DEPARTMENT OF BUSINESS REGULATION, ) DIVISION OF ALCOHOLIC BEVERAGES ) AND TOBACCO, )
vs. ) CASE NO. 86-0203
) MICHAEL G. MANDEVILLE, d/b/a ) THE SUGAR SHACK, )
Respondent. )
For Petitioner: Sandra P. Stockwell, Esquire
For Respondent: Michael J. Griffith, Esquire
An immediate post-suspension final hearing was held in this case in Pensacola on January 24, 1986. The issues are the truth of the allegations of multiple drug violations and drink solicitations contained in the Notice To Show Cause filed in this case by Petitioner, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco (Division), against Respondent Michael G. Mandeville, d/b/a The Sugar Shack (Mandeville), Mandeville's responsibility for any such violations by his employees or patrons and, if applicable, the penalty to be imposed on Mandeville.
Respondent Michael G. Mandeville, d/b/a The Sugar Shack (Mandeville), is licensed under the Beverage Law, license number 27-1311, series 2-COP, for the premises known as The Sugar Shack located at 11 East Fairfield Drive, Pensacola, Escambia County, Florida. Mandeville has operated The Sugar Shack at that location under that license from July 1985 through the emergency suspension of the license and closing of the business on January 16, 1986.
Previously, Mandeville was President, Secretary and Treasurer and 100 percent stockholder of Someplace Else Pensacola, Inc., a licensee under the Beverage Law. On February 1, 1984, Someplace Else Pensacola, Inc., entered into a Stipulation with Petitioner, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco (Division), settling a Notice To Show Cause containing eight counts of solicitation of drinks and one count of conspiring to deliver a controlled substance. At the time, the licensee, Someplace Else Pensacola, Inc., was doing business as The Sugar Shack at 720 West Government Street, Pensacola, Florida.
Earlier the licensee Someplace Else Pensacola, Inc., was doing business as Someplace Else at Highway 29 and Roberts Road in Pensacola, Florida. Mandeville was its Secretary and Treasurer and owned half of the stock issued by the corporate licensee. On July 29, 1982, the licensee Someplace Else Pensacola, Inc., d/b/a Someplace Else, entered into a Stipulation with the Division settling a Notice To Show Cause containing twelve counts of solicitation of drinks and five counts of delivering a controlled substance.
In the short time Mandeville's current license was being operated, he was aware of drug problems on the premises. Problems of this sort in approximately September 1985 caused Mandeville to be in contact with the Escambia County Sheriff's Office, Narcotics Division. In order to help himself, Mandeville agreed to cooperate with the Sheriff's Office. Although Mandeville told officers in the Sheriff's Narcotics Division that he personally knew no drug users on the premises, he would have a part-time employed disk jockey named Darrel Able, who might have information, contact the Narcotics Division. Mandeville and his staff also had to fire several employees on suspicion of drugs, including a dancer named Margie.
The Sugar Shack's premises consist of one large major room with a separate room for playing pool, separate dressing rooms, and men and ladies restrooms. The licensed, premises contain two stages for topless dancing performances, a booth for the disk jockeys and a large bar. It is not possible to see into the dressing rooms from the main room, from the bar or from the disk jockey booth. It is not possible to see the room containing the pool tables from the main room, the disk jockey booth, or the bar. Within the licensed premises, there are many tables where customers sit. During business hours of The Sugar Shack, there are topless dancers performing to loud music. Because of the loud music, it is difficult to hear normal conversations even among those sitting at one of the various tables in the licensed premises.
Mandeville employs several people to assist him in the operation and maintenance of The Sugar Shack. During most of the business day, Mandeville is present at the licensed premises. When Mandeville is not present, his brother Steve is in charge of the licensed premises. When Steve Mandeville is not present, the assistant manager and doorman Russell Sapp is in the licensed premises and supervises them. When Sapp is not present, John Chiarito, an employed disk jockey, manages the licensed premises and supervises them. For most of the day, two or three of these people are present in the licensed premises and serve in a supervisory capacity. Additionally, Mandeville employs a day bartender named Helen Mabie, who functions in a supervisory capacity. Mandeville also employs other personnel including bartenders and waitresses who are in the licensed premises during business hours and are supposed to inform management of any violations of laws and rules they suspect.
Mandeville himself is present at the licensed premises for approximately eight hours a day at various times between 1:30 p.m. and 2:00 a.m. Mandeville generally supervises the overall business operations of The Sugar Shack, including the hiring and firing of employees.
Since Mandeville opened the licensed premises, he has announced a policy applicable to all employees prohibiting the possession of drugs in the licensed premises and the solicitation of drinks by employees. Generally, all employees, especially dancers, are required to sign statements agreeing to the policies.
Rules implementing the policies are posted prominently in several locations within the licensed premises including the dancers' dressing rooms. However, the signs contain statements like: "there's a time & place for everything, please think before making your move"; "they are watching you know the law, they know you"; and "the law has the right to walk in this dressing room at any given second keep yourself & your friends out of trouble." Although the overall message of the signs and policies prohibit drugs and drink solicitation, the above unfortunately phrased parts of the signs might tend to imply a management attitude that those activities are acceptable as long as no employees are caught doing them.
Mandeville has made it known to his employees that violation of the prohibition against drugs would result in termination, supposedly without giving anybody a second chance. Mandeville and his management staff have in fact fired several employees for violation of the prohibition against drugs on the licensed premises: Toni for smoking marijuana in the dressing room; Nicki for possession of prescription drugs not in a bottle; Margie for using and selling cocaine; and Nicole for suspicion of selling cocaine. According to Mandeville, even suspicion of violating the drug prohibition will result in termination, and there is not supposed to be a second chance for anyone. However, Margie was rehired after being terminated for violating the drug prohibition. In addition, Mandeville did not fire Margie a second time before his license was suspended and did not fire another dancer named Nicole until the first week of January 1986 although he suspected both of them of selling cocaine as early as December 19, 1985, when an undercover Escambia County Sheriff's Office narcotics deputy posing as a patron told him that Nicole had sold the deputy cocaine.
Mandeville also made it known to his employees that patrons were supposed to be asked to leave the premises if they violated drug laws on the premises. If such a patron refused to leave, either they were to be forced to leave or law enforcement was to be notified. However, Mandeville did not ask the undercover deputy to leave on December 19, 1985, although the undercover deputy told Mandeville that he had bought cocaine from Nicole. Similarly, the same undercover deputy was not asked to leave by an employee named Sophia on December 27, 1985, when the deputy told Sophia that he had bought cocaine from Nicole.
Mandeville or his managements staff conducts periodic unannounced searches of the dancers' lockers. These searches are conducted in the dancers' presence. Refusal to permit a locker search is grounds for termination, and two employees, one a dancer named Connie, were fired for refusal to allow a locker search.
According to Mandeville, his management staff is supposed to periodically review with the employees the rules prohibiting drugs and drink solicitation. However, Mandeville does not follow up on the performance of his management staff and several understand their obligation to be only to go over the rules with the employees when one of the employees violates the rules. Only Dwight Sparks, the Sunday night manager, goes over the rules each night he works.
Violation of the rule against drink solicitation, when detected, is supposed to result in termination. But there was no evidence that any employee has been fired for drink solicitation. Enforcement of this policy is not as strict as enforcement of the policy against drugs on the premises.
Mandeville does not require his employees to subject themselves to a polygraph lie detector examination. He asks prospective employees for an oral history of employment but does not get it in writing and does not check the validity or quality of the references. Mandeville does not check for arrest records of his employees.
On December 3, 1985, Officer Zeka of the Escambia County Sheriff's Department entered the licensed premises in an undercover capacity posing as a patron. Within minutes of entering the premises, Zeka was able to buy five capsules of cocaine from the employed dancer Nicole. Nicole and Zeka were sitting back to back in adjoining booths when the transaction took place.
Nicole reached over the waist high back of the booths and placed the capsules on Zeka's table in exchange for $50. Because of the loud music, dark lighting, relatively cluttered table and the topless dancing performances attracting attention elsewhere, the transaction would have been difficult for anyone to detect who was not paying attention and trying to detect a drug transaction even though the transaction was not completely concealed. Zeka quickly counted the capsules and put them in his pocket.
On December 4, 1985, Zeka bought from Nicole another three capsules of cocaine in a clear cellophane cigarette package wrapper for $50. The circumstances of the transaction were essentially the same as on December 3.
Later on December 4, 1985, Zeka bought from Nicole another five capsules of cocaine for $50. The circumstances of this transaction also were the same as on December 3. As on December 3, Nicole placed the capsules on the table in front of Zeka who counted them and put them in his pocket.
On December 5, 1985, Zeka again bought from Nicole five capsules of cocaine. Again, the circumstances were essentially the same as on December 3. As on December 3, Nicole placed the capsules on the table in front of Zeka who counted them and put them in his pocket.
On December 26, 1985, Zeka was in the licensed premises and asked employed dancer Margie to sell him some cocaine. At first Margie was unable to because "her man," i.e., her source of drugs, was not around. Later she walked over to and embraced "her man," Darrel Able, who slipped a clear plastic bag containing approximately one-half gram of cocaine into the back of her g-string type panties. Margie returned to the table and put the bag on the table between Zeka and another undercover officer named Lewis.
Somehow the bag opened, and some cocaine spilled on the table. Margie suggested they "do a line" from the cocaine spilled on the table and took a straw out of one of the glasses on the table. When Zeka and Lewis affected to warn her not to be so open about it in order to preserve their cover, Margie told them not to worry because it was done all the time. However, it was not proved that Margie was not either joking or intoxicated, and no credence can be given to her statement that cocaine was used at the tables in the licensed premises.
As before, the licensed premises were dark and noisy at the time and the attention was directed to the dance stage. Although the transaction was not completely concealed it still would not have been easy to detect.
On December 27, 1985, an employed dancer named June openly handed Lewis a marijuana cigarette she said she had been given as a tip and invited Lewis to smoke it outside. Again, although June made no attempt to conceal what she was doing, it would have been difficult to detect exactly what she was doing and that she had a marijuana cigarette.
Also on December 27, 1985, Zeka asked employed dancer Nicole to sell him some more cocaine. Nicole had none and had to leave the licensed premises to obtain some. She put on her street clothes, left, returned and handed Zeka four capsules of cocaine in a concealed manner.
On December 31, 1985, a man named John Carroll sold cocaine to Zeka's confidential informant twice within 20 minutes. Both times the confidential informant walked over to Carroll, who was standing by the bar. The first time Mandeville himself was seated five bar stools away from Carroll. Both times the confidential informant persuaded Carroll to sell the cocaine, reached into his front shirt pocket to get the cocaine and returned to Zeka who was approximately
15 feet away. In a concealed manner, the cocaine was handed to Zeka, who held the clear plastic bag containing the cocaine up by the corner, looked at it and placed it in his pocket. Again, although Mandeville was in a position to see the first transaction if he had been paying attention and watching for it, the evidence did not prove that he actually saw the transaction.
It was not proved that Carroll was an employee, as opposed to a patron, of Mandeville.
On January 13, 1985, Lewis bought a half gram of cocaine from employed dancer Margie for $50. Margie delivered the cocaine in a concealed manner that would have avoided any detection.
In addition to the activity involving controlled substances described above, Mandeville's employees on numerous occasions solicited drinks from Lewis as follows:
Sophia | December | 19, | 1985 |
Liz | December | 19, | 1985 |
Angela | December | 19, | 1985 |
Debbie | December | 19, | 1985 |
Candy | December | 30, | 1985 |
Judy | December | 30, | 1985 |
Chastity | December | 30, | 1985 |
Candy | December | 30, | 1985 |
Margie | December | 26, | 1985 |
June | December | 27, | 1985 |
Cindy | December | 27, | 1985 |
Candy | December | 27, | 1985 |
Peggy | December | 27, | 1985 |
Mandeville never asked the Division for assistance in, or suggestions for, supervising the licensed premises so as to control or eliminate illegal drug violations and drink solicitations. Rather, the evidence is that Mandeville offered to cooperate with the Escambia County Sheriff's Office to "help himself and them" in September 1985 and later in late December 1985 or early January 1986. In essence, as previously mentioned, Mandeville put the
Sheriff's Office in contact with Darrell Able and, on one occasion in early January 1986, telephoned the Sheriff's Office to relate that Able supposedly thought he was going to be able to set up a drug deal for the Sheriff's Office. Neither Mandeville nor Able ever re-contacted the Sheriff's Office.
Weighing the totality of the evidence, it is found that Mandeville did not supervise the premises and his employees in a reasonably diligent manner under the circumstances. Mandeville was aware from past experience of the problem of drugs in an establishment like the licensed premises in general and in the licensed premises themselves in particular. Mandeville announced adequate policies and placed some management techniques in effect to implement the policies. However, Mandeville did not adequately follow up and did not know that his staff was not following all of the techniques. They were not, for example, regularly reviewing the rules prohibiting drugs and drink solicitation with the employees, and the employees did not understand that they were to report all suspicion of violation of the rules by both employees and patrons to the management. Mandeville himself failed to follow his own procedures by rehiring Margie and failing to fire Margie and Nicole immediately upon receiving information or knowledge of their drug use and dealing at least by December 19, 1985.
Not only did Mandeville and his staff not follow all the procedures that he had in place, Mandeville did not seek the assistance and suggestions of the Division for additional management techniques. He did not improve the lighting in the licensed premises, did not polygraph his employees and did not check the background of prospective employees.
A combination of the laxity of Mandeville and his staff in enforcing the procedures he had in place and Mandeville's failure to adopt more effective available procedures that he should have known were required under the circumstances proximately caused the employee violations on the premises. As for the drink solicitation violations, Mandeville's written policy against drink solicitation appears to be more honored in the breach. In addition to the thirteen violations within eleven days charged in this case, the two previous notices to show cause against a licensee in which Mandeville had substantial interest and control contained a total of twenty counts of drink solicitation which were settled by stipulation.
CONCLUSIONS OF LAW
Section 569.29, Florida Statutes (1983), 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 permitting another on the licensed premises to violate any of the laws of this state or of the United States . . . .
Violation by the licensee . . . of any laws of this state or any state or territory of the United States.
Maintaining a nuisance on the licensed premises.
* * *
(3) 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 (1983), declares a place or building where controlled substances are illegally kept, sold, or used, to be a nuisance.
Section 893.13(2)(a)(5), Florida Statutes (1983), makes it unlawful for any person:
To keep or maintain any store, shop, ware- house, 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 cocaine are controlled substances. It is a violation of state law to sell, use, deliver, or possess marijuana or cocaine. Section 893.13, Florida Statutes (1983).
Mandeville's employees Nicole, Margie and June violated Section 893.13, Florida Statutes (1983).
Section 562.131(1), Florida Statutes (1983) provides: It is unlawful for any licensee, his employee,
agent, servant, or any entertainer employed at the licensed premises or employed on a contractual basis to entertain, perform or work upon the licensed premises to beg or solicit any patron or customer thereof or visitor in any licensed premises to purchase any beverage, alcoholic or otherwise, for
such licensee's employee, agent, servant, or entertainer.
On thirteen occasions within a period of eleven days, eleven of Mandeville's employees solicited drinks from undercover officers posing a patrons.
Mandeville is held accountable for the violations of his employees if he was culpably responsible by reason of his own negligence, intentional wrongdoing or lack of diligence. Pauline v. Lee, 147 So. 2d 359 (Fla. 2nd DCA 1962). In Pauline v. Lee, the court held:
The persistent and practiced manner with which the solicitations [for prostitution] described by the state's witnesses were made is sufficient to permit a factual inference leading to the conclusion that such violations of law were either fostered, condoned or negligently over- looked by the licensee notwithstanding
his absence from the premises on the date in question.
Id. at 364. See also Taylor v. State Beverage Department, 194 So. 2d 321, 325 (Fla. 2nd DCA 1967). The evidence in Pauline v. Lee consisted of five separate solicitations for prostitution by five different employees of the licensee.
In Lash, Inc. v. State Department of Business Regulation, 411 So. 2d
276 (Fla. 3rd DCA 1983), the operative facts before the court were:
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 applied the standard for revocation or suspension of a beverage license to the facts of that case:
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. (Citations 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 appellants' failure to supervise the premises and his employees in a reasonably diligent manner, properly leading
to the license revocation.
The Court in Lash permitted the Division to draw an inference that the licensee negligently overlooked the violations or failed to exercise ordinary care in the maintenance of the licensed premises or supervision of his employees based upon the operative facts in Lash.
In this case, there was evidence of more violations over a longer period of time than in the Lash case. Accordingly, the evidence in this case establishes a prima facie case. In this case, the evidence is sufficient to support an inference of the type drawn in Lash. Weighing the totality of the evidence, it is found that Mandeville did not supervise the premises and his employees in a reasonably diligent manner under the circumstances. Mandeville was aware from past experience of the problem of drugs in an establishment like the licensed premises in general and in the licensed premises themselves in particular. Mandeville announced adequate policies and placed some management techniques in effect to implement the policies. However, Mandeville did not adequately follow up and did not know that his staff was not following all of the techniques. They were not, for example, regularly reviewing the rules prohibiting drugs and drink solicitation with the employees, and the employees did not understand that they were to report all suspicion of violation of the rules by both employees and patrons to the management. Mandeville himself failed to follow his own procedures by rehiring Margie and failing to fire Margie and Nicole immediately upon receiving information or knowledge of their drug use and dealing at least by December 19, 1985.
Not only did Mandeville and his staff not follow all the procedures that he had in place, Mandeville did not seek the assistance and suggestions of the Division for additional management techniques. He did not improve the lighting in the licensed premises, did not polygraph his employees and did not check the background of prospective employees.
A combination of the laxity of Mandeville and his staff in enforcing the procedures he had in place and Mandeville's failure to adopt more effective available procedures that he should have known were required under the circumstances proximately caused the employee violations on the premises. As for the drink solicitation violations, Mandeville's written policy against drink solicitation appears to be more honored in the breach. In addition to the thirteen violations within eleven days charged in this case, the two previous notices to show cause against a licensee in which Mandeville had substantial interest and control contained a total of twenty counts of drink solicitation which were settled by stipulation.
Section 561.29(1)(a), Florida Statutes (1983), also prohibits a licensee from "permitting another [i.e. someone other than himself, his agents,
officers, servants or employees] on the licensed premises to violate any of the laws of this state or the United States . . . ." The evidence established that a patron on the licensed premises, John Carroll, violated drug laws on the licenses premises. But there was no evidence that Mandeville actually or constructively permitted Carroll to conduct illegal drug activities on the licensed premises. Therefore, it must be concluded that Mandeville did not permit Carroll to conduct illegal drug activities on the premises. See Jones v. State Department of Business Regulation, 448 So.2d 1109 (Fla. 1st DCA 1984).
Cf. Bach v. Florida State Board of Dentistry, 378 So.2d 34 (Fla. 1st DCA 1980).
For the reasons set forth in paragraph 11 of the Conclusions of Law above, Mandeville also is culpably responsible for maintaining a nuisance in violation of Sections 823.10 and 561.29(1)(c), Florida Statutes (1983), and for keeping a place which is resorted to by persons using controlled substances in violation of Chapter 893 for the purpose of using those substances or which is used for keeping or selling them in violation of Chapter 893, thereby violating Sections 893.13(2) (a) (5) and 561.29(1)(a), Florida Statutes (1983). A literal reading of those statues, like 561.29(1)(a), "would indicate that a liquor licensee is under the onus of suspension or revocation . . . irrespective of his own personal fault in connection therewith." Pauline v. Lee, supra, at 364. But, like Section 561.29(1)(a), those statutes must be read to require proof of culpable responsibility by the licensee as a result of his own negligence, intentional wrongdoing or lack of diligence in order to warrant discipline of his license. As previously explained, proof in this regard was sufficient in this case as to all the violations on the licensed premises.
Based upon the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that Petitioner, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, enter a final order revoking Alcoholic Beverage License Number 27-1311, Series 2-COP, held by Respondent, Michael G. Mandeville, d/b/a The Sugar Shack, 11 Eastfair field Drive, Pensacola, Escambia County, Florida, on all the grounds alleged in the Notice To Show Cause in this case except paragraphs (1)g. and (2)g.
RECOMMENDED this 13th day of February 1986, in Tallahassee, Florida.
J. LAWRENCE JOHNSTON Hearing Officer
FILED with the Clerk of the Division of Administrative Hearings this 13th day of February 1986.
APPENDIX TO RECOMMENDED ORDER IN CASE NO. 86-0203
2-4. Covered by Findings 5-7, respectively.
5. Covered by Findings 15, 8, and 9, to the extent necessary.
6-9. Covered by Finding 10, to the extent necessary. (The evidence was not clear exactly who fired the various employees but that is not necessary or relevant).
10. Covered by Finding 1.
11-13. Rejected as unnecessary recitation of procedural history. 14-17. Covered by Findings 16-19., respectively.
18. Covered by Findings 11 and 28. (There was no persuasive evidence that Mandeville "conducted an investigation concerning the activities of Nicole" or "obtained additional information" or that Mandeville fired Nicole "as soon as the Respondent verified this information").
19-22. Covered by Findings 20-23, respectively.
27-37. Covered by Finding 26, to the extent necessary.
38-40. Rejected as incomprehensible. See also paragraphs 41-49. below. 41-49. Covered by Findings 8-14. There was no evidence that any employee
ever has been fired for solicitation of drinks. The evidence was not clear which individual or group of individuals actually fired all of the individuals listed in Finding 10. Their identity is not necessary or relevant.
50. Covered by Findings 8, 13. and 14.
51-52. Covered by Finding 12. (There was only evidence that two employees were fired for refusing to allow a locker search).
58-59. Accepted and covered by the absence of any finding that they did.
Sandra P. Stockwell, Esouire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
Michael J. Griffith, Esguire Post Office Box 12308 Pensacola, Florida 32581
Howard M. Rasmussen, Director Division of Alcoholic Beverages
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
Richard B. Burroughs, Jr., Secretary Department of Business Regulation 725 South Bronugh Street Tallahassee, Florida 32301
