STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 83-3124

) MEL HEIFETZ, D/B/A KEY WESTER INN, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in the above-styled matter before Marvin E. Chavis, duly designated Hearing Officer of the Division of Administrative Hearings, on October 24 and 25, 1983, in Key West, Florida.

APPEARANCES

For Petitioner: Harold F.X. Purnell, Esquire

General Counsel

Department of Business Regulation 725 Bronough Street

Tallahassee, Florida 32301

For Respondent: Charles Curtis, Esquire

1177 Southeast Third Avenue Ft. Lauderdale, Florida 33316

BACKGROUND

This case concerns the issue of whether the Respondent's alcoholic beverage license should be suspended, revoked or otherwise disciplined for multiple violations of the Florida controlled substances law and for maintaining a nuisance on the licensed premises.

At the formal hearing, the Petitioner called as witnesses John Harris, Frank Oliva, Faye Francy, Robert Holloway, Harry Sawyer, Whitney Russel Papy, Patricia Almeda, and Leonard DelMonte. The Respondent called as witnesses Francisco Ramon Oliva, Mel Heifetz (the Respondent), George Snider, Leroy Patrick Saavedra, Elizabeth Carol Mahon, Onelia Alvarez, Nellie Lucille Benton, Amelia R. Boza, Lou Anna Williams, DeAnna A. Carbonelle, Robert Goodman, Rachel Dunnick, William A. Freeman, III, Ruth Sullivan, Lt. Bradley Jacobs, Russel F. Sullivan, Debbie Surprise, Jose A. Roque, and Paul F. Carr. The Petitioner offered and had admitted seven exhibits. The Respondent offered and had admitted ten exhibits. Petitioner's exhibit No. 10 for identification, which was not admitted, was a group of petitions signed by local citizens on behalf of the Inner Circle Lounge.

Counsel for Petitioner and counsel for Respondent submitted proposed findings of fact and conclusions of law for consideration by the Hearing Officer. To the extent that those proposed findings of fact and conclusions of law are inconsistent with the findings of fact and conclusions of law contained in this Order, they were considered by the Hearing Officer and rejected as being not supported by the evidence or being unnecessary to the resolution of this cause.

FINDINGS OF FACT

1. At all times material to the instant case, Respondent was the holder of beverage license No. 54-279-S, Series 6COPS. The license was obtained by the Respondent by transfer in September, 1977. The licensed premises is located at the Key Wester Inn, 975 South Roosevelt Boulevard, Key West, Florida. The Key Wester Inn and the licensed premises are owned and operated by Mr. Mel Heifetz, the Respondent herein.

   
   

2. On September 10, 1983, Beverage Officers Frank Oliva and Leonard DelMonte went to the licensed premises to investigate a complaint of drug sales taking place inside the licensed premises. The officers entered the lounge at approximately 7:00 p.m.

   
   

3. The licensed premises are called the Inner Circle Lounge and consists of three areas. The main portion of the lounge is a large room with a bar along the south wall and a bandstand and dance floor in the northwest corner. The remainder of this area is filled with tables and chairs. To the east of the main bar is a large room which opens onto the main bar area through two large openings. This area contains tables and chairs. To the west of the main bar area is a deck and patio area called the pool bar area.

   
   

4. When the officers arrived at the licensed premises on September 10, they sat on two bar stools at the northwest end of the pool bar. The two officers engaged a white female waitress named Lori Hart in conversation. Eventually the conversation led to a discussion of drugs and Officer Oliva asked if she could sell him some quaaludes. She said that she could not but that she could sell them cocaine if they would return at 10:00 or 10:30 p.m. that evening. She also said that the price would be between $80 and $100 and that she would have to be turned on also. This meant she would inhale some of the cocaine she sold them. The officers agreed and then left. The officers had never met Lori Hart before and no one at the bar had vouched for them or introduced them to her.

   
   

5. At approximately 10:00 p.m., the officers returned to the lounge and sat on two bar stools at the west end of the pool bar. Lori Hart walked up and asked if they still wanted the cocaine and the officers responded "yes." She said the price would be $80. She then asked a bartender named George to tend bar for her. She picked up her purse and walked into the interior bar area and then returned and walked to the area of the bathrooms near the pool. The two officers followed her to the bathroom area. When they reached the bathroom area, the door to the ladies' room was closed. About five to ten minutes later the manager of the lounge, George Font, came to the bathroom area and went into the men's room to wash his hands. He left and a few minutes later came back and knocked on the door to the ladies' room and said "Lori you have customers." After George Font left, Lori Hart came out of the bathroom, and exchanged a packet of cocaine for $80 cash from Officer Oliva.

6. On this particular evening, Pedro Corpion, an off-duty police officer working as a security guard at the licensed premises, was seen in the pool bar area at various times. The location where the exchange took place is a hallway adjacent to the pool area restrooms and is not visible from anywhere in the bar.

   
   

7. On September 16, 1983, Officers Oliva and DelMonte returned to the licensed premises. They were accompanied by Faye Francy of the Monroe County Sheriff's Department. They sat at a table next to the dance floor and adjacent to the north wall of the interior lounge. While seated at the table, a waitress named Linda Carteret took their order for drinks and Officer Oliva asked if she could sell them 2 grams of cocaine. She said she would see what she could do. She later returned to the table and stated she could only get 1 1/2 grams.

   About a half hour later, she returned to the table again and stated that she did not have quite 1 1/2 grams so the price would be $110 rather than $120 as originally stated. Officer Oliva said o.k. and told her that the money was under a napkin on the table. She crouched between his chair and the chair where Faye Francy, who was dancing, had been seated. She placed a small packet of cocaine wrapped in a one dollar bill under Officer Oliva's left leg.

   
   

8. When Linda Carteret crouched at the table and transferred the cocaine, she had her back to the bar area. These actions were being watched by Whitney Russel Papy, an investigator for the state attorney's office, from a table nearer the bar and he could not tell that an exchange or buy had taken place until Officer Oliva, by prearranged signal, got up and left.

   
   

9. Officers Oliva and DelMonte had never met Linda Carteret before and had not been introduced to her before asking to purchase cocaine.

   
   

10. On the evening of September 15, 1983, Officers DelMonte and Oliva returned to the licensed premises. They sat at the west end of the interior bar and ordered drinks. Lori Hart was working behind the bar and at approximately 9:30 a.m., Officer DelMonte and Oliva returned to the licensed premises. They sat at the west end of the interior bar and ordered drinks. Lori Hart was working behind the bar and at approximately 9:30 a.m., Officer DelMonte asked Lori Hart to sell him a gram of cocaine. She said she could get it and a short while later, she returned to where the officers were seated and placed a bulging matchbook on the bar in front of Officer DelMonte. Inside the matchbook was a small plastic baggie containing cocaine. Approximately five minutes later, Officer DelMonte ordered a drink and gave Lori Hart $100. She walked to the register, rang up the drink, and returned and handed him $17.00 in change. The price of the cocaine was $80.00 and the drink cost $3.00. Officer DelMonte placed the matchbook and cocaine in his pocket.

    
    

11. On the evening of September 16, Paul Carr, the manager of the Key Wester Inn, came into the lounge several times. He walked in, looked around the lounge, remained for a few minutes and then left. The band was playing in the lounge this particular evening.

    
    

12. On September 17, 1983, Officers DelMonte and Oliva were again in the licensed premises for the purpose of attempting to purchase drugs. They sat at the east end of the interior bar. Officer DelMonte placed four (4) $20.00 bills in a matchbook and placed it on the bar in front of him. A few minutes later, Lori Hart, who was behind the bar, saw the matchbook and said she would get the stuff. Some of the numbers of one of the twenty dollar bills were showing.

    Lori Hart asked if there was $80.00 in the matchbook and Officer DelMonte responded "yes." She took the matchbook and a short while later placed a napkin in front of Officer DelMonte. Inside the folded napkin was a small plastic

    baggie containing cocaine. Officer DelMonte placed the cocaine and napkin in his pocket.

    
    

13. On this particular evening, off-duty Police Officer Pedro Corbione was working inside the lounge and was out of uniform. He passed the bar area where the officers were seated while the matchbook containing the money was on the bar. However, there was no evidence that Officer Corbione saw the matchbook. The band was playing in the lounge this evening.

    
    

14. Beverage Officers DelMonte and Oliva returned to the licensed premises on September 22, 1983, at approximately 9:15 p.m. They were joined a few minutes later by Deputy Francy of the Monroe County Sheriff's Department. The three officers sat at a table just inside the large sitting area to the east of the interior bar area. The table where they were seated was partially obscured from vision of the bar area by a short wall that extended to the edge of the large entrance way. While seated at the table, Officer Oliva asked Linda Carteret if they could purchase some cocaine. She was on duty as a waitress. A short time later, Lori Hart walked over and asked if they were still interested in a gram of cocaine. Officer Oliva said yes and she asked for $80.00. Officer Oliva told her he didn't think he should be so open and she agreed. She told him to give the $80.00 to Linda who came over a few minutes later and picked up a napkin with the $80.00 beneath it. After taking the money, Linda Carteret returned with a foil packet under a napkin and placed it on the table. The foil packet contained cocaine. Both women were on duty as cocktail waitresses when this transaction took place.

    
    

15. There was nothing suspicious about the actions of the officers or Lori Hart and Linda Carteret during this transaction. The transfer took only a few seconds and the foil packet was not visible beneath the napkin. This was a very secretive transaction and the exchange itself was not observed by Deputy Faye Francy who was seated at the table with Officers Oliva and DelMonte. The area where the officers were seated was dimly lit. The band was playing in the lounge this evening.

    
    

16. On September 28, 1983, Officers Oliva and DelMonte returned to the licensed premises. They entered the lounge at approximately 7:00 p.m. and sat at the same table they had sat at on the evening of September 22. They had first entered the interior bar area and sat at the bar, but after they were joined by Linda Carteret, they went to the table. Officer Oliva asked Linda Carteret to sell them some cocaine and she responded that she had heard rumors that they were police officers. Officer Oliva convinced her that they were not police officers and she then agreed to sell them 1 gram of cocaine for $80.00. She went to the bathroom area and when she returned she placed her hands over Officer Oliva's hands and dropped the plastic baggie containing cocaine into his hands. He then handed her the $80.00. The entire exchange took about 5 seconds.

    
    

17. While this transaction took place, the bar manager, Don Crawford, was seated at the east end of the interior bar with his back to the table where the officers and Linda Carteret were seated. This particular evening, Linda Carteret was not working at the lounge. No indication of a transaction was observed by Harry Sawyer, an investigator with the state attorney's office. Harry Sawyer was in the lounge on September 28 as a backup to Officers Oliva and DelMonte. A band was playing in the lounge on this evening.

    
    

18. Lori Hart had previously worked at the Inner Circle Lounge in 1982. She terminated when she went home to visit her family and was rehired in

    January, 1983. There were no problems with her work in 1982. However, in April, 1982, an administrative complaint was made against the Respondent's license charging that Lori Hart had failed to check the identification of a minor and had sold the minor a drink. She was not terminated at that time because she was needed as a witness in the administrative proceedings. Lori Hart resigned some time prior to September 28, 1983, because she was changed to a different shift and location in the lounge.

    
    

19. Lori Hart was initially hired as a cocktail waitress and was transferred later to bartender. Prior to being hired she was interviewed by the bar manager and by the manager of the Key Wester Inn, who oversees the entire property where the Inner Lounge is located. She was required to obtain and provide the management with an ID card which is obtained from the Key West Police Department. This ID is required for persons working in Key West and in order to obtain an ID, an application with certain background information must be given and a photograph is taken and placed on the ID card. Lori Hart was also required to fill out an employment application for the lounge. On this application, she was required to give background information and references and these were checked by the manager.

    
    

20. At the time she was hired in January, 1983, Lori Hart was required to sign a form which states:

    
    

    As an employee of the Key Wester Inn I understand that it is unlawful to drink alcohol or take any form of drugs that are not prescribed by a doctor during the performance of my shift of work. And further I realize this would be grounds for dismissal.

    
    

    Each employee hired was required to sign such a form. The Inner Circle Lounge and Key Wester Inn had a policy against any drugs on the premises and this policy was explained to all employees when they were hired and was repeated on a continual basis. Employees caught with drugs or alcohol while on duty were terminated under this policy.

    
    

21. Linda Carteret was employed in September, 1983. She was hired the same day she applied because the lounge was short one cocktail waitress. She was interviewed by the bar manager who requested that the manager, Paul Carr, allow him to hire her immediately. Mr. Carr approved the hiring but did not interview her. Linda Carteret was also required to provide the lounge with the ID card obtained from the Key West Police Department and was informed of the policy of drugs and alcohol while on duty.

    
    

22. The Key Wester Inn is owned by Respondent and is managed by Paul Carr, the resident manager. Mr. Carr has 2 years experience in the hotel, restaurant and lounge business. Prior to September 12, 1983, George Font was manager of the lounge. Mr. Font had been asked to resign because of poor performance and it was agreed that September 12, 1983, would be his last day. After Mr. Font left, Don Crawford, originally hired as a cook was promoted to bar manager. He was given no authority or real responsibility because he was considered to be in a training status. Paul Carr, the resident manager actually took over management of the lounge begining September 12. The evidence did not establish that Mr. Font or Mr. Crawford was aware of the drug transactions that occurred in September, 1983. Mr. Paul Carr, the resident manager, had no knowledge of any drug transactions or drug problems in the lounge.

23. The bar manager was in the lounge each night full-time. Paul Carr was at the lounge when it opened and closed and visited the lounge several times each evening at random times. Prior to July or August, Mr. Pedro Carbione, an off-duty Key West Police Officer worked as security officer at the entrance to the lounge. He checked ID's and watched the outside area. In July or August, Officer Corbione, on Paul Carr's recommendation, moved inside the lounge to work security. When he moved inside the lounge, he no longer worked in uniform. The evidence failed to establish that Officer Carbione was aware of any drug transactions taking place in the licensed premises.

    
    

24. The Respondent has held the beverage license in question since 1977. Since that time, there have been no prior charges involving drugs. The only prior charge against the license involved selling to minors.

    
    

25. The Respondent and his staff have cooperated with local authorities in prior drug investigations and the licensed premises enjoy a reputation in the community as a nice, decent place to go and dance. The Inner Circle Lounge is frequented primarily by business people, military officers, and local residents including law enforcement officers. The patrons are primarily thirty to fifty years of age. The lounge does not have a reputation in the community as a place where drugs can be sold or used or as a place frequented by people who use drugs.

    
    

26. At no time prior to service of the Emergency Suspension Order was Respondent or his staff informed of a drug problem in the Inner Circle Lounge by the Division or local authorities.

    
    

27. Lori Hart and Linda Carteret made several statements during the sales and during interrogation after their arrest which indicated some knowledge of the drug sales on the part of George Font and Don Crawford. This evidence was considered by the hearing officer and considered to be of no probative value in light of the total lack of any direct evidence which would show knowledge on the part of those individuals and because of the contradictions between such statements and the very secretive manner in which all the sales were made.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

29. The Division of Alcoholic Beverages and Tobacco is empowered under Florida Statute 561.29 (1981) to discipline a beverage license when the licensee is found to have committed one or more violations enumerated in that section.

    
    

30. In the instant case, the Notice to Show Cause charges the Respondent with the following violations:

    
    

    1. A violation of Florida Statute 893.13(1)(a) and Florida Statute 561.29(1)(a) by the felony sale or delivery of cocaine on the licensed premises by an employee;

    2. A violation of Florida Statutes 561.29(1)(a), 777.011 and/or 777.04 by an employee aiding or abetting and/or conspiring with an employee to sell cocaine on the licensed premises;

    3. A violation of Florida Statutes 561.29(1)(a) and 893.13(2)(a)(5) by main- taining the licensed premises as a place resorted to by persons using controlled substances; and

    4. A violation of Florida Statutes 561.29(1)(c), 561.29(1)(a), 823.10, and

823.01 by maintaining a public nuisance on the licensed premises. Each of these charges arises out of the sale of cocaine by an employee of the licensed premises to an undercover beverage officer on September 10, 15, 16, 17, 22 and 28.

31 Section 561.29(1)(a), Florida Statutes (1981), empowers the Division of Alcoholic Beverages and Tobacco to revoke or suspend an alcoholic beverage license if it finds that the licensee or his agents, servants, or employees are permitting another on the licensed premises to violate any of the laws of this state or the United States. Section 561.01(11) defines the "licensed premises" to include the building area where alcoholic beverages are served and the area embraced within the sketch of the premises attached to the license application. Based upon the evidence, the licensed premises in the instant case is limited to the lounge itself.

1. Cocaine is a controlled substance and it is a violation of state law to sell, use, deliver, or possess it. Section 893.13, Florida Statutes (1981)

   
   

2. Negotiating a sale of a controlled substance or acting as a go between in arranging such a drug transaction is a violation of Florida law and will subject a person committing such acts to a conviction under the criminal laws of Florida. Nadjawski v. State, 371 So.2d 554 (Fla. 2d DCA 1979), State v. Hubbard, 328 So.2d 465 (Fla. 2d DCA 1976), State v. Dent, 322 o.2d 543 (Fla. 1975). Florida Statute Section 776.011. It is also unlawful to aid or abet in the commission of a violation of Chapter 893, Florida Statutes or to conspire with another to commit a violation of that chapter. Florida Statute 777.011 (1981).

3. Florida Statutes 893.13(2)(a)(5) makes it unlawful for any person: To keep or maintain any store, shop,

   warehouse, dwelling, building, vehicle, boat, aircraft, or other structure 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. A violation of this section also constitutes a violation of the Beverage Law through Section 561.29(1)(c), Florida Statutes.

   
   

4. A license may also be disciplined by the Division if the licensee is found guilty of "maintaining a nuisance on the licensed premises." Section 561.29(1)(c), Florida Statutes (1981). Section 823.10 of the Florida Statutes declares a place or building where controlled substances are illegally kept, sold, or used to be a nuisance. Section 823.01, Florida Statutes, declares such a nuisance to be a violation of the criminal laws of the State of Florida.

5. Licensees are not insurers against unlawful acts by their employees. Woodbury v. State Beverage Department, 219 So.2d 47 (Fla. 1st DCA 1969). In order to discipline Respondent's license, the Division of Alcoholic Beverages and Tobacco must prove the Respondent was culpably responsible for the violations alleged; that he is guilty either of intentional wrongdoing, or of condoning wrongdoing or failing to exercise due diligence in supervising and maintaining surveillance over the licensed premises. See, e.g., Bach v. Florida State Board of Dentistry, 378 So.2d 34 (Fla. 1st DCA 1980); Pauline v. Lee, 147 So.2d 359 (Fla. 2d DCA 1962); Golden Dolphin II v. State of Florida, Division of Alcoholic Beverages and Tobacco, 403 So.2d 1372 (Fla. 5th DCA 1981); G. & B. of Jacksonville, Inc. v. State, 371 So.2d 137 (Fla. 1st DCA 1979).

   
   

6. In the instant case, the evidence clearly establishes that two employees of the licensed premises sold cocaine, a controlled substance, to undercover Beverage Officers on the evenings of September 10, 15, 16, 17, 22 and 28, 1983. Each of these sales, except for the sale on September 28, was made while the two women were on duty working as cocktail waitresses at the licensed premises. Each of the sales occurred on the licensed premises. The sole issue remaining is whether the licensee is culpably responsible for the illegal drug sales.

   
   

7. There was no evidence that the licensee was involved in or knowingly condoned the drug activity. Therefore culpability, if it exists, must have been the result of negligence or the failure of the licensee to exercise due diligence. The evidence also failed to establish such negligence.

   
   

8. The transactions which took place were limited to two female employees. Each sale was made in very secretive and surreptitious manner and on several occasions backup officers in the lounge were not able to observe whether a sale had taken place or not. The beverage officers themselves testified that the exchanges took only a very short time and that the actions of the waitresses and the officers were not suspicious or unusual. Cocktail napkins, matchbooks, drink orders, and drink transactions were used very effectively to create an appearance of business as usual.

   
   

9. Both employees had been interviewed and required to obtain an ID card from the Key West police Department. The licensee had had no prior drug related problems of any type with either employee and Linda Carteret had only been working at the licensed premises.

   
   

10. In addition to the bar manager and resident manager, an off-duty police officer was employed to monitor and supervise the licensed premises. A trained police officer is certainly an aggressive step to take when management is not even aware that a drug problem exits.

    
    

11. There was a clear definite policy against the use or possession of drugs by employees. These employees were required to sign a statement of this policy and were reminded regularly of the policy.

    
    

12. The lounge catered to an older, business and professional clientele and was also frequented by off-duty law enforcement personnel. The music and atmosphere in the lounge were geared to this type of patron. These are not the kinds of patrons the licensee should typically expect to be involved in drugs. The licensed premises enjoy a good reputation in the community.

13. Under the circumstances and evidence presented the evidence establishes that the licensee took reasonable steps to screen employees and supervise the licensed premises and is therefore not culpably responsible for the illegal drug sales by Lori Hart and Linda Carteret. The evidence also established that the licensed premises are not a nuisance.

RECOMMENDATION

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

That the Respondent be found NOT GUILTY of the violations charged in the Notice to Show Cause and that the charges be dismissed and the license immediately restored.

DONE and ENTERED this 15th day of November 1983, in Tallahassee, Florida.

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 15th day of November, 1983.

COPIES FURNISHED:

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

Charles L. Curtis, Esquire 1177 S.E. Third Avenue

Ft. Lauderdale, Florida 33316

Howard M. Rasmussen, Director Division of Alcoholic Beverages

and Tobacco

725 South Bronough Street Tallahassee, Florida 32301

Docket for Case No: 83-003124

Orders for Case No: 83-003124