STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 92-1666

) FLORIDA PREMIER CLUBS, INC., ) d/b/a MAKO'S BAY CLUB,, )

)

Respondent. )

)

RECOMMENDED ORDER

On May 21, 1992, a formal administrative hearing was held in this case in Tampa, Florida, before J. Lawrence Johnston, Hearing Officer, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Monica Atkins White, Esquire

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

For Respondent: Bobby Silor

Florida Premier Clubs, Inc. 901 North Franklin Street Tampa, Florida 33602

STATEMENT OF THE ISSUES

The issues in this case are framed by the Notice to Show Cause issued by the Petitioner, the Department of Business Regulation, Division of Alcoholic Beverages and Tobacco (the Department), on or about January 22, 1992, in DBR Case No. TA-39-91-0555. The Notice to Show Cause alleges that the Respondent, Florida Premier Clubs, Inc., d/b/a Mako's Bay Club, through its employees, sold alcoholic beverages to minors on November 6, 1991, in violation of Sections 562.11(1)(a) and 561.29(1)(a), Fla. Stat. (1991). The Respondent denies the charges and also asserts mitigating circumstances and the Florida Responsible Vendor Act defense under Section 561.706, Fla. Stat. (1991).

PRELIMINARY STATEMENT

On or about January 22, 1992, the Department issued the Notice to Show Cause described in the preceding paragraph. The Respondent requested a formal administrative proceeding, and the matter was referred to the Division of

Administrative Hearings on March 16, 1992. By Notice of Hearing issued on April 8, final hearing was scheduled for May 21, 1992, in Tampa, Florida.

At the final hearing, the Department called three special agents, three undercover underage operatives and its acting district captain as witnesses in its case-in-chief. It also had Petitioner's Exhibits 1 through 11 admitted in evidence. The Respondent called as witnesses four employees and one DABT- approved responsible vendor instructor. The Department recalled its case agent briefly in rebuttal

Neither party ordered the preparation of a transcript of the final hearing.

The parties were given ten days in which to file proposed recommended orders. Explicit rulings on the proposed findings of fact contained in the parties' proposed recommended orders may be found in the attached Appendix to Recommended Order, Case No. 92-1666.

FINDINGS OF FACT

1. The Respondent, Florida Premier Clubs, Inc., operates several establishments known as Mako's Bay Club in Pinellas County, Florida. All are licensed for consumption of alcoholic beverages on the premises. All are relatively large establishments that feature multiple bars and dancing. All cater to a relatively young clientele. All stress strict compliance with the Beverage Law, including the prohibition against sales to minors, and all employees receive training approved by the Petitioner, the Department of Business Regulation, Division of Alcoholic Beverages and Tobacco (the Department), under the Florida Responsible Vendor Act, which includes training in how to avoid illegal sales to minors. New employees receive this training either before they begin working or within approximately a month of beginning work. In addition, the management of the establishments hold periodic meetings that include a reminder about the prohibition against sales to minors and the establishment's policies for avoiding illegal sales to minors.

   
   

2. On or about January 23, 1991, the Respondent opened a Mako's Bay Club at 901 North Franklin Street, Tampa, Florida, under alcoholic beverage license number 39-03295, Series 4-COP. Before the establishment opened for business, all employees received training approved by the Department under the Florida Responsible Vendor Act, which included training in how to avoid illegal sales to minors. New employees have received this training either before beginning work or within approximately a month of beginning work. Generally, new employees are not permitted to serve alcoholic beverages until completing this training, except under supervision. In addition, the management holds monthly meetings with all staff that include a reminder about the prohibition against sales to minors and the establishment's policies for avoiding illegal sales to minors. 1/

   
   

3. The Mako's Bay Club in Tampa, at least, allows underage clientele (18 years old and up) to enter the premises on Wednesdays and Saturdays. On these nights, as on all others, clientele who appear to be relatively young are "carded" at the entrance. If they are under 21, the back of their right hand is marked in permanent ink with a large "X". If they are 21 or over, they are given a tight-fitting band to wear around their wrist. Bartenders and servers know they can only serve someone with the wrist band and without the "X" mark. If a customer has neither, and appears to be possibly under 21, the bartender or waitress is to ask to see proof of age. The bar's bouncers circulate during the evening and are alert to underage drinking, loose wrist bands, and underaged clientele in the company of authorized drinkers having more than one drink in front of them.

4. Although the Department has investigated complaints concerning underage sales at establishments operated by the Respondent, prior to November 6, 1991, the Department never made a case of selling to minors against any establishment operated by the Respondent, and the Department has considered the Respondent to be in compliance with the Beverage Law prohibiting sales to minors.

   
   

5. In response to complaints of underage drinking in the Mako's Bay Club in Tampa, the Department conducted an investigation that included sending undercover underage operatives (aides) into the establishment under the supervision of Department special agents. The aides are selected from among applicants who are college students 18 to 19 years old and who look their age. Often, they aspire to careers in law enforcement. They are instructed to carry correct identification, not to dress to appear older than they are, not to try to deceive the management and employees of the establishment they are investigating, and to give their correct age and identification if asked. Following these instructions, they are to enter the premises and see if they can buy a drink. They operate in pairs, and each pair is accompanied by special agent, who keeps them in sight, particularly when they are attempting to make a buy.

   
   

6. The investigation of the Mako's Bay Club in Tampa took place on November 6, 1991. Three teams of special agents and aides entered the premises separately between approximately 9:30 and 10:00 p.m. After a short period of orienting themselves and spreading out in the establishment, the aides went to work.

   
   

7. One, Asim Brown, a young-looking 18 year-old, ordered a Budweiser beer from a waitress the second time she approached the table where he and 19 year- old Belvin Sanchez were sitting. (Sanchez declined.) The waitress was new and, against normal procedures, was pressed into service before she was completely trained. She did not ask Brown's age or ask to see proof of age. She left, placed Brown's order at a bar, and later returned to the bar to get the beer to serve at their table. Brown paid for the drink. The transaction was observed by Special Agent Powell, who was seated nearby.

   
   

8. Sanchez later went to the "front bar" where he ordered a wine cooler while being observed by Special Agent Powell. He put the money on the bar counter while waiting for his drink. The bartender served him and took the money.

   
   

9. Brown went to another bar where he ordered another Budweiser beer, this time from a female bartender. She served him, and he paid for the beer.

   
   

10. 19-year old Ricky Salgado, who was teamed with Special Agent Hamilton and aide Steve Towe, also ordered a wine cooler at the front bar. He was served and paid for his drink. Special Agent Hamilton observed this transaction.

    
    

11. Apparently about this time, the bartender recognized Special Agent Hamilton and spread the word for the staff to be extra careful to be in compliance with the Beverage Law. The next time aide Sanchez tried to buy a wine cooler at the front bar, the bartender escorted him to a manager and had him evicted. When aide Towe tried to buy a drink, he was evicted, too. The female bartender who had sold beer to Brown later evicted both of the other aides, who were 17 year-old females, as well as two other minors, for trying to buy alcoholic beverages.

12. The evictions ended the investigation. Later, the special agents returned to arrest those accused of selling to minors and to serve a Notice to Show Cause on the Respondent.

    
    

13. The Respondent attacked the credibility of the Department's special agents and aides, essentially accusing them of fabricating the evidence, primarily on the basis that: (1) the Mako's Bay Club staff knew Special Agent Hamilton was on the premises and was being especially cautious; and (2) Brown could not have been served Budweiser.

    
    

14. As to the first point, the evidence was not clear when Special Agent Hamilton was spotted and when all the staff became advised of his presences.

    
    

15. As to the second point, the Respondent contends that the waitress from whom Brown and Powell say he purchased the Budweiser beer remembers that she did not serve any Budweiser that night. A bartender testified that she was assigned to his bar and was required by the bar's procedures to place her orders through him. He had $1 Corona specials at his bar, and he contends that it would have been rare for someone to order a Budweiser at his bar, rare enough for him and the waitress to remember it. He also claims to have checked his drink orders on the night in question and to have found no order for Budweiser beer. 2/ But the evidence is clear that the waitress had not completed her training and was working without supervision for the first time. She may not have followed all of the Mako's Bay Club's usual procedures. In addition, the evidence revealed that she was very upset at having been accused of selling to a minor because she was about to join the military and did not want a criminal record to come out of the incident. She had a motive to attempt to defend herself, perhaps by telling untruths about what happened.

    
    

    CONCLUSIONS OF LAW

    
    

16. Section 561.29, Fla. Stat. (1991), contains the following relevant provisions:

    
    

    1. The division is given full power and authority to revoke or suspend the license of any person holding a license under the Beverage Law, when it is determined or found

       by the division upon sufficient cause appearing of:

       1. 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, or . . . permitting another on the licensed premises to

          violate any of the laws of this state or of the United States . . ..

       2. Violation by the licensee . . . of any laws of this state or any state or territory of the United States.

          * * *

          (3) 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.

          
          

17. Section 562.11(1)(a), Fla. Stat. (1991), makes it unlawful to sell, give, serve, or permit to be served alcoholic beverages to a person under 21 years of age, or permit a person under 21 years of age to consume such beverages on the licensed premises.

    
    

18. It might be possible to read the decision in Surf Attractions, Inc.,

    v. Dept. of Business Reg., etc., 480 So. 2d 1354 (Fla. 1st DCA 1985), to require that, to establish violations of Section 562.11(1)(a), Fla. Stat. (1991), the Department had to prove that the employees who sold alcoholic beverages to the Department's underage operatives failed to exercise "due diligence." If so, the facts of this case establish that they did not exercise "due diligence." They either ignored or did not look for the wrist bands and "X" marks, and they did not ask the minors their age or ask them for identification. Under the facts found in this case, there clearly were four violations of Section 562.11(1)(a), Fla. Stat. (1991).

    
    

19. The case law is clear that, when charges of a violation of Section 561.29(1), Fla. Stat. (1991), are based on violations committed by a licensee's employees, it is necessary for the Department to prove not only the underlying violations by the employees but also that the licensee was culpably responsible for the violations. As explained in Pauline v. Lee, 147 So.2d 359, 364 (Fla. 2nd DCA 1962):

    
    

    A literal reading of [Section 561.29(1)] would indicate that a liquor licensee is under the onus of suspension or revocation of his license for any violation of law committed by his employees on his premises, irrespective of

    his own personal fault in connection therewith. However, the case of Cohen v. Schott, decided by the Supreme Court, and the case of Trader Jon, Inc.

    v. State Beverage Department, decided by the First District Court of Appeal, both appear to lay down the rule that, before his license can be suspended or revoked for a violation of law on his premises, a licensee should be found to have been culpably responsible for such violation through or as a result of his own negligence, intentional wrongdoing or lack of diligence.

    
    

20. In Lash, Inc. v. State Dept. of Business Reg., 411 So.2d 276, 278 (Fla 3rd DCA 1983), the court held:

    
    

    Under Section 561.29(1), where the unlawful activity is committed by the Licensee's agent, simple negligence is sufficient for revocation. Admittedly, the courts have refused to uphold revocations when the evidence showed only that

    on one occasion the licensee's employees violated the laws, and that the licensee otherwise took measures to comply with them. (Citations omitted.) Where, however, the laws are repeatedly and flagrantly violated by the employees, an

    inference arises leading to the conclusion that such violations are either fostered, condoned or negligently overlooked by the licensee, notwithstanding his absence from the premises when the violations occur. (Citations omitted.) Consequently, if the evidence supports the conclusion that the licensee failed to exercise ordinary care in the maintenance of the licensed premises or the supervision of his employees, he can be found negligent and his license revoked. (Citation omitted.)

    
    

    See also Jones v. State Dept. of Business Reg., 448 So.2d 1109, 1111 (Fla. 1st DCA 1984)("The licensee may be guilty of violating the beverage law . . . if he fails to exercise due diligence in supervising and maintaining surveillance over the licensed premises."); Taylor v. State Beverage Dept., 194 So. 2d 321, 329 (Fla. 2d DCA 1967)("such conduct and operation of [a licensee's] privileged business must always be judged on balance and not by any isolated instance. The beverage law, like the real estate license law, is aimed at flagrant and chronic offenders."); Pauline v. Lee, supra at 364, ("The persistence and practiced manner with which the solicitations [for prostitution] described by the state's witnesses were made is sufficient to permit a factual inference leading to the conclusion that such violations of law were either fostered, condoned or negligently overlooked by the licensee notwithstanding his absence from the premises on the dates in question.").

    
    

21. In this case, there is no basis for an inference of negligent oversight by the Respondent. The Respondent had procedures in place at Mako's Bay Club in Tampa (as well as those in Pinellas County) to assure that minors would not be sold alcoholic beverages. The Respondent's employees were trained in responsible vending and received regular reminders to follow the procedures for preventing sales to minors. There were four sales on a single evening on which other minors were refused permission to buy alcoholic beverages and were evicted from the premises. There is no basis for a finding either that the licensee fostered or condoned underage drinking or that the licensee knew or should have known that sales to minors were taking place on the premises. Cf. Pic N' Save Central Florida, Inc., v. Dept. of Bus. Reg., 17 F.L.W. D1379 (Fla. 1st DCA 1992).

    
    

22. Section 561.29(1)(a), Fla. Stat. (1991), also prohibits a licensee from "permitting another [i.e., someone other than the licensee himself, his agents, officers, servants or employees] on the licensed premises to violate any of the laws of this state or of the United States . . .." There was no evidence that the Respondent actually or constructively permitted underage clientele to buy alcoholic beverages on the premises. See Jones v. State Dept. of Business Reg., supra. Cf. Bach v. Florida State Board of Dentistry, 378 So. 2d 34 (Fla. 1st DCA 1980).

    
    

23. The Section 561.706, Fla. Stat. (1991), exemption from suspension or revocation does not apply. The Respondent did not prove that it maintains employment records of the application, acknowledgments, and training of its employees required by Section 561.705, Fla. Stat. (1991). But since the Department did not prove a violation of Section 561.29(1)(a), Fla. Stat. (1991), it was not necessary for the Respondent to establish entitlement to the Section 561.706 exemption.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, enter a final order dismissing the Notice to Show Cause in this case.

RECOMMENDED this 9th day of June, 1992, in Tallahassee, 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 9th day of June, 1992.

ENDNOTES

1/ The Respondent did not prove that it maintains employment records of the application, acknowledgments, and training of its employees required by Section 561.705, Fla. Stat. (1991). Therefore, the Section 561.706, Fla. Stat. (1991), exemption from suspension or revocation does not apply.

2/ There also was some confusion on the part of Brown and Sanchez as to what Sanchez ordered. They testified at first that Sanchez also ordered a Budweiser but later modified their testimony, saying they were not sure it was Budweiser. Special Agent Powell's testimony and Petitioner's Exhibits 7, 8 and 9 clarify that Brown bought beer, and Sanchez bought a wine cooler.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-1666

To comply with the requirements of Section 120.59(2), Fla. Stat. (1991), the following rulings are made on the parties' proposed findings of fact:

Petitioner's Proposed Findings of Fact.

1.-3. Accepted and incorporated to the extent not subordinate or unnecessary.

1. Rejected as not proven and as contrary to facts found that he never asked to see his hand. The next time Sanchez tried to order a drink, Burciaga had him evicted. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary.

2. Accepted and incorporated to the extent not subordinate or unnecessary.

3. Rejected as not proven that Salgado expressly "showed" Burciaga his "X"; accepted that he extended his hand to give Burciaga the money in a way that would have enabled Burciaga to see the "X". Otherwise, accepted and incorporated to the extent not subordinate or unnecessary.

4. Irrelevant since no violation of Section 561.29(1)(a), Fla. Stat. (1991), was proven. Besides, it was represented that 7A-6.001 is not yet a rule, and the evidence did not prove the non-rule standard guidelines or the basis for them. Specifically, the evidence indicated that the guidelines are subject to

modification at the discretion of the Director, but only during informal hearings or informal conferences.

Respondent's Proposed Findings of Fact.

The Respondent's proposed findings of fact took the form of a four-page letter containing 20 unnumbered paragraphs. For purposes of these rulings, the paragraphs of the letter and the sentences of the paragraphs have been assigned consecutive numbers, and reference is made to the paragraph and sentence numbers.

1.-2. Accepted and incorporated to the extent not subordinate or unnecessary.

1. Second sentence, rejected as contrary to facts found and to the greater weight of the evidence. Burciaga did not immediately recognize Special Agent Hamilton as he entered the premises. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary.

2. The characterization that the flaws were "many" and the assertion that the investigation was "not conducted properly and professionally" are rejected as contrary to the greater weight of the evidence. Accepted that the special agents were not able to maintain constant eye contact with both aides under the agent's supervision at all times. Unnecessary.

3. Accepted but subordinate and unnecessary.

6.-7. Except for the argument, accepted. Incorporated in part but in part subordinate to facts contrary to those found, and unnecessary. Also, see 4., above.

1. Except for the argument, accepted. Incorporated in part but in part subordinate to facts contrary to those found, and unnecessary. (It was found that the Salgado sale occurred before Burciaga recognized Hamilton.)

2. Except for the argument, accepted. Incorporated in part but in part subordinate to facts contrary to those found, and unnecessary. (Towe did not make, but only attempted, a buy. He may have approached the bar back working with Burciaga. He may have placed his order at the time, after Burciaga recognized Hamilton, when Burciaga left his bar to spread the word that Hamilton was there.)

3. Argument and subordinate.

4. Rejected as contrary to facts found and to the greater weight of the evidence. Powell clarified in his testimony that he waited outside the bathroom door.

5. Except for the argument, accepted but subordinate and unnecessary. (Freese's aides made no buys and did not testify.)

6. Accepted but subordinate to facts contrary to those found, and unnecessary.

7. Last sentence, accepted but subordinate to facts contrary to those found, and unnecessary. The rest is rejected as argument and unnecessary.

8. Rejected in part as contrary to facts found and to the greater weight of the evidence. It was found that sales to minors occurred without proper precautions being taken by the employees who made the sales. Corpora is not accused of selling to Sanchez but rather to Brown. Accepted and incorporated that she had four minors evicted. Last sentence, rejected as argument. (Her sale may have occurred before she was told about Special Agent Hamilton.)

9. Second sentence, accepted and incorporated to the extent not subordinate or unnecessary. (However, the drink orders were not put in evidence to substantiate his testimony.) The rest is rejected as hearsay and as subordinate to facts contrary to those found and contrary to the greater weight of the evidence.

10. Second sentence, accepted and incorporated. First sentence, in part rejected as not supported by any evidence (his status and reputation on campus) and in part accepted (that he has common sense) but subordinate to facts

    contrary to those found (that he made mistakes on this occasion, perhaps because he was too busy) and to the greater weight of the evidence.

11. First sentence, rejected as contrary to facts found and to the greater weight of the evidence. Second sentence, rejected as to the number 750 as not being supported by any evidence; otherwise, accepted and incorporated. Third sentence, accepted and incorporated to the extent not subordinate or unnecessary. Fourth sentence, rejected as argument and conclusion of law. (Section 561.705(7), Fla. Stat. (1991), does not make reference to sales to minors but rather to illegal use of controlled substances.) Fifth sentence, rejected as contrary to facts found, and to the greater weight of the evidence, that the employees are "innocent"; accepted but subordinate and unnecessary that Silor "stands by them." Last sentence, accepted but argument, conclusion of law, subordinate and unnecessary.

12. Cumulative and argument.

13. Rejected as not proven that the Respondent "complied fully." Otherwise, rejected as argument and conclusion of law.

COPIES FURNISHED:

Monica Atkins White, Esquire Assistant General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007

Bobby Silor

Florida Premier Clubs, Inc. 901 North Franklin Street Tampa, Florida 33602

Richard W. Scully, Director Div. of Alcoholic Beverages

and Tobacco

Dept. of Business Regulation The Johns Building

725 South Bronough Street Tallahassee, Florida 32399-1000

Donald D. Conn, Esquire General Counsel

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

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

ALL PARTIES HAVE THE RIGHT TO SUBMIT TO THE DEPARTMENT OF BUSINESS REGULATION, DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO WRITTEN EXCEPTIONS TO THIS RECOMMENDED ORDER. ALL AGENCIES ALLOW EACH PARTY AT LEAST TEN DAYS IN WHICH TO SUBMIT WRITTEN EXCEPTIONS. SOME AGENCIES ALLOW A LARGER PERIOD WITHIN WHICH TO SUBMIT WRITTEN EXCEPTIONS. YOU SHOULD CONSULT WITH THE DEPARTMENT OF BUSINESS REGULATION, DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO CONCERNING ITS RULES ON THE DEADLINE FOR FILING EXCEPTIONS TO THIS RECOMMENDED ORDER.

Docket for Case No: 92-001666

Orders for Case No: 92-001666