STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS REGULATION ) DIVISION OF ALCOHOLIC BEVERAGES & ) TOBACCO, )

)

Petitioner, )

)

vs. ) CASE NO. 84-2051

)

FCB, INC., d/b/a UNICORN )

LIQUORS FANTASY SHOW BAR, )

Respondent. )

)

RECOMMENDED ORDER

Predicated upon an emergency order of suspension served on the Respondent in the case on June 8, 1984, a hearing was held before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings, in Cocoa, Florida, on June 13, 1984. The issue for consideration was whether Respondent's alcoholic beverage license should be disciplined by Petitioner because of the allegations of misconduct outlined in the Notice To Show Cause filed in the case, which was also dated June 8, 1984.

APPEARANCES

For Petitioner: William A. Hatch, Esquire

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

For Respondent: James R. Dressler, Esquire

110 Dixie Lane

Cocoa Beach, Florida 32931 BACKGROUND INFORMATION

On the evening of June 8, 1984, an Emergency Order of Suspension was served by Petitioner on Respondent at the Respondent's place of business in Cocoa Beach, Florida. Thereafter, Respondent requested a final hearing under the provisions of Section 12j.57 (i), Florida Statutes, (1983).

At the hearing, Petitioner Presented the testimony of Gloria Smith, a beverage investigator for Petitioner, Division of Alcoholic Beverage and Tobacco (DABT) ; and introduced Petitioner's Exhibits 1 - 5.

Respondent presented the testimony of Lowell M. Tatum, a polygraph operator for the Broward County Sheriff's office; John W. Lageman, manager of Respondent's licensed premises; Frederick C. Burgett, Jr., president and primary stockholder of Respondent Corporation and Kevin Ashcroft, a beverage investigator. Respondent also introduced Respondent's Exhibit A.

FINDINGS OF FACT

1. At all times pertinent to the allegations contained herein, Respondent FCB, Inc., d/b/a Unicorn Liquors Fantasy Show Bar (Show Bar) was the holder of Florida Alcoholic Beverage License Series 4-COP, No. 15-00398 for the Fantasy Show Bar located at 104 Cleveland Avenue, Cocoa Beach, Florida.

   
   

2. During the course of an ongoing investigation by the United States Division of Alcohol, Tobacco and Firearms, (DATF); the United States Drug Enforcement Agency (DEA); and the Florida Department of Alcoholic Beverages and Tobacco, investigators and agents of all three agencies had been in the Cocoa Beach area since the end of February, 1984, regarding a list of some twenty (20) bars and lounges in the area about which complaints, regarding drugs had been received. During this time, using a investigator, Beverage Officer Smith had made friends with one of the dancers at the Show Bar, a woman named Janice Becker, who use the stage name "Angel."

   
   

3. At approximately 10:30 p.m. on April 3, 1984, Smith and DATF Agent Altman, working together in an undercover capacity, entered the Show Bar. The bar was more well lit than most bars and they were able to see quite clearly. They took seats near the runway and shortly afterwards observed what to them appeared to be a surreptitious transfer of contraband from one dancer to another. The subject of the transfer, a small clear envelope of a white powdery substance was wrapped by both dancers in a napkin when not in their purses except for the time it fell to the floor and was observed by Altman. One dancer then handed money to the other in return. When Smith approached one of the two dancers involved, Nora, and asked for some cocaine for herself, Nora indicated she had none available but tried unsuccessfully to get some from another dancer, Lynn.

   
   

4. Just at this time, Angel came up and engaged in a discussion regarding cocaine with Smith and Altman. She stated that she had some cocaine herself that she would give them after she danced for some customers. Some thirty (30) minutes later Angel came back and placed a folded $1.00 bill in Altman's hand. Altman gave the hill to Smith who immediately took it into the 1dies' restroom where she opened it and found a white powdery substance later properly determined to be cocaine. When Altman asked Angel what he owed her for the substance, she replied that it was a gift from her. She also stated that if he needed more in the future she could make it available in quantities of one half (1/2) or one (1) gram and would deliver to their residence or to the Show Bar.

   
   

5. Altman and Smith again went into the Show Bar at about 10:30 p.m. on April 10,1954. When they entered, Angel came up to them and said she could not get the cocaine that Smith had previously ordered by phone for delivery at the Show Bar. Angel said that Barbie, another dancer at the bar, could get it in quantities of one half (1/2) to one (1) gram for $50.00 and $100.00 respectively. When Smith asked for one (1) gram and asked Angel what she wanted for her trouble, Angel said she would take a "line". Angel then made a call from a pay phone after which she told Smith the cocaine would be delivered by her source, Tony, within a short while. Angel then went off to dance after a short conversation and, when finished, returned to Smith and Altman and asked them for $100.00 for the cocaine. When Altman paid her, she went over to another table where she talked with a male identified as Tommy. After speaking with him for a few minutes, she came back and said that since Tony had not contacted him, he did not have a full gram. When Altman heard this, he took back the $100.00 bill and gave Angel $50.00 for one half (1/2) gram. Angel went back to Tommy's table, then went into the dancer's dressing room, and returned

   to Altman and Smith's table where she made delivery of the substance later identified as cocaine. When Altman asked Angel if she needed a blade to take her "line", she replied that there was a blade in the dressing room that all the girls used.

   
   

6. Altman and Smith came back to the Show Bar early on the evening of April 19, 1984. When they came in, Nora, one of the dancers they had seen involved in the surreptitious exchange on April 3, came up to Smith and asked her if she wanted any. When Smith indicated she did, they all went into the main bar and ordered drinks. During this time Nora mentioned she had given some cocaine to Barbie, another dancer. When Smith asked Nora how much she was charging, she was told $50.00 for one half (1/2) gram. Nora then told Smith to come with her into the restroom where when the transfer was made. Smith gave Nora $50.00 and Nora gave Smith a substance later identified as cocaine.

   
   

7. On April 27, 1984. Smith and Altman, this time accompanied by DEA Agent Eslinger, entered the Show Bar at about 11:15 p.m. This time they were approached by a dancer, Samantha, with whom they discussed cocaine use in general, but made no buy. Somewhat later, a female patron known to Smith as Deosia, came up to Smith and indicated she had some good "stuff" for sale. Smith was then told to go to the restroom and Deosia would get some cocaine for her. When she got there, Smith paid Deosia $80.00 and the two women left. On the way out of the restroom, Deosia stopped to talk with a male she identified

   as Doug and asked him for some cocaine. Smith went back to her table from which she saw Doug leave the premises, only to return ten (10) minutes later.

   Somewhat later, Deosia came to Smith's table and gave her two small packages subsequently identified as cocaine, from which, she said, she had taken out her "lines" as a finder's fee.

   
   

8. The three investigators came back to the Show Bar the following night, April 28, hoping to find Nora and Deosia, and sat at a table. Shortly thereafter, Deosia came up and said she had started to work there as a dancer that night. She sat down beside Smith and told her she could get her one-eighth (1/8) ounce of cocaine and that it was much cheaper to buy it that way. The agents discussed among themselves, in front of Deosia who then went and made a phone call; returning shortly to say the deal had been set up. She then wrote out the address where they could pick up the cocaine and asked for and received from Eslinger a $20.00 fee for setting up the deal. The officers subsequently went to the address which Deosia had given them where they paid for and received a substance subsequently identified as cocaine.

   
   

9. When Smith, Altman and Eslinger next went back to the Show Bar on the night of May 2, 1984, they were approached by the dancer, Samantha, who sat down next to Smith. They talked for a while about who had cocaine available and Samantha left to go dance. After she left, two males known to the agents to be drug dealers came up and sat down to talk. While they were there, Deosia came up and Smith asked her if she could get one eighth (1/8) of an ounce of cocaine. Deosia started to talk with one of the two men (Hair) and later asked Smith if she had $225.00. When Smith said she did, Deosia told her to come to the restroom where Smith gave Deosia $225.00. Deosia than talked to Hair after which she told Smith the cocaine was available for pick-up at a near by bottle club. After some discussion, it was decided that Altman would go with Deosia to get the cocaine and Smith and Eslinger would wait at the Show Bar. While Smith and Eslinger were waiting, another dancer, named Brandy, came up to Smith and

   engaged her in a discussion about cocaine transactions. When Deosia came back with Altman, she asked Smith to come into the restroom with her. In there, she pulled a substance later identified as cocaine out of her waistband, cut out her "line" which she "snorted" right there, and turned over the rest to Smith.

   
   

10. Smith also bought cocaine from Brand, a dancer at the Show Bar, when she and her associates went in on the nights of May 4, 1984. Brandy told Smith she had fronted $50.00 for cocaine for her earlier in the evening when the source had come in. Smith gave Brandy $50.00 whereupon Brandy got up and went to the dressing room. When she came back five (5) minutes later, she gave Smith a folded $1.00 bill which contained what was later identified as cocaine. In a discussion there at the table, Brandy said, in response to an inquiry by Smith, that she could get cocaine in one eighth (1/8) ounce quantities and more. Smith gave her $50.00 for more cocaine to be delivered later. During their discussion, Brandy indicated that before coming to work at the Show Bar, she did not use cocaine but that she does now because it was so prevalent there.

    
    

11. The three agents did not come back to the Show Bar again until the night of June 5, 1984. When they entered that night, they were met at the front door by a gentlemen they knew as Jim Knox who had previously been identified as the assistant manager of the club. Knox asked them to join him at his table which Smith did, while Eslinger and Altman stopped to talk with another patron. While Smith was sitting at Knox's table with Knox, Brandy came up and asked her if she wanted to buy some cocaine, to which Smith said she would buy one half (1/2) gram. Brandy left and shortly came back and sat down next to Smith and told her her source was going to another club to get the cocaine. Smith then gave Brandy a $50.00 bill and continued her conversation with Knox who had been sitting there all along. Shortly thereafter, Knox left and Brandy came back and placed a match box on the table indicating that the cocaine was in it. She then left to dance. Smith picked up the match box, opened it, and took out a plastic bag containing a white powder which was subsequently identified as cocaine.

    
    

12. Lowell M. Tatum, a certified polygraph operator was asked by Fred Burgett, owner of the Show Bar, about eight or nine months prior to the hearing to do a series of polygraph examinations of his employees covering such areas as prostitution, drugs, thefts of merchandise, and the like. As a result he ran tests of the managers and cashiers, bouncers, waitresses and dancers, several times per month, with questions relating to the examinee's knowledge of the use or sale of drugs on the premises. These examinations were run more than once on each person and the results were furnished to Mr. Burgett. As a result of these examinations, management became aware of the possibility of drugs in the Show Bar and the suspects were discharged.

    
    

13. John W. Lageman was hired as manager by Mr. Burgett approximately three and a half months before the closure. He was briefed on management's policies which included a strict prohibition against drugs and underage drinkers. When he was hired, he was not made aware of any problem regarding prostitution or drugs nothwithstanding Mr. Burgett's feeling, as indicated by his testimony, that in any bar of this size, there will always be some drug and prostitution activity. His instructions were to terminate any employee found involved in prostitution or drugs and to call the police when he had information a patron was dealing in drugs. Whenever he did that, however, the police would not arrest the offender but let him go.

    
    

14. Mr. Burgett, who is a full time employee of the National Aeronautics and Space Administration at Kennedy Space Center and who operated this and another bar as an investment, has been in the bar business for twelve years. In

    that time he has never had a beverage citation in any capacity. Just recently, he contends, a representative of Department of Alcoholic Beverage and Tobacco advised him his operation was "fine". In order to combat what he recognizes as the very real risk of drugs and prostitution in any bar, he has arranged for not only the polygraph tests mentioned above, but also stress analysis of his employees, and uses spotters from outside the club. His anti-drug/prostitution efforts cost him about $1,000.00 per month.

    
    

15. Nora was fired because she was suspected of prostitution and Samantha and her cousin Sonya also left. The management got information on Brandy's actions on June 8th, 1984 and were about to discharge her. Coincidently, the Emergency Order of Closure was served before that could be done.

    
    

16. There is some sort of program within Department of Alcoholic Beverage and Tobacco to assist licensed holders to keep out drug activity and prostitution. Notice of this policy was contained in a letter dated March 8, 1984 from the Director of Department of Alcoholic Beverage and Tobacco to all licensees. Unfortunately, Kevin Ashcroft, an agent in the Department of Alcoholic Beverage and Tobacco office in Rockledge, Florida, did not know much about their program and could not recall providing any assistance to any licensee in the area. He contends that while Respondent's efforts are laudatory, they are insufficient per se because they did not work and, therefore, Respondent must be liable. It is his opinion that it is the responsibility of the licensee to insure that whatever steps he takes are successful.

    
    

17. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of the proceedings.

    
    

18. In subparagraphs 1 - 3 and 5 - 7 of the Notice to Show Cause, the Petitioner alleges that on diverse occasions during April through early June, 1984, employees of the Respondent either sold or delivered a controlled substance, cocaine, to State or Federal agents, on the licensed premises in violation of Sections 893.13 and 576.29(1)(a), Florida Statutes (1983). Section

    1. makes it unlawful to sell or otherwise transfer controlled substances of which cocaine is one. Section 561.29(1)(a) provides that a liquor license may be disciplined upon the showing of:

       
       

       1. Violation by the licensee or his 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; except that whether or not the licensee or his or its agents, officers, servants, or employees have been convicted in any criminal court of any violation as set forth in this paragraph shall not be

    considered in proceedings before the division for suspension or revocation of a license except as permitted by chapter 92 or the rules of evidence.

    
    

19. The testimony of Agent Smith, uncontradicted by the Respondent, is sufficient to support a conclusion that these violations, as alleged, took place.

    
    

20. In Subparagraph (4) of the Notice To Show Cause, Petitioner alleges that on April 28, 1984, an employee of Respondent aided and abetted the sale or delivery of cocaine to the agent as alleged. The additional statutory provision cited here is Section 777.011, Florida Statutes, which makes the aider and abettor of an offense punishable as a principal. The other statutes allegedly violated here are the same as discussed in the paragraph next above. Again, the evidence presented by the Petitioner, uncontradicted by the Respondent, clearly establishes the violation.

    
    

21. In paragraph 8 of the Notice To Show Cause, Petitioner alleges that during the period alleged and described in the Findings of Fact, supra, Respondent maintained a public nuisance on its licensed premises by maintaining it as a place used for the keeping, selling, and delivery of controlled substances in violation of Section 823.10, Florida Statutes. The evidence taken as a whole indicates the licensed premises repeatedly served as the locus for the sale and delivery of cocaine, a controlled substance, by several different employees of the license holder, and this allegation has clearly been established. The same evidence also clearly establishes the violation alleged in subparagraph of the Notice To Show Cause. The prosecuted conduct here is a violation of Section 893.13(2)(5), Florida Statutes, which makes it a misdemeanor of the first degree to keep a place which is used for the selling of controlled substances and, as well, a violation of Section 561.29(1)(a) and (c), Florida Statutes.

    
    

22. Once it is established, as here, that the offenses alleged, in fact occurred, the questions then remains as to what, if anything, can and should be done about it. It is clear that the Petitioner has the authority to discipline a license holder when it finds that either the licensee or its agents have violated certain laws of the State on the licensed premises.

23 A showing of only one isolated violation, when combined with a showing that the licensee otherwise took pains to obey the law, would not normally support a revocation or, perhaps, even discipline. If, however, the evidence shows that the law has been repeatedly and flagrantly violated by the licensee's employees, an inference arises that the violations were fostered, condoned or negligently overlooked by the licensee; Pauline v. Lee, 147 So.2d 359 (Fla. 2nd DCA, 1962); Lash, Inc., v. State, Department of Business Regulation, 411 So 2d

276 (Fla. 3rd DCA 1982). A licensee, therefore, has the obligation to maintain sufficient intelligence with regard to its own establishment so as to know, at least generally, what its employees are doing, and its failure of proper management; G&H of Jacksonville, Inc. v. State, Department of Business Regulation, (371 So2d 138 (Fla. 1st DCA 1979).

1. In this case, the evidence shows that not merely one but several of the dancers employed by the licensee not only used but also dealt in cocaine. Though some effort was made to conceal these transactions by wrapping the cocaine in dollar bills or napkins, or by effecting the transfers in the ladies' restroom, many were consummated in the lounge and by far the greatest part of

   the negotiations were carried on there. Respondent made much of his effort to keep drugs out of the licensed premises but it is obvious that either he failed to get the word to his assistant manager, Jim Knox, or that gentleman did not take it seriously. No doubt Respondent did make some effort in that direction but as an owner who did not spend his full time as management, he failed to insure that those he left in charge supported his policies. This is not, however, to adopt the attitude of Mr. Ashcroft that if efforts do not work, they are inadequate. The law does not impose that strict a degree of liability.

   
   

2. Consequently, while the Respondent had the responsibility to properly supervise its establishment and clearly failed to do so here, and though the sales were repeated and by several different employees, it cannot be said that the Respondent's negligence justifies revocation under the circumstances of this case. See also Rex Allen Jones, t/a Happy Hour v. State, Division of Alcoholic Beverages and Tobacco, Case No. AO-132 (Fla. 1st DCA 1984), Opinion filed March 30, 1984.

RECOMMENDED ACTION

Based on the foregoing Findings of Fact and Conclusions of law, it is, therefore,

RECOMMENDED that Respondent FCB, Inc. d/b/a Unicorn Liquors Fantasy Show Bar, pay a fine of $5,000.00.

DONE and RECOMMENDED this 10 day of August, 1984, in Tallahassee, Leon County, Florida.

ARNOLD H. POLLOCK, 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 10 day of August, 1984.

COPIES FURNISHED:

William A. Hatch, Staff Attorney Department of Business Regulation The Johns Building

725 South Bronough Street Tallahassee, Florida 32301

James R. Dressler, Esquire

110 Dixie Lane

Cocoa Beach, Florida 32931

Howard M. Rasmussen, Director Department of Business Regulation

Division of Alcoholic Beverages and Tobacco 725 South Bronough Street

The Johns Building Tallahassee, Florida 32301

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

Docket for Case No: 84-002051

Orders for Case No: 84-002051