STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

)

) BARRY PAUL PETERSON, )

)

Petitioner, )

)

vs. ) CASE NO. 88-4792

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

)

Respondent. )

)

RECOMMENDED ORDER

A final hearing was held in this matter at Tampa, Hillsborough County, Florida, on December 21, 1988, before J. Lawrence Johnston, a duly designated hearing officer of the Division of Administrative Hearings. The parties were represented by counsel as follows:

APPEARANCES

For Petitioners: Tari L. Peterson, Esquire

Post Office Box 17979 Tampa, Florida 33682-7979

For Respondent: Thomas A. Klein, Esquire

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

CASE BACKGROUND

Prior to the above-styled causes being referred to the Division of Administrative Hearings, the Division of Alcoholic Beverages and Tobacco (hereinafter the Division) held separate informal hearings for the respective Petitioners, pursuant to Section 120.57(2), Florida Statutes On October 19, 1987, Douglas Herman Peterson, d/b/a Summit Industries II Corporation, (hereinafter Summit) was given an informal hearing via a telephone conference

call. On January 8, 1988, Barry Paul Peterson (hereinafter Peterson) was likewise given an opportunity for an informal hearing. Peterson elected to provide the Division with written documentation and legal argument in lieu of appearing in person.

On January 19, 1988, and May 19, 1988, respectively, the Division by Final Order denied Peterson's and Summit's application for licensure. Peterson and Summit each timely filed a Notice of Appeal in the Second District Court of Appeal. (Case Nos. 88-00454 and 88-1670). On July 15, 1988, the parties jointly moved that the cases be remanded back to the agency level, so that more facts could be introduced into evidence. By an Order of August 11, 1988, the Second District Court of Appeal granted the Motion to Remand and temporarily relinquished its jurisdiction. These matters were referred to the Division of Administrative hearings for a formal hearing, pursuant to Section 120.57(1), Florida Statutes.

PROCEDURAL AND EVIDENTIARY MATTERS AT HEARING

During the hearing the following exhibits were admitted into evidence: Petitioners' Exhibit 1, Summit Exhibits 1-7, Peterson Exhibits 1-6 and Respondent's Exhibits 1 & 2. Barry Paul Peterson testified on behalf of Summit and Peterson while the Division's sole witness was Barry Schoenfeld.

The only factual issue to be resolved at the hearing was whether the Summit and Peterson license applications should be denied. Summit and Peterson advanced the proposition that local zoning problems mitigated against license denial.

FINDINGS OF FACT

1. The Summit Application.

   
   

   1. By correspondence dated February 25, 1987, Summit was advised by the Division that it was one of the preliminary applicants selected in the drawing held February 18, 1987, for an available quota license in Hillsborough County. The letter clearly stated that Summit had forty-five days to file a full and complete application with the Division. Summit was given notice that failure to do so within that time frame would be deemed a waiver of its right to apply for the quota license.

      
      

   2. On July 1, 1987, Summit wrote to the Division requesting an extension of time in which to obtain zoning approval for the location sought to be licensed in Hillsborough County. Summit recited various zoning problems it was experiencing which might necessitate the filing of an amended application with an alternative location.

      
      

   3. On July 10, 1987, the Division notified Summit of its long-standing policy to grant extensions where a "good faith effort" was demonstrated by an applicant. Summit was further advised to contact the Division's Tampa Office and that the Division was prohibited by statute from granting an extension beyond August 17, 1987, the one hundred and eightieth day from the date of selection of Summit as a preliminary applicant, i.e., February 18, 1987.

      
      

   4. On August 4, 1987, the Division notified Summit that it would be granted an extension to submit an amended application no later than August 17, 1987.

   5. Summit failed to file an amended application by August 17, 1987. On September 1, 1987, the Division denied Summit's license application on the ground that there was no properly zoned location in which to place the license.

      
      

   6. On September 20, 1987, Summit requested an informal proceeding in accordance with Section 120.57(2), Florida Statutes. Paragraph six of this request indicated Summit's belief that there were no disputed issues of material fact.

      
      

   7. On November 2, 1987, the Division entered a Recommended Order, which recommended denial of Summit's license. On January 19, 1988, the Division by Final Order, adopted the recommendation and denied Summit's license. It was not until May 5, 1988, when Summit attempted to introduce certain factual matters on appeal, that the parties became aware of potential disputed facts.

      
      

2. The Peterson Application.

   
   

   1. In January of 1984, Peterson submitted a preliminary application for a new quota alcoholic beverage licensed in Hillsborough County, Florida.

      
      

   2. By correspondence dated July 17, 1987, Peterson was advised by the Division that he had been selected as an alternative preliminary applicant for a quota liquor license in Hillsborough County. 1/ The correspondence also notified Peterson that he had forty-five days in which to file a full and complete application in accordance with Florida Administrative Code Rule 7A-

      2.017. Peterson also was personally familiar with the Division's license application process in that he had assisted his father in filing the Summit application.

      
      

   3. Peterson notified the Division by letter dated September 20, 1987, that during late July or early August, 1987, he had received the Division's July 17, 1987, notification. Peterson further advised of his change of address and asked that any future correspondence be mailed to his new address in Tampa. At no time prior to license denial did Peterson request an extension of time in which to file a license application.

      
      

   4. On September 29, 1987, the Division issued a Notice of Intent to Disapprove Peterson's license due to his failure to timely submit an application for the same.

      
      

   5. On October 7, 1987, Peterson first notified the Division that his failure to timely file an application was due to zoning problems in Hillsborough County.

      
      

   6. On October 21, 1987, the Division notified Peterson that his license application had been denied because he failed to file a full and complete application within the prescribed forty-five day time period.

      
      

   7. Peterson timely requested a hearing, indicating his uncertainty as to whether there were disputed issues of material fact, and the matter was scheduled for an informal proceeding on January 8, 1988.

      
      

   8. In lieu of appearing at the informal hearing, Peterson elected to provide the Division with written documentation and legal argument in response to the license denial.

   9. On February 23, 1988, the Division entered a Recommended Order, which recommended license denial. On May 19, 1988, the Division entered its Final Order which adopted the Division's prior recommendation of license denial.

      
      

3. Zoning in Hillsborough County.

1. The Beverage Law requires an application for a quota license to include a properly zoned location for operation of the license to be issued.

   
   

2. To find a suitable location, the applicant must follow up leads on locations. In light of the $75,000 to $200,000 investment the applicant will be making in the business, it is reasonable for the applicant to want to conduct traffic counts and preview the competitive environment. The applicant then must negotiate a lease.

   
   

3. To be considered proper, a location in Hillsborough County must be commercially zoned as well as "wet-zoned." In order to obtain wet-zoning, one must go through the zoning process in Hillsborough County. Just to apply for the zoning change, there are substantial expenses that must be paid by the applicant.

   
   

4. The zoning application in Hillsborough County is more extensive, and the zoning laws are more complicated, than in many other counties in Florida. Typically, the application cannot be completed on one visit to the zoning office.

   
   

5. Summit picked up its application in early March, 1987, and filed it on March 31, 1987. A hearing was scheduled before a zoning hearing officer on June 4, 1987, but the hearing was postponed to June 18, 1987. At the hearing, several neighbors appeared and opposed the application. The zoning hearing officer decided that the application should be granted, but the final decision was for the Hillsborough County Board of Commissioners to make. This hearing was scheduled for July 28, 1987, and the Board's final decision was to deny the application.

   
   

6. When Summit saw the extent of the opposition to its wet-zoning application at the June 18, 1987, hearing, it became concerned about the eventual outcome and began looking for alternative locations. It also apprised the Division of its situation and was told that, if it was acting and continued to act in good faith, it could file an amended application with a suitable location with a "reasonable chance" of being properly zoned, so long as the amended application was filed by August 17, 1987, the 180-day deadline. When the zoning hearing officer recommended approval of wet-zoning for Summit, Summit suspended its search for an alternative location. When the Board denied wet- zoning, Summit tried to no avail to secure another properly zoned location.

   
   

7. Peterson, who was directly involved in his father's efforts to secure a location for Summit, decided not to even try to do so when he was notified of his selection as an alternate preliminary applicant.

   
   

8. In certain counties, including, but not limited to, Hillsborough County, the failure rate to comply with the 45-day rule is higher than in other counties. In Hillsborough County, it is difficult to find a location that is already properly zoned. A properly zoned location must be already zoned commercial and, in addition, must be wet-zoned in Hillsborough County.

9. Summit and Peterson presented evidence that it had called officials from ten of 15 randomly chosen counties to inquire about their zoning requirements and the failure rate for applicants trying to obtain a wet-zoned location. All of the officials from the other counties relayed that in their experience and to their knowledge, no applications were denied once submitted. Hillsborough County, Florida, was the only county of those contacted that denied applications once submitted.

   
   

10. There are 67 counties and over 500 municipalities in Florida that have various kinds of zoning laws with which applicants for a quota license must comply. Although some applicants from Hillsborough County have experienced difficulty with zoning, seven of the 18 original preliminary applicants in the 1984 Hillsborough County drawing found properly zoned locations within 45 days, and in the 1987 drawing, 14 of the 18 original preliminary applicants found properly zoned locations within 45 days.

    
    

11. It was not proven that zoning difficulties are unique to Hillsborough County. To the contrary, the evidence shows examples of other jurisdictions in which local zoning recently presented difficulties for applicants -- parking restrictions in the City of North Miami Beach and liquor store restrictions in the City of Apalachicola.

    
    

12. Originally, there was no 45-day rule for applications to be submitted. The 45-day period was chosen so that the Division would have ample time to perform its investigation before the 180-day period expired.

    
    

    CONCLUSIONS OF LAW

    
    

13. Section 562.45(2), Florida Statutes (1987), provides:

    
    

    Nothing contained in the Beverage Law shall be construed to affect or impair the power or right of any incorporated municipality of the State hereafter to enact ordinances regulating the hours of business and location of place of business, and prescribing sanitary regulations therefor, of any license under the Beverage Law within the corporate limits of such municipality.

    
    

14. The statute giving to the cities the power to enact zoning ordinances was intended to reserve to cities their power to designate areas within their limits where alcoholic beverages could and could not be sold. Ellis v. City of Winterhaven, 60 So.2d 620 (Fla. 1952).

    
    

15. Proper zoning for the location at which the license is to operate is a prerequisite. The applicant must obtain proper zoning before the license will be issued by the Division. Section 561.19, Florida Statutes, governs the issuance of new quota beverage licenses and provides in pertinent part as follows:

    
    

    Subject to this selection process, if an applicant is found qualified by the beverage law a license shall be granted. However, it shall not be issued until and unless the applicant establishes to the satisfaction of

    the director that the premises to be licensed qualify under the beverage law.

    
    

16. As noted above, to qualify under the beverage law, the premises to be licensed must comply with local zoning ordinances. To insure that the premises so qualify, the Division requires the applicant to obtain a statement from the appropriate zoning official that the premises to be licensed can be operated as an alcoholic beverages establishment. Unless the location meets this qualification, the license cannot be issued.

    
    

17. Rule 7A-2.017, Florida Administrative Code, which requires an applicant to submit a completed application within forty-five days from the drawing, is a valid extension of legislative authority. Final Order, John Harry Michaels and Martin County Liquors v. Division of Alcoholic Beverages and Tobacco, DOAH Case No. 88-3977R, entered on October 18, 1988. The rule is not arbitrary or capricious. Id. 2/ It establishes a deadline which applies equally to each of the 67 counties and over 500 municipalities in Florida. For various reasons, it can be expected that it might be more or less difficult for applicants in the various jurisdictions to obtain proper local zoning. But that does not necessarily mean that this is unfair to Summit and Peterson. They are and were on the same footing with other Hillsborough County applicants. Some have met the 45-day deadline, others have not. Indeed, the very same difficulties of which Peterson complains in this case may have been responsible for conferring on him, 29th ranked in a drawing for 18 licenses, the status of alternative preliminary applicant and the ability to attempt to file a proper and complete application.

    
    

18. Summit and Peterson, as applicants, have the burden to prove their entitlement to an alcoholic beverage license. Astral Liquors, Inc. v. Department of Business Regulation, 432 So.2d 3 (Fla. 3rd DCA 1983); Balino v. Department of HRS, 348 So.2d 34 (Fla. 1st DCA 1977). It is concluded that both Summit and Peterson have failed to prove by a preponderance of the evidence that they ever had the right to occupy a premises to sell alcoholic beverages.

Absent a location that meets the requirements of the beverage law, the Division is prohibited by statute from issuing a license.

RECOMMENDATION

Based upon the foregoing, it is recommended that both Summit's and Peterson's applications for a new quota liquor license be DENIED.

DONE and ENTERED this 27th day of February, 1989 in Tallahassee, Leon County, Florida.

J. LAWRENCE JOHNSTON 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 27th day of February, 1989.

ENDNOTES

1/ Peterson was ranked 29th in the random drawing, but some of the first eighteen preliminary applicants and alternate preliminary applicants 19 through

28 did not qualify or did not file an application.

2/ It should be noted that this is not a rule challenge under Section 120.56, Florida Statutes (1987).

APPENDIX TO RECOMMENDED ORDER CASE NOS. 88-4791 AND 88-4792

To comply with Section 120.59(2), Florida Statutes (1987), the following rulings are made on the parties' proposed findings of fact:

1. Summit's Proposed Findings of Fact.

   
   

   1-7. Accepted and incorporated to the extent necessary and not subordinate. 8-11. Unnecessary.

   12-13. Accepted and incorporated (except to add that the parties jointly requested remand.)

   14-18. Unnecessary.

   1. Accepted and incorporated.

   2. Subordinate in part to facts found and in part to facts contrary to those found. "Difficult" must relate to a standard. The evidence was that zoning in Hillsborough County is "difficult" compared to some other local jurisdictions but not necessarily to all. For some, zoning problems have blocked licensure in Hillsborough County; for others, proper locations have been found within 45 days.

   3. Accepted and incorporated (although the evidence is that Summit did not search for an alternate location after the zoning hearing officer recommended that its zoning application be granted.)

   4. Rejected as not proven by the evidence.

   5. Last three sentences, accepted and incorporated. Rest, rejected as not proven by the evidence.

   6. Accepted and incorporated.

   7. Accepted. Subordinate to facts found.

   
   

2. Peterson's Proposed Findings of Fact.

   
   

   1-7. Accepted and incorporated to the extent necessary and not subordinate.

   8. Accepted. In part, subordinate to facts found (first paragraph after the colon); in part (second and third paragraphs), subordinate to argument and conclusions of law.

   9-13. Accepted and incorporated. 14-18. Unnecessary.

   1. Accepted and incorporated.

   2. Subordinate in part to facts found and in part to facts contrary to those found. "Difficult" must relate to a standard. The evidence was that zoning in Hillsborough County is "difficult" compared to some other local jurisdictions but not necessarily to all. For some, zoning problems have blocked licensure in Hillsborough County, for others, proper locations have been found within 45 days.

   21-22. Rejected as not proven by the evidence.

   1. Last three sentences accepted and incorporated. Rest, rejected as not proven by the evidence.

   2. Accepted and incorporated.

   3. Accepted. Subordinate to facts found.

   
   

3. Division's Proposed Findings of Fact.

1-18. Accepted and incorporated to the extent necessary.

COPIES FURNISHED:

Tari Peterson, Esquire Post Office Box 17979 Tampa, Florida 33682-7979

Thomas A. Klein, Esquire Assistant General Counsel Department of Business

Regulation

725 South Bronough Street Tallahassee, Florida 32399-1007

Leonard Ivey, Director

Division of Alcoholic Beverages and Tobacco

725 South Bronough Street Tallahassee, Florida 32399-1000

Van B. Poole, Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1000

Docket for Case No: 88-004791

Orders for Case No: 88-004791