STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, ) DIVISION OF ALCOHOLIC BEVERAGES ) AND TOBACCO, )

)

Petitioner, )

)

vs. ) CASE NO. 95-1167

)

SUNNY ACRES OF TAMPA, INC., ) d/b/a MILLER'S SEAFOOD CENTER, )

)

Respondent. )

)

RECOMMENDED ORDER

On July 31, 1995, 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: Richard A. Grumberg, Esquire

Senior Attorney

Department of Business and Professional Regulation

1940 North Monroe Street Tallahassee, Florida 32399-1007

For Respondent: William Dammous

Sunny Acres of Tampa, Inc. d/b/a Miller's Seafood Avenue 2315 West Linebaugh Avenue Tampa, Florida 33612

STATEMENT OF THE ISSUES

The issue in this case is whether the Petitioner, the Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco (DABT), should take disciplinary action against the Respondent, Sunny Acres of Tampa, Inc., d/b/a Miller's Seafood Center, on the following charges contained in an Administrative Action filed against the Respondent, DABT Case No. TA 940223: Count I, alleging a violation of Sections 562.02 and 561.29(1)(a), Fla. Stat. (1993) (for selling alcoholic beverages not authorized by law and the Respondent's beverage license); Count II, alleging a violation of Section 561.32(1)(a), Fla. Stat. (1993) (for failing to transfer its alcoholic beverage license to a new purchaser after a bona fide sale); and Count III, alleging a violation of Sections 561.29(1)(a) and (2), Fla. Stat. (1993) (for failing to comply with an official DABT request for documents and records).

PRELIMINARY STATEMENT

On or about January 19, 1995, the DABT filed and served an Administrative Action against the Respondent, DABT Case No. TA 940223, and the Respondent requested formal administrative proceedings. The DABT referred the matter to the Division of Administrative Hearings (DOAH) on March 9, 1995, and was assigned to former Hearing Officer, James E. Bradwell.

The case was not set for hearing, and on or about May 12, 1995, the former hearing officer became unavailable. On or about May 18, 1995, a Notice of Reassignment and of Ex Parte Communication and Order for Status Report was entered. After receipt of a Status Report from the DABT on June 8, 1995, the case was scheduled for final hearing on July 31, 1995.

At final hearing, the DABT called two witnesses and had Petitioner's Exhibits 1 through 4 admitted in evidence. (Petitioner's Exhibit 2, consisting of 31 liquor bottles, was left in the custody of the DABT in Tampa.) The Respondent called one witness and had Respondent's Exhibit 1 admitted in evidence.

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. Only the DABT filed one. The proposed findings of fact contained in the DABT's proposed recommended order are accepted and incorporated to the extent not subordinate or unnecessary.

FINDINGS OF FACT

1. The Respondent holds DABT beverage license number 39-01203, a Series 2COP license that only authorizes the sale of beer and wine. The Respondent is owned by Bianca Dammous; her husband, William Dammous, is listed on the license as the holder of a direct interest.

   
   

2. On or about July 20, 1994, the Respondent sold its business to Abigail Vasquez and Sergio Sanchez.

   
   

3. The Respondent did not apply to transfer its beverage license to Vasquez and Sanchez. Instead, the Respondent relied on them to file the application to transfer the license. However, the Respondent did note on its last DABT surcharge report filed on or about August 12, 1994, that the business had been sold and that the new owners were Vasquez and Sanchez.

   
   

4. As of October 11, 1994, Vasquez and Sanchez still had not applied to transfer the beverage license.

   
   

5. On October 11, 1994, Vasquez and Sanchez had seven sealed and 24 unsealed bottles of liquor, which was not authorized to be sold under the Respondent's beverage license, stored behind the bar of Miller's Seafood Center, in plain view from the vicinity of the bar. The liquor was left from a campaign party held at Miller's Seafood Center on October 8, 1994. Vasquez and Sanchez had rented a room and supplied the liquor for the party at a cost of $700. The liquor they purchased for the party had been brought onto the premises on or about October 4, 1995.

   
   

6. While the Respondent sold the business on or about July 20, 1994, the purchase agreement contained a clause requiring William Dammous to be "available

   to Purchaser for consultation and assistance in the Business of Seller through December 31, 1994." In that capacity, Dammous was on the premises on a daily basis through October 11, 1994.

   
   

7. Although the liquor stored behind the bar was in plain view from the vicinity of the bar, and other employees knew it had been there for about a week prior to October 11, 1994, Dammous did not have actual knowledge that it was there. For reasons not explained during the course of the hearing, he avoided the bar area while performing his services as "consultant" and "assistant." While Vasquez had asked Dammous for advice as to how much to charge for the rental of a room for the campaign party, and Dammous had advised her to charge

   $400, Dammous disclaimed any knowledge that she charged $700 for rental of the room, plus supplying the liquor.

   
   

8. DABT special agents entered the premises on October 11, 1994, and saw the liquor bottles behind the bar. They approached Dammous and asked for the owner of the establishment. Dammous referred them to Vasquez. When the special agents learned that the Respondent had sold the business to Vasquez and Sanchez in July, 1994, Dammous explained that he had relied on the new owners to apply to transfer the license. Vasquez confirmed the Respondent's reliance on her and Sanchez to transfer the license and told the special agents and Dammous that she had an appointment with the DABT for October 13, 1994, for that very purpose. Vasquez and Dammous explained the facts regarding the liquor to the special agents.

   
   

9. The special agents notified Dammous that charges would be filed against the Respondent both for the liquor violations and the failure to timely transfer the license to the new owners. Through Dammous, the Respondent was put on notice that Vasquez and Sanchez had not yet applied to transfer the license from the Respondent; but, like the special agents, he was given to understand that Vasquez would attend to the matter on October 13, 1994.

   
   

10. On November 4, 1994, the DABT served on Dammous a "Record of [Business] Visit - Record Inspection" form. In the "Remarks" section of the form, it was requested that the Respondent: "provide any and all documents related to the sale of your business and alcoholic beverage license . . . to include purchase contracts, financial reports, managerial agreements/contracts [sic], all business records since July 1, 1994, personal financial records of Sunny Acres of Tampa, Inc. and Bianca Dammous, and any other documents pertinent to this transaction." The form also included a "Notice to Produce Records" and a notice that: "Failure to provide these records within 10 days of this notice will result in the filing of Administrative Charges against the license."

    
    

11. In response to the records request, Dammous asked Vasquez to bring the DABT a copy of the Asset Purchase Agreement the next time she went to the DABT in connection with the application for transfer of the license. Although there were some additional documents and records technically within the terms of the DABT's request (primarily the Respondent's business records between July 1 and 20, 1994), Dammous believed that the Asset Purchase Agreement would satisfy the DABT's concerns and its documents and records request. No other documents were presented to the DABT.

    
    

12. Vasquez presented a copy of the Asset Purchase Agreement to the DABT on or about November 10, 1994, and the DABT issued Vasquez and Sanchez a temporary license.

13. Shortly after the temporary license was issued, Vasquez and Sanchez defaulted under the terms of the Asset Purchase Agreement, and the Respondent took back ownership and control of the business and license and continues to operate the business under the license.

    
    

    CONCLUSIONS OF LAW

    
    

14. It was proven by clear and convincing evidence that, technically, the Respondent possessed alcoholic beverages not permitted by law to be on the premises in violation of Sections 562.02 and 561.29(1)(a), Fla. Stat. (1993). Given that the Respondent technically still was the license holder, even if Dammous had no actual knowledge of the presence of the illegal alcohol on the premises, through the exercise of due diligence, the Respondent should have known. See Surf Attractions, Inc., v. Dept. of Business Reg., etc., 480 So. 2d 1354 (Fla. 1st DCA 1985). But, for purposes of determining the appropriate discipline for this violation, it should be noted that Dammous and the Respondent did not know that they continued to be responsible to exercise due diligence to assure that the business was being operated in accordance with the law. They thought the business and license had been transferred to Vasquez and Sanchez.

    
    

15. It was proven by clear and convincing evidence that the Respondent failed to transfer its alcoholic beverage license to Vasquez and Sanchez after a bona fide sale. But Section 561.32(1)(a), Fla. Stat. (1993), does not make it a violation to fail to transfer a license after a bona fide sale; rather, it prohibits transfer of a license except when the licensee has made a bona fide sale.

    
    

16. Even if Section 561.32(1)(a), Fla. Stat. (1993), made it a violation to fail to transfer a license after a bona fide sale, it should be noted that Dammous and the Respondent were relying on Vasquez and Sanchez, who were to become temporary licensees on November 10, 1994, to timely file the application to transfer the license and believed that the license had been transferred. There was no evidence that it was improper to have the purchaser attend to the application for license transfer. To the contrary, on October 11, 1994, the DABT special agents also appeared to be satisfied with Vasquez's representation that she had an appointment with the DABT on October 13, 1994, for purposes of filing the application. The extent of the Respondent's fault would have been in not requiring Vasquez and Sanchez to furnish proof of the license transfer. It also should be noted that the Respondent made an attempt to notify the DABT, via the notation of ownership change on the Respondent's last surcharge report, that the business had been sold. To some extent, in lieu of requiring proof of transfer of the license, the Respondent was relying on the DABT to require the license transfer that should follow a change in ownership.

    
    

17. It was proven by clear and convincing evidence that the Respondent technically failed to comply fully and directly with the DABT request for documents and records. But Section 561.29(1)(a) and (2), Fla. Stat. (1993), does not make it a violation to fail to comply with any DABT records request. Subsection (2) of the statute authorizes the DABT to examine the records of a licensee and to subpoena licensees and others. Under the statute, wilful failure to comply with a subpoena can result in punishment in circuit court, but the statute does not make it a violation punishable in administrative discipline proceedings. Even if it did, no subpoena was issued in this case.

    
    

18. Section 561.29(1)(j), Fla. Stat. (1993), requires a licensee to produce records of monthly sales and purchases of alcoholic beverages within ten

    days of a written request from the DABT. Although the request in this case did not specify records of monthly sales and purchases of alcoholic beverages, those records technically would have fallen within the general request for "all business records since July 1, 1994." But the DABT did not allege a violation of Section 561.29(1)(j), Fla. Stat. (1993).

    
    

19. Even if the DABT had proven a technical violation, it would have to be noted that the Respondent arranged to have Vasquez provide the DABT with a copy of the Asset Purchase Agreement and reasonably believed that the information contained in it would satisfy the DABT's needs. The only information shown to have been omitted was the Respondent's financial reports and business records for the time period from July 1 through 20, 1994.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the DABT enter a final order finding the Respondent guilty of a technical violation under Count I, but not guilty under Counts II and III, and assessing a $250 fine.

RECOMMENDED this 23rd day of August, 1995, 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 23rd day of August, 1995.

COPIES FURNISHED:

Richard A. Grumberg, Esquire Department of Business and

Professional Regulation 1940 N. Monroe Street

Tallahassee, Florida 32399-1007

William Dammous

Sunny Acres of Tampa Inc. d/b/a Miller's Seafood Center 2315 W. Linebaugh Avenue Tampa, Florida 33612

Captain B. E. Ashley District Supervisor Park Trammel Building

1313 Tampa Street Suite 802

Tampa, Florida 33602

John J. Harris, Director Department of Business and

Professional Regulation 1940 N. Monroe Street

Tallahassee, Florida 32399-1007

Lynda Goodgame, Esquire General Counsel

Department of Business and Professional Regulation

1940 N. Monroe Street Tallahassee, Florida 32399-1007

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit to the 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 Division of Alcoholic Beverages and Tobacco concerning its rules on the deadline for filing exceptions to this Recommended Order.

Docket for Case No: 95-001167

Orders for Case No: 95-001167