STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 84-3283

)

TERESA LOUISE KIEFFER, )

d/b/a KNOWLES GENERAL STORE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to the Amended Notice of Hearing and Notice to Show Cause filed herein, a Final Hearing was held in this matter at Ocala, Marion County, Florida, on March 4, 1985, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings. The parties were represented by counsel as follows:

For Petitioner: Thomas A. Klein, Esquire

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

For Respondent: Michael W. Johnson, Esquire

307 Northwest Third Street Ocala, Florida 32670

The issues to be determined at Hearing were:

1. Whether from on or about October, 1982, through March, 1983, the Respondent's husband, Terry Joseph Kieffer, the Respondent's step-daughter, Teresa Louise Kieffer, or one Lynwood E. Knowles, had a direct or indirect interest in the license or licensed premises; and

   
   

2. Whether the Respondent failed to disclose such direct or indirect interest to the Petitioner.

PROCEDURAL AND EVIDENTIARY MATTERS AT NEARING

The parties stipulated that the Hearing Officer had jurisdiction and that venue of this proceeding was proper. Further, on March 1, 1985, the Petitioner and Respondent executed a Stipulation whereby the authenticity and admissibility of Petitioner's Exhibits 1 through 35 (including composite part) were admitted, that true copies of said Exhibits may be admitted into evidence in lieu of original documents and whereby the Respondent waived all evidentiary objections to Petitioner's Exhibits 1 through 35 (including composite parts) except as to

the relevancy or materiality. During the Hearing the following Exhibits were admitted into evidence: Petitioner's Exhibits 1 through 17 and 19 through 36, and Respondent's Exhibits 1 through 14. The Petitioner called the following witnesses: Shirley Rozar, Joe Ogonowski, Brad D. Brown, John Clardy, Cary Hays, Larry Simmons, and Thomas Deen. The following witnesses were called by the Respondent: Teresa J. Kieffer, Teresa Louise Kieffer, and Lynwood E. Knowles.

FINDINGS OF FACT

Based upon the stipulation of the parties, the exhibits received into evidence, and the testimony of the witnesses at hearing, I make the following findings of fact:

1. The Respondent, Teresa Louise Kieffer t/a Knowles General Store, is, and was at all times pertinent hereto, licensed by the Division of Alcoholic Beverages and Tobacco under License Number 52-583, Series 1-APS. The licensed premises, Knowles General Store, is located at 12186 Northwest Highway 27, Ocala, Marion County, Florida.

   
   

2. On July 22, 1982, the Respondent, Teresa Louise Kieffer, executed an application for transfer of License Number 52-00583, Series 1-APS. (Petitioner's Exhibit Number 1)

   
   

3. On August 9, 1982, the Respondent executed a Personal Questionnaire as part of the application for transfer of License No. 52-00588. (Petitioner's Exhibit Number 2) The application was filed with the Division of Alcoholic Beverages and Tobacco on August 25, 1982. In the application the Respondent revealed that she was leasing the licensed Premises from Lynwood Knowles and Wanda Aytes and, further, that financing in the amount of $13,000.00 was obtained for the purchase of Inventory from Lynwood Knowles. No other persons were indicated as being connected, directly or indirectly, with the business for which the license was sought. The only financing obtained by the Respondent was the $13,000.00 from Mr. Knowles, and the $4,000.00 bank loan described below.

   
   

4. On August 17, 1982, the Respondent leased the licensed premises from Lynwood E. Knowles and Wanda F. Aytes for a period of three (3) years. The Respondent agreed to pay Knowles and Aytes, as Lessors, the sum of $842.40 for rent and additionally agreed to pay all charges for utilities used at the leased premises. During the period in question, the only monies paid by the Respondent to Knowles were pursuant to the note and lease agreement, both of which were disclosed to agents of the Petitioner.

   
   

5. On July 13, 1982, Terry Joseph Kieffer, the Respondent's husband, was adjudged guilty of possession of marijuana in excess of twenty (20) grams, a third degree felony. (Petitioner's Exhibit Number 5)

   
   

6. On December 28, 1982, the Respondent and her husband, Terry Joseph Kieffer, applied for and obtained a loan in the amount of $4,000.00 from The First Marion Bank of Ocala, Florida. (Petitioner's Exhibit Number 6). The proceeds of this loan were deposited in the Knowles General Store Account and the Respondent testified that the loan was subsequently repaid from income from Knowles General Store, the licensed premises. This loan was unsecured. (Petitioner's Exhibit Number 6)

   
   

7. It is clear that Terry Joseph Kieffer, a person not qualified to be licensed, did not have an interest in the licensed premises, based upon the following:

   1. The loan obtained by the Respondent and Terry Joseph Kieffer was unsecured and repaid from income from the operation of Knowles General Store.

      
      

   2. The Respondent, Teresa Louise Kieffer, exercised direct control over the operations of Knowles General Store.

      
      

   3. Although Terry Joseph Kieffer did sign for purchases on behalf of Knowles General Store at Seminole Stores, Inc., he picked up the inventory as a favor to Respondent and otherwise assisted her in the delivery of feed from Seminole Stores, Inc. In all cases, payment for the inventory was made by check drawn on the Knowles General Store Account and signed either by the Respondent or the Respondent's step-daughter, Teresa J. Kieffer, who was an authorized signer on the business account. (Petitioner's Exhibit Number 78 through 7L). Additionally, the account with Seminole Stores, Inc. was C.O.D. and personally guaranteed by the Respondent, Teresa L. Kieffer. (Petitioner's Exhibit Number 7A)

      
      

   4. Terry Joseph Kieffer did sign a few checks on the Respondent's business account. (Petitioner's Exhibit Numbers 8A through 8C, and 9A through 9D). However, Terry Joseph Kieffer was not an authorized signer on the Respondent's business checking account, had no operational control over the account, and signed those checks without the Respondent's authorization. (Petitioner's Exhibit Number 31)

      
      

   5. Although Terry Joseph Kieffer charged items at the Respondent's business, all charges to the business by the Respondent's husband or for her husband's farm use, were repaid. (Respondent's Exhibits Number 1 through 14)

      
      

8. It is also clear that Teresa Jo Kieffer, the Respondent's step- daughter, did not have a direct or indirect interest in the Respondent's business or the license based upon the following:

   
   

   1. Although Teresa Jo Kieffer, while assisting her step-mother in the operation of the business, did make payment of numerous bills on Respondent's business checking account, did direct the delivery persons in the receipt of inventory on a recurring basis, however, she did so subject to the direct supervision of the Respondent and at the Respondent's direction.

      
      

   2. Teresa Jo Kieffer's arrangement with her step-mother was in contemplation of employment, but at the time in question, the store was not earning enough money to pay her a salary. The business did provide gasoline on occasion to her as well as repairs to her motor vehicle on two (2) occasions. (Petitioner's Exhibit Number 25, 26EE-26HH, 28A through 28D and 32) These payments were gifts from the Respondent to her step-daughter.

      
      

9. It is also clear that Lynwood E. Knowles did not have a direct or indirect interest in the Respondent's a business or the subject license based upon the following:

   
   

   1. Although the City of Ocala Utilities records show that as of the date of the Hearing, and at all times pertinent prior thereto, Lynwood E. Knowles was the responsible party for payment of the electric service to the licensed premises, the Lease Agreement and other evidence indicated that the Respondent agreed to pay all utility service. Further, the fact that Mr. Knowles was still held responsible by the City of Ocala Utilities was unknown to either the Respondent or to Lynwood E. Knowles. Additionally, at the direction

      of the Respondent, her step-daughter went to the City of Ocala Utilities office and requested that service be changed to the Respondent's name. (Petitioner's Exhibit Number 3, 33C, 33D)

      
      

   2. Although during the period in question Lynwood E. Knowles was responsible to Clardy Oil Company for payment of hills for gasoline received by and sold at the licensed premises, at all times during the period in question, payment for the fuel received by Knowles General Store was made from the Knowles General Store Account. Further, during the period in question, there was in effect a special purpose lease and marketing agreement (Petitioner's Exhibit Numbers 34D and 34E) with Lynwood E. Knowles for the purpose of marketing gasoline at Knowles General Store. From and after October 1982, the date that the license was transferred to the Respondent, the commission payments on gasoline sales were paid to Knowles General Store and deposited in the Knowles General Store account. Mr. Clardy was notified by Mr. Knowles that the marketing agreement and lease should be assigned to the Respondent, but he did not get around to making the assignment until February 17, 1984.

      
      

   3. Although Lynwood E. Knowles was an authorized signer on the Respondent's business checking account, Mr. Knowles never signed any checks.

      Mr. Knowles' name was placed on the account merely as a matter of convenience for the Respondent during the period of transition of ownership and operation of the store.

      
      

      Discussion of Proposed Findings

      of Fact and Reasons for Rejection of Same

      
      

10. The foregoing findings of fact include the substance of virtually all of the findings of fact proposed by the Respondent. The foregoing findings of fact also include the substance of the majority of the "basic" facts proposed by the Petitioner. They do not include many of the "conclusional" facts proposed by the Petitioner which are based on inferences or assumptions the Petitioner urges should be drawn from the "basic" facts, because I am convinced that many of the inferences and assumptions urged by the Petitioner are unwarranted when all of the "basic" facts are considered together. Also, many of the Petitioner's proposed findings consist of unnecessary surplus details (See, specifically, most of the language in paragraphs 2, 3, 5, and 6 of Petitioner's proposed findings.) It should also be specifically noted that the preponderance of the competent substantial evidence in this case supports the finding that neither Terry Joseph Kieffer, Teresa Jo Kieffar, nor Lynwood E. Knowles had an interest in the Respondent's business.

    
    

    CONCLUSIONS OF LAW

    
    

    Based upon the foregoing findings of fact and upon the applicable principles of law, I make the following conclusions of law:

    
    

11. Pursuant to Section 120.57(1), Florida Statutes, the Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this case.

    
    

12. All applicants for Alcoholic Beverage Licenses are required to notify the Division of Alcoholic Beverages and Tobacco of any and all persons having a direct or indirect interest in the business for which a license is sought or in the license itself. Section 561.17, Florida Statutes, and Department of Business Regulations Form DBR700-L rev, 10-80. This requirement is intended to

    preclude a person not qualified to obtain a beverage license pursuant to Florida Statutes, Section 561.15, from receiving a direct or indirect financial benefit from a license issued in contravention of these requirements.

    
    

13. The Division of Alcoholic Beverages and Tobacco is authorized to revoke or suspend any license issued under the Beverage Law if it is established that a parson who is interested directly or indirectly in the license or licensed business authorized to sell alcoholic beverages is not qualified, or if it is established that any person required to be qualified by the Division as a condition for the issuance of the license is not qualified. Florida Statutes, Section 561.29(1)(f)(g).

    
    

14. The Florida Beverage Law clearly prohibits a convicted felon from being employed as a manager or person in charge of the licensed premises. Florida Statutes, Section 562.13(3)(a), and Rule 7A-3.111, Florida Administrative Code. The term "employed" as used in the Beverage Law should be construed in the same manner as the term "employee" is defined, that is: "a person who receives a salary or wages for services performed, for and in behalf of a licensee...." Rule 7A-3.17, Florida Administrative Code. The evidence showed that neither Terry Joseph Kieffer nor Teresa J. Kieffer received a salary. Nor did either of them manage the business.

    
    

15. The Beverage Law does not prohibit gratuitous provision of services to the licensee, nor does the Beverage Law prohibit the licensee from providing to others gratuities or from reimbursing them for expenses incurred in providing services to the licensee. What the Beverage Law contemplates and prohibits is the maintenance of an undisclosed interest, either direct or indirect, in the licensed premises by a person not qualified to hold such interest. Section 561.17(1), Florida Statutes. The type of interest contemplated by the statutes is a "pecuniary" interest. See Wilkenfeld v. Meiklejohn, 216 So.2d 237 (Fla. 1st DCA 1968).

    
    

16. Any finding of the existence of undisclosed interests must be supported by competent substantial evidence. Mere suspicion or conjecture is not enough. See Wilkenfeld, supra, at 239. The substantial competent evidence in this case fails to show that Terry Joseph Kieffer or Teresa J. Kieffer have or had any pecuniary interest in the license or the licensed premises.

    
    

17. Further, the substantial competent evidence fails to show that Lynwood

    E. Knowles has or had any undisclosed pecuniary interest in the license or licensed premises. Responsibility for utilities in not proof of a pecuniary interest, particularly in light of the provisions in the lease agreement between the Respondent and Lynwood E. Knowles. Wilkenfeld, supra, at 239.

    (Petitioner's Exhibit Number 3) The Respondent disclosed to the Division on her application for transfer of the beverage license that she was leasing the premises from Lynwood E. Knowles and that financing for the purchase was being obtained from him. Additionally, the evidence showed that during the period in question, the only monies received by Knowles were pursuant to the disclosed lease agreement and note. Further, there is no evidence that Knowles retained a security interest in the license. All monies received from Clardy Oil Company during the lease period were assigned to and received by the Respondent pursuant to prior agreement with Knowles.

    
    

18. The circumstances in this case are in a number of ways similar to the circumstances in Wilkenfeld v. Meiklejohn, 216 So.2d 237 (Fla. 1st DCA 1968).

    Both cases involved rumors, relatives, and utility bills. Both cases contain facts which, in the words of the Wilkenfeld decision, are sufficient to "give rise to prudent suspicion of an interest...." But both cases lack competent substantial evidence sufficient to prove the facts which were suspected.

    
    

19. There being insufficient proof to establish that Terry Joseph Kieffer, Teresa Jo Kieffer, or Lynwood E. Knowles had any pecuniary interest in the license or the licensed business, it follows a fortiori that there is insufficient proof of the charges that the Respondent filed false information by failing to disclose any such interests.

RECOMMENDATION

Based upon all of the foregoing, it is recommended that the Division of Alcoholic Beverages and Tobacco enter a Final Order dismissing all charges against the Respondent.

DONE and ORDERED this 15th day of May, 1985, at Tallahassee, Florida.

MICHAEL M. PARRISH

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 May, 1985.

COPIES FURNISHED:

Michael W. Johnson, Esquire

307 Northwest Third Street Ocala, Florida 32670

Thomas A. Klein, Esquire Staff Attorney Department of Business

Regulation

725 South Bronough Street Tallahassee, Florida 32301

Howard M. Rasmussen, Director Division of Alcoholic Beverages

and Tobacco

725 South Bronough Street Tallahassee, Florida 32301

Docket for Case No: 84-003283

Orders for Case No: 84-003283