STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS )

REGULATION, DIVISION OF )

ALCOHOLIC BEVERAGES AND )

TOBACCO, )

)

Petitioner, )

)

vs. ) CASE NO. 87-4932

) 2000 COLLINS AVENUE CORP., d/b/a ) FIVE O'CLOCK CLUB, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the above matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Don W. Davis, on February 4, 1988 in Miami, Florida. The following appearances were entered:

APPEARANCES

FOR PETITIONER: Douglas Moody, Esq.

Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007

FOR RESPONDENT: Harold F. X. Purnell, Esq.

Oertel & Hoffman, P.A. Post Office Box 6507

Tallahassee, Florida 32314-6507

BACKGROUND

The Petitioner issued a Notice To Show Cause to Respondent. The notice charged Respondent with statutory violations and sought the suspension or revocation of Respondent's alcoholic beverage license in the absence of a showing of good cause why such action should not be taken. Respondent requested a formal administrative hearing.

At hearing, the parties stipulated to the existence of the factual matters set forth in an emergency order issued by Petitioner suspending Respondent's license, that Respondent has had no prior license violations since issuance of the license in 1963, and that Petitioner is in the process of resolving another case of a similarly situated licensee which will allow that licensee to sell or transfer such license.

Respondent presented the testimony of Mrs. Doris Marshall.

Proposed findings of fact, in addition to those stipulated by the parties, were submitted by Respondent and are addressed in the appendix to this recommended order.

Based upon all of the evidence, the following findings of fact are determined:

FINDINGS OF FACT

The parties stipulated to the factual matters set forth in the Petitioner's emergency order of suspension received by Respondent on July 16, 1987. Those facts are set forth in the following paragraphs 1 through 14.

The Stipulated Facts

1. The records of the Petitioner disclose that 2000 Collins Avenue, Corp., is the holder of Alcoholic Beverage License No. 23-02639, Series 4-COP, for a licensed premises known as the Five O'Clock Club, which is located at 2000 Collins Avenue, Miami Beach, Dade County, Florida.

   
   

2. On or about May 20, 1987, Petitioner's Investigators O. Santana and H. Garcia, entered the licensed premises of the Respondent as part of an ongoing narcotics investigation. While on the premises, Investigator Garcia purchased crack cocaine in plain view at the bar from a patron named "Maggy". Two male bartenders named Joe and Paul were also present.

   
   

3. On May 27, 1987, Investigators Santana and Garcia returned to the licensed premises of the Respondent known as the Five O'Clock Club. Bartender Joe was on duty at this time. At approximately 6:45 p.m., Maggy appeared and inquired of Investigator Garcia whether he wished to purchase more crack cocaine. Investigator Garcia indicated that he desired to do so and gave Maggy

   $40.00 for the purchase. Maggy left Investigator Garcia, returned shortly thereafter and placed the crack cocaine in a napkin on the bar counter. Maggy cut a small piece of the crack cocaine rock and placed it in her mouth in plain view of the bartender and patrons on the licensed premises.

   
   

4. On June 3, 1987, Investigators Santana and Garcia again entered the Five O'Clock Club in an undercover capacity. Once on the premises, the investigators were approached by a white male patron later identified as "Vincent". He asked if the investigators wished to purchase any drugs. The investigators indicated that they would take any thing that was available. The investigators indicated that they would prefer some powder cocaine and if it was unavailable some rock cocaine. Vincent went to the end of the bar and engaged in conversation with an unidentified latin male. He returned to the investigators and indicated that he could get some rock cocaine immediately from someone in the bar. Vincent indicated that he could get three cocaine rocks for

   $40.00 and the investigators agreed to purchase them. Vincent then returned to talk to the latin male who was also joined by Joe, the bartender on duty .

   During conversation between these three, Joe indicated that they should be careful to whom they sold as he did not want to get arrested. Vincent then returned to the investigators and requested identification to indicate that they were not police officers. Investigator Garcia removed his wallet showing Vincent false identification which Vincent accepted as legitimate. Garcia gave

   $40.00 to Vincent who then walked back over to the latin male. Vincent inquired of Joe whether Investigators Garcia and Santana were "okay". Joe indicated that

   the investigators were okay and were regulars at the bar. Vincent then placed a napkin on the bar in front of the investigators. When the napkin was opened on the bar top, three crack cocaine rocks were revealed. This transaction occurred, and the cocaine rocks exposed, in plain view of patrons and employees on the licensed premises. Joe made no effort at any time to terminate the transaction.

   
   

5. On June 4, 1987, Investigators Santana and Garcia returned to the licensed premises known as the Five O'Clock Club in an undercover capacity. At that time, bartender "Billy" was on duty. After a period of time, the investigators observed a black male walk up to Billy and indicate that he was going to "make his rounds." The black male then proceeded from patron to patron speaking in short conversations. When the black male reached an unidentified male patron playing an amusement device, the investigators heard the black male ask the patron if he wanted some "crack". The patron indicated yes and handed the black male $10.00. The black male handed a small, clear plastic bag containing a brownish rock to the patron. Shortly after this transaction occurred, Vincent again returned to the licensed premises. He approached the investigators and inquired whether or not they desired to purchase some additional crack. The investigators indicated that they did, and Garcia handed Vincent $40.00 for the purchase. Vincent left the bar and returned a period of time later and placed a napkin with three cocaine rocks on the bar in front of the investigators. While the cocaine rocks were still in plain view on the bar, Billy served a beer to Vincent. Billy made no effort whatsoever to either complain about or terminate the drug transaction taking place in plain view on the licensed premises.

   
   

6. On June 8, 1987, Investigators Santana and Garcia again returned to the Five O'Clock Club in an undercover capacity. While on the premises, the investigators observed a white female walk into the bar and engage several patrons in short conversations. She was stopped and handed a $20.00 bill by another white female patron identified as "Candy". The first white female reached into the front of her pants and pulled out a small plastic bag containing a white powder which she then handed to Candy. Candy stated, "I'm going to the restroom and have some fun." Shortly after this transaction occurred, the investigators left the premises. After exiting the Five O'Clock Club , they were confronted by Vincent. Vincent inquired whether the investigators intended to buy some crack from him on this date. The investigators indicated they would, however they did not wish to make a purchase on a public street. Vincent suggested they go back into the Five O'Clock Club and conduct the transaction at the bar. They did. While seated at the bar, Investigator Garcia gave Vincent $40.00. Billy, the bartender then on duty, stated to Vincent, "you are a great salesman." Vincent then left the bar and returned shortly thereafter placing 3 pieces of rock cocaine on the bar for the investigators and suggested that it was the "best crack on Miami Beach." After the investigators took possession of the cocaine, Billy remarked, "do you really like that stuff?"

   
   

7. On June 15, 1987, Investigators Santana and Garcia again returned to the licensed premises of the Five O'Clock Club in an undercover capacity. After a period of time on the licensed premises, the investigators were unable to locate any patrons with whom they had previously transacted drug purchases.

   Upon leaving the premises, the investigators were approached by an individual known as "Eita", who had been previously introduced to them by Vincent. Eita and the investigators went back into the Five O'Clock Club. Eita informed the investigators that Vincent was incarcerated and that he, Eita, could obtain crack cocaine for them. The investigators agreed and provided Eita $40.00 .

   Eita left the premises and returned shortly with three cocaine rocks. Eita, in the presence of Billy the bartender, placed the three cocaine rocks on the bar of the licensed premises. He then wrapped the cocaine rocks in a brown piece of paper. Investigator Garcia picked the rocks up and placed them in his pocket.

   This transaction occurred in the immediate presence of Bill and other patrons on the licensed premises.

   
   

8. On June 17, 1987, Investigators Santana and Garcia again returned to the Five O'Clock Club in an undercover capacity. At this time the licensed premises were being serviced by a barmaid known as "Toni". Eita again appeared on the licensed premises. Eita offered to sell crack cocaine to Investigators Santana and Garcia. The investigators agreed and in furtherance of the transaction provided Eita $40.00. Eita left the premises and returned shortly thereafter and seated himself next to the investigators. Eita opened his purse and began to place pieces of rock cocaine on the bar top. While this transpired Toni approached the group and placed a beer in front of Eita. Toni observed as Eita took three cocaine rocks and wrapped them in a cigarette wrapper and handed them to Investigator Garcia. Toni made no effort to either complain about or otherwise terminate the drug transaction taking place on the licensed premises.

   
   

9. On the same date as indicated in paragraph 8 above, Investigators Santana and Garcia approached a patron known as "Paco" while on the licensed premises of the Five O'Clock Club. They engaged in a casual conversation with Paco who was known to them as a crack dealer in the Miami Beach area. They inquired of Paco whether or not he could obtain crack cocaine for them and he replied that he could. The investigators provided Paco $30.00. Paco handed Investigator Garcia three cocaine rocks which Garcia placed on the bar and subsequently wrapped in a napkin. This transaction occurred without complaint on the licensed premises in the plain view of Toni and other patrons.

   
   

10. On June 22, 1987, Investigators Santana and Garcia returned to the licensed premises in an undercover capacity. Bartender Billy was on duty at this time. After a period of time, Paco arrived on the licensed premises and inquired of the investigators whether they needed "any thing" today. Investigator Garcia asked Paco if he could obtain some rock cocaine on this date. Paco indicated that he could. Paco left the premises, returned shortly thereafter and gave Investigator Garcia a large cocaine rock. Paco then demanded $40.00. This transaction took place in plain view at the bar in the presence of Billy and other patrons in the licensed premises. At no time did Billy complain about or terminate the transaction.

    
    

11. On June 24, 1987, Investigators Santana and Garcia entered the licensed premises of the Five O'Clock Club in an undercover capacity. Bartender Joe was on duty at this time. Paco was on the licensed premises. The investigators listened while several other patrons approached Paco in an effort to obtain rock cocaine. Paco indicated that rock cocaine was presently unavailable. After a period of time, a black male came into the licensed premises and sat by Paco. The black male provided Paco several cocaine rocks which he distributed to the patrons who had made the previous requests.

    Further, Paco provided Investigator Garcia with a large cocaine rock for the purchase price of $30.00. These transactions took place at the bar and in the presence of Joe and other patrons. At no time did Joe object to the drug transactions taking place at the bar of the Five O'Clock Club

    
    

12. On the same date identified in paragraph 11, shortly after the foregoing transactions occurred, Eita came into the Five O'Clock Club. Eita asked the investigators if they wished to purchase any rock cocaine and they

    indicated that they did. They provided Eita $35.00 whereupon he left the premises. Eita returned shortly thereafter and placed cocaine rocks on the bar in plain view of Joe and other patrons at the bar. The investigators then took possession of the cocaine. At no time did Joe protest the occurrence of this transactions.

    
    

13. On July 13, 1987, Investigators Santana and Garcia returned to the licensed premises known as the Five O'Clock Club in an undercover capacity. While seated at the bar, the investigators purchased two cocaine rocks from a patron known as "Orlando". Bartender Billy was on duty at this time. The transaction took place at the bar in plain view of Billy and other patrons on the licensed premises. At no time did any employee of the bar make an effort to terminate the transaction.

14. All substances purchased at the licensed premises and identified as cocaine have been laboratory analyzed and determined to be cocaine.

    
    

    Additional Facts

    
    

    In addition to the above stipulated facts, Respondent presented testimony upon which the following factual findings are based.

    
    

15. Myrtle Klass is the predominant shareholder of the respondent, 2000 Collins Avenue Corporation. Mrs. Klass is 88 years of age, is in declining health, and requires the services of a full-time caregiver.

    
    

16. Mrs. Klass's late husband purchased the building in which the Five O'Clock Club is located in the late 1950's. Upon his death a trust fund was created, 75% of which goes to Mrs. Klass and 25% of which is divided between the Klass's two children, Mrs. Marshall and her brother. Her brother, because of health problems, is totally dependent on the income from such trust fund. Portions of Mrs. Marshall's share of the trust fund are passed on to her children, one of whom is likewise dependent on such income.

    
    

17. At the time of acquisition of the 2000 Collins Avenue building and license No. 23-2639, the neighborhood was a substantially better locale than at present. The neighborhood has significantly declined and is populated by "street people" whose involvement in drug dealing is endemic.

    
    

18. Mrs. Klass, since 1963, has utilized the services of a certified public accountant-attorney and a property manager to manage the overall operation of the licensed property. She has utilized the same "on premises" manager since 1963 to supervise the day to day operation of the Five O'Clock Club. There have been no prior violations during the approximate 25 years in which the premises have been operated in this manner.

    
    

19. The Klass family trust sold the building in early 1987 because of the decline in the neighborhood. The Five O'Clock Club was due to be closed permanently in September 1987. At the time of the service of the Petitioner's emergency order, license No. 23-2639, services 4-COP, was the subject of a contract for sale for $45,000 to the owner of a family restaurant located elsewhere on Collins Avenue. Because of the emergency order of suspension, the contract could not be completed.

    
    

20. Because of Mrs. Klass's age and health, her daughter, Doris Marshall, represents that Mrs. Klass has no desire to hold any alcoholic beverage license, but only desires to sell the existing license so as not to deprive the trust and the persons dependent on the income therefrom of an asset valued at $45,000.

    CONCLUSIONS OF LAW

    
    

21. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes (1987).

    
    

22. Based on the stipulated facts, Respondent is guilty of the violations contained in the Notice to Show Cause.

    
    

23. Section 823.10, Florida Statutes declares that any store, shop or building which is visited by persons for the purpose of unlawfully using any substance controlled under Chapter 893, Florida Statutes, or which is used for the illegal keeping, selling or delivery of the same is deemed to be a public nuisance.

    
    

24. It is unlawful to keep or maintain any store, shop, warehouse, dwelling or building which is resorted to by persons using controlled substances in violation of Chapter 893, Florida Statutes. Section 893.13 (2) (a) 5, Florida Statutes.

    
    

25. An alcoholic Beverage license is subject to suspension or revocation where there is maintained a nuisance on the licensed premises. Section 561.29

    (1) (c), Florida Statutes.

    
    

26. License No. 23-2639, series 4-COP is a "quota license" issued pursuant to section 561.20(1), Florida Statutes. Such licenses authorize the sale of beer, wine, and other distilled spirits and are limited in number to one for each 2,500 residents in the county. Because such licenses are limited in number and authorize the sale of distilled spirits, "quota licenses", unlike most other types of alcoholic beverage licenses, have a substantial independent value and are routinely transferred for significant consideration. Sections 561.20(1) and 571.32(3), Florida Statutes. The limited number of these licenses make them valuable. Therefore, outright revocation of a quota license visits an additional penalty on the licensee, i.e. loss of the license's independent value, not involved in non-quota license revocations.

    
    

27. Respondent's 25 year problem-free operation of the premises, the steep decline in the quality of the neighborhood, a factor over which Respondent had no control, and the fact that, because of the decline in the neighborhood, the building was sold and the license was under a contract for sale and the premises was due to go out of business within 45 days of service of the emergency order, all mitigate against an outright revocation of the license. Outright revocation of the license would impose an added penalty of depriving the Klass family trust of the independent $45,000 value for the liquor license.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered by Petitioner revoking

Respondent's alcoholic beverage license No. 23-2639, series 4-COP, subject first to a suspension of 120 days or such lesser period of time within which Respondent may sell the license, in an arms length transfer, to a duly qualified transferee who will agree to 1) operate such license at a location other than the present licensed premises 2) not employ any personnel of the Respondent that were present on the premises during the incidents set forth in the Notice To

Show Cause and 3) operate the license under a name other than the "5 O'Clock Club." Upon completion of the license transfer in accordance with the above stated conditions or the expiration of the 120 day suspension period, whichever occurs first, the license, as to the Respondent in this case, shall stand revoked.

DONE AND RECOMMENDED this 29th day of February, 1988, in Tallahassee, Leon County, Florida.

DON W. DAVIS

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 29th day of February, 1988.

APPENDIX

The following constitutes my ruling on proposed findings of fact submitted by the Respondent.

1. All stipulated facts are included in findings numbered 1-14.

2. Accepted in finding number 15.

3. Accepted in finding number 16.

4. Accepted in finding number 17.

5. Accepted in finding number 18.

6. Accepted in finding number 19.

7. Accepted in finding number 20.

COPIES FURNISHED:

Douglas Moody, Esquire

Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007

Harold F. X. Purnell, Esquire OERTEL & HOFFMAN, P.A.

Post Office Box 6507 Tallahassee, Florida 32314-6507

Daniel Bosanko, Director Department of Business Regulation

Division of Alcoholic Beverages and Tobacco The Johns Building

725 South Bronough Street Tallahassee, Florida 32399-1000

Van B. Poole, Secretary Department of Business Regulation The Johns Building

725 South Bronough Street Tallahassee, Florida 32399-1000

Joseph A. Sole General Counsel

Department of Business Regulation The Johns Building

725 South Bronough Street Tallahassee, Florida 32399-1000

Docket for Case No: 87-004932

Orders for Case No: 87-004932