STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS )

REGULATION, DIVISION OF ) ALCOHOLIC BEVERAGES AND TOBACCO, )

)

Petitioner, )

)

vs. ) CASE NO. 87-2095

)

LILLIAN MARlE REYNOLDS )

d/b/a DIAMOND LIL'S, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause was heard by Linda M. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on October 21, 1987, in Key West, Florida.

Petitioner Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, was represented by Thomas A. Klein, Esquire, Tallahassee, Florida; and Respondent Lillian Marie Reynolds d/b/a Diamond Lil's was represented by John P. Rotolo, Esquire, Key West, Florida.

On May 25, 1987, Petitioner served on Respondent a Notice to Show Cause alleging certain violations of the beverage laws, and Respondent requested a formal hearing on those allegations. Accordingly, the issue for determination herein is whether Respondent is guilty of the allegations contained in that Notice to Show Cause and, if so, what disciplinary action should be taken, if any.

Petitioner presented the testimony of James W. Deloach and Betty Warner. Respondent testified on her own behalf and presented the testimony of David P. Silin and Kevin W. Blackburn. Additionally, Petitioner's Exhibits numbered 1-7 and Respondent's Exhibit numbered 1 were admitted in evidence.

Both parties submitted posthearing proposed findings of fact in the form of proposed recommended orders. Rulings on each proposed finding of fact can be found in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Petitioner is the Department of Business Regulation, Division of Alcoholic Beverages and Tobacco. Respondent is Lillian Marie Reynolds, d/b/a Diamond Lil's, who currently operates under beverage license number 54-00573, Series 2-COP, at U.S. Highway #1, Lot #5, Big Coppitt Key, Monroe County, Florida.

   
   

2. On August 7, 1986, the Monroe County Sheriff's Department and Petitioner began an undercover narcotics investigation entitled "Operation

   Sabre". As part of that investigation, two of Petitioner's beverage agents conducted surveillance of Respondent's licensed premises.

   
   

3. On August 15, 1986, Petitioner's investigators, Deloach and Warner, entered this licensed premises. They met a patron known as "Ken" and discussed the purchase of marijuana. Subsequently, Ken sold Investigator Deloach approximately 3.4 grams of marijuana, in exchange for $10. This transaction occurred in plain view and took place in an open and notorious manner inside the licensed premises.

   
   

4. On that same day Investigator Deloach was invited into the ladies' bathroom by two other patrons to use cocaine. He observed the patrons "snort" cocaine in the licensed premises.

   
   

5. On August 16, 1986, Investigators Deloach and Warner reentered the licensed premises. Investigator Deloach was approached by the patron Ken regarding the sale of marijuana. During the conversation, Ken displayed a marijuana cigarette in plain view. Later in the evening, the investigators were approached by Steve Anderson, a member of the band that played at Diamond Lil's. Anderson discussed future sales of marijuana to the investigators. Anderson then sat on the floor just inside the front door of Diamond Lil's, rolled a marijuana cigarette, lit it, smoked it, and passed it to Investigator Deloach who simulated smoking it.

   
   

6. On August 18, 1986, Investigators Deloach and Warner returned to the licensed premises. On this occasion, Respondent's son Kevin Blackburn was acting as the bartender/manager. The investigators were approached by Steve Anderson, who inquired whether they would be interested in purchasing some marijuana or cocaine. In response thereto, Investigator Deloach handed Anderson

   $10 for the purchase of some marijuana. However, Anderson later returned Investigator Deloach's money and stated that his supplier was not at home.

   
   

7. On that same day the investigators approached Kevin Blackburn to inquire as to whether he could get them cocaine or marijuana. In response thereto, Blackburn stated that he had been on a "three day buzz" and that there were no drugs available at this time. The term "three day buzz" is a slang term which is generally understood to mean a narcotics-induced euphoria. Investigator Deloach also asked Blackburn to advise him when drugs became available.

   
   

8. On August 19, 20 and 21, 1986, Investigators Deloach and Warner returned to the licensed premises. No actual drug purchases were made on these occasions; however, the investigators had loud conversations with Steve Anderson relative to the purchase of cocaine and marijuana.

   
   

9. On August 22, 1986, Investigators Deloach and Warner returned to the licensed premises. On this occasion, the licensee and her son were sitting at the bar, facing the investigators, in the vicinity of a patron known as "Jackie Francesia". While at the bar, Investigator Deloach asked Jackie Francesia if he could purchase some cocaine. In response, Jackie Francesia sold Investigator Deloach one-half (1/2) gram of cocaine for $35. This transaction occurred in plain view and took place in an open and notorious manner, some fifteen feet from the licensee and her son.

   
   

10. On August 25, 1986, Investigators Deloach and Warner returned to the licensed premises. Investigator Warner met with band member Steve Anderson to inquire as to the availability of marijuana. Anderson stated that he did not

    have any but that he would check in the bar for some. Anderson then left the immediate vicinity of Investigator Warner and approached Kevin Blackburn, who was tending bar. Investigator Warner observed Kevin Blackburn talking with Anderson and pointing out another patron, who was seated in the premises.

    Anderson went directly to that patron and spoke with the patron. Shortly thereafter, Anderson returned to Investigator Warner and told her that the cocaine was available but that his motorcycle was not running. Also on this date, the investigators observed three patrons standing just outside the main entrance of the licensed premises, smoking marijuana.

    
    

11. On August 26, 1986, Investigators Deloach and Warner returned to the licensed premises. On this occasion, Kevin Blackburn was working behind the bar in a managerial capacity. The investigators met with Jackie Francesia to inquire as to the availability of cocaine. In response, Francesia handed Investigator Warner one-half gram of cocaine in exchange for $35. This transaction occurred in plain view and took place in an open and notorious manner in the licensed premises. After the cocaine delivery, Investigator Deloach approached Investigator Warner at the bar of the licensed premises and held out his wallet in full view of several patrons and Kevin Blackburn. Investigator Warner removed the cocaine from her pants pocket, held it up in plain view of Kevin Blackburn and placed it in Investigator Deloach's wallet. Subsequently, Investigator Deloach approached Kevin Blackburn and told him that he had just purchased cocaine from Jackie Francesia at the bar. In response thereto, Kevin Blackburn voiced his approval of the narcotics transaction occurring on the licensed premises.

    
    

12. On August 28, 1986, Investigators Deloach and Warner returned to the licensed premises. Again, Kevin Blackburn was tending bar. The investigators approached Steve Anderson in the presence of Kevin Blackburn to inquire as to the availability of cocaine. Anderson stated that a patron known as "Miguel Vasguez" had some in his possession. Investigator Deloach then gave Anderson

    $40 for the purchase of cocaine. Anderson left the immediate vicinity of the investigators and returned shortly thereafter with one-half gram of cocaine. He then handed the cocaine to Investigator Deloach. This transaction occurred in plain view and took place in an open and notorious manner on the licensed premises.

    
    

13. After taking delivery of the cocaine, Investigator Deloach again approached Kevin Blackburn and told him that he had just purchased cocaine in the licensed premises. Kevin Blackburn again acknowledged his approval of the narcotics transaction.

    
    

14. In addition to being the licensee of record in the instant case, Lillian Marie Reynolds operates another premises which has an alcoholic beverage license and at which business she spent almost all of her time. Sometime prior to the commencement of "Operation Sabre", Reynolds turned over the management of Diamond Lil's to her son Kevin Blackburn. Although Reynolds was only present during one of the drug transactions described above, Blackburn was present during most of the others. Neither Reynolds nor Blackburn voiced any disapproval of the drug transactions taking place in Diamond Lil's.

    Furthermore, Reynolds admitted she had given no specific directions to her son regarding prohibiting drug use or transactions in the premises even though she had told the Sheriff prior to "Operation Sabre" that drug dealing might be taking place in Diamond Lil's.

    CONCLUSIONS OF LAW

    
    

15. The Division of Administrative Hearings has jurisdiction over the subject matter hereof and the parties hereto. Section 120.57(1), Florida Statutes.

    
    

16. Respondent is charged with violating section 893.13(2)(a)5, Florida Statutes, and therefore violating section 561.29(1)(a), Florida Statutes, by maintaining a place resorted to by persons using, keeping, or selling controlled substances. Respondent is further charged with violating section 823.10, Florida Statutes, and therefore section 561.29(1)(c) by maintaining a place or building deemed a public nuisance.

    
    

17. The evidence presented clearly demonstrates that Respondent has fostered, condoned and/or negligently overlooked trafficking in and use of controlled substances in and just outside the licensed premises and has failed to exercise diligence in supervising her employees and in managing the licensed premises so as to prevent the illegal trafficking and use of controlled substances therein. The evidence further shows that Diamond Lil's has been operated as an open and notorious gathering place for those predisposed to using, dealing in, and delivering controlled substances prohibited by Chapter 893, Florida Statutes. Accordingly, Diamond Lil's constitutes a nuisance within the meaning of Sections 823.10 and 561.29(1)(c), Florida Statutes.

    
    

18. Section 893.13(1)(a), Florida Statutes, provides that it is unlawful for a person to sell or deliver any controlled substance in violation of Chapter 893, Florida Statutes. Section 561.29(1)(a), Florida Statutes, subjects an alcoholic beverage license to disciplinary action whenever the licensee permits another on the licensed premises to violate the laws of this state. The facts set forth hereinabove clearly demonstrate that patrons and other persons were knowingly permitted to commit the offense of possession, sale, or delivery of controlled substances in violation of Chapter 893, Florida Statutes, on the licensed premises. On one occasion both Reynolds and Blackburn were looking at Deloach when he purchased cocaine, and he held it in open view for them to see before placing it in his wallet. On two occasions Deloach specifically advised Blackburn that he had just purchased cocaine, and Blackburn only smiled displaying his approval. No evidence was offered to indicate that the licensee or her son did anything to prevent narcotics activity from occurring on the premises prior to the charges being filed in the instant case. Both Respondent and her son had actual knowledge that Diamond Lil's was being patronized by persons for purposes of using, buying, and selling controlled substances. Even had Petitioner failed to prove actual knowledge, it must be concluded that Respondent was culpably negligent in the management of the licensed premises. Whether absent from the premises or not, the level of drug activity occurring in the licensed premises during the undercover investigation was so pervasive that even the most negligent licensee should have been put on notice of the illegal activity.

    
    

19. In its proposed recommended order, Petitioner recommends that a civil penalty of $5,000 be assessed against Respondent in this cause. Such a fine is reasonable based upon the continuing nature of the activities involved and the number of drug transactions participated in at Diamond Lil's by the investigators herein.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is,

RECOMMENDED that a Final Order be entered finding Respondent guilty of the allegations contained within the Notice to Show Cause and assessing a civil penalty against Respondent in the amount of $5,000.

DONE and RECOMMENDED this 4th day of December, 1987, at Tallahassee, Florida.

LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 4th day of December, 1987.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-2095

1. Petitioner's Proposed Findings of Fact numbered 1-14 and the first two sentences of finding numbered 15 have been adopted verbatim or in substance in this Recommended Order. The remainder of finding numbered 15, however, has been rejected as not constituting a finding of fact but rather as constituting argument of counsel.

   
   

2. Respondent's Proposed Findings of Fact numbered 1, 2, and 4-7 have been adopted in this Recommended Order either verbatim or in substance. The remainder of Respondent's Proposed Findings of Fact have been rejected as follows: 3 and 9 as being immaterial to the issues under consideration herein;

12 as being contrary to the evidence in this cause; and 8, 10, 11, and 13 as not being supported by the evidence herein.

COPIES FURNISHED:

Daniel Bosanko, Director Division of Alcoholic Beverages

and Tobacco

725 South Bronough Street Tallahassee, Florida 32399-1000

Thomas A. Klein, Esquire Department of Business

Regulation

725 South Bronough Street Tallahassee, Florida 32399-1000

John P. Rotolo, Esquire 627 Whitehead Street Key West, Florida 33040

Van B. Poole, Secretary Department of Business

Regulation

725 South Bronough Street Tallahassee, Florida 32399-1000

Docket for Case No: 87-002095

Orders for Case No: 87-002095