STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 90-2912

)

ERNEST SCOTT, d/b/a SONNY'S ) STARDUST LOUNGE AND RESTAURANT, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in this case at Fort Lauderdale, Florida, on July 20, 1990, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings.

Appearances for the parties at the hearing were as follows:

APPEARANCES

For Petitioner: D. Lance Langston, Esquire

Assistant General Counsel Department of Business Regulation The Johns Building

725 South Bronough Street Tallahassee, Florida 32399-1007

For Respondent: Fred S. Schmunk, Jr., Esquire

2601 East Oakland Park Boulevard Suite 600

Fort Lauderdale, Florida 33306 STATEMENT OF THE ISSUES

The issue in this case is whether disciplinary action should be taken against the Respondent on the basis of alleged violations regarding the sale of alcoholic beverages to minors and the failure to have accommodations for service of two hundred or more patrons at tables.

PRELIMINARY STATEMENT

At the hearing on July 20, 1990, the Petitioner presented the testimony of Investigator P.S. Krauss, Investigator R. W. Dees, Investigator C. Sellers- Sampson, and Investigative Aide Seth Ross. The Petitioner also offered exhibits designated as 1, 2, 3, 4, 5, 6, 7, 9, 10, 11, and 12, all of which were received in evidence. The Respondent presented the testimony of Ernest Scott, Donna Aven, Linda Bohlander and Loren Hostetler. The Respondent did not offer any exhibits. The parties elected not to file a transcript of the hearing with the Hearing

Officer. The parties requested, and were granted, two weeks within which to file their proposed recommended orders. Thereafter, all parties filed proposed recommended orders containing proposed findings of fact and conclusions of law. 1/ The parties' proposals have been carefully considered during the preparation of this recommended order. Specific rulings on all findings of fact proposed by the parties are contained in the Appendix hereto.

FINDINGS OF FACT

Findings regarding general matters

1. The Respondent, Ernest Scott, d/b/a Sonny's Stardust Lounge and Restaurant, is the holder of a special alcoholic beverage license for premises located at 5181 N.W. 9th Avenue, Fort Lauderdale, Broward County, Florida. His current license number is 16-00368SRX. The type of license held by the Respondent is a special license authorized by Chapter 61-579, Laws of Florida.

   
   

2. The Respondent purchased the licensed premises as a going business in 1983. At that time the business had a similar license, which license was transferred to the Respondent when the Respondent purchased the business.

   
   

   Findings regarding sales to minors

   
   

3. On December 15, 1989, Respondent's employee, Lillian C. Pender, unlawfully sold an alcoholic beverage to a person under the age of twenty-one years. The beverage sold was a 12-ounce can of Budweiser beer. The minor to whom the sale was made was Jerry Wieczorek, age 16, date of birth April 11, 1973. 2/

   
   

4. On January 12, 1990, the Respondent, Ernest Scott, unlawfully sold an alcoholic beverage to a person under the age of twenty-one years. The beverage sold was a 12-ounce can of Budweiser beer. The minor to whom the sale was made was Seth Ross, age 18, date of birth August 22, 1971.

   
   

5. At the time of the alcoholic beverage sale on January 12, 1990, Seth Ross was engaged as an under age "Investigative Aide." His primary function in that capacity was to attempt, under the watchful eyes of the Division's Investigators, to purchase alcoholic beverages from various premises licensed to sell alcoholic beverages. When his efforts were successful, the Division Investigators would arrest the person who sold the alcoholic beverage to the Investigative Aide and would issue a notice to the licensee. All Investigative Aides, including Seth Ross, were instructed not to make any false statements about their age, not to use any false identification documents, and to answer truthfully any questions regarding their age that might be asked by the person from whom they were attempting to buy alcoholic beverages.

   
   

6. Shortly after 8:00 p.m. on the evening of January 12, 1990, Seth Roth entered the licensed premises and walked up to the bar. The Respondent, Ernest Scott, was on duty behind the bar. Ross asked the Respondent for a Budweiser and in response the Respondent asked Ross for identification. Ross handed the Respondent a valid Florida driver license that contained Ross' correct date of birth, namely August 22, 1971. The Respondent looked at the driver license and then said to Ross, "This makes you twenty." Ross replied, "No, it makes me eighteen." The Respondent said something to the effect that that was "good enough," and sold a Budweiser beer to Ross. Ross paid for the beer and then walked over to where two Division Investigators were sitting and delivered the beer to them. 3/

   Findings regarding seating accommodations

   
   

7. The furniture inventory at the time of Respondent's purchase of the licensed premises included the following: 49 four seat tables, 5 two seat tables, and 206 chairs. Except as specifically noted in the findings which follow, that original inventory of furniture has been continuously located on the licensed premises. Since the purchase of the licensed premises the Respondent has added some furniture to the licensed premises, including at least

   5 small chairs and one large table.

   
   

8. On December 18, 1989, Investigator R. W. Dees went to the licensed premises, contacted the Respondent, and conducted an inspection of the licensed premises. On the basis of the inspection, Investigator Dees concluded that the licensed premises were not being maintained in compliance with Chapter 61-579, Laws of Florida, and he issued a notice to that effect to the Respondent. 4/ The notice constituted a warning to the Respondent, as well as specific instructions regarding what the Respondent was required to do to be in compliance with the requirements of Chapter 61-579, Laws of Florida. At the time of the inspection on December 18, 1989, the Division's policy with regard to first offenses regarding the accommodations required by special acts like Chapter 61-578, Laws of Florida, was to issue a warning and to allow the licensee ten days within which to take the necessary corrective action.

   
   

9. On the basis of the record in this case it cannot be said with certainty how many patrons could be served full course meals with the accommodations on the licensed premises at the time of the inspection on December 18, 1989. 5/ However, by the next day the Respondent had taken steps to remedy any deficiencies in that regard, and on December 19, 1989, there were sufficient tables and chairs on the licensed premises to serve at least two hundred patrons at tables.

   
   

10. On January 12, 1990, Investigators Krauss and Dees conducted another inspection of the Respondent's licensed premises. At the time of the inspection on January 12, 1990, there were a sufficient number of tables and chairs on the licensed premises for service of at least two hundred patrons. 6/

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Sec. 120.57(1), Fla. Stat.

    
    

12. In a license discipline proceeding of this nature the Petitioner bears the burden of proving its charges by clear and convincing evidence. See Ferris

    v. Turlington, 510 So.2d 292 (Fla. 1987). The nature of clear and convincing evidence has been described as follows in Slomowitz v. Walker, 429 So.2d 797, 800 (Fla. 4th DCA 1983):

    
    

    We therefore hold that clear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the testimony must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it

    produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established.

    
    

    See also, Smith v. Department of Health and Rehabilitative Services, 522 So.2d 956 (Fla. 1st DCA 1988), which, at page 958, quotes with approval the above- quoted language from Slomowitz. The Smith case also includes the following at page 958:

    
    

    "Clear and convincing evidence is an intermediate standard of proof, more than the "preponderance of the evidence" standard used in most civil cases, and less than the "beyond a reasonable doubt" standard used in criminal cases. See State v. Graham, 240 So.2d 486 (Fla. 2d DCA 1970).

    
    

13. Chapter 61-579, Laws of Florida, a so-called "population act," provides for the issuance of special alcoholic beverage licenses in certain counties, including Broward County. Among the entities to which such a special license may be issued are

    
    

    any bona fide restaurant containing all necessary equipment and supplies for and serving full course meals regularly and having accommodations at all times for service of two hundred or more patrons at tables and occupying more than four thousand square feet of space. . . . (emphasis added)

    
    

14. The portion of Chapter 61-579, Laws of Florida, underscored above requires as a condition for a special alcoholic beverage license that the restaurant have accommodations at all times for service of two hundred or more patrons at tables." In other words, the restaurant must have the ability to simultaneously serve two hundred people at tables. To have that ability, the restaurant must, of necessity, have at least two hundred chairs on the premises, and it must also have a sufficient number of tables at which to simultaneously arrange all of the two hundred chairs. The statute does not specifically require that all of the chairs must always be arranged at those tables, but only that the restaurant be able to accommodate two hundred people at tables. So long as the necessary number of chairs and the necessary number of tables are present on the premises, the fact that the chairs are not all arranged at the tables does not constitute a violation of Chapter 61-579, Laws of Florida. Accordingly, the evidence in this case is insufficient to establish any violation of Chapter 61- 579, Laws of Florida. 7/

    
    

15. Pursuant to Section 562.11, Florida Statutes, it is unlawful for any person to engage in selling, giving, or serving alcoholic beverages to a person under twenty-one years of age. Violation of that provision by the Respondent's employee on December 15, 1989, and by the Respondent on January 12, 1990, subjects the Respondent to the penalty provisions of Section 561.29, Florida Statutes.

    
    

16. Upon a review of the entire record in this case, it appears that the appropriate penalty to be imposed for the two violations regarding sales of alcoholic beverages to minors is a fine in the amount of five hundred dollars

    ($500.00) for each of the two violations. In determining the appropriate penalty it has been especially noted (a) that there is no evidence that the Respondent knew of or condoned the unlawful sale by his employee and (b) that it is more likely than not that the unlawful sale by Respondent was the result of an honest mistake by the Respondent. 8/ Honest mistakes that result in sales of alcoholic beverages to minors warrant the imposition of a penalty if for no other reason than to motivate licensees to be more careful. But the penalty for such sales should be less severe than the penalty for sales to minors that result from a callous indifference to the prohibitions.

    
    

17. In determining the appropriate penalty there has been no reliance on any so-called "penalty guidelines" of the Division of Alcoholic Beverages and Tobacco. This is because the Petitioner failed to offer any persuasive evidence as to the source of those guidelines, the rationale for the guidelines, or the consistency, if any, with which they have been applied. 9/ Agencies that intend to rely on policies and procedures that have not been adopted as rules in the Florida Administrative Code must not only prove the existence of the policies and procedures, but must also demonstrate on the record the basis for and the wisdom of such policies and procedures. Absent adequate proof of an agency's non-rule policies, cases must be resolved by Hearing Officers and by agencies without resort to such policies. See Bajrangi v. Dept. of Business Regulation, 561 So.2d 410 (Fla. 5th DCA 1990). 10/

    
    

    RECOMMENDATION

    
    

    For all of the foregoing reasons, it is recommended that the Division of Alcoholic Beverages and Tobacco enter a final order in this case to the following effect:

    
    

    1. Concluding that there has been no violation of Chapter 61-579, Laws of Florida, and dismissing the charges set forth in the second and fourth paragraphs of the Notice To Show Cause;

       
       

    2. Concluding that the Respondent did violate Section 562.11, Florida Statutes, by reason of the sale, by the Respondent's employee, of an alcoholic beverage to a minor, as charged in the first paragraph of the Notice To Show Cause;

       
       

    3. Concluding that the Respondent did violate Section 562.11, Florida Statutes, by reason of the sale, by the Respondent, of an alcoholic beverage to a minor, as charged in the third paragraph of the Notice To Show Cause; and

       
       

    4. Imposing a penalty consisting of a fine in the amount of five hundred dollars ($500.00) for the violation described in subparagraph

(b) of this recommendation and an additional fine in the amount of five hundred dollars ($500.00) for the violation described in subparagraph (c) of this recommendation.

RECOMMENDED at Tallahassee, Leon County, Florida, this 24th day of September, 1990.

MICHAEL M. PARRISH, 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 24th day of September, 1990.

ENDNOTES

1/ The Petitioner's proposed recommended order was timely. The Respondent's was a few days late. Although late, the Respondent's proposed recommended order has been considered and the facts proposed by the Respondent are specifically addressed in the Appendix to this Recommended Order. However, parties are cautioned that the late submission of proposed recommended orders is at the peril of having their proposed findings ignored for failure to be submitted in accordance with agency rules.

2/ This violation is charged in Paragraph 1 of the Notice To Show Cause. The Respondent admitted this violation at the beginning of the hearing.

3/ There is a great deal of conflict in the testimony about what conversation took place between Seth Ross and the Respondent. The findings of fact in this paragraph are consistent with Ross' version. The Respondent contends that Ross' response to the statement, "this makes you twenty," was, no, it makes me twenty- one." The Respondent also contends that Ross handed him a driver license showing a date of birth consistent with Ross being twenty-one years old. I am persuaded that Ross has given a truthful account of what happened. It is nevertheless possible that the Respondent misunderstood what Ross said or misread the information on Ross' driver license.

4/ In the course of that inspection Investigator Dees concluded, on the basis of the number of tables and the sizes of the tables, that the available table space was sufficient to accommodate only 123 patrons. In reaching this conclusion Investigator Dees relied upon some type of Division "formula" for determining the number of patrons who can be served full course meals on tables of various sizes. The record does not contain any information about the nature of the formula. Accordingly, on the record in this case, it is not possible for the Hearing Officer to reach a conclusion as to whether the "formula" is reasonable or otherwise. Similarly, on the record in this case, it is not possible for the Hearing Officer to determine whether Investigator Dees correctly applied the formula. With these omissions from the record, it cannot be said that there is clear and convincing evidence that on December 18, 1989, the tables at the licensed premises would accommodate only 123 patrons. On December 18, 1989, Investigator Dees also counted only 152 chairs set up at the tables. Investigator Dees' chair count was limited to chairs actually set up at tables. His testimony does not address the matter of whether there were other chairs on the licensed premises at the time of his inspection, but his testimony

does not preclude the possibility of other chairs. This is because, as noted in the later testimony of Investigator Krauss, any chairs not actually set up at tables are "of no investigative significance." (Apparently, the Division's investigators are of the view that Chapter 61-579 requires that the necessary furniture to serve two hundred patrons must be set up at all times.)

5/ Although the Respondent testified that all of the original inventory of furniture at the time he purchased the licensed premises had remained on the premises, and that he had also purchased some additional items of furniture, he also testified that at the time of the December 18, 1989, inspection several of the large tables were broken and were not in use. Those tables were repaired and restored to use immediately after the December 18, 1989, inspection.

6/ There is conflicting evidence on this point. The Petitioner's evidence offered in support of an opposite finding fails to pass muster under the clear and convincing evidence standard. The investigators' chair count on January 12, 1990, included an observation that there were "approximately" 16 chairs stacked up that were not part of their count. In a case in which clear and convincing evidence is required, approximations are an insufficient basis upon which to determine that a licensee has failed to meet a legislatively imposed minimum number. And in any event, the Respondent presented persuasive evidence that, at the time of the January 12, 1990, inspection, the requisite number of tables and chairs were on the licensed premises.

7/ Although the record is not entirely clear, the Respondent may have been in violation of Chapter 61-579, Laws of Florida, on December 18, 1989. But any such violation was promptly corrected and, as observed in the findings of fact, at that time it was the Division's policy to only give a warning for a first offense of that nature.

8/ In this regard it is noted that when Seth Ross asked for a beer, the Respondent asked for identification and then questioned Ross about the information on his identification. What would be the point of these actions if the Respondent were not making an effort to prevent sales to minors? When interviewed by the investigators at the time of the incident, and again at the hearing, the Respondent insisted that he had been provided with information to the effect that Ross was at least twenty-one years old. All things considered, the Respondent's position on this issue is more likely the result of mistake than mendacity.

9/ Because of these failures of proof the Petitioner's proposed findings of fact regarding the penalty guidelines have been rejected.

10/ The evidence in this case regarding the so-called "penalty guidelines" is really no better than the evidence regarding the same "penalty guidelines" that was found to be insufficient in Bajrangi.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-2912

The following are my specific rulings on all proposed findings of fact submitted by all parties.

Findings submitted by Petitioner:

Paragraphs 1 and 2: Accepted.

Paragraph 3: First, third, and fourth sentences are accepted in substance.

Second sentence of this paragraph is rejected because the evidence offered by the Petitioner in support of this finding falls short of meeting the clear and convincing standard and because evidence on this issue offered by the Respondent is found to be persuasive.

Paragraphs 4 and 5: Rejected as subordinate and unnecessary details. Paragraph 6: Accepted in substance.

Paragraph 7: First sentence accepted. The remainder of this paragraph is rejected because the evidence offered by the Petitioner in support of this finding falls short of meeting the clear and convincing standard and because evidence on this issue offered by the Respondent is found to be persuasive.

Paragraph 8: Rejected because the evidence offered by the Petitioner in support of this finding falls short of meeting the clear and convincing standard.

Findings submitted by Respondent:

Paragraphs 1 and 2: Accepted.

Paragraph 3: First, third, and fourth sentences are accepted in substance.

Second sentence of this paragraph is rejected because the evidence offered by the Petitioner in support of this finding falls short of meeting the clear and convincing standard and because evidence on this issue offered by the Respondent is found to be persuasive.

Paragraphs 4 and 5: Rejected as subordinate and unnecessary details.

Paragraph 6: First sentence rejected as subordinate and unnecessary details. The remainder of this paragraph is rejected as contrary to the greater weight of the evidence.

First unnumbered paragraph on page 5: Rejected as subordinate and unnecessary details.

Second unnumbered paragraph on page 5: First sentence accepted in substance. Second sentence rejected as constituting argument rather than proposed findings of fact.

Third unnumbered paragraph on page 5: Rejected as constituting argument rather than proposed findings of fact.

Fourth, fifth, and sixth unnumbered paragraphs on page

5: Rejected as constituting a combination of argument and subordinate and unnecessary details. (Mr. Ross' expressed desires and interests were taken into consideration in the evaluation of his credibility.)

Paragraph 7: Accepted in substance.

First unnumbered paragraph following Paragraph 7: Rejected as subordinate and unnecessary details.

Second unnumbered paragraph following Paragraph 7: Accepted in substance. Paragraph 8: Rejected as subordinate and unnecessary details.

Unnumbered paragraph following Paragraph 8: Rejected as constituting argument rather than proposed findings of fact.

Paragraph 9: Rejected as subordinate and unnecessary details not supported by competent substantial evidence.

COPIES FURNISHED:

D. Lance Langston, Esquire Assistant General Counsel Department of Business Regulation The Johns Building

725 South Bronough Street Tallahassee, FL 32399-1007

Fred S. Schmunk, Jr., Esquire 2601 East Oakland Park Boulevard Suite 600

Fort Lauderdale, FL 33306

Joseph A. Sole, Esquire General Counsel

Department of Business Regulation The Johns Building

725 South Bronough Street Tallahassee, FL 32399-1007

Stephen R. MacNamara Secretary

Department of Business Regulation The Johns Building

725 South Bronough Street Tallahassee, FL 32399-1007

Leonard Ivey, Director

Division of Alcoholic Beverages and Tobacco Department of Business Regulation

The Johns Building

725 South Bronough Street Tallahassee, FL 32399-1007

Docket for Case No: 90-002912

Orders for Case No: 90-002912