STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS )

REGULATION, DIVISION OF )

ALCOHOLIC BEVERAGES AND )

TOBACCO, )

)

Petitioner, )

)

vs. ) CASE NO. 90-3632

) LEHIGH ACRES MEMORIAL POST #4174, ) VFW OF U.S., INC., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the above matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Donald R. Alexander, on September 11, 1990, in Fort Myers, Florida.

APPEARANCES

For Petitioner: Nancy C. Waller, Esquire

725 South Bronough Street Tallahassee, Florida 32399-1007

For Respondent: George F. St. Lawrence (qualified Rep.)

324 Fleetwood Avenue 1/ Lehigh Acres, Florida 33936

STATEMENT OF THE ISSUES

The issue is whether respondent's alcoholic beverage license should be disciplined for the reasons stated in the notice to show cause.

PRELIMINARY STATEMENT

By a notice to show cause served on March 19, 1990, petitioner, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco (Division), charged that respondent, Lehigh Acres Memorial Post #4174, VFW of U.S., Inc., had violated Subsection 561.29(1)(a), Florida Statutes (1989). More specifically, the notice to show cause alleged that in October 1989 respondent sold alcoholic beverages to a nonmember, possessed gambling devices on the licensed premises, maintained a gambling house, and conducted lottery drawings. Respondent disputed the above allegations and requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes (1989). The matter was referred by petitioner to the Division of Administrative Hearings on June 13, 1990, with a request that a hearing officer be assigned to conduct a formal hearing. By notice of hearing dated June 28, 1990, a final hearing was scheduled on September 11, 1990, in Fort Myers, Florida.

At final hearing, petitioner presented the testimony of Stephen H. Thompkins and Robert B. Baggett, Division investigators, Bryan Beery, a detective for the Pinellas County sheriff's office, and Tommy Lee Ewing, a Division district supervisor. Also, it offered petitioner's exhibits 1-43. 2/ All exhibits were received in evidence. Respondent presented the testimony of Robert C. Wagner, John Ondeck, and Robert Donahue, all members of the organization. Also, it offered respondent's exhibits 1-13. All exhibits were received in evidence.

This Recommended Order was prepared without the benefit of a transcript of hearing. Proposed findings of fact and conclusions of law were filed by respondent and petitioner on October 11 and 12, 1990, respectively. A ruling on each proposed finding has been made in the Appendix attached to this Recommended Order.

FINDINGS OF FACT

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

1. Background

   
   

   1. At all times relevant hereto, respondent, Lehigh Acres Memorial Post #4174, VFW of U. S., Inc. (respondent or club), held alcoholic beverage license number 46-00555, series 11-C, issued by petitioner, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco (Division). Respondent used the license to sell alcoholic beverages at its club located at 18 South Homestead Road, Lehigh Acres, Florida. Under the license, respondent was authorized to sell alcoholic beverages to its members and guests, provided such guests signed a guest book and the members paid for all drinks.

      
      

   2. Described by respondent's qualified representative as a "day of infamy", October 29, 1989, was the day on which petitioner conducted a search of respondent's licensed premises. The search was conducted after Division investigator Steven H. Thompkins visited the club on three prior occasions in October 1989 in an undercover capacity. Those visits were prompted by an anonymous complaint that the club was engaged in illegal gambling activities. Based upon information uncovered during the three visits, a search warrant was obtained from a local judge, and two Division investigators and three Lee County deputy sheriffs entered the licensed premises on Sunday afternoon, October 29, during the midst of a Bingo game being attended by forty or fifty club members and their guests. Thereafter, a notice to show cause was issued by the Division alleging that respondent had violated chapter 561 in several respects. The issuance of the notice to show cause prompted respondent to initiate this proceeding.

      
      

2. Search Warrant

   
   

   1. A search warrant was obtained by Thompkins and an assistant state attorney from a local county judge on October 27, 1989. The probable cause was based upon an affidavit filed by Thompkins which requested that the judge issue the warrant to search the premises of the club in "the daytime or the nighttime, or on Sunday as the exigencies of the occasion demand or require." Although the warrant was executed on a Sunday, the warrant did not refer to Sunday or specifically authorize a search to be made on a Sunday. Rather, after referring

      to Thompkins' affidavit, describing the premises to be searched, and citing the type of gambling paraphernalia believed to be on the premises, the warrant read in relevant part as follows:

      
      

      THESE ARE THEREFORE to command you with proper and necessary assistants of the law enforcement agencies, to enter and to search the above described premises referred to as VFW Post 4174, 18 South Homestead Road, Lehigh Acres, Lee County, Florida, for the property described above: a daily number book, betting pool sheets for baseball, pull tab cards for a game of chance instant bingo, two video poker machines, a green bag or envelope, and papers or documents or currency used in connection with the gambling operation.

      
      

   2. When the warrant was executed on the club premises, the affidavit was not physically attached to the warrant. This finding is based on uncontroverted testimony presented by respondent.

      
      

3. Count (1)

   
   

   1. Count (1) of the notice to show cause alleges that between October 15 and October 22, 1989, respondent, through its agents Walter Adams and Cindy Carboni, "did sell alcoholic beverages to a nonmember to wit: Stephen Thompkins." Respondent has stipulated that Adams, a club bartender, did sell a beer Thompkins on October 15 and 22, 1989, and a mixed drink on October 22, 1989. The record also shows that Thompkins purchased a mixed drink from Carboni on October 19, 1989. All sales were in the club bar on the licensed premises. Thompkins was not a member of the club, had not signed in on the club's guest book, and was not a member's guest. The record further shows that Thompkins did not mislead or deceive the club bartenders into believing that he was a member or guest. Therefore, the allegation in Count I has been sustained.

      
      

4. Count 2(a)

   
   

   1. Part (a) of the second count charges that between

      October 15 and 29, 1989, the club possessed "Bingo pull tabs tickets and door prize raffle tickets within (its) licensed premises which are gambling devices and had `been used for gambling purposes contrary to F.S. 849.231(1)."

      
      

   2. Each Sunday afternoon around 1:45 p.m., the club conducted a Bingo game. In order to play Bingo and receive a Bingo card, a patron had to purchase a minimum of four double numbered tickets at fifty cents per ticket. Half of the ticket was retained by the club and used as the basis for a drawing at intermission. On his October 22, 1989, visit, agent Thompkins was a winner on the drawing and received a Florida Lottery Wild Winner's ticket as a prize. For fifty cents each, a patron could also purchase Bingo pull tab cards which are small cards having five removable tabs. These cards were sold only on Sundays by Robert Wagner, a club officer, during the 3:30 p.m. intermission. If the right combination (e.g. the letters "BINGO") was underneath the tabs, a customer could win cash prizes. Indeed, on Thompkins' first visit, one of the forty tickets he purchased for $20 was a winner, and Thompkins received a $51 cash prize.

   3. The club also conducted a daily drawing wherein patrons purchased for twenty-five cents a chance to win by placing their names in small capsules which were kept in a large plastic jar. At the end of each day a capsule was drawn out of the jar at random, and the name selected won a prize. To keep track of the participants, the club required them to write their names in a "daily book" (a stenographer's pad) while the prize money was retained in a coffee can kept for that purpose. In addition to the daily drawings, the club conducted what was called a weekly 50:50 drawing which involved essentially the same procedure as the daily drawing, that is, patrons purchased chances by placing their names into small capsules which were kept in a plastic jar until the lucky capsule wad drawn once a week. In both games, the club retained a portion of the moneys wagered by the patrons. Thus, the club was engaged in gambling activities as alleged in the notice to show cause.

      
      

5. Count (2)(b)

   
   

   1. The second portion of Count (2) alleges that between October 15 and 29, 1989, the club "did possess World Series Baseball Pool Sheets and two (2) video poker machines which are gambling devices and had been used for gambling purposes."

      
      

   2. In the club bar, the bartender (Adams) maintained a World Series pool sheet, which was a large card with ten numbered spaces across the top and ten numbered spaces down, or one hundred spaces in all. Individuals participating in the pool signed their names in various blocks of the card indicating what they thought the score would be. Each chance cost twenty-five cents, and on his first visit, Thompkins purchased twelve chances for three dollars. Such a sheet was also maintained for subsequent World Series games. Therefore, it is found that the club possessed baseball pool sheets for gambling purposes.

      
      

   3. During the time period in question, the club maintained two Greyhound electric video game machines on its licensed premises. One was known as "Hi Lo Joker Poker", the other as "Super Poker." Each game required a minimum quarter deposit to play. Agent Thompkins observed several club patrons play the machines and Thompkins himself played the Joker Poker machine, albeit unsuccessfully. The club bartender explained to Thompkins that a minimum of forty points had to be earned on the machine before credit would be recorded and that every forty points equaled ten dollars in credits or winnings. Through the expert testimony of Pinellas County sheriff's detective Brian Beery, it was established that the two machines had been modified by a computer chip so that their character was no longer amusement in nature but instead were illegal gambling machines. In their modified state, the machines could be reset and cleared after each player with a remote control device operated by the bartender. Moreover, the payoff odds were controlled by the club. According to Beery's uncontradicted testimony, the club retained 56% of all moneys deposited in the machines. Beery added that the machines are generally modified at the lessee's or renter's direction and that the owner of the machines shares in the profits.

      
      

   4. The name of the owner of the machines is not of record. According to the club's past commander, the machines had been on the premises for less than two weeks prior to the October 29 raid. This was not controverted. Even so, for those two weeks, the club was utilizing video poker machines for gambling purposes as alleged in the notice to show cause.

6. Count (3)

   
   

   1. The third count charges that between October 15 and 29, 1989, respondent maintained "a gambling house by allowing video poker machines, "bingo" pull tabs tickets and door prize raffles to be used for gambling purposes within (its) licensed premises."

      
      

   2. The evidence detailed in findings of fact 7, 8 and 11 supports a finding that the club maintained video machines, Bingo pull tab tickets and door prize raffles for gambling purposes during the time period in question.

      
      

7. Count (4)

   
   

   1. The last count alleges that respondent "did

      conduct lottery drawings by having 3rd and 4th game World Series Baseball Pool and conducting drawings at the intermission of bingo each Sunday."

      
      

   2. Respondent has admitted that Walter Adams, the club's bartender, conducted a World Series pool for two games during the 1989 series. A description of such activities is found in finding of fact 10. The club's only defense to this allegation was that Adams was not authorized to conduct the pool, and the canteen (bar) was not under the post commander's direct responsibility. Even so, this charge has been sustained.

      
      

   3. The evidence also shows that during the intermission of the Bingo game on October 15 and 22, 1989, Robert Donahue, a post member, conducted a drawing for a prize. Additional findings as to this allegation are contained in finding of fact 7. Therefore, this charge has been established.

      
      

8. Penalty and Mitigating Evidence

1. The Division's district supervisor has recommended

   that respondent's license be revoked. This recommendation is based on the fact that pursuant to a consent agreement executed in October 1986 respondent suffered a $2,000 fine and a thirty day suspension of its license for illegal gambling activities. Further, the supervisor pointed out that: the club has been lectured on illicit gambling as recently as August 7, 1989. Moreover, the club was given a verbal warning concerning illegal alcoholic sales to non- members on January 16, 1986. Finally, the Division calculated what it believed to be the amount of profits realized by the club from its gambling activities.

   These profits exceeded $5,000 which, according to the supervisor, is the threshold amount of illegal income to justify revocation of a license.

   
   

2. In mitigation, the club contended that it did not know that many of the activities were illegal and that it was simply engaged in activities that are commonplace in other clubs and business enterprises. Moreover, the club points out that much of its profits from gambling were donated to charitable causes. In addition, the club building is now in need of a new roof and the club contends it cannot afford to lose the revenues that are generated by the liquor license. Finally, the club maintains that Adams' activities were not authorized, and the club should not be penalized for his actions.

   
   

   CONCLUSIONS OF LAW

   
   

3. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties hereto pursuant to Subsection 120.57(1), Florida Statutes (1989).

4. The Notice to Show Cause alleges that violations occurred on the licensed premises in five respects:

   
   

   1) Between 10-15-89 and 10-22-89, you, Lehigh Acres Memorial Post #4174 Veterans of Foreign Wars of United States, Inc., or agent, servant, or employee, to wit: Walter Adams and Cindy Carboni, did sell alcoholic beverages to a non member to wit: Stephen Thompkins as follows:

   Alcoholic

   Date of Sale	Beverage	Sold By
   10-15-89	Budweiser Beer	W. Adams
   10-16-89	Mixed Drink	W. Adams
   10-16-89	Budweiser Beer	C. Carboni
   10-22-89	Budweiser Beer	W. Adams

   Contrary to F.S. 565.02(4) within 561.29(1)(a). 1 Count

   2a) Between 10-15-89 and 10-29-89, you, Lehigh Acres Memorial Post #4174 Veterans of Foreign Wars of United States, Inc., or your agent, servant or employee, to wit: Robert Wagner, June Wagner and Robert Donahue did possess "Bingo" pull tabs tickets and door prize raffle tickets within your licensed premises which are gambling devices and had been used for gambling purposes contrary to F.S. 849.231 (1) within 561.29(1)(a).

   2b) Between 10-15-89 and 10-29-89, you, Lehigh Acres Memorial Post #4174 Veterans of Foreign Wars of United States, Inc., or your agent, servant or employee, to wit: Bar Manager Penjamin Pedraini, Walter Adams, and Cindy Carboni, did possess World Series Baseball Pool Sheets and two (2) video joker machines within your licensed premises which are gambling devices and had been used for gambling purposes contrary to F.S. 849.231(1) within 561.29(1)(a). 2 Counts.

   3) Between 10-15-89 and 10-29-89, you, Lehigh Acres Memorial Post #4174 Veterans of Foreign Wars of United States, Inc., or your agent, servant or employee to wit: Bar Manager Benjamin Pedraini and Bingo Chairman Robert Donahue did maintain a gambling house by allowing video poker machines, "bingo" pull tabs tickets and door prize raffles to be used for gambling purposes within your licensed premises contrary to F.S. 849.01 within 561.29(1)(a). 1 Count

   4) Between 10-15-89 and 10-22-89, you, Lehigh Acres Memorial Post #4174 Veterans of Foreign Wars of United States, Inc., or your agent, servant, or employee, to wit: Robert Donahue and Walter Adams did conduct lottery drawings by having 3rd and 4th World Series

   Baseball pool and conducting Adams drawings by having 3rd and 4th World Series Baseball pool and conducting drawings at the intermission of bingo each Sunday-contrary to F.S. 849.09(1)(a) within 561.29(1)(a). 1

   Count

   
   

   If proven true, such violations would constitute grounds for revoking respondent's license under the authority of Subsection 561.29(1)(a), Florida Statutes (1989). That subsection authorizes the Division to revoke a beverage license if, while on the licensed premises, the licensee violates any laws of this state. In this regard, it is noted that in order to sustain the allegations, the agency is obligated to probe such charges by the preponderance of the evidence.

   
   

5. Respondent argues that Thompkins' testimony and the seized contraband are inadmissible on the theory that the search and seizure was illegal. It contends that the search warrant was improperly executed on October 29, 1989, because that date was a Sunday, and the warrant made no reference to a Sunday as required by Section 933.101, Florida Statutes (1989). That section provides as follows:

   
   

   A search warrant may be executed by being served on Sunday, if expressly authorized in such warrant by the judge or

   issuing the same.

   
   

   A copy of the search warrant received in evidence as petitioner's exhibit 19 reveals that no express authorization to conduct the search on a Sunday is found in the warrant. The above statute is clear and unambiguous on this matter and prohibits the execution of a warrant on a Sunday unless "expressly authorized in such warrant." In construing this statute, it is noted that "statutes authorizing searches and seizures must be strictly construed and affidavits and search warrants issued thereunder must strictly conform to the constitutional and statutory provisions authorizing their making and issuance." Hesselrode v. State, 369 So.2d 348, 350 (Fla. 2d DCA 1979). Applying this principle to the facts at hand, it is concluded that the search warrant was improperly executed since it failed to expressly authorize the Division to conduct a search on a Sunday. Cf. Laramore v. State, 342 So.2d 90 (Fla. 1st DCA 1977) (trial court's denial of a defendant's motion to suppress proper where the warrant expressly authorized execution on a Sunday). It is also noted that the evidence supports a conclusion that the warrant was improperly executed because the affidavit was not attached to the warrant. Booze v. State, 291 So.2d 262, 263 (Fla. 2d DCA 1974) (affidavit must be attached to and made a part of the warrant). In reaching the above conclusions, the undersigned has considered petitioner's contention that the undersigned has no authority to determine constitutional issues. There are, of course, a wide array of constitutional claims that can be raised in an administrative proceeding, Key Haven Associated Enterprises, Inc.

   v. Board of Trustees of the Internal Improvement Trust Fund, 427 So.2d 153 (Fla. 1983), and, for example, the courts have considered a party's challenge of a warrantless search in a license revocation setting such as this. Adams v. State Professional Practices Council, 406 So.2d 1170 (Fla. 1st DCA 1981). Therefore, the undersigned finds no impediment to resolving the constitutional claim. Even so, the entry onto respondent's premises by Division investigators was not illegal by virtue of the following authorization in Subsection 562.41(5), Florida Statutes (1989):

   (5) Licensees, by the acceptance of their license, agree that their places of business shall always be subject to be inspected and searched without search warrants by the authorized employees of the division and also by sheriffs, deputy sheriffs, and police officers during business hours or at any time such premises are occupied by the licensee or other persons.

   
   

   Therefore, while respondent may arguably raise the contention that the search was illegal in any criminal or civil actions arising out of the October 29 search and seizure, given the above statutory authorization, such a contention in an administrative action is deemed to be unavailing.

   
   

6. The preponderance of the evidence supports a conclusion that respondent has violated the law as alleged in the notice to show cause. Therefore, the charges have been sustained.

   
   

7. Through counsel, petitioner urges that respondent's license be revoked, particularly since the licensee suffered a monetary fine and licensure suspension for similar transgressions in 1986, was given a verbal warning as recently as August 1989, and has profited financially through its illicit gambling activities. Given these circumstances, this penalty is appropriate.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty as charged in the notice to

show cause and that its license be REVOKED.

DONE and ENTERED this 19th day of October, 1990, in Tallahassee, Florida.

DONALD R. ALEXANDER

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 19th of October, 1990.

ENDNOTES

1/ By agreement of the parties, Mr. St. Lawrence, a retired member of the District of Columbia Bar, was allowed to represent respondent as a qualified representative under Rule 221-6.035, F.A.C. (1989)

2/ Due to the size and number of petitioner's exhibits, and because many of the exhibits are now being used in a civil forfeiture proceeding, the parties agreed that photographs of much of the physical evidence could be used in lieu of the actual items.

APPENDIX

Petitioner:

1. Partially adopted in finding of fact 1.

2. Partially adopted in finding of fact 2.

3-21. Partially adopted in findings of fact 5 - 17. 22-23. Rejected as being unnecessary.

24-28. Partially adopted in finding of fact 11.

29. Rejected as being unnecessary.

30-33. Partially adopted in finding of fact 18.

1. Partially adopted in findings of fact 3 and 4.

2. Partially adopted in finding of fact 19. 36-39. Rejected as being unnecessary.

40-44. Partially adopted in finding of fact 18.

Note - Where a finding has been partially used, the remainder has been rejected as being irrelevant, subordinate, unnecessary, not supported by the evidence, cumulative, or a conclusion of law.

Respondent:

Note - Respondent submitted argument styled as Proposed Order 1, 2 and 3. To the extent respondent contends the record does not support a finding that the search and seizure was legal, the same reasoning has been used in this order. As to mitigation contentions, the same have been recited in finding of fact 19 and considered by the undersigned in determining an appropriate penalty.

COPIES FURNISHED:

Mary C. Waller, Esquire 725 South Bronough Street Tallahassee, FL 32399-1007

George F. St. Lawrence

324 Fleetwood Avenue Lehigh Acres, FL 33936

Leonard Ivey, Director

Division of Alcoholic Beverages and Tobacco

725 South Bronough Street Tallahassee, FL 32399-1007

Joseph A. Sole, Esquire 725 South Bronough Street Tallahassee, FL 32399-1007

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

ALL PARTIES HAVE THE RIGHT TO SUBMIT WRITTEN EXCEPTIONS TO THIS RECOMMENDED ORDER. ALL AGENCIES ALLOW EACH PARTY AT LEAST 10 DAYS IN WHICH TO SUBMIT WRITTEN EXCEPTIONS. SOME AGENCIES ALLOW A LARGER PERIOD WITHIN WHICH TO SUBMIT WRITTEN EXCEPTIONS. YOU SHOULD CONTACT THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE CONCERNING AGENCY RULES ON THE DEADLINE FOR FILING EXCEPTIONS TO THIS RECOMMENDED ORDER. ANY EXCEPTIONS TO THIS RECOMMENDED ORDER SHOULD BE FILED WITH THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE.

Docket for Case No: 90-003632

Orders for Case No: 90-003632