premises, and that to the extent any unlawful activities were conducted on his licensed premises, he neither condoned nor negligently overlooked them.

FINDINGS OF FACT

1. Robert Pauley is the holder of Alcoholic Beverage License No. 60-1229, Series 2-COP. The licensed premises is located at 4458 Purdy Lane, West Palm Beach, Florida, and is operated under the name "The Treehouse Saloon".

   
   

2. The Treehouse Saloon is a "topless bar". It offers so-called adult entertainment to members of the public as well as beer and wine for consumption on the premises. The entertainment consists of women who dance nude or semi- nude. The premises includes numerous tables and a bar where patrons sit, pool tables, restrooms, an office where the Respondent conducted business, a disc jockey's booth, and a dance floor where the women performed.

   
   

3. The Treehouse Saloon has been closed since June 8, 1983, when the Petitioner issued an emergency suspension order and notice to show cause.

   
   

4. During May and June, 1983, John T. Slavin, an agent employed with the Palm Beach County Sheriff's Department, was acting in an undercover capacity. He took on the appearance and wore clothes compatible with the role of a member of a motorcycle gang. He had been directed to frequent topless lounges in Palm Beach County and to work undercover to determine if illegal drug activities or prostitution were occurring.

   
   

5. On May 5, 1983, Slavin entered the Treehouse Saloon. During the evening, he made friends with "Duane" who was working in the saloon as a disc jockey. Slavin asked Duane about the prospects of purchasing cocaine. Duane told Slavin that that could be arranged and that it would cost $60 for three- fourths of a gram. Slavin gave Duane $60. Duane left the disc jockey area and approached one of the dancers whose name was "Barbara." Duane then returned to Slavin and advised him that the "product" was on the way. A short time later, Barbara approached Duane, then Duane brought a matchbox to Slavin. The matchbox contained a transparent plastic bag with white powder in it. After he left the bar, Slavin 7 field-tested the "product" then turned it over to a chemist employed with the Sheriff's Department. The "product" was cocaine. The sale was made at approximately 2:00 a.m.

   
   

6. On or about May 12, 1983, Slavin entered the Treehouse lounge at approximately 11:45 p.m. He saw Duane and asked whether Duane was "playing oldies." This was a signal meaning that Slavin wished to purchase more cocaine. Duane said that he was "playing oldies nightly" and asked Slavin how much he wanted. Slavin handed Duane $60. A short time later, Duane delivered a cigarette pack to Slavin and told Slavin that a cigarette was missing. Slavin found two transparent bags containing a white powder inside the cigarette pack.

   Slavin later field-tested the contents and delivered them to the chemist. The product was cocaine.

   
   

7. On or about May 13, 1983, Slavin returned to the Treehouse Saloon at approximately 11:30 p.m. Shortly after mid- night on May 14, he approached Duane's booth and asked if they could do business. Duane said "yes," but that it would take a little longer for the delivery due to a special event (a "banana eating contest") that was being presented. Slavin gave Duane $60 which Duane put in his pocket. Later that morning, Duane put a pack of matches in Slavin's pocket. Slavin went to the men's room and found two plastic bags with a white powder inside. He later field-tested the contents then delivered them to the chemist. The product was cocaine.

   
   

8. On or about May 18, 1983, Slavin returned to the Treehouse Saloon at approximately 10:30 p.m. He saw Duane at the bar and asked him why he was not in the disc jockey's booth. Duane indicated that he was squabbling with the management and would be taking some time off. Duane asked Slavin if he was interested in "some white" which is a "street name" for cocaine. Slavin asked if Duane could get him a gram. Duane said that he could. Slavin gave Duane

   $80. Later, Duane handed Slavin an aspirin tin. There were two small bags of white powder inside the tin. Slavin later field tested the contents then delivered them to a chemist. The product was cocaine. On this occasion, Duane said that he would be away for a while. Slavin asked Duane who could supply "coke" (cocaine) in Duane's absence. Duane named three dancers: "Linda," "Doree," and "Barbara." Although Duane was not in the disc jockey's booth on that occasion, he did appear to be directing other employees, including dancers, in their activities.

   
   

9. On or about May 19, 1983, Slavin returned to the Treehouse Saloon at approximately 1:00 a.m. He talked to a dancer called "Doree." Doree's actual name is Diana Donnell. Since then, she has been arrested. Slavin asked Doree if she could get him some "coke." She told Slavin that it would cost $40 for a half gram. Slavin asked if he could buy a full gram, and she said "yes." Doree then performed as a dancer, after which Slavin gave her $80. At that time, he was standing right next to the dance floor. A short time later, Doree returned with two small plastic bags which contained a white powder. Later, Slavin

   field-tested the powder and turned it over to the chemist. The product was cocaine.

   
   

10. On or about May 25, 1983, Slavin returned to the Treehouse Saloon shortly after noon. He sat at the bar next to a dancer whose name was "Samantha." Slavin asked her where Doree was, and was told that Doree was not working there anymore. Slavin asked Samantha if she could help him buy a half gram of cocaine. She said "yes" and that it would cost $40. Slavin placed $40 on the bar between them. She placed a cigarette pack on the bar and told him that there was a half gram inside. She took the money. The witness examined the contents of the cigarette pack, removed a plastic bag which contained a white substance, and returned the cigarettes to Samantha. Samantha told Slavin that he could buy from her in the future. Later, Slavin field-tested the product and delivered it to the chemist. The product was cocaine.

    
    

11. Later in the day on May 25, 1983, at approximately 7:30 p.m., Slavin returned to the Treehouse Saloon. He saw Samantha and asked her if he could buy another half gram. She told him it would cost $40. Slavin gave her $40 and she went into the dressing room that was on the premises. When she came out, she gave him a transparent package that had white powder inside. Later, Slavin

    field-tested the contents and delivered it to the chemist. The product was cocaine.

    
    

12. On May 31, 1983, at approximately 10:45 p.m. Slavin returned to the Treehouse Saloon. He talked to a dancer known as "Mama She She." Slavin asked if Samantha was available and was told that she was not there. Maid She She, whose actual name is Michelle West, said that she had "done a line of coke" earlier which was "dirty," but had given her a "good high." She told Slavin that a half gram would cost $40. Shortly after midnight, Slavin gave her $40. He did not receive anything from Mama She She until approximately 3:50 a.m. On several occasions in the interim, Slavin talked to Mama She She about it, but she indicated she was having some difficulty obtaining the cocaine. Eventually, she gave him a clear bag that had powder inside. She told Slavin that she would be working the next day (June 2) from 11:00 a.m. until 7:00 p.m. and that the witness could buy more then. Later, Slavin field-tested the contents of the bag and delivered them to the chemist. The product was cocaine.

    
    

13. On or about June 2, 1983, Slavin returned to the Treehouse Saloon at approximately 3:30 p.m. He saw Mama She She and talked to her. She asked him if he was interested in "a half or a whole." He said "A half." She returned a bit later and said that there was nothing there then, but that if he would wait, she could probably get it. Later, she told Slavin that she was a bit reluctant to sell to him because he had not given her a "line" from his purchases. Slavin told Mama She She that he was buying it for friend to whom he owed money. At approximately 7:30 p.m., Mama She She still had not delivered anything to Slavin. She asked if he could drive her home, which he agreed to do. As they were leaving, another dancer, "Barbie," came in. Barbie asked Slavin if he recognized her. She told him that he had gotten cocaine from her through Duane in the past. Slavin asked if he could get a half gram, and Barbie said "yes." Slavin then took Mama She She home and returned at approximately 8:30 p.m. Barbie gave him a plastic bag with white powder inside. Slavin later field- tested the product and delivered it to the chemist. The product was cocaine.

    
    

14. All of the women that Slavin dealt with at the Treehouse Saloon were dancers. They were either scantily clad or nude. They would dance for three songs on the dance floor, and customers would put money in their garter belts.

    A bartender and a bouncer were also present at the saloon. From time to time, a bartender or the disc jockey would tell a dancer it was her turn. The Respondent had hired the dancers as "independent contractors." Whatever their status at the Treehouse Saloon, the dancers were subject to direction from the Respondent or his managers. A list of rules for dancers provided, among other things, that no hard liquor or drugs were allowed on the premises and that the first offense would result in termination. The dancers were required to sign an "independent contractor agreement." The contract provided that dancers would not be considered an agent or employee of the saloon for any purpose. Despite these provisions, the dancers were clearly subject to direction by the bartender or disc jockey at the saloon. In addition, they were required to wait on tables, to circulate among customers, to work their complete shifts, to tip the bartender, and to perform other functions. They were clearly subject to the supervision and control of the Respondent, the bartender, or the disc jockey.

    
    

15. When Slavin made the cocaine purchases described above, he communicated with Duane or the dancers in a normal conversational tone. A normal conversational tone in the Treehouse Saloon would he somewhat loud because loud music was constantly playing. The transactions were made in a somewhat secretive manner. A person who was carefully observing or monitoring

    the premises, however, would necessarily have been suspicious of Slavin, Duane, and the dancers.

    
    

16. The Respondent did post rules in various locations of the Treehouse Saloon which provided that illicit drugs were not allowed. His dancers' rules provided to the same effect. Other than that, it does not appear that the Respondent took any steps to properly monitor his premises to assure that such activities were not occurring. Given the number of transactions and the nature of the transactions undertaken by Slavin, the transactions would have been observed by a manager who was reasonably observing and monitoring the premises. There is no evidence from which it could be concluded that the Respondent was directly involved in any drug trafficking or that he condoned it. The evidence does, however, establish that he was negligent in not properly monitoring the licensed premises to assure that illegal activities were not being undertaken there.

    
    

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding. Sections 120.57(1), 120.60, Florida Statutes.

    
    

18. Section 561.29(1)(a), Florida Statutes, provides that the Petitioner can revoke or suspend an alcoholic beverage license if the licensee or its agents or employees are permitting persons on the premises to violate any laws of the state or of the United States. Trafficking in cocaine on the licensed premises would constitute violations of Sections 893.13(2)(a)5, 823.01, and 893.13, Florida Statutes. Under Section 561.29(1)(c), Petitioner can suspend or revoke an alcoholic beverage license if the licensee maintains a nuisance on the licensed premises. Places where controlled substances are illegally sold are nuisances. Section 823.10, Florida Statutes.

    
    

19. In order to discipline the Respondent's license, the Petitioner must establish that the Respondent was culpably responsible for the violations that occurred on his premises, or that he condoned wrongdoing or failed to exercise due diligence in supervising and maintaining surveillance over the premises. Golden Dolphin II v. Division of Alcoholic Beverages and Tobacco, 403 So.2d 1372 (5 DCA Fla. 1981); Bach v. Florida State Board of Dentistry, 378 So.2d 34 (1 DCA Fla. 1980); and G & B of Jacksonville, Inc. v. State, 371 So.2d 137 (1 DCA A Fla. 1979). Where there is a persistent or recurring activity on the licensed premises, it can be inferred that the licensee had knowledge of the activity or did not properly supervise his premises. Golden Dolphin II, supra; G & B of Jacksonville, Inc. v. State, 371 So.2d 139 (1 DCA Fla. 1979)

    
    

20. While there is no evidence from which it could be concluded that the Respondent personally engaged in any illegal activities or condoned them, he did not adequately supervise his licensed premises to assure that illegal activities did not take place. If he had adequately supervised his premises, the illegal cocaine transactions could not have occurred in the volume and in the manner that they did occur. The transactions were open, persistent, and recurring.

    The Respondent either took no steps to adequately monitor his premises, or he took no steps to stop the illegal activities. The Respondent's conduct constitutes a violation of Sections 561.29(1)(a) and (c), Florida Statutes.

    
    

21. In determining an appropriate penalty, it should be considered that there is no evidence that the Respondent actually participated in any wrongdoing nor that he condoned it. His violation was a failure to adequately supervise

and monitor his premises. A two-year suspension of Respondent's alcoholic beverage license is appropriate.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is, hereby,

RECOMMENDED:

That a final order be entered by the Division of Alcoholic Beverages and Tobacco, Department of Business Regulation, finding the Respondent guilty of the violations alleged in the notice to show cause and suspending his beverage license for a period of two years.

RECOMMENDED this 14 day of July, 1983, in Tallahassee, Florida.

G. STEVEN PFEIFFER Assistant Director

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 14th day of July, 1983.

COPIES FURNISHED:

Harold F. X. Purnell, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

Albert R. Wilber, Jr., Esquire

315 Third Street, Suite 301 West Palm Beach, Florida 33401

Mr. Gary R. Rutledge, Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

Mr. Howard M. Rasmussen, Director Division of Alcoholic Beverages

and Tobacco

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

Docket for Case No: 83-001855

Orders for Case No: 83-001855