The Issue The issues are whether Respondent violated various provisions of law governing the operation of restaurants and, if so, what penalty should be imposed.
Findings Of Fact Respondent operates the restaurant known as Middle East Connections, which is located inside a shopping mall at 19575 Biscayne Boulevard in Aventura, Florida. This restaurant is part of the food court inside the mall. Petitioner's inspector conducted inspections of the restaurant on July 23, October 18, and October 29, 2001. These inspections revealed numerous violations. The inspection on October 29, 2001, identified that Respondent was holding hot gyro meat at a temperature that was at least 30 degrees cooler than the minimum temperature required for this meat. Additionally, Respondent was maintaining the steam table at too low a temperature; thus, chicken was at a dangerously cool temperature of 103 degrees Fahrenheit. The October 29 inspection also revealed dried food debris on the gaskets of the reach-in coolers. The risk of this violation is that food handlers may be obtaining ready-to-eat food, which may become contaminated if the food handlers touch dirty cooler gaskets. The October 29 inspection also uncovered dried food debris on the dish shelves and grease on the hood filters. Dried food debris poses a contamination risk, and greasy hood filters pose a fire hazard. Respondent's first defense is that its principal did not acquire the restaurant from its former operator until February 11, 2002. However, Respondent's principal initiated a license transfer in August 2001. Petitioner promptly transferred the license. Petitioner's policy is not to issue two licenses for the same location, so that, if Respondent were to prevail on this argument, the restaurant would have been unlicensed during the time of these violations due to the action of Respondent's principal in initiating a transfer of the license. The documentation of the transaction between the current and former operators states that the change in ownership took place on July 1, 2001, and the inspector saw Respondent's principal at the restaurant after the license transfer. Respondent's second defense is that it has corrected all violations and is operating the restaurant in compliance with the law. This claim is credited, although it operates more in mitigation than as a defense.
Recommendation RECOMMENDED that the Division of Hotels and Restaurants enter a final order imposing a $2000 fine upon such terms as the Director determines are appropriate. DONE AND ENTERED this 5th day of November, 2002, in Tallahassee, Leon County, Florida. ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 5th day of November, 2002. COPIES FURNISHED: Susan R. McKinley, Director Division of Hotels and Restaurants Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202 Charles F. Tunnicliff Assistant General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202 Tony Kalach 19575 Biscayne Boulevard, #1373 Aventura, Florida 33180
The Issue The issue in these cases is whether Respondent is guilty of violating provisions governing the operation of restaurants and, if so, what penalty should be imposed.
Findings Of Fact Respondent is the owner and operator of Mr. P's Emporium and the Spaghetti House, which are both names of the same restaurant located at 1709 West Vine St. (State Route 192), Kissimmee, Florida. Petitioner issued Respondent license number 59-00352-R to operate the restaurant. Respondent first began operating a restaurant at the West Vine St. location nearly 20 years ago. In 1976, Respondent encountered a problem with Frank Wolf, who was then a food-service inspector employed by the Osceola County Health Department. Mr. Wolf is now the Environmental Health Director of the Osceola County Health Department. Responsibility for restaurant food-service inspections appears to have been assumed by the Health Department at one time. Presently, food-service inspections are conducted by Petitioner or, pursuant to contract with Petitioner, the Office of Restaurant Programs (ORP), which is part of the Department of Health and Rehabilitative Services. Mr. Wolf and Respondent had a misunderstanding concerning Respondent's application for a beer and wine license when he was opening his new restaurant. Although the license was issued, Respondent's relations with the Health Department worsened when Mr. Wolf later took photographs during a routine inspection. In attempting to resolve Respondent's objections to the photographing of his restaurant, the Director of the Health Department worked out an arrangement with Respondent that no inspector would conduct an inspection of Respondent's restaurant without first calling him and making an appointment. If Respondent then failed to be present at the restaurant at the appointed time, the inspector would conduct the inspection without him. However, Respondent invariably made sure he was present so he could accompany the inspector. This special arrangement was not extended to any other restaurants in the area; such restaurants remained subject to unannounced food-service inspections. In 1981, Respondent moved to South Florida, leaving the Kissimmee restaurant in charge of his son, Art, Jr. The following year, Art. Jr. expressed an interest in leaving the restaurant business. When Respondent returned to run the Kissimmee restaurant, he learned that Art, Jr. had not required the Health Department inspectors to contact him in advance of inspections. Respondent immediately proceeded to restore this arrangement, not hesitating, as always, to contact supervisors of supervisors, both locally and in Tallahassee, to ensure that all problems were straightened out to his satisfaction. It appears that the old practice of prior notice before inspection was reinstated. The alleged violations set forth in DBR Case No. 04-91-199 arose as a result of an inspection on January 2, 1991. On that day, an inspector employed by the Osceola County Health Department, Dolores Miller, visited the restaurant to conduct an inspection. She found the front door locked and approached the side door. She had not made any prior arrangements with Respondent. Respondent was not in the restaurant at the time of Ms. Miller's visit. There is a dispute as to what transpired. Ms. Miller testified that a big dog attacked her after she announced, at the open side screen door, "Hello, Health Department." This testimony is discredited. Respondent lived upstairs over the restaurant with this dog, which was permitted to roam the area outside the restaurant but not inside the restaurant. Respondent testified that the dog is friendly and does not serve as a watchdog. Respondent's dog, which sometimes roamed freely outside of the restaurant, would not likely be unfriendly. Otherwise, the dog would frighten away customers. No evidence suggests that the dog could identify Ms. Miller as a food-service inspector from the Health Department, and, sharing Respondent's antipathies, selectively attacked Ms. Miller. Ms. Miller's testimony is discredited for a second reason. She testified that she left a copy of the Inspection Report, Petitioner Exhibit 3, at the restaurant and that the copy stated at the bottom, in her handwriting: "Management would not allow me to do an insp[ection.]" Respondent testified that Ms. Miller left a copy of Petitioner Exhibit 3, but it had no such language on it. Respondent produced a copy of his copy, which contained no such language. Respondent's exhibit does not appear to be altered. To the contrary, it is found that Ms. Miller added this notation to her office copy and did not leave at the restaurant a copy of the Inspection Report with the notation. Therefore, the remaining facts concerning the January 2, 1991, incident are primarily based on Respondent's version of the events. When Ms. Miller appeared at the restaurant, Respondent's dog was in the vicinity. In the course of conversing with the restaurant employees, Ms. Miller inadvertently allowed the dog to enter the kitchen, where the dog was not permitted and, on the rare occasions when the dog found its way into the kitchen, was never allowed to stay. Ms. Miller did not make an effective request of Respondent to make an inspection. She did ask Respondent's kitchen help for access to the premises for the purpose of conducting an inspection. Acting in accordance with Respondent's usual instructions, the employees denied Ms. Miller permission. Had the matter ended at this point, Respondent, through his agents, would have denied Ms. Miller access for the purpose of conducting an food-service inspection. However, Ms. Miller returned to the restaurant to alter the date on the form that she had left with the workers. While she was correcting the date on both forms, Respondent returned to the restaurant. Having accidentally allowed Respondent's dog into the kitchen once again, Ms. Miller incurred Respondent's displeasure, as he began to yell at her. Although it is understandable under the circumstances, Ms. Miller nonetheless, by her own admission, neglected to ask Respondent to allow her to inspect the restaurant. Although Respondent had authorized his employees to deny an inspector access to the restaurant in his absence, they had no such authority while he was on the premises. The employees' refusal of access, given Ms. Miller's return to the premises almost immediately after her departure, constituted only a deferral of the decision given the fact that Respondent had returned while Ms. Miller was still at the restaurant. Under these circumstances, the deferral of the decision did not ripen into a denial unless and until Ms. Miller directed to Respondent her demand of access. Petitioner has thus failed to prove the allegations of the Notice to Show Cause arising out of the January 2, 1991, "inspection." 1/ The alleged violations set forth in DBR Case No. 04-92-85 arose as a result of an encounter between Respondent and food-service inspectors on August 30, 1991. On August 22, 1991, the local office of the Division of Hotels and Restaurants received a complaint from a person who had patronized Respondent's restaurant. She complained that a sign outside Respondent's restaurant was misleading. According to the complaint, the sign advertised a lunch buffet for $2.99, but the price for the lunch buffet, if no drink were ordered, was actually 49 cents more. The rectangular sign itself consists of three parts. The uppermost strip states horizontally: "$5.99 DINNER $5.99." The lowermost strip states horizontally: "$2.99 LUNCH $2.99." The larger middle portion states in small angular script: "Italian." Beside the word, "Italian" runs horizontally the word, "BUFFET" in letters larger than any others on the sign. The four prices were in red, the words "DINNER" and "LUNCH" were in green, the word "Italian" was in green, and the word "BUFFET" was in red. Respondent only offered three items for lunch. The lunch special was salad, spaghetti, and meatballs. The price for the lunch special was $2.99, regardless whether the customer ordered a drink other than water, which was free. The Italian buffet was $2.99, but the menu clearly indicated that the price for the buffet was $3.49 if no beverage (other than water) was ordered. The third item was pizza, which was available a la carte. Respondent's sign was not false or misleading. The sign advertised a lunch available for $2.99 and a lunch--a nourishing and substantial one--was available at that price. Any expectation that the customer could obtain the lunch buffet for $2.99 was not based on a fair reading of the sign, which advertises the standard lunch entry. 2/ Significantly, there was no evidence of any other complaints concerning the accuracy of the sign, which, perhaps not surprisingly, remained unchanged until February, 1992. Unfortunately, Respondent's encounter with Mr. Laforte was no happier than his encounter eight months earlier with Ms. Miller. Respondent is an intelligent, sensitive, honest, and hard-working older gentleman operating a restaurant at which business has been better in previous years. Respondent is also impulsive, stubborn, cranky, and quick to demand special treatment. There is no doubt that the patience of most food- service inspectors would be quickly exhausted when confronted by Respondent's in-your-face style of interpersonal relations, constant carping about all but the most obvious of deficiencies noted in routine inspections, repeated insistence upon nonexistent constitutional rights to protect his property (i.e., the restaurant) from the trespasses (i.e., inspections) of government employees, frequent charges of selective enforcement, and willingness to go over the head of the inspector at what he perceived as the slightest provocation (e.g., an inspection). Omitting the subordinate details of escalating unpleasantries between Mr. Laforte and Respondent, the key event is that on August 30, 1991, Mr. Laforte and his immediate supervisor, Kendall Burkette, visited the restaurant. As a courtesy, they requested the food-service inspector from ORP to accompany them. Her name is Jo Ellen Beekman-Dean. Responsible for routine food-service inspections of Respondent's restaurant, Ms. Beekman-Dean had, and continues to have, a very good relationship with Respondent. Among other things, Respondent had allowed her to make a food-service inspection of his restaurant on July 8, 1991, although she had not made an appointment first. As the trio entered the restaurant at about 1:30 p.m., they asked a waitperson or cashier who was in charge. They were introduced to John Bauer, who was a cook. They asked to see the restaurant license, which was not posted at the cashier's station. Mr. Bauer led them to the storeroom, but they could not find the restaurant license that DBR had issued. In fact, Respondent had closed his restaurant due to declining business earlier in the year and had not paid to renew his license at the normal time in April. However, he had paid the normal fee and late charges on August 6, 1991, about three weeks prior to the August 30 inspection. Moreover, Mr. Laforte had handled the paperwork on Respondent's late renewal. Mr. Laforte had issued Respondent a receipt, which serves as a temporary license. However, Respondent did not understand this fact and had not posted the receipt/temporary license pending the arrival of the permanent license, which had not yet been sent from Tallahassee. The alleged violations set forth in DBR Case No. 04-92-84 arose as a result of the August 30 inspection conducted by Ms. Beekman-Dean, as well as subsequent activities occurring on September 9 and 10, 1991. Ms. Beekman-Dean decided to conduct a food-service inspection on August 30 because she was already at the premises. At the time, she was required to conduct four such inspections annually; if possible, quarterly. She had conducted an inspection on July 8, reinspected certain deficiencies on July 22, and reinspected on August 12 those deficiencies not remedied by July 22. The deficiencies were cleared up by then and Ms. Beekman-Dean determined that the restaurant was in compliance. As Ms. Beekman-Dean conducted her inspection, she encountered Art, Jr., who had evidently not been in the restaurant when Ms. Beekman-Dean, Mr. Laforte, and Mr. Burkette had first arrived. Saying that he was going to call his father about the inspection, Art, Jr. returned to tell her that she could conduct her inspection. During the inspection, Ms. Beekman-Dean discovered that the walk-in cooler was not working and the temperature had reached 60-67 degrees. She contacted her supervisor to obtain approval to enter a Stop Sale Order. Getting the supervisor's approval, Ms. Beekman-Dean then informed Art, Jr. of the malfunction. He had not known of the problem and promptly fixed it by flipping a reset switch. As Ms. Beekman-Dean and Mr. Laforte were sitting at a table while Ms. Beekman-Dean finished her paperwork (Mr. Burkette having already left), Respondent returned to the restaurant. Seeing Mr. Laforte, Respondent, still irritated over his feeling that Mr. Laforte had not dealt with him fairly over the signage question, pointed at him and said, "Get out." As Mr. Laforte left, Ms. Beekman-Dean prepared also to depart, but Respondent assured her that she could remain. Finishing her Inspection Report, Ms. Beekman-Dean mentioned the problem with the walk-in cooler. After confirming with his son the existence of the problem, Respondent willingly agreed to destroy the food. For this reason, the most serious deficiency uncovered by Ms. Beekman-Dean's August 30 inspection is not alleged as a deficiency in the Notice to Show Cause in DBR Case No. 04- 92-84 or, thus, DOAH Case No. 91-7103. The only other major deficiency noted on the August 30 Inspection Report, which is Petitioner Exhibit 7, is the failure of the operator to keep the rear (or side) door shut or repair the screen door and then leave it shut. An additional 13 items were noted as minor deficiencies. The deficiencies were: failing to label bulk containers; storing lemons in a sealed, hanging container in the ice machine; storing toxic items improperly; failing to clean the slicer, reach-in cooler, dry-storage shelves, mixer, outside of the ice machine, floor fan, and cooler gaskets; failing to refinish or replace rusted shelves in the reach-in freezer; failing to provide soap at a hand sink; failing to bag all garbage before placing in the dumpster, failing to clean the dumpster, and failing to keep the dumpster lid closed; failing to clean area around the dumpster; failing to clean floors, failing to ensure all surfaces are smooth and easily cleanable, and failing to install molding between the floor and wall to facilitate cleanliness; failing to repair holes in the walls and ensure that that the walls and ceiling in food prep room meet; failing to provide shields on all lights in kitchen, prep areas, coolers, and freezers; and failing to post a DBR restaurant license. As is the typical practice, Ms. Beekman-Dean gave Respondent a period of time to correct the deficiencies. In this case, she wrote on the form that a reinspection would take place on September 9, 1991. Ms. Beekman-Dean handed Respondent a copy of the Inspection Report, which prominently displayed the reinspection date. Respondent promptly contacted Petitioner's offices in Tallahassee to complain about selective enforcement and bias. When Ms. Beekman-Dean returned around lunchtime to reinspect the premises on September 9, 1991, Respondent said he was busy preparing food, refused her access to the restaurant, and invited her to return later in the day. She declined and warned him that she would have to report this. He acknowledged her warning and said that she would have to do what duty required. Some follow-up activities took place, first in connection with an informal conference and later in connection with prehearing preparation in connection with the above-styled cases. The material allegations end as of September 9, when Respondent refused Ms. Beekman-Dean to conduct the reinspection as previously scheduled. It is sufficient to note that, based on inspections that Respondent permitted on October 2, 1991, and March 6, 1992, he had not repaired the screen door by the September 9 reinspection date and a number of the minor deficiencies remained uncorrected as of that time as well.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Business Regulation, Division of Hotels and Restaurants, enter a final order finding Respondent guilty of violating the above-cited statutory and regulatory provisions, imposing an administrative fine of $1000, and requiring Respondent to attend a Hospitality Education Program, at his expense, within six months of the date of the final order. ENTERED this 18th day of June, 1992, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of June, 1992.
The Issue This is a license discipline case in which the Petitioner seeks to impose an administrative fine on the basis of allegations in an Administrative Complaint in which the Respondent is charged with having violated the Florida Food Safety Act, Chapter 500, Florida Statutes.
Findings Of Fact 1. The Department of Agriculture and Consumer Services (Department) is the state agency charged with the responsibility for enforcement of the Florida Food Safety Act, Chapter 500, Florida Statutes. 2. At all times material to this case, the Respondent, Laste International, Inc, d/b/a Laste Supermarket, was the owner and operator of a retail food service establishment located at 1721 North Andrews Square, Fort Lauderdale, Florida. At all times material to this case, the Respondent has held a food service permit for the establishment. 3. On January 8, 2001, a Department representative inspected the Respondent's premises described above. At the time of the inspection, there were numerous conditions on the Respondent's premises that were violations of the Florida Food Safety Act. Among the violations observed on January 8, 2001, were the following critical deficiencies: ~ Failure to discard unsafe, adulterated or contaminated food. - Food on premises from an unknown and/or unapproved source. - Equipment or utensils that were not properly sanitized. - Failure to have hot and cold running water under pressure for warewashing sinks. - Failure to have hot and cold running water under pressure at handsink. - Failure to control the presence of insects. - Failure to control the presence of rodents. 4. As a result of the several critical deficiencies and numerous other deficiencies, the Respondent's establishment was given an overall rating of "poor," and the Respondent was advised that the premises would be reinspected two weeks later. The Respondent was also notified of several specific violations which required the removal of several specified items of food from the Respondent's establishment because the food items were adulterated or were from unapproved sources. In the food retail area of the Respondent's establishment there were insect droppings, rodent droppings, and rodent urine. Some bags of rice were adulterated by rodent excrement. Some cans of food were dented and rusted and unfit for human consumption. 5. As of the date of the inspection on January 8, 2001, the Respondent's establishment had a long history of unsatisfactory conditions. During the period of slightly more than three years from November 20, 1997 to January 8, 2001, the Respondent's establishment was inspected a total of 13 times by Department inspectors. During that entire period the Respondent's establishment was never rated as "good," and was rated as "fair" following only two inspections. On all of the other inspections prior to January 8, 2001, the Respondent's establishment was rated as "poor." This long history of unsatisfactory conditions was one of the considerations that led to the Department 's decision to impose an administrative fine when the Respondent had another "poor" inspection report as a result of the inspection conducted on January 8, 2001. 6. The Respondent's establishment was reinspected on January 25, 2001. On that date, for the first time in over three years, the Respondent's establishment received an inspection rating of "good." 7. The Department seeks to impose an administrative fine in the amount of $5,000.00. The fine the Department seeks to impose in this case is consistent with the administrative fines the Department has imposed on other permit-holders who had similar histories of unsatisfactory conditions in retail food service establishments.
Conclusions John McCarthy, Esquire Department of Agriculture and Consumer Services Mayo Building, Fourth Floor 407 South Calhoun Street Tallahassee, Florida 32399-0800 Yves Corneille Laste International, Inc. 1721 North Andrews Square Fort Lauderdale, Florida 33311-4862
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order in this case imposing an administrative fine in the total amount of $5,000.00. gt | DONE AND ENTERED this |} day of July, 2001, in Tallahassee, Leon County, Florida. — ~~ L : MICHAEL M. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this LX day of July, 2001. COPIES FURNISHED: John McCarthy, Esquire Department of Agriculture and Consumer Services Mayo Building, Fourth Floor 407 South Calhoun Street Tallahassee, Florida 32399-0800 Yves Corneille Laste International, Inc. 1721 North Andrews Square Fort Lauderdale, Florida 33311-4862 Honorable Terry L. Rhodes Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
The Issue Whether the Respondent's real estate salesman license should be disciplined because of the misconduct alleged in the Administrative Complaint.
Findings Of Fact The Department is the state agency charged with licensing and regulation of real estate salesman. At all times material to these proceedings, Respondent Spaniak was licensed as a real estate salesman in Florida, having been issued license number 0153115 in accordance with Chapter 475, Florida Statutes. The license expired on March 31, 1989, due to non-renewal. On or about October 15, 1985, Linda Myers, d/b/a Happy Days Ice Cream, leased space in a shopping center owned by Hancock Square Partnership, a Florida General Partnership, in order to operate an ice cream shop. Respondent Spaniak, Norbert Murray, and Timothy H. Heuer, were the three general partners within the Hancock Square Partnership. On May 2, 1988, Linda Meyers filed a third party complaint against the partnership, alleging that she entered into the lease based upon the representations of Respondent regarding the location within the shopping center she was leasing and the number of signed leases within the center. Both of these factors were considered essential by Linda Meyers in her decision to sign the lease and financially obligate herself to run the business. Based upon her reliance as to the Respondent's representations, Linda Meyers signed the lease. Once her business venture was begun, she discovered she was not given the location set forth in the lease, and very few businesses occupied the shopping center. As the ice cream shop relied on a large volume of walk-in business from the shopping center and an easily accessible location, Linda Meyers was not able to run a successful business in the location she was actually provided in the low occupancy shopping center. The Respondent misrepresented both the business location and the number of established businesses at the center. But for Respondent's misrepresentations, Linda Meyers would not have financially obligated herself to her financial detriment in the ice cream business. The misrepresentations contributed to her failure in the business and her loss of monies in the venture. A default judgement was entered against Respondent Spaniak in the third party complaint on October 19, 1988, for damages to Linda Meyers in the amount of $100,132.47. It was judicially determined that Respondent Spaniak materially misrepresented facts during the lease signing to Linda Meyers' detriment. The Respondent has not satisfied the judgement. In mitigation, the Respondent has voluntarily consented to the cancellation of his real estate salesman's license.
Recommendation Based upon the foregoing, it is RECOMMENDED: That Respondent, Charles Gary Spaniak be found guilty of the violation of Section 475.25(1)(b), Florida Statutes, based upon the material misrepresentations made to Linda Meyers, which induced her to sign a shopping center lease to her financial detriment. That the Respondent Spaniak's privilege to reinstate his real estate salesman's license be suspended for five years. DONE and ENTERED this 28th day of December, 1989, in Tallahassee, Florida. VERONICA E. D0NNE 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 28th day of December, 1989. APPENDIX Petitioner's proposed findings of fact are addressed as follows: Accepted. See HO #1 Accepted. See HO #2 Accepted. See HO #3 Accepted. See HO #4 Accepted. See HO #5 Accepted. See HO #6 Accepted. See HO #7 Accepted. See HO #8 Accepted. See HO #9 Accepted. See HO #10 COPIES FURNISHED: Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 James H. Gillis, Esquire Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Charles Gary Spaniak c/o NRC Realty, Inc. 12995 Cleveland Avenue, #150 Fort Myers, Florida 33907 =================================================================
The Issue Whether the Petitioner is liable for taxes, penalties, and interest as set forth in Issue I of the Notice of Decision dated January 13, 2002, and, if so, the amount owed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Department is the state agency authorized to administer and enforce the assessment and collection of Florida's sales tax and to enact rules to enforce the provisions of Chapter 212, Florida Statutes. Section 212.18(2), Florida Statutes (2002). The Department audited Packaged Ice in accordance with its standard audit procedures and calculated the assessment, interest and penalties using the standard procedures and methodology. Packaged Ice paid to the Department the sum of $5,000.00 for that portion of the assessment that is uncontested. Packaged Ice is a Texas corporation and is the largest manufacturer and distributor of packaged ice in the United States. Packaged Ice has four subsidiaries, two of which are involved in its ice operations, and approximately 90 percent of its annual revenues derives from these operations. Packaged Ice's business practices relevant to the assessment at issue herein remained the same during the audit period and are still in effect at the present time. Packaged Ice sells packaged ice for resale to retailers nationwide, primarily to large companies such as Albertsons, Krogers, Walmart, 7-Eleven, and Circle-K that operate chains of supermarkets and convenience stores (referred to collectively herein as "customers"). The typical Supply Agreement between Packaged Ice as Seller and a customer as Buyer provides in pertinent part: RECITALS Buyer operates a chain of retail supermarket and drug stores ("Store" or "Stores" as appropriate) in various states and Seller is the manufacturer and marketer of packaged ice (block and/or cube) products for retail sales from Seller-owned merchandisers and/or in-store bagging equipment. Buyer and Seller wish to enter into this Agreement under which Seller will supply Buyer with Seller's Reddy Ice brand and Buyer's private label packaged ice (block and/or cube)(collectively, "Products") and/or in-store bagging equipment (as determined by Buyer) to designated Stores as mutually agreed to by the parties, and to provide Seller-owned ice merchandisers for each Store, . . . . Pursuant to its typical supply agreement, Packaged Ice agrees to "use its reasonable efforts to supply the needs of each Store as determined by Buyer and the movement of Product." The typical agreement gives the customer the option of having Packaged Ice supply ice either through direct store delivery of bagged ice or through in-store ice-bagging systems. Direct store delivery involves the distribution of ice manufactured by Packaged Ice in traditional ice plants, where the ice is packaged in plastic bags. The bagged ice is loaded onto trucks, and delivered to the stores operated by Packaged Ice's customers. Pursuant to the supply agreement, Packaged Ice installs an ice "merchandiser" in each store to which it delivers bagged ice, and Packaged Ice retains ownership of the merchandiser. The ice merchandiser is used to store and market the bagged ice to shoppers in the store:3 When the bagged ice is delivered to the store, Packaged Ice's employee stacks the bags of ice in the merchandiser, where it is available to shoppers, who remove the bags of ice from the merchandiser and pay the store the retail price for the ice. The store collects sales tax on each bag of ice that is sold at retail. The transaction whereby Packaged Ice delivers bagged ice to a store and places it into a merchandiser owned by Packaged Ice but installed in the store is treated by the Department as a sale for resale, and Packaged Ice is not required to remit sales tax on the transaction. Sometimes a store orders more ice than can be stored in the merchandiser. This ice is stored in freezers located on the store's premises. In order to maximize the sale of bagged ice, the store's employees monitor the merchandiser, move bags of ice from the freezers into the merchandiser, and shift ice around in the merchandiser so that it is accessible to shoppers. The costs associated with the delivery of packaged ice manufactured at traditional ice plants are approximately one-third to one-half of the cost of a bag of ice. It is fairly expensive to transport ice because it is dense and heavy, and typically ice from a traditional ice plant can be delivered only within a radius of one hundred miles. Packaged Ice's in-store ice-bagging system, also referred to as an in-store ice factory, is the alternative means by which Packaged Ice delivers bagged ice to its customers' stores for sale at retail. When Packaged Ice determines that the volume of a store's sales of bagged ice is sufficiently high, Packaged Ice will, at the customer's request, install a self-contained ice factory on the store's premises. Packaged Ice has installed approximately 2900 in-store ice factories throughout the country. Pursuant to the typical supply agreement, Packaged Ice is free to remove an ice factory from a customer's store at any time and commence direct store delivery of bagged ice, and Packaged Ice will remove an ice factory from a customer's store and commence direct store delivery of bagged ice whenever the customer requests that they do so. The in-store ice factory consists of three parts: The top part of the system is the ice-making machine; the middle part of the system is the ice-bagging machine, and the bottom part of the system is the merchandiser. The merchandiser is identical to the merchandisers installed in stores to which Packaged Ice delivers ice manufactured and packaged in a traditional ice plant. The ice-making machine and the ice-bagging machine sit on top of the merchandiser, so the entire system takes up no more floor space in a store than the merchandiser. Cubes of ice are manufactured in the ice-making portion of the ice factory and dropped into a hopper. When space is available in the merchandiser for additional bags of ice, the ice-bagging machine releases eight pounds of ice from the hopper into an empty plastic bag and seals the plastic bag. The bag then drops into the merchandiser, where it is available to shoppers. The ice factory is designed to manufacture and bag ice and drop the bagged ice into the merchandiser until the merchandiser is full. Once the merchandiser is full, the machine automatically stops making and bagging ice. The machine begins producing ice again when its sensors indicate that the merchandiser is no longer full. Packaged Ice sells empty plastic bags to those of its customers opting to have ice factories installed in their stores. The bags can be customized with the customers' name and logo, and the bags are used in the ice-bagging machine to package the ice manufactured in the ice-making machine. The cost of the empty bags is the only cost to Packaged Ice's customers that is associated with the operation of the ice factories. Because of the cost efficiencies in the manufacture of ice by in-store ice factories, in most cases, Packaged Ice's customers pay slightly less for each empty bag used in an ice factory than they pay for a bag of ice manufactured and bagged in a traditional ice plant and delivered to the customers' stores by truck. Packaged Ice gives its customers credit for any bags that break or for any bags that, for whatever reason, cannot be sold because its customers are required to pay only for bags of ice that can be sold at retail at the customer's stores. When Packaged Ice installs an ice factory in one of its customers' stores, either Packaged Ice is totally responsible for the installation, which is done either by its employees or by a subcontractor it hires. Packaged Ice pays all the expenses of installation, including the cost of the necessary permits and licenses, as well as the cost to install electrical outlets and a water connection to the store's electricity and water supply. Thereafter, the electricity and water necessary for the operation of the ice-making and ice-bagging machines and of the merchandiser is provided by the store. The price Packaged Ice charges its customers for a bag of ice is adjusted to reimburse the customers for the cost of the water and electricity used by the ice factory. The ice factories located in the various stores are controlled exclusively by Packaged Ice, and they cannot be operated by the stores' employees. The ice-making and ice-bagging machines are connected to computers located in Texas using wireless technology, and Packaged Ice controls the production of ice via computers located in Texas. If a machine malfunctions, a signal is immediately sent to the Packaged Ice computers, where technicians can diagnose the problem and reset the machine. If the malfunction cannot be corrected by computer, Packaged Ice employs local technicians who are dispatched to store to repair the machine, and they generally arrive within four hours after having been dispatched. In addition to repairing the machines when they malfunction, Packaged Ice's local technicians go on-site at least once each week to check each ice factory; during peak season, Packaged Ice's local technicians check each ice factory four or five times a week, and each day during periods of extremely high sales volume, to ensure that each ice factory is working properly and producing quality bagged ice in sufficient quantities to meet the needs of its customers. Packaged Ice's local technicians have the following responsibilities with respect to the in-store ice factories: They deliver boxes of empty bags to the store, load the empty bags into cassettes,4 and load the cassettes into the ice-bagging machine; they rearrange ice in the merchandiser to clear the area underneath the ice-bagging machine, where the bagged ice tends to form a pyramid,5 and move bags of ice to the front of the merchandiser so they are more accessible to shoppers; and they clean and sanitize the machines and perform any maintenance necessary to ensure that they are in proper working condition. When the ice factories cannot meet the demand for bagged ice or when the ice factories are not manufacturing bagged ice due to a malfunction, Packaged Ice supplies bagged ice by direct store delivery to ensure that its customers' stores have sufficient supplies of bagged ice to meet demand. When an ice factory is installed, Packaged Ice provides a training program for store employees, the purpose of which is to teach the store employees how to assist in maximizing the potential of the ice factory to manufacture bagged ice for retail sale. Packaged Ice suggests, but does not require, that store employees Front and properly stack the ice machine as needed, about every 6-8 hours. . . . Don't let the production unit pyramid and shut off. Assign personnel to take bags from the production machine and fill your In-Line display or satellite boxes each night, this insures a constant production of ice. Load bags if necessary. Cooperate and assist the Package Ice Retail Merchandisers in planning ice reserves for key weekends and holidays. Only pull ice from the reserve stock if needed and only load ice in the front row of the production machine. Filling the rear or second row will shut off the capability of the machine to produce product. Visual check of the production unit frequently to ensure proper operation. The machine will alert store personal [sic] with a flashing light if there is a production interruption. Should a problem arise, call Package Ice Company immediately at [6] With few exceptions, the responsibilities of the store employees would be the same if Packaged Ice delivered ice to the store under the direct delivery system rather than by the in- store ice factory: Store employees would be required to load, stack, and shift bagged ice in the merchandiser; they would assist in planning for reserves of bagged ice to be available during times of high demand; and they would move bagged ice from the reserves held in the store's freezer to the merchandiser when the supply of bagged ice in the merchandiser was low. Store employees load a cassette of empty bags only rarely, when demand is high and the machine runs out of bags between service calls by Packaged Ice's local technician. In addition, it is not necessary for store employees to monitor the operation of the ice factory, and few stores call Packaged Ice to report a problem because the store employees are aware that Packaged Ice is immediately alerted if there is a problem. Packaged Ice records the revenue from the sales of empty bags for use in ice factories as sales of bagged ice, and it includes in its annual reports the overall tonnage of ice produced both in its traditional ice plants and in the ice factories installed in its customers' stores. Based on the information provided by Packaged Ice, the Department determined that, during the period covered by the audit, Packaged Ice was engaged in leasing tangible personal property when it installed ice factories in their customers' stores and that Packaged Ice was required under Florida law to pay sales tax on the proceeds of these leases. The Department rejected Packaged Ice's contention that it was actually manufacturing and delivering bagged ice to its customers for resale by means of the ice factories and as an alternative to direct store delivery of bagged ice, concluding instead that Packaged Ice's customers had custody and possession of the ice factories because they were installed on property owned or leased by Packaged Ice's customers and that the customers had control over the ice factories because they could stop the production of ice at any time by disconnecting the ice factory from its water and electricity supply. Because the only cost to Packaged Ice's customers associated with the ice factories is the price paid to Packaged Ice for empty plastic bags, the Department decided that the amount paid for the empty bags was representative of the consideration paid for the lease of the machines, and it used these figures to calculate sales tax owed by Packaged Ice. According to the Department's calculations, which have not been challenged, Packaged Ice owes sales tax in the amount of $70,266.69. The Department imposed the maximum penalty of $35,132.72, or 50 percent of the tax owed, and the final assessment included interest on the amount of the tax through January 10, 2002, for a total assessment of $137,590.70.7 Summary The ice factories installed by Packaged Ice in the stores of its customers are pieces of tangible personal property. However, the uncontroverted evidence of the terms of the supply agreements between Packaged Ice and its customers and of the ordinary and customary course of conduct between Packaged Ice and its customers is sufficient to refute the Department's determination that the installation of the ice factories constitutes the lease of tangible personal property. The uncontroverted evidence establishes that the agreements between Packaged Ice and its customers are for the delivery of bagged ice and that, pursuant to the agreements, the customers that have elected to have ice factories installed on the premises of their stores have done so as an alternative to having Packaged Ice deliver to the stores bagged ice manufactured and packaged in traditional ice plants. The uncontroverted evidence also establishes that it is Packaged Ice's intent to deliver bags of ice to its customers' stores through the mechanism of an in-store ice factory, as a cost-effective alternative to the delivery of bagged ice manufactured and packaged in traditional ice plants. Likewise, the evidence is sufficient to support the inferences that it is the intent of Packaged Ice's customers to purchase bagged ice manufactured in the in-store ice factories and that they do not intend to take possession, custody, or control over the machines in order that they might, themselves, manufacture bagged ice. The uncontroverted evidence establishes that Packaged Ice installs ice factories on property owned or leased by its customers. However, the evidence is sufficient to establish that, in so doing, Packaged Ice does not turn over to its customers custody or possession of the ice factories or the right to use or control the ice factories in any meaningful sense. An in-store ice factory has no intrinsic value to a customer: The only value the customer derives from having an in-store ice factory is the product it delivers - bagged ice available for the customer to sell at retail. Without Packaged Ice's intervention as the operator of the ice-making and ice-bagging machines, its customers would possess nothing more than a merchandiser in which bagged ice could be stored and presented for sale. Significantly, the Department apparently does not consider the installation of ice merchandisers owned by Packaged Ice in its customers' stores as the lease of tangible personal property, since it has not included in its assessment sales tax attributable to any "lease" of the merchandisers alone. Rather, the Department treats the delivery of bagged ice to a store that has only a merchandiser as a sale of bagged ice for resale. The uncontroverted evidence establishes that Packaged Ice controls all aspects of the production of bagged ice by the in-store ice factories and that it is responsible for maintaining, servicing, and repairing the ice factories. The employees of the stores in which the ice factories are installed are asked to do little more than they would do in handling bagged ice delivered to the store by truck and stored in an ice merchandiser furnished by Packaged Ice. Finally, although the uncontroverted evidence establishes that Packaged Ice's customers provide the electricity and water necessary to operate the in-store ice factories and that Packaged Ice's customers can cut off the supply of electricity and water to the ice factories, the exercise of this power certainly does not give Packaged Ice's customers the right to use the ice factories, nor does it give Packaged Ice's customers meaningful control of the operation of the ice factories. Cutting off the supply of electricity and water to the ice factory can only stop the manufacture and bagging of ice and cause the ice merchandiser to be unsuitable for storing bagged ice for sale. The customers cannot, under any circumstances, cause the ice factories to manufacture and bag ice without the intervention of Packaged Ice.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order finding that Packaged Ice, Inc., is not engaged in leasing tangible personal property in Florida and withdrawing the assessment of $137,590.70 in sales and use tax, penalties, and interest associated with Source #A0013106432-010. DONE AND ENTERED this 27th day of August, 2002, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of August, 2002.
The Issue The issues in this case are whether Respondent violated Florida Administrative Code Rules 61C-1.004(6) and (10) and 61C-3.001(7): by failing to maintain a path of egress unobstructed; by failing to maintain the plumbing system in good repair; by failing to maintain all building structural components, attachments, and fixtures in good repair and clean and free of obstructions; and, if so, what penalties, if any, should be imposed pursuant to Section 509.261(1), Florida Statutes (2001). (All chapter and section references are to Florida Statutes (2001) unless otherwise stated. Unless otherwise stated, all references to rules are to rules promulgated in the Florida Administrative Code in effect on the date of this Recommended Order.)
Findings Of Fact Petitioner is the state agency responsible for regulating and inspecting public food service establishments defined in Section 509.013(5). Respondent is a public food service establishment located at 3409 Prudence Drive, Sarasota, Florida 34235 (the "licensed premises"). Petitioner conducted follow-up inspections of the licensed premises on: November 12 and 19, 1999, August 3 and September 8, 2000; and February 8, 2001. Each inspection revealed several failures to correct deficiencies in the initial inspections. Respondent failed to correct blocked exits in the licensed premises. A chair at the rear exit blocked egress from the second level to the ground. A cabinet in the hallway for the air conditioning unit blocked the pathway to the top of the stairs. Blocked exits are critical violations because exits are essential to life safety. Water leaked from the hand sink. Leaking water can precipitate mold, wood rot, and building repair. Ceiling tiles were missing in the hallway. Ceiling tiles are components of fire safety and must be maintained in good repair. The side unit of the hall was soiled with cobwebs and dust. An accumulation of the personal belongings obstructed ingress and egress. The yard outside the licensed premises was littered with cans, bottles, bedding, bed frames, and a battery from an automobile. The accumulation of personal belongings is a fire hazard. Respondent failed to keep the licensed premises and surrounding areas clean and in good condition.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent guilty of violating Rules 61C-1.004(6) and (10) and 61C-3.001(7) and imposing a fine of $1,400. DONE AND ENTERED this 8th day of January, 2002, in Tallahassee, Leon County, Florida. ______________________________ DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 8th day of January, 2002. COPIES FURNISHED: Susan R. McKinley, Director Division of Hotels and Restaurants Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Charles F. Tunnicliff, Esquire Assistant General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Michael Diffley, President Palm Hotel, Inc. 3409 Prudence Drive Sarasota, Florida 34235
