STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF BUSINESS )
REGULATION, DIVISION OF ) ALCOHOLIC BEVERAGES AND TOBACCO, )
)
Petitioner, )
)
vs. ) CASE NO. 84-1794
) TUPELO MANAGEMENT, INC., d/b/a ) PASTIME, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to Notice, a formal evidentiary hearing was held in this case on July 16 and 17, 1984, at Panama City, Florida, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings. The parties were represented by the following counsel:
For Petitioner: Louisa E. Hargrett, Esquire
Staff Attorney
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
For Respondents: Clinton E. Foster, Esquire
1610 Beck Avenue
Panama City, Florida 32401
Stephen D. Barron, Esquire Post Office Call Box 2462 Panama City, Florida 32402
ISSUE
The issue in this case is whether the Petitioner, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco (DABT), should revoke, suspend, or otherwise discipline the alcoholic beverage license number 13-153, Series 5-COP, issued to the Respondent, Tupelo Management, Inc., doing business as Pastime, a bar located at 3602 West Highway 98, Panama City, Florida, upon the following grounds alleged in DABT's Notice To Show Cause issued May 2, 1984:
On or about March 7, 1984, you, Tupelo Management, Inc., d/b/a the Pastime, licensed under the beverage laws, your agent, servant or employee, to wit: Margie, did violate F.S. 561.29(1)(a),
to wit: did sell or deliver marijuana to Investigator Moore on your licensed
premises in violation of F.S. 893.13.
On or about March 12, 1984, you, Tupelo Management, Inc., d/b/a the Pastime, licensed under the beverage laws, your servant, agent or employee, to wit: Margie, did violate F.S. 561.29(1)(a),
to wit: did sell or deliver marijuana to Detective Moore on your licensed premises in violation of F.S. 893.13.
On or about March 23, 1984, you, Tupelo Management, Inc., d/b/a the Pastime, licensed under the beverage laws, your agent, servant or employee, to wit: Teresa, did violate F.S. 561.29(1)(a), to wit: did deliver marijuana to Investigator Moore on your licensed premises in violation of section 893.13.
On or about March 26, 1984, you, Tupelo Management, Inc., d/b/a the Pastime, licensed under the beverage laws, your agent, servant, or employee, to wit: Margie, did violate F.S. 561.29(1)(a),
to wit: did sell or deliver marijuana to Investigator Moore and Officer Russ on your licensed premises in violation of Section 893.13.
On or about April 2, 1984, you, Tupelo Management, Inc., d/b/a the Pastime, licensed under the beverage laws, your servant, agent or employee, to wit: Margie, did violate F.S. 561.29(1)(a), to wit: did sell or deliver marijuana to Investigator Moore and Officer Russ on your licensed premises in violation of Section 893.13.
On or about April 9, 1984, you, Tupelo Management, Inc., d/b/a the Pastime, licensed under the beverage laws, your servant, agent or employee, to wit: Margie, did violate F.S. 561.29(1)(a), to wit: did sell or deliver marijuana to Investigator Moore and Officer Russ on your licensed premises in violation of Section 893.13.
You, Tupelo Management, Inc., d/b/a the Pastime, licensed under the beverage laws, between March 7, 1984 and the date of service of this Notice to Show Cause have maintained a public nuisance on your licensed premises, to wit: a place or building which is visited by persons for the purpose of unlawfully
using, keeping, selling and/or delivering controlled substances in violation of Chapter 893, Florida Statutes, such being a violation of: (a) Florida Statutes
823.10 and 561.29(1)(c); (b) Florida
Statutes 823.01 and 561.29(1)(a).
You, Tupelo Management, Inc., d/b/a the Pastime, licensed under the beverage laws, between March 7, 1984 and the date of this Notice to Show Cause have maintained your licensed premises as a place resorted to by persons selling controlled substances in violation of Chapter 893, Florida Statutes, in violation of Sections 893.13(2)(a)5 and 561.29(1)(a), Florida Statutes.
FINDINGS OF FACT
Based on the testimony of the witnesses and the exhibits admitted in evidence at the hearing, I make the following findings of fact:
At all times relevant and material to this case, Tupelo Management, Inc., has been the holder of alcoholic beverage license number 13-153, Series 5- COP, issued for the premises known as the Pastime, located at 3602 West Highway 98, Panama City, Florida. Mr. John Michael Whitfield is, and was at all relevant and material times, the president of Tupelo Management, Inc. Mr. Whitfield and his wife own all of the stock of Tupelo Management, Inc.
Mr. Whitfield first opened the Pastime on May 18, 1977. At that time it was a small beer and wine bar with five pool tables. Over the years the business grew and in August of 1983 Mr. Whitfield purchased a 5-COP license for the Pastime. Prior to the events giving rise to this case, the Pastime had only been cited by the DABT for two violations. The first violation occurred during the first year of Pastime's operation. It concerned the wording of an advertisement on the exterior of the building. A DABT agent wrote a report or citation and the sign was promptly removed. No penalty was imposed as a result of that event. The second violation occurred during January of 1984. On that occasion the DABT agents found two minors on the licensed premises. The January 1984 violation was resolved by stipulation, pursuant to which Tupelo Management, Inc., paid a civil penalty in the amount of $250.00.
The Bay County Sheriff's Department began an investigation of the Pastime in March of 1984 on the basis of information that illegal drug activity was occurring on the licensed premises. Mr. Floyd M. Moore, Jr., an investigator with the Bay County Sheriff's Department, went to the licensed premises the evening of March 7, 1984. Investigator Moore was introduced by a confidential informant to a waitress named Margie Adams, who was employed on the licensed premises. Investigator Moore asked Margie Adams if she could obtain some marijuana and she answered in the affirmative. Investigator Moore left the premises and returned at approximately 7:45 P.M. that same evening. He made contact with Margie Adams again. Margie Adams made a telephone call and then told Investigator Moore the marijuana would be there a short time later. At about 8:45 P.M. Margie Adams asked Moore how the transaction could be made. At Moore's suggestion they went to a table on the licensed premises and Margie Adams handed Investigator Moore a clear plastic bag containing marijuana. The plastic bag was covered when it was given to Investigator Moore. Investigator Moore paid Margie Adams $35.00 for the marijuana.
On March 12, 1984, at approximately 7:45 P.M. Investigator Moore and Beverage Officer Rodney Russ entered the Pastime. After Investigator Moore introduced Margie Adams to Russ, Margie asked Moore if he had liked what she had
previously sold him and agreed to get another bag for Moore, stating that it would just take a phone call. Margie spoke to a female waitress for a few minutes, after which she went behind the bar and made a telephone call. She thereafter returned to the officers and stated that the marijuana would arrive in approximately 30 minutes and asked that Investigator Moore pay her at that time to avoid confusion when it arrived. Investigator Moore gave Margie $35. At approximately 8:45 P.M. Margie told Investigator Moore that the merchandise had arrived and asked him to walk to the end of the bar. Moore went to the end
of the bar located next to the dart board, where there was a lot of activity and numerous people, and Margie handed him a white paper napkin covering a plastic baggie of marijuana.
On the evening of March 19, 1984, Investigators Moore and Russ returned to the Pastime. The officers each ordered one-quarter ounce of marijuana from Margie Adams but she stated that the person she was getting it from was not home so it would take some time. The officers observed Margie making a phone call, after which she told them that it would be approximately one hour before she could deliver. The officers left the Pastime and returned at approximately 9:00
P.M. The officers entered into a conversation with a male patron who told them there was a man in the pool room trying to sell marijuana. Investigator Moore told the patron to tell the man in the pool room that they were interested in buying. The patron went to the pool room and spoke to a male, who later came over to the officers and introduced himself as George. George (who was later identified as George W. Osborne) told the Officers that he had heard they were interested in buying, and Moore explained that they had ordered one-quarter ounce each but it did not look like it was going to arrive. George stated that he could sell them one-quarter ounce for $35.00 and the officers agreed to buy it. George left the officers and went to speak with Margie Adams. He returned shortly and asked the officers if they were getting their marijuana from Margie Adams. Russ stated that he would rather not say, and George said it was okay because he and the waitress were getting from the same person and that he and Margie had discovered that they were each ordering for the same persons. Russ told Margie that he did not want to cut her out of a sale, and she stated that it was okay to buy from George, that it was just like buying from her and she would get credit for the sale. During the time that Russ was talking to Margie, George handed Investigator Moore an orange tablet which he stated was a Preludin. Shortly thereafter, the officers and George walked outside to a motorcycle parked near the door and George laid two plastic baggies containing marijuana on the seat of the motorcycle. Each officer obtained one of the baggies of marijuana and each paid George 535.00.
On March 22, 1984, Investigators Moore and Russ returned to the pastime. Margie was not on duty that night. Moore and Russ spoke to two waitresses who were on duty, Karen and Sionna, and told the waitresses they had purchased marijuana from George and were waiting to buy some more from him. The officers asked Sionna if George was an all right guy to deal with and she said that he was. Later that evening when George entered the Pastime he spoke to Sionna and then went back outside where the officers observed him talking to customers near the front door. A few minutes later George approached the officers and asked how they had liked the marijuana he had sold them. The officers said it had been fine and they asked George if he could obtain some more marijuana and some more "speed" or Preludin. George said he could obtain both and he left the premises on his motorcycle. When George returned he approached Investigator Russ and handed him five orange tablets which were supposed to be "speed" or Preludin. Investigator Russ paid George $25.00 for
the tablets. George told the officers he had been unable to obtain marijuana, but would have some the following morning. The five tablets sold to Investigator Russ were later tested and found to contain caffeine, but they did not contain any controlled substances.
On March 22, 1984, Detective Jonathan McNeil and Investigator Pam Hellett were also at the Pastime. They were seated at a booth with other officers. A male who identified himself as Phillip (later identified as Leroy Phillips) sat with the officers for a while. He got up to leave and told Detective McNeil that he would be back, he just needed to find something for his head. When he returned, McNeil asked Phillips where he could get something for his head and Phillips got up and said that he would go see his sister, he knew she had something. Phillips later identified his sister as Gloria, the manager of the Pastime. When Phillips returned to the table, he pulled a package of cigarettes from his pocket and showed Detective McNeil two small white square pieces of paper under the cellophane portion and stated that they were two hits of acid. McNeil paid Phillips $10.00 and took the two pieces of paper and inserted them into his cigarette package. Phillips told McNeil that the acid was "Mr. Natural." The pieces of paper were subsequently tested and found to contain LSD. The male previously identified as George came and sat with the officers and they began discussing whether a man seated at the next booth was a police officer. Investigator Hellett said to George, "Hurry up and give me everything you have," and George reached into his jacket and removed several orange tablets and some marijuana, which he placed in Investigator Hellett's lap. Hellett told George that she did not accept anything that she did not pay for and he asked how much she would like to buy. Detective McNeil asked George how much he was selling the tablets for and he stated that he would sell them to the officers for $3.00 apiece although he had sold them to other Persons for
$5.00. McNeil agreed to buy five tablets and, in an attempt to be discreet, handed George $15.00 under the table. George handed the tablets to McNeil under the table, although McNeil stated that he was the only one trying to be discreet about the transaction. Investigator Hellett bought seven tablets from George in exchange for $21.00. George gave Investigator Hellett a small amount of marijuana and told her to try it and see if she liked it. The substance given to Investigator Hellett was subsequently tested and found to be marijuana, and the pills were tested and found to contain caffeine, but not to contain any controlled substance.
Late in the morning on March 23, 1984, Investigator Moore went to the licensed premises to obtain the marijuana previously promised by George. George was not at the Pastime, and Moore talked to the bartender Teresa about being there to obtain marijuana from George. Teresa stated that George was probably getting it from "us." After conversing with Teresa about other drug transactions, Moore told Teresa that it looked like George was not going to arrive and Teresa stated that she would give him some. She put her purse on the bar and removed from it a small portion of marijuana and placed it in a napkin lying on the bar. Investigator Moore observed Mr. Michael Whitfield and his wife on the licensed premises, but neither of them were in sight at the time Teresa placed the marijuana on the napkin. Moore also talked to Teresa about cocaine and she said she could obtain some for him for $100.00 a gram.
On March 26, 1984, Investigators Moore and Russ returned to the Pastime. They asked the waitress Margie Adams if she could get them a quarter ounce of marijuana. At first she said she could not, because she said she had had a fight with her supplier. Later she said she could obtain some marijuana from someone else, but that she did not know anything about the quality of the marijuana. The officers told Margie that they would trust her judgment on the
matter. Investigator Russ paid Margie $40.00 for the marijuana, $5.00 of which was a tip for her. At about 8:55 P.M. that evening Margie Adams approached Investigator Moore. She had a napkin on a tray and told Moore that it was in the napkin. Investigator Moore took the napkin from the tray. Inside the napkin was a small plastic bag containing marijuana.
On April 2, 1984, Investigators Moore and Russ returned to the Pastime. The waitress Margie Adams told the officers that she was leaving at 8:00 P.M. and Investigator Russ advised her that they would like to purchase one-quarter ounce of marijuana before she left. Margie stated that she would see what she could do and later came over and said that she had arranged for some marijuana to be delivered and that if it did not arrive before she left,
one of the other waitresses would deliver it to them. A short time later Margie returned and showed Investigator Russ a towel on her tray. A plastic baggie of marijuana was under the towel. Investigator Russ took the plastic baggie of marijuana and paid Margie for it. Then he placed the baggie on the table and both investigators wrote their initials on it.
On April 9, 1984, Investigators Moore and Russ returned to the Pastime. Margie Adams approached the officers and Russ asked whether she could get them some more of the same marijuana. She said she could and asked how much they wanted. The officers openly discussed the amount to be purchased and agreed upon one-half ounce, which Margie stated would be cheaper than purchasing two one-quarter ounces. Russ asked Margie if she could get some LSD or acid. Margie later came over to the officers and stated that the marijuana had arrived but that she could not deliver it because an undercover officer was seated at the bar. Margie later returned and sat beside Moore and handed him a white napkin covering a clear plastic baggie of marijuana. The officers paid her for the marijuana. Margie told them that she had not been able to get any acid. Investigator Russ told her he would be in town later on and would like to have a couple of hits of acid.
On April 11, 1984, Investigator Russ went to the Pastime and asked Margie Adams if she had been able to obtain any acid or LSD. Margie said she had been unable to get it yet. Russ told her he was going to Montego Bay (another bar) and Margie said that if she was able to get the acid she would bring it to him at Montego Bay later that night. Russ paid her $20.00 for three hits of acid at $5.00 each, plus $5.00 as a tip for her.
On April 16, 1984, Investigators Moore and Russ entered the Pastime to find out if Margie Adams had been able to obtain the acid Investigator Russ had paid her for. Margie was not present when the investigators arrived. When she came in later, she told the officers she had been unable to obtain the acid since she had been out of town for her grandmother's funeral. George Osborne was on the premises and Investigator Moore asked George if he had a quarter- ounce of marijuana to sell. George stated that he could get it for them in a few seconds. George left and returned shortly, motioning to investigator Moore to follow him. Moore followed George to the restroom and George handed Moore a plastic baggie containing marijuana. As Moore was examining the baggie, two white males entered the restroom, observed George and Moore, commented on how nice the marijuana looked, and asked how much it cost. Officer Moore paid George $45.00 for the marijuana and returned to the table and handed the baggie to Russ. Russ opened the baggie in plain view of other patrons and smelled the contents. Margie Adams, who was waiting on another nearby table, observed the
bag of marijuana and commented to the investigators that she saw that they had gotten what they were looking for. Russ then put the baggie of marijuana in his shirt pocket so that half of it was visible and visited around the bar for several minutes. One patron told Russ that he was about to lose something out of his pocket.
On April 25, 1984, Investigators Moore and Russ entered the Pastime again. They asked Margie Adams if she had been able to obtain the acid Russ had paid her for. Margie told the investigators she had been unable to obtain the acid. Investigator Moore contacted George Osborne and asked whether George could get the officers a quarter-ounce bag of marijuana and also asked how long it would take. Shortly thereafter George and the two investigators walked outside to George's motorcycle and George removed from his shoe a wallet containing two plastic baggies. As George handed Moore one of the baggies, a white male walked up. George asked what he wanted and he said he wanted a bag. George went inside to make change for the $40.00 Moore had given him. While George was inside the white male said that he had been told to go to the Pastime if he wanted drugs. George returned with Moore's change and then walked around to the back of the establishment with the white male. The baggie George had handed to Moore contained marijuana.
In brief summary of the foregoing, during the 7-week period from March 7, 1984, through April 25, 1984, the following events occurred on the licensed premises:
3/07/84 Employee Margie Adams sold marijuana to Investigator Moore.
3/12/84 Employee Margie Adams sold marijuana to Investigator Moore.
3/19/84 Employee Margie Adams agreed to sell marijuana to Investigator Moore and Russ, but she did not sell them anything that day.
3/19/84 Patron George Osborne, with the knowledge of employee Margie Adams, agreed to sell marijuana to Investigator Moore and Russ. (The actual sale took place outside the licensed premises.)
3/22/84 Patron George Osborne, with the knowledge of employee Sionna, agreed to sell marijuana and "speed," or Preludin to Investigators Moore and Russ, and actually sold 5 tablets to Investigator Moore which were supposed to he "speed," or Preludin.
3/22/84 Patron Leroy Phillips sold fro tabs of LSD to Detective McNeil.
3/22/84 Patron George Osborne gave some marijuana to Investigator Hellett, sold 7 tablets that were supposed to
be "speed," or Preludin to Investigator Hellett and sold 5 of the same tablets to Detective McNeil.
3/23/84 Employee Teresa gave some marijuana to Investigator Moore and told him she could obtain cocaine for him.
3/26/84 Employee Margie Adams sold marijuana to Investigators Moore and Russ.
4/02/84 Employee Margie Adams sold marijuana to Investigators Moore and Russ.
4/09/84 Employee Margie Adams sold marijuana to Investigators Moore and Russ and agreed to sell Russ some LSD.
4/11/84 Employee Margie Adams agreed to sell LSD to Investigator Russ and accepted payment for same, but did not deliver anything to him that day.
4/16/84 Patron George Osborne, with the knowledge of employee Margie Adams, sold marijuana to Investigator Moore.
4/25/84 Patron George Osborne agreed to sell marijuana to Investigators Moore and Russ. (The actual sale took place outside the licensed premises.)
The vast majority of the drug transactions described above were accomplished in a relatively discreet manner. Most of the transactions took place in a booth and involved delivery of marijuana that was covered with a towel or a napkin. During the period of the investigation which led up to this case, the police officers and DABT investigators did not see any illegal drug usage or any illegal drug transactions on the licensed premises other than the ones they were personally involved in.
Mr. John Michael Whitfield, the President of Tupelo Management, Inc., and co-owner with his wife of all of the corporation's stock, takes an active role in the management of the business because it is his family's sole source of income. He usually visits this licensed premises six days per week and he spends between 40 and 50 hours per week at the licensed premises.
Mr. Whitfield is well educated. His formal education includes a Bachelor of Science degree in Social Welfare and a Master's degree in Social Work, both from Florida State University. After receiving his Master's degree, Mr. Whitfield was employed for three years as the Assistant Director of the Mental Health Center in Panama City, Florida. Thereafter he also worked for a year as Director of the Gerontology program at the same Mental Health Center. His work at the Mental Health Center included work in the area of drug abuse and alcoholism programs. Mr. Whitfield has never used any type of illegal drugs and is opposed to the use of illegal drugs by others.
Mr. Whitfield has a very responsible attitude towards the fulfillment of his obligations and responsibilities as an alcoholic beverage licensee. For example, prior to January 1984, Mr. Whitfield had always used his own employees as doormen to check identification of patrons. Immediately after two minors were found on the licensed premises in January of 1984, Mr. Whitfield not only fired the doorman who was on duty that night, but arranged with Florida Security Service to provide extra uniformed security personnel to check the identification of patrons.
When Mr. Whitfield met with DABT representatives concerning the problem with the two minors, he was advised that the two major priorities of the DABT were minors and drugs. Mr. Whitfield had several meetings with all of his employees in which he told them explicitly that he did not want to have any problems with minors or drugs on the licensed premises. He told all of the employees that they would be fired if they were responsible for any problems on the licensed premises related to minors or drugs. He also told the employees they would not be given any second chances about such matters, but would be fired for a first offense.
Prior to May 2, 1904, when the Notice To Show Cause was served on the Pastime, Mr. Whitfield had never seen anything that caused him to suspect there was a drug problem at the Pastime. The security service never told him that there was a drug problem at the Pastime or that they suspected a drug problem. The uniformed police officers who walked through the Pastime practically every night never told him he had a drug problem on the licensed premises.
Mr. Whitfield usually requires prospective employees to fill out a written application form. He usually does not check references, but he usually does check with prior employers. Mr. Whitfield will not hire people who have previously worked in what he considers to be dives. His usual employment practices notwithstanding, Mr. Whitfield has occasionally failed to require a written application and has occasionally failed to check the background of new employees. Some of the employees and former employees he failed to check were the causes of the present charges against Mr. Whitfield. One former employee whose background was not checked was George Osborne.
Mr. Whitfield has barred several patrons in the past for improper conduct on the licensed premises and he has barred a suspected drug dealer from patronizing the Pastime.
The DABT sent a letter to all alcoholic beverage licensees in south Florida in March of 1984 advising them of the DABT's priorities. The main priorities were the prevention of sales of alcoholic beverages to minors and the prevention of illegal drug activities on the licensed premises. The letter was not sent to alcoholic beverage licensees in north Florida, but will be sent to them later.
CONCLUSIONS OF LAW
Based on the foregoing facts and on the applicable statutory, rule, and case law, I make the following conclusions of law:
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Section 120.57, Florida Statutes.
Section 561.29, Florida Statutes, contains the following relevant provisions:
The division is given full power and authority to revoke or suspend the license of any person holding a license under the Beverage Law, when it is determined or found by the division upon sufficient cause appearing of:
Violation by the licensee or his or its agents, officers, servants, or employees, on the licensed premises, or elsewhere while in the scope of employment, of any of the laws of this state or of the United States, or violation of any municipal or county regulation in regard to the hours of sale, service, or consumption of alcoholic beverages, or engaging in or permitting disorderly conduct on the licensed premises, or permitting another on the licensed premises to violate any of the laws of this state or of the United States . . . .
(b) . . . .
(c) Maintaining a nuisance on the licensed premises.
*** *** ***
The division may impose a civil penalty against licensee for any violation mentioned in the Beverage Law, or any rule issued pursuant thereto, not to exceed $1,000 for violations arising out of a single transaction. If the licensee fails to pay the civil penalty, his license shall be suspended for such period of time as the division may specify.
Section 823.10, Florida Statutes, declares a place or building where controlled substances are illegally kept, sold, or used, to be a nuisance. And Section 893.13(2)(a)(5), Florida Statutes, 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.
Marijuana and LSD are controlled substances. It is a violation of state law to sell, use, deliver, or possess marijuana or LSD. Section 893.13, Florida Statutes.
The negotiation of a sale of a controlled substance or the act of serving as a go-between in arranging such a drug transaction is a violation of Florida law and a person committing any such acts is subject to conviction under the criminal laws of Florida. Nadjawski v State, 371 So.2d 554 (Fla. 2d DCA 1979); State v. Hubbard, 328 So.2nd 465 (Fla. 2d DCA 1976); State v. Dent, 322 So.2d 543 (Fla. 1975). Section 777.011, Florida Statutes.
There is no real dispute in this case about whether the events alleged in the Notice To Show Cause actually occurred. (See Respondent's proposed findings of fact numbered 2 and 3.) There is an abundance of competent substantial evidence to support each of the specific charges in the Notice To Show Cause. In addition to proof of the six marijuana transactions alleged in paragraphs 1 through 6 of the Notice To Show Cause, the competent substantial evidence also establishes the following incidents which occurred on the licensed premises: One gift of marijuana by a patron, one sale of marijuana by a patron, one sale of LSD by a patron, three sales of fake controlled substances by patrons, two incidents of negotiations by patrons for the sale of marijuana (which negotiations culminated in sales outside the licensed premises), and several instances of employees agreeing to provide controlled substances which were never delivered. All of these events taken in conjunction with the events described in paragraphs 1 through 6 of the Notice To Show Cause are sufficient to establish the violations alleged in paragraphs 7 and 8 of the Notice To Show Cause.
The real dispute in this case is whether the facts charged and proved are sufficient to warrant the penalty of revocation, or any penalty at all, in view of the fact that the licensee had no actual knowledge of the illegal activity and did not condone or foster it. 1/
Thus, the gut issue in this case is whether the licensee negligently overlooked the illegal activities or otherwise negligently permitted them to occur. An instructive case in this regard is Lash, Inc. v. State, Department of Business Regulation, 411, So.2d 276 (Fla. 2d DCA 1983). The operative facts before the court in the Lash case are described as follows at page 277 of the decision:
The license revocation stemmed from narcotics violations on appellant's premises. The evidence established that on five occasions over a period of a week, undercover beverage agents purchased controlled substances from two of appellant's employees.
At page 278 of its decision, the court in Lash expounds at length on the proper standard for revocation or suspension of a beverage license.
Under Section 561.29(1), where the unlawful activity is committed by the Licensee's agent, simple negligence is sufficient for revocation. Admittedly, the courts have refused to uphold revocations when the evidence showed only that on one occasion the licensee's employees violated the laws,
and that the licensee otherwise took measures to comply with them (citations omitted).
Where, however, the laws are repeatedly and flagrantly violated by the employees, an
inference arises leading to the conclusion that such violations are either fostered, condoned or negligently overlooked by the licensee, notwithstanding his absence from the premises when the violations occur (citation omitted). Consequently, if the evidence supports the conclusion that the licensee failed to exercise ordinary care in the maintenance of the licensed premises or the supervision of his employees, he can be found negligent and his license revoked (citation omitted).
Where the violations are, as here, committed in a persistent and recurring manner consisting of more than one isolated incident, the courts have not hesitated to find that such violations were either fostered, condoned, or negligently overlooked by the licensee, even though he may have been absent at the time of the commission of such (citations omitted). In the present case, the recurring sales were made possible by appellant's failure to supervise the premises and his employees in a reasonably diligent
manner, properly leading to the license revocation.
In this case there were more violations by employees than in the Lash case and the violations took place over a longer period of time than in the Lash case. Accordingly, the violations established in this case are sufficient to give rise to the inference discussed in Lash that the licensee negligently overlooked the violations or failed to exercise ordinary care in the maintenance of the licensed premises or the supervision of his employees. But the inference which flows from the violations can be rebutted, as it has been, to a certain extent, by the evidence in this case. First, it is clear from the evidence in this case that the licensee neither condoned nor fostered illegal drug activities on the licensed premises, or elsewhere for that matter. Nor was he inattentive to his business or ignorant or indifferent to what happened on the licensed premises. Unlike the licensee in Club 99, Inc., 2/ who only visited the licensed premises for a few hours each month, here the licensee was actively involved in the management of the licensed premises and spent an average of 40 to 50 hours per week on the premises. This was the licensee's only business and he devoted full time to the operation of the business.
With regard to the matter of whether the licensee negligently overlooked the violations that occurred on the licensed premises, by either his own personal oversight or the oversight of the security officers he employed, the violations in this case were virtually all incidents which were conducted in a relatively discreet manner. And just as the licensee and his security officers saw no drug transactions, the police officers and the DABT investigators saw no drug transactions other than those in which they participated. Although the Lash case might be interpreted as concluding otherwise, in the case of a licensee who is actively engaged in the operation of the licensed premises and who spends a substantial amount of time personally supervising the operation of the premises, there is less basis for an inference of negligent oversight in a case involving discreet drug transactions than in the cases involving solicitation for prostitution and lewd and lascivious
behavior, which are the cases which appear to have given rise to the inference applied in Lash. 3/ A discreet drug transaction is difficult to detect even by the vigilant; a substantially naked lady cavorting about the premises is difficult to miss even by the indifferent. Accordingly, I am persuaded that the evidence does not demonstrate that the licensee negligently overlooked the illegal drug activities on the licensed premises. But that is not the end of the matter because, as we learn from the Jones 4/ case, violations by employees are different from violations by patrons.
Not only does a licensee have a duty to supervise his employees and exercise reasonable diligence to detect and arrest any wrongdoing on their part, but he also has a duty to exercise reasonable diligence in the selection of employees and in the training and instruction of employees. In this regard the licensee has failed to act in a reasonably diligent manner. Although he usually does a background check on new employees, he failed to do a background check on any of the employees or former employees who were the principal actors in this case. This failure is all the more egregious with regard to former employee George Osborne. Osborne's appearance and behavior were such as would cause any reasonable person to hesitate to employ him in a position of responsibility even with a background check, and he should never have been hired without one. Further, when Osborne was fired for his irresponsible behavior he should also have been barred from the premises because by then the licensee certainly knew that Osborne was an undesirable element, even if he did not know that Osborne was engaging in illegal drug activities.
It is difficult, if not impossible, to articulate a precise standard of care which must be observed by every licensee on every occasion when new employees are hired. Rather each case must be judged in light of the total factual situation. And there is, of course, a logical relationship between the amount of care which is devoted to the selection process and the amount of the subsequent instruction and supervision which is devoted to the employees. A certain laxness in the selection process would perhaps be reasonable where the employees were subsequently subjected to stringent instructions as to what they must and must not do and were stringently supervised to make sure they complied with their instructions. Here the supervision could perhaps most fairly be described as ordinary--standing alone it would be enough, but nothing special. The instructions to the employees regarding illegal drug activities were at best marginal, because the licensee did not think he had a drug problem that needed attention. In sum, there was no stringent instruction program and no stringent supervision program to overcome the laxness in the hiring procedures. A licensee who hires employees without conducting a background check is virtually inviting the kinds of problems that occurred here.
With regard to the 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). Here the licensee was careless, not an intentional violator. He was trying to do the right thing, but not trying hard enough. Thus, while his conduct does not warrant revocation, the seriousness of the violations that took place on the licensed premises warrant a penalty of sufficient severity to impress upon the licensee the importance of paying diligent attention to all phases of the operation of his business.
For all of the foregoing reasons I recommend that the Division of Alcoholic Beverages and Tobacco enter a Final Order finding that the Respondent has
violated Sections 561.29(1)(a) and (c), Florida Statutes, ordering the Respondent to pay a civil penalty of five hundred dollars ($500.00) for each of the violations charged in the first six paragraphs of the Notice To Show Cause (a total of three thousand dollars), and suspending the Respondent's alcoholic beverage license for a period of six months.
DONE and ORDERED this 29day of October, 1984, at Tallahassee, Florida.
MICHAEL M. PARRISH
Hearing Officer
Division of Administrative Hearings 2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 29th day of October, 1984.
ENDNOTES
1/ The Petitioner does not contend that Mr. Whitfield had actual knowledge of the illegal activity, nor does it contend that he condoned it. See paragraph B of Petitioner's proposed conclusions of law.
2/ See Recommended Order issued October 8, 1984, in Division of Alcoholic Beverages v. Club 99, Inc., d,/b/a Shangri-La, DOAH Case No. 84-3288.
3/ The first application of the inference appears to be Pauline v. Lee, 147 So.2d 359 (Fla. 2d. DCA 1962). It has since been applied in a number of what may euphemistically be described as "exotic" dancer cases. See the G & B of Jacksonville cases beginning at 371 So.2d 137, and Golden Dolphin No. 2, Inc. v. State Division of Alcoholic Beverages and Tobacco, 403 So.2nd 1372 (Fla. 5th DCA 1982).
4/ Jones v. State, Department of Business Regulation, 448 So.2d 1109 (Fla. 1st DCA 1984).
5/ Even though Osborne was no longer an employee at the time of the events underlying this case, his prior employment was certainly a contributing factor to his freedom of activity on the licensed premises.
6/ The period of suspension should run from the date on which the emergency suspension began unless the Respondent has had the emergency order of suspension set aside by an appellate court.
COPIES FURNISHED:
Louisa E. Hargrett, Esquire Staff Attorney
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
Clinton E. Foster, Esquire 1610 Beck Avenue
Panama City, Florida 32401
Stephen D. Barron, Esquire Post Office Call Box 2462 Panama City, Florida 32402
Mr. Howard M. Rassmussen Director
Division of Alcoholic Beverages and Tobacco.
725 South Bronough Street Tallahassee, Florida 32301
| Issue Date | Proceedings |
|---|---|
| Oct. 29, 1984 | Recommended Order sent out. CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Oct. 29, 1984 | Recommended Order | On the specific facts in this case, alcoholic beverage licensee should be fined $3,000 and have license suspended for six months. |
