Respondent. )
Pursuant to notice, the above-styled matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Daniel M. Kilbride, on September 27, 1990 in Sanford, Florida. The following appearances were entered:
For Petitioner: John B. Fretwell, Esquire
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007
For Respondent: Richard A. Colegrove, Jr., Esquire
Whether Respondents violated the terms of probation of the Consent Agreement, effective January 12, 1990.
Whether Respondents committed the violations alleged in the notices to Show Cause.
On March 20, 1990, Petitioner entered a Notice to Show Cause against Respondents in which various violations of probation, and an unlawful sale of an alcoholic beverage to a person under 21 years of age were alleged. The Notice to Show Cause was served on March 27, 1990, and Respondents requested a hearing. The file was forwarded to the Director, Division of Administrative Hearings, for the appointment of a hearing officer. Hearing Officer Kilbride was duly appointed, and a hearing set for July 25, 1990, in Sanford, Florida.
On June 29, 1990, Petitioner moved to continue the hearing so that a second Notice to Show Cause, which alleged a failure to maintain control of the business conducted on the licensed premises, could be consolidated for hearing with the first Notice to Show Cause. Respondents joined in this motion, and the case was continued until September 27, 1990.
At the hearing, the two Notices to Show Cause were consolidated, and there being no objection, a motion to amend the allegation in the second Notice to Show Cause was granted. The hearing officer took official recognition of Rule 7A-3.017 of the Florida Administrative Code. Petitioner presented the testimony of five witnesses, and offered four exhibits. Petitioner's Exhibit 1 was admitted into evidence with the proviso that Respondents were allowed to reserve objections. Petitioner's Exhibits 2 and 3 were admitted into evidence over Respondents' objection. Petitioner's Exhibit 4 was provisionally admitted into evidence pending a showing of relevance. The parties stipulated as to jurisdiction by the Division. Respondents presented the testimony of two witnesses, and offered one exhibit which was admitted into evidence without objection.
Respondent moved to dismiss the alleged sale of an alcoholic beverage to a person under the age of 21 on the grounds that Petitioner failed to introduce the beer bottle. The Hearing Officer reserved ruling. Respondents made a similar motion with respect to the allegation in the second Notice to Show Cause. The motion was denied.
As to Case No. 90-2711:
At all times pertinent to this case, Respondents were doing business at 3200 South Orlando Drive, Sanford, Seminole County, Florida as Cesare's Palace, under alcoholic beverage license number 69-00467, series 4-COP-S.
On April 19, 1989 a formal hearing was conducted in Sanford, Florida, and presided over by Hearing Officer Mary Clark of the Division of Administrative Hearings, in which the parties were the same.
On August 4, 1989, a Final Order was issued in which the Division Director adopted in toto Hearing Officer Clark's findings of fact, all but one of her conclusions of law, and adopted her recommendation for a finding of guilty. The Division Director changed the recommended penalty to a twenty day suspension and a $1,000.00 civil penalty. The twenty day suspension was to commence, and the $1,000 civil penalty was to be paid on August 23, 1989.
Respondents timely appealed Petitioner's Final Order on August 14, 1989. On August 22, 1989, Petitioner stayed the imposition of the penalty pending appellate review.
Respondents and Petitioner executed a Consent Agreement in settlement of the case. Accordingly, Respondents withdrew their appeal, and timely paid the $1,000.00 civil penalty. Petitioner suspended imposition of the 20 day license suspension for 12 months commencing on January 12, 1990. The Agreement and the Addendum thereto were signed by both Respondents and their attorney.
Respondents agreed to abide by certain terms of probation, as set forth in the Consent Agreement, and acknowledged that violation of one or more of the terms of probation would result in the imposition of the 20 day license suspension.
The terms of probation called for Respondents to affirm in writing not later than 30 days after the effective date of the Consent Agreement, to the Division of Alcoholic Beverages and Tobacco, that certain specified tasks had been accomplished.
The Consent Agreement became effective on January 12, 1990 when it was accepted by the Director, Division of Alcoholic Beverages and Tobacco.
On or about February 11 (a Sunday) or February 12, 1990, Law Enforcement Investigator David Ramey went to the licensed premises to ascertain whether Respondents had accomplished the tasks which were to be affirmed in writing to the Division as being accomplished. The task of posting signs indicating that identification was required had been accomplished. The task to provide "written policies and procedures for employees to ensure that they are familiar with Florida drivers licenses, Florida identification cards, and passports; that they are sensitive to the importance of ensuring that alcoholic beverages are not sold to the underaged; that they are capable of, given a birth date, computing age; and that they understand that service of alcoholic beverages must be refused to those whose age and/or identification appear questionable to the employee" was not accomplished. The task of training and instructing all employees on the written policies and procedures relative to identification was not accomplished. The task of carefully monitoring employees to ensure that they are following company policy was not accomplished. No written affirmation reporting accomplishment of the above tasks was forwarded to the Division either within or without the thirty day period.
The Consent Agreement included as a term of probation that Respondents become certified responsible vendors by March 1, 1990.
Respondents' Application for Certification as a Responsible Vendor is dated March 5, 1990; the application was not forwarded to the Bureau of Vendor Training until April 7, 1990. Respondents had not become certified responsible vendors by March 1, 1990.
William Walter Proctor was born on October 1, 1970 and has been serving as an underaged operative with the Division of Alcoholic Beverages and Tobacco since late January or early February 1990. When serving as an underaged operative, Mr. Proctor is to bring his drivers license, and to possess only the money given to him by the investigators. If asked for identification, Mr. Proctor is instructed to provide his drivers license which accurately reflects his date of birth. If asked his age, Mr. Proctor is instructed to answer truthfully.
On March 6, 1990, Proctor was serving as an underaged operative with the Division of Alcoholic Beverages and Tobacco. He was working with Investigators Dave Ramey and Mark Douglas. During the evening Proctor entered the licensed premises, Cesare's Palace, located at 3200 South Orlando Boulevard, Sanford, Florida. Investigator Douglas also entered the premises. Proctor went to the bar and took a seat. The bartender took Proctor's order for a Michelob light beer, and asked to see Proctor's identification. Proctor gave the bartender his drivers license. The bartender took the license to the end of the bar, held it under a light, and then returned the license to Proctor and handed him the beer he had ordered. Proctor observed the bartender open the Michelob Light beer, and place the beer in front of Proctor. Proctor took possession of the beer, and the bartender took possession of the $1.85 provided by Proctor in payment for the beer. Proctor immediately turned the Michelob Light beer over to Investigator Douglas. Proctor identified Petitioner's Exhibit 3 as the drivers license he provided the bartender at Cesare's Palace on March 6, 1990.
Mark Douglas is a law enforcement investigator for the Division of Alcoholic Beverages and Tobacco. He, along with Investigator Ramey were working with the underaged operative William Walter Proctor on March 6, 1990. Investigator Douglas entered the licensed premises, Cesare's Palace around 9:15
p.m. on the 6th of March. Some ten minutes later, underaged operative Proctor entered the premises.
Investigator Douglas observed Mr. Adams open a bottle of Michelob Light beer and place it in front of Mr. Proctor. Investigator Douglas deals with alcoholic beverages every day of his working life. He is familiar with Michelob beer, and has seen bottles of Michelob Light before. The bottle of Michelob Light he received from Mr. Proctor on the 6th of March looked like the other such bottles he had seen. Additionally, Investigator Douglas took a sample of the beer prior to destroying the remaining contents of the bottle. Investigator Douglas has been trained in identifications; drivers licenses in particular. He knows that the yellow background against which Proctor's picture is depicted on Petitioner's Exhibit 3 means that the individual to whom the license was issued was under 21 at the time of the issuance. Investigator Douglas identified Respondent Polidoro as having been seated at the end of the bar when the sale to Proctor occurred. When Mr. Adams was looking at Mr. Proctor's drivers license, Respondent Polidoro leaned forward and looked down the bar.
Respondent Polidoro has very bad vision; he is both nearsighted and farsighted. His glasses were not on at the time of the events involving Adams and Proctor. Respondent Polidoro has known Adams for two years and has complete confidence in him. On March 6, 1990, Respondent Polidoro was not aware that his bartender, Adams wore reading glasses. Adams made the mistake of forgetting his glasses. He left them in his room. Thus he was without his reading glasses while tending bar at the licensed premises on March 6, 1990.
Respondent Polidoro is of the opinion that he has twice been entrapped by Petitioner into selling an alcoholic beverage to a minor, and that Petitioner, on 15 other occasions has failed to entrap Respondents.
As to Case No. 90-5983:
Marino Benevides went to work for Respondents as the housekeeping manager of the Cavalier Motor Inn, located at 3200 South Orlando Drive, in April, 1988. On or about May 1, 1989, Benevides leased from Respondents the lounge that is part of the Cavalier Motor Inn complex. The rent was $7500 a month, and was paid to Respondent Polidoro. Although the lease agreement was reduced to writing, it was never signed. Benevides hired and paid the employees of the lounge. Benevides hired and paid for the entertainment in the lounge. Benevides paid the utility bill for the lounge. Had there been net profits generated by the lounge, the net profits would have been received by Benevides. Benevides' obligation to Respondents was to pay them a fixed sum of $7500 a month. Payment of distributors for alcoholic beverages was made by the Respondents who were then reimbursed by Benevides. Benevides could not pay the distributors directly because the liquor license was not under his name. Respondent Milazzo was aware that leasing the lounge was a violation. The Respondents had the authority to "kick out" Benevides and that is what they did on January 27, 1990.
"No violations of Section 562.11(1)(a), Florida Statutes during the probationary period" is a term of probation in the Consent Order.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.
Section 562.11(1)(a), Florida Statutes (1989) states, in relevant part, that "[i]t is unlawful for any person to sell, give, serve, or permit to be served alcoholic beverages to a person under 21 years of age..."
Section 561.29(1), Florida Statutes (1989) authorizes the Division of Alcoholic Beverages and Tobacco to revoke or suspend a beverage license upon a showing 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...
Section 561.29(1) also authorizes the Division of Alcoholic Beverages and Tobacco to revoke or suspend a beverage license upon a showing of:
(e) Violation by the licensee, or, if a corporation, by any officer or stockholder thereof, of any rule or rules promulgated by the division in accordance with the provisions of this chapter or of any law referred to in paragraph (a), or a violation of any such rule or law by any agent, servant, or employee of the licensee on the licensed premises or in the scope of such employment.
Rule 7A-3.017, Florida Administrative Code, entitled Management, Operation and Responsibility Licensed Premises states:
All business conducted on the licensed premises under the beverage law shall be managed and controlled at all times by the licensee or managed by his authorized employee or employees.
The term "employee," as used herein, shall mean a person who receives a salary or wages for services performed for and in behalf of a licensee, under the exclusive control and direction of the latter. It does not include a lessee, an independent contractor or any person employed by collateral agreement to independently manage and control the said business on the licensed premises.
Indicia for determining whether a purported managerial contract conforms to this rule are as follows:
The licensee must retain control of the operation of the business.
Salary or wages must be paid by the licensee or the manager or employee for conduct of the business under the ultimate direction of the former.
Social Security and Workers' Compensation coverage must be paid and accounted for by the licensee.
The licensee must be responsible for all debts of the business and legally entitled to all incomes therefrom. All alcoholic beverages for the business must be purchased in the licensee's behalf and under the license covering the premises.
The licensed premises must be operated for all purposes in the name of the licensee or his legal trade name as distinguished from the name or names of any other person or persons.
The licensee must be responsible for all conduct of the business and the license involved must be subject to suspension and revocation for any illegal acts committed on the premises or under the beverage law.
Complete ultimate authority for the hiring and dismissal of all employe
premises must rest with the licensee.
The licensee must be primarily responsible for the rent, utilities and insurance covering the premises, and all other incidental expenses occasioned in the operation of the business.
The licensee must remain at all times responsible for the maintenance and proper operation of equipment on the premises.
The contract must contemplate the formation of the relationship of principal and agent between the licensee and the employee within the limits defined and implied by the contract.
A contract wherein the so-called employee or manager pays a fixed sum to the licensee whether from net profits or not would not create the employee-employee relationship as contemplated by the rule.
Any agreement woven in such language so
as to clothe or disguise the true character of a contract either as a lease or a managerial contract will be shorn in order to effect the intent and purpose of the
law and rule in this regard. The Pole Star which will guide the Division in determining whether or not a purported agreement is a bona fide managerial contract as distinguished from a lease
will depend upon who has ultimate overall control and direction of the licensed premises under the terms of the agreement.
All agreements concerning ownership or operation of an alcoholic beverage license shall be attached to and submitted with each new or transfer application for a license, including, but not limited to, management agreements, options to purchase, and retailer franchise agreements. Any such agreements coming into existence following the issuance of a new or transfer license shall be submitted to the Division within ten (10) days of execution.
Section 561.29(5), Florida Statutes (1989) states:
The division may suspend the imposition of any penalty conditioned upon terms the division should in its discretion deem appropriate.
The burden is on the Petitioner to establish the elements of two substantive offenses alleged, (viz., sale of an alcoholic beverage to a person under the age of twenty-one; and failure to maintain control of the licensed premises) by a preponderance of the evidence. Pauline v. Lee, 147 So.2d 359, 363 (Fla. 2DCA 1962). Since Respondents' alcoholic beverage license is not a professional license, the clear and convincing evidence standard of Ferris v. Turlington, 510 So.2d 292 (Fla 1987) is not applicable to these two allegations.
Another feature distinguishing alcoholic beverage licenses from all other business licenses is the fact that the holding of an alcoholic beverage license is a unique privilege because of the operation of the Twenty-first Amendment. Florida courts have stated more than once that the selling of
intoxicants is subject to heavy regulation and, moreover, is merely a privilege. Morton v. State, 64 So.2d 536 (Fla. 1953); Jones v. City of Sarasota, 89 So.2d
350 (Fla 1958); Astral Liquors v. State Department of Business Regulation, 432 So.2d 93 (Fla 3d DCA 1983), affirmed 462 So.2d 1130 (Fla. 1986).
With respect to the violations of probation alleged, Petitioner's burden is also the preponderance of the evidence standard. The purpose of a probation violation hearing "is to satisfy the conscience of the court as to whether the conditions of the suspended sentence have been violated. A secondary purpose is to give the person accused of violating the suspended sentencing a chance to explain away the accusation against him..." Bernhardt v. State, 288 So.2d 490, 495 (Fla. 1974).
With respect to the issue of the alleged failure to maintain control of the licensed premises, Respondents developed, presumably for impeachment purposes, evidence tending to indicate that Marino Benevides harbored a grudge against Respondents. If the credibility of Benevides were at issue in this case, the aforementioned evidence of bias would be important in the deliberations on this allegation. However, the testimony of Benevides was corroborated by the testimony of Respondent, Anthony Milazzo. Therefore, it is uncontroverted the oral agreement between the parties called for Benevides to pay Respondents the fixed sum of $7500 per month to operate the licensed premises. Respondents did not pay Benevides salary or wages for the conduct of the business under the ultimate direction of Respondents. Benevides had complete authority for hiring, firing, and paying employees and entertainers. Social Security and Workers Compensation coverage was paid and accounted for by Benevides, not Respondents. Benevides, not Respondents, paid for the utilities. Benevides, not Respondents, was legally entitled under the agreement to whatever profits the licensed premises might generate. The evidence is clear and convincing that Respondents did not retain control of the operation of the business but rather turned that control over to Benevides. Respondent Milazzo admitted that he knew leasing the bar would be a violation and hence he refused to reduce this lease agreement to writing. An illegal agreement which is not reduced to writing is of course not forwarded to the Division pursuant to Rule 7A-3.017(5), Florida Administrative Code.
Rule 7A-4.0021, Florida Administrative Code prohibits a distributor from accepting a third-party check in payment for alcoholic beverages, therefore, Respondents and Benevides employed the artifice of having Respondents pay the distributors after which Benevides would reimburse Respondents. Benevides was completely aware that the distributors would not accept his checks. Finally, it must be noted that Respondents' refusal to enter into a written lease with Benevides was motivated, in part by a desire to be able to sever their relationship with Benevides on short notice. Which is what they did on January 27, 1990. Respondents gave Mr. Benevides "ultimate overall control and direction of the licensed premises under the terms of the agreement" from May 1, 1989 until January 27, 1990 in violation of Rule 7A-3.017(4), Florida Administrative Code.
At the close of the Petitioner's evidence Respondent moved to dismiss "with respect to the alcoholic beverages" on the grounds that Petitioner did not produce the beer bottle in evidence. The motion is deemed to allege a failure of proof by Petitioner.
Section 562.47(2), Florida Statutes (1989), states:
Proof that the beverage in question was contained in an unopened bottle or can, labeled as "beer", "ale", "malt liquor", or "malt beverage" or with other similar name; which has printed or lithographed on the crown of the bottle or lid of the can the word "Florida"; and which bears the manufacturer's insignia, name, or trade mark shall be prima facie evidence that such beverages is an alcoholic beverage as defined in s. 561.01
See also Section 562.47(3), Florida Statutes (1989).
William Proctor testified that he had been working as an underaged operative for approximately a month prior to March 6, 1990. He was used by the Division of Alcoholic Beverages and Tobacco "to go in and buy beer, and see if the establishment is selling to minors." While on the licensed premises on March 6, 1990 he ordered a Michelob Light, which he knew to be a brand of beer. He received from the bartender a Michelob Light. He knew it to be a Michelob Light by the label. He witnessed the bartender open the Michelob Light. He then delivered the Michelob Light to Investigator Douglas. Investigator Douglas has worked for the Division of Alcoholic Beverages and Tobacco for a year and a half. He deals with alcoholic beverages each day of his working life. He is familiar with Michelob beer and he is familiar with bottles of Michelob Light beer. He observed the bartender open a bottle labeled "Michelob Light" and place the bottle on the bar in front of Proctor. The bottle of Michelob Light beer Douglas observed looked like the other bottles of Michelob Light beer he had seen. Douglas took possession of the beer from Proctor. He took a sample of the beer and destroyed the remainder. Both Proctor and Investigator Douglas advised Investigator Ramey that a sale of alcoholic beverages to Proctor had been made. Charges were filed against the bartender.
The evidence summarized above stands unrebutted. Accordingly, the prima facie case is unrebutted. No evidence was submitted to rebut the prima facie showing that the substance sold to Proctor was anything other than the alcoholic beverage beer.
Respondents reliance on the special defense of entrapment is misplaced. "[E]ntrapment presupposes the act charged was committed and a denial of the offense is inconsistent with the defense of entrapment." Ivory v. State
173 So. 2d 759 (Fla. 3rd DCA 1965), cert. dismissed without opinion 183 So. 212 (Fla. 1965). See also Wilson v. State, 549 So. 2d 702 (Fla. 1st DCA 1989). The Respondent "confesses the truth of the averments of fact in the declaration, either expressly or by implication, but then proceeds to allege new matter which tends to deprive the facts admitted of their ordinary legal effect..." Blacks Law Dictionary, revised fourth edition at 369. By raising the issue of entrapment on the witness stand Respondents admit each and every element of the offense of unlawful sale of an alcoholic beverage, to wit: a 12 ounce bottle of Michelob Light beer, to a person under twenty one years of age, to wit: William Walter Proctor. Looking at Instruction 3.04(c)(2), found at 840 of West's Florida Criminal Laws and Rules (1990) for guidance, Respondents failed to carry their burden of establishing by a preponderance of the evidence that Adams' criminal conduct occurred as the result of entrapment. No one would suggest, for example, that Proctor "induced or encouraged" Adams by employing "methods of persuasion or inducement which created a substantial risk that the crime would
be committed by a person other than one who was ready to commit it." Id Proctor ordered a beer and provided Adams his drivers license which accurately reflected his age. Proctor employed no persuasion, or encouragement, or inducement.
Similarly, Petitioner does not suggest that Adams was guilty of intentional criminal misconduct. This unlawful sale allegation sounds in negligence.
Since there is no evidence indicating that one or both of the Respondents personally sold an alcoholic beverage to an underaged person Petitioner has the burden of establishing that one or both of the Respondents were "culpable", that is guilty of either "negligence, intentional wrongdoing, or lack of diligence in supervising and maintaining surveillance over the premises." Simmons v. Division of Alcoholic Beverages and Tobacco, 465 So 2d 578, 579 (Fla. 1st DCA 1985). (emphasis added). On the 6th of March 1990, Polidoro did not have his glasses on while on his licensed premises although his vision was poor. In addition, Polidoro did not even know that his bartender, Adams, wore reading glasses. On March 6, 1990 when Proctor arrived on the premises, Adams did not have his glasses with him, a fact which escaped the attention of his supervisor, Polidoro. Adams took Proctor's drivers license over to the light, not because he was being careful, but because he could not see. Because Proctor so quickly and forthrightly provided his license to Adams, Adams guessed that Proctor was of age and sold him the beer. He guessed wrong. Adams was clearly negligent. Polidoro was also negligent. While sitting at the bar next to the register he took minimal interest in insuring that Proctor was of age. He merely leaned forward and looked down the bar toward Proctor but since he did not have his glasses on he could not distinguish Proctor's features. He did not make any inquiry of Adams, nor check the license himself. Polidoro failed to see that his and his bartenders' negligent inability to see was the proximate cause of the sale to Proctor. Even at the hearing, Polidoro was unable to comprehend why it is important to know whether his employees who check identification wear glasses. He was there to make money. "He didn't worry about him wearing reading glasses or not." Prevention of sales to the underaged was not an important concern to him. Both Polidoro and Milazzo were blind with respect to their obligations relative to the terms of probation.
Each term was designed to assist the Respondents in ensuring that no further sales were made to the underaged. Each of those terms of probation were ignored by Respondents.
Each element of the two substantive offenses alleged, and each violation of probation alleged have been established by clear and convincing evidence.
As mitigation for their failure to adhere to the terms of their probation, Respondents offer that they assumed the state would take care of it. Respondents and their attorney signed both the Consent Agreement and the addendum thereto. Not surprisingly, nothing in the consent agreement, or the addendum thereto states that the Division of Alcoholic Beverages and Tobacco will insure that Respondents comply with the terms of probation. Insuring compliance was the responsibility of Respondents.
The division may impose a civil penalty against a 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. The funds so collected as civil penalties shall be deposited in the state General Revenue Fund.
In his proposed recommended order, counsel for Petitioner suggests revocation as an appropriate penalty. Although the violations are significant and there is evidence of the violation of probation for the prior offense, there are no rules or guidelines regarding appropriate penalties. A range of penalties is available in Sections 561.29(1) and (3), Florida Statutes, and the recommendation for the ultimate penalty for these offenses are not supported by evidence or argument.
