Findings Of Fact Ida Bartlett is the sole shareholder, officer and director of the Applicant corporation. She pursued the lottery drawing for Pasco County for a quota liquor license in order to embark on her own business venture involving the sale of alcoholic beverages for on-premises consumption in a lounge-type situation, as well as possibly to sell alcoholic beverages in a package store for off-premises consumption. On September 18, 1984, the Division informed Ms. Bartlett by letter that she had been selected in the lottery drawing for an available quota liquor license in Pasco County. The letter advised her that she had 45 days from the date of the letter to file her application with the Tampa field office of the Division, which she did. In preparing her application, she sought the advice and counsel of her son, Charles Bartlett, an attorney who has extensive experience in commercial and real estate matters, including commercial litigation, contract litigation, landlord tenant litigation and zoning matters, as well as experience representing other quota liquor license applicants as clients. Mr. Bartlett was tendered and accepted without objection as an expert in these areas of law, and in the interpretation of contracts, leases and other documents related to these fields of law. In particular, Mr. Bartlett currently represents establishments holding liquor licenses, has recently been actively involved in leasing and licensing matters for them and was counsel for a 4-COP quota liquor license applicant in Sarasota County with regard to the same lottery drawing as the instant application. After she was advised of her successful lottery drawing and of the right to file her application within the 45 days, Mr. Bartlett and Ms. Bartlett began the preparation process for the application by attempting to locate suitable premises in Pasco County at which to locate the license and operate the related business. Mr. Bartlett contacted several real estate brokers in this connection and eventually met Mr. Harry Sasser, who had an existing lounge establishment in Hudson, Florida, Pasco County. Mr. Sasser's premises were then used for only on premises consumption of alcoholic beverages in a lounge-type situation. Mr. Bartlett and Mr. Sasser negotiated an agreement, reduced to writing and executed by the Applicant and Mr. Sasser, whereby his premises would be used for the liquor license sought by Ms. Bartlett. That agreement was entered into on November 1, 1984. It provided that upon the issuance of a license to Ms. Bartlett, Mr. Sasser would place his liquor license in escrow so that the only license applicable and used at the Sasser premises would be the license to be awarded Ms. Bartlett. Ms. Bartlett entered into this agreement in good faith and with the bona fide intent to be bound by it and to actually operate the premises under the license she sought (Applicant's Exhibit 2, in evidence). Mr. Bartlett drafted the agreement which required Mr. Sasser to lease the premises to the Applicant upon the occurrence of the condition precedent which is the granting of the liquor license. The agreement does not specify a rental amount, but rather provides that the rent shall be the prevailing market rate upon the execution of the related lease, which the parties agreed to enter into upon the granting of the license. The agreement does not specify a date certain for execution of the lease, but rather provides that the leasing of the subject premises will take effect upon the issuance of the liquor license. Mr. Bartlett established that this agreement is a legally binding document and affords the Applicant a legal right of occupancy to Mr. Sasser's premises upon the occurrence of that condition precedent. Such provisions for rental payment at market rates are common in lease agreements of that nature, and such a provision as to rental amount does not mitigate the binding effect and enforceability of such an agreement. Agreements contingent on the occurrence of a specific event which would trigger the execution of a lease to which the agreement refers, are common. Otherwise there would be no purpose to be served in leasing the premises for either party, until it is clear that the Applicant can use the premises for the purposes for which the agreement and contemplated lease are intended. Charles Bartlett and the Applicant prepared and completed the remainder of the license application and related documents to be filed with it. Mr. Sasser was actively involved in the completion and submission of the application, and indeed took it himself to the Pasco County zoning Authority to secure that body's approval of the purpose to which the premises involved would be devoted. The Pasco County Zoning Authority indicated no objection to issuance of the liquor license for the Sasser premises and it is noted in three letters, (in evidence) from the Pasco County Attorney regarding the zoning question, that the property was correctly zoned for on-premises consumption of alcoholic beverages, which is what the premises were currently used for and would be used for under the sought license, at least in part. The letters from the County Attorney regarding zoning do indicate that if off-premises package store sales were engaged in under the sought liquor license, that further certification from the zoning authority concerning the question of whether that would be a substantial departure from the existing use of the premises might be necessary and that rezoning to commercial zoning might be necessary before the premises could be used for package sales for off-premises consumption. Mr. Bartlett opined, based upon his experience in similar liquor license application matters that the premises were appropriately zoned for the issuance of the subject liquor license. Mr. Sasser took the application to the appropriate health department official and secured his approval as to the suitability of the Sasser premises for the use of the liquor license. The zoning authority approval and health department approval were asserted on the face of the application when filed. On about November 1, 1984, Mr. Sasser, Mr. Bartlett, and Ms. Bartlett met at the Tampa field office of the Respondent to assemble the liquor license application, submit it, and sign the agreement concerning the use of Sasser premises. The Division's filing clerk thereupon reviewed the materials submitted with the application and the application to make certain that all information had been provided in the spaces and blanks on the application, and that it was duly executed and signed. Those parties then met with Mr. Espinola who identified himself to them as the "licensing officer" to review the completeness of the application. Mr. Espinola met with the parties for about 15 minutes to review the application and the related agreement with Mr. Sasser. After reviewing the Sasser agreement, Mr. Espinola suggested that Sasser enter into an escrow agreement for his existing liquor license for those premises, so that the Applicant's license, if issued, could be located at the Sasser premises without occurrence of the situation of two licenses being issued for the same premises. Mr. Sasser agreed and entered into and signed an escrow agreement to that effect in the presence of Mr. Espinola, Charles Bartlett and Ms. Bartlett, the principal of the applicant corporation. Mr. Espinola, on behalf of the Division, accepted the application as complete upon submission. Mr. Bartlett was advised that the acceptance of the application as complete would stand so long as he submitted an affidavit from his father concerning the source of financing for the proposed business. Mr. Bartlett had the affidavit executed the same day and sent it by Federal Express the same day to Mr. Espinola. He then called Mr. Espinola the following day to verify the receipt of the financial affidavit by Federal Express, and Mr. Espinola indicated that all was in order. Thereafter the Applicant, being advised that the application was complete and in order, waited to hear from the Division as to its decision regarding the application. Neither the Applicant nor her attorney, Mr. Bartlett, was contacted further by the Division or by anyone from its headquarters in Tallahassee concerning any questions regarding the review of the application. In the meantime, Ms. Bartlett and her attorney, Mr. Bartlett, remained in contact with Mr. Sasser to make certain that everything was still in order regarding their arrangement. Mr. Sasser gave them no indication that anything was amiss or that he had changed his position regarding escrow of his license and the lease of his premises to the applicant corporation. Since a binding agreement between the Applicant and Mr. Sasser had been entered into, and since the execution of the contemplated lease only required occurrence of the condition precedent, that is the issuance of the license, there was no reason to enter into other agreements by the parties until the license was issued. Thus, the Applicant and Mr. Sasser awaited the Division's decision before taking any further action regarding the application or the inauguration of the new business. On March 6, 1985, by letter, the Applicant was advised that its application was denied by the Division. This was the first indication the Applicant had that the application was not in order and would not be routinely approved following Mr. Espinola's assurance that the application was complete and in order. The Division indicated in its letter of denial that the bases for denial were a lack of establishment of a right of occupancy of the subject premises, and lack of sufficient zoning for the subject premises. Upon learning of the Division's denial of the application, Mr. Bartlett contacted the Tampa and Tallahassee offices of the Division seeking further explanation for the denial. He offered to file an amendment to the application to cure the alleged defects, but was informed by a staff member of Mr. Schoenfeld, the Bureau Chief's office, that amendments would not be accepted. Thereupon, the Applicant instituted this-administrative challenge to the denial of the application. During the interim period of time prior to the subject hearing, the Applicant took further steps to secure approval of the application. Thus, at Mr. Bartlett's behest, the Chief Assistant County Attorney for Pasco County provided Attorney Sandra Stockwell of the Division a letter setting forth further and clarifying the zoning authority's position regarding the Sasser premises. This letter (in evidence) makes clear that the County has no objection to the issuance of a 4-COP liquor license for the Sasser premises, although it points out that should the holder of the license desire to expand the alcoholic beverage use to include the sale of liquor for on-premises consumption then a determination would have to be obtained from the zoning administrator of the County whether or not the expansion constituted a substantial expansion of use. If the administrator determined that the expansion of use was substantial in nature, then the Board of County Commissioners would have to approve the actual sale of liquor on the premises. Correspondingly, if the holder of the license were to seek to expand the alcoholic beverage use for the Sasser premises to include the sale of alcoholic beverages for off-premise consumption (package sales) the same action would be necessary prior to actual sale of the alcoholic beverages for off-premise consumption. Additionally, rezoning of property to the appropriate commercial district would be required prior to sale of alcohol for off-premise consumption. The Applicant also secured alternate premises to locate the applied-for liquor license in the event the Sasser arrangement fails to consummate or is otherwise deemed undesirable. The Applicant thus entered into a three-year lease agreement with two 5-year options for premises on U.S. 19 in the City of Port Richey. These premises had been recently used as a lounge establishment and are equipped with all required lounge and bar equipment and fixtures. The lease depicted in Applicant's Exhibit 8, in evidence, gives the Applicant a legal right to occupy the premises identified in that lease for the purposes of this license application. Those premises, additionally, are zoned for commercial use, which according to the City of Port Richey Zoning Code is appropriate for the on premises consumption of alcoholic beverages. In this connection, it was established by Mr. Bartlett, based on his personal experience in representing liquor license applicants, that the Division has approved the issuance of 4-COP liquor licenses to a number of applicants he has represented for premises zoned for on-premises consumption of alcoholic beverages only without them being zoned at the time of issuance for off-premises package sales. DIVISION POLICY Mr. Barry Sehoenfeld is the Bureau Chief of Licensing and Records for the Division. He has been delegated the authority to process and finalize all quota liquor license applications and is in charge of the state-wide system for the review and issuance of alcoholic beverage licenses. He is the final decision maker on quota liquor license applications. Quota liquor licenses authorize license holders to sell alcoholic beverages for on-premise consumption and/or package sales. A quota liquor license enables the holder to sell alcoholic beverages for on-premise consumption, to sell such beverages in a package store capacity or both, according to Mr. Schoenfeld. Quota liquor licenses are issued on a county basis. Only a certain number of such licenses are issued in a county, depending on the population of the county. When the Division determines that it is appropriate for additional quota liquor licenses to be issued for a county, the Division holds a drawing and all interested persons may apply to get in the pool for the lottery drawing. When such a person is drawn, that person can then file an application with the Division for issuance of a liquor license. A "4-COP quota liquor license" refers to a county which has more than 100,000 population. When a party is selected from the lottery drawing to file an application for a quota liquor license, that person has 45 days from notice of the drawing to do so. The application is filed in the local field office of the Division in which the applicant seeks a license. The field office involved in this proceeding is the Tampa office. The application and all related documents must be filed with the licensing clerk of that field office, who then determines whether all documents are in order and whether the application can be accepted by the field office for review. Another staff member in the field office then meets with the applicant to determine whether all necessary forms and documents are complete. In the instant situation, that person was Mr. Espinola. According to Division policy, the field office will not accept an application if not complete. According to policy the applicant does not receive a letter regarding completeness from the field office, but simply a verbal understanding from the personnel of the field office that the application is complete upon submission and acceptance by that office. Here the Applicant was so informed. Once an application is submitted and deemed complete, the field office may ask the applicant for additional information. Requesting additional information is common practice and is often done after the 45-day submission deadline. In fact, if an application is missing the field office will contact an applicant to request that he provide the missing documents. According to Division policy, as explicated by Mr. Schoenfeld, review of an application should be performed with the applicant present so that additional information or explanation required may be done at that time. The intent of this policy is to keep the applicant advised of Division requirements and to communicate freely with an applicant to ensure that all necessary data is gathered for review. Further investigation of an application will be pursued if the field office supervisor deems that necessary and it is within the discretion of that supervisor as to whether an investigation is necessary, and if so, the scope of that investigation. If an investigation is deemed necessary, the supervisor should provide specific instructions to an investigator as to the scope of his investigation. There is no set time during which an investigation should be completed, and the scope depends on the particular circumstances of the application. It is common for an investigation to require one to to three months. The purpose of the investigation is to discover as much information as necessary to fairly make a recommendation on the application. After review by the field office, and any investigation by that office if it is deemed necessary, the field office makes a recommendation to the Division headquarters and Mr. Schoenfeld in Tallahassee regarding disposition of the license application. It is at this point that Mr. Schoenfeld becomes involved with any license application. Thereafter Mr. Schoenfeld makes a final determination on the application and the applicant is sent either a liquor license or a letter of denial. The letter of denial sets forth all bases for the Division's denial of such an application. According to statute, the application process must be completed and the Division must make its decision within 180 days. This time frame can be waived by an applicant however, if it appears for any reason that the statutory time requirement cannot be met, as for instance in situations where the premises to be used are not yet constructed or other delays have been encountered by the applicant or the Division, when both are acting in good faith. In such situations, the Division's decision on the application is placed in abeyance for an indefinite period until the premises are constructed or the other basis for delay by either the Division or the applicant in the review process have been alleviated. Mr. Schoenfeld also explained Division policy to allow for a liquor license holder to move his license to another premises by submitting an application to the Division for a transfer. Additionally, Division policy allows an applicant to propose to locate his license in a premise already holding a liquor license, if the existing license holder places his license in escrow. It is a routine matter for such previous license holders to place their licenses in escrow under these circumstances. Pursuant to the below-cited statutory authority, an applicant must have "suitable premises" in which to house or locate the liquor license for which it has applied. The Division interprets this to mean that an applicant must demonstrate a legal right of occupancy for the premises identified in an application. Mr. Schoenfeld acknowledged that the phrase "legal right of occupancy" is not defined by statute or agency rule, but that the intent is to make certain that an applicant has a lawful right to occupy the identified premises. The Division determines on a case by case basis whether an applicant has secured a lawful right of occupancy. Typically, this determination process does not employ the use of Division attorneys to review and determine from a legal standpoint whether a right of occupancy has been demonstrated. There is no statutory provision or Division rule which requires that written documentation be submitted with an application in establishing a legal right of occupancy. The Division's policy and procedures manual does not specifically require a right of occupancy document to be filed with the application. The Division's application form furthermore, does not require written documentation by the applicant to prove its legal right of occupancy. Although Mr. Schoenfeld indicated that the Division requires written documentation of an applicant's lawful right of occupancy to the identified premises, no specific type of agreement is required. Rather, any document reflecting a binding, lawful right of occupancy is sufficient, nor is it necessary that the written document be a lease agreement. In the instant case, as Mr. Bartlett established, a binding, written contract calling for the occupancy of the Sasser premises was timely executed by the parties to the application and filed with the application, which binds the parties to enter into a written lease upon the occurrence of the condition precedent, that is the issuance of the liquor license. The Division requires an applicant to show sufficient, appropriate zoning for the premises identified to be used in an application. On the second page of the application there is a section requiring indication whether the appropriate zoning authority has determined whether the identified premises are in compliance with existing zoning regulations. Additional information in the form of letters from the appropriate governing authority is commonly submitted with an application to demonstrate that the premises have sufficient zoning. A 4-COP quota liquor license authorizes on-premises consumption of alcoholic beverages and/or package store sales. In some situations, existing zoning regulations permit only the on-premises consumption of alcoholic beverages and not package store sales for off-premise consumption. That is the case with the Sasser premises involved herein and as to the alternate premises, depicted in Applicant's Exhibit 8, in evidence, although that property is commercially zoned. Commercial zoning also encompasses on-premises consumption of alcoholic beverages only. Division policy, however, provides that conditional zoning approvals are acceptable in the process of reviewing and granting liquor licenses. The Division has approved applications where the zoning only allowed on-premises consumption of alcoholic beverages and, as discussed above, in Mr. Bartlett's experience with his own clients such approval has been given where zoning only permitted on-premises consumption for quota liquor licenses on more than one occasion. In these situations, the Division's policy is that it is not responsible for enforcing the terms of the conditional zoning approval' that is a matter to be negotiated or enforced between the local zoning authority and the ultimate holder of the liquor license involved. Conditional zoning approval does not bar the issuance of a quota liquor license. Additionally, Mr. Schoenfeld corroborated Mr. Bartlett's testimony showing that it is often reasonable to waive the 180-day statutory time period to accommodate situations where an applicant must change the premises originally applied for in such instances where a landlord or owner of the premises originally identified in an application breaches the right of occupancy agreement after the application is submitted for review by the Division. In those instances, it has often been determined to be reasonable to allow an applicant to amend his application after the 45-day time period has elapsed to allow for such a change of premises. Licenses have indeed been issued frequently for alternate or changed premises from those originally identified in an application so long as an applicant has acted in good faith throughout the application process. Also, according to Division policy, if an applicant is making a good faith effort to arrange for a suitable, appropriately zoned premises from which to operate his license, the Division will permit the applicant to locate alternate premises in instances where zoning approval is denied subsequent to the 45-day period or has not yet been obtained at the end of the 45-day period. It should be noted that Mr. Bartlett described two instances where this policy was followed where the Division permitted a change of premises after submission of an application. In one case an application was submitted for premises in a shopping center not yet built. After it was filed and prior to issuance of the license, the applicant elected to change the location and to amend the application. The license was granted for the second location. In another situation an amendment to the application was effected after the 45-day period, proposing a change of premises. The amended application was approved by the Division and the zoning on the changed location allowed only on-premises consumption of alcoholic beverages and not package store sales. Even so the Division approved issuance of that license. DIVISION REVIEW Mr. William Fisher is a law enforcement investigator for the Tampa field office of the Division. Mr. Fisher's immediate supervisor is Reuben Espinola. Mr. Fisher's duties involve investigation of liquor license applicants and related premises to ascertain whether the application should be recommended for approval or not. He does not investigate applications independently, but rather acts on Mr. Espinola's instructions. Mr. Espinola normally does not instruct him as to the scope of his investigation (contrary to policy as stated by their superior, Mr. Schoenfeld). In any event, Mr. Espinola ordered Mr. Fisher to investigate the Ida Know, Inc. application without giving him specific instructions. Mr. Fisher was not present at the meetings between the applicant and Mr. Espinola and other members of the staff in the Tampa field office when the application was first submitted and accepted as complete. Mr. Fisher traveled to Mr. Sasser's establishment to investigate the application, and conferred with Mr. Sasser for approximately 75 minutes on January 29, 1985, which meeting constituted the entirety of his investigation of this application, although he had acknowledged that such application investigations normally require one to three months so as to discover as many facts as possible to completely and fairly conduct the review. The next day, however, Mr. Fisher recommended to his superiors that the application be denied after his single conversation with Mr. Sasser. No further investigation by the Tampa field office was performed. Mr. Fisher never conversed with the applicant nor Mr. Bartlett during the investigation or at any other time, nor did he communicate in writing with them, although he acknowledged that conversing with applicants concerning matters involved in investigation of an application is common practice. Mr. Fisher had not read the Division's policy and procedures manual in its entirety. He exhibited some unfamiliarity with Division policy, as for example, his belief that Division policy does not allow issuance of a liquor license for premises where the zoning does not authorize both on-premises consumption and package store sales for off-premises consumption. Mr. Schoenfeld acknowledged that Mr. Fisher misunderstood the pertinent Division policies regarding this liquor license application and the review of it, and yet Mr. Schoenfeld's denial of the application was based entirely on the investigation performed by the Tampa field office and specifically Mr. Fisher. Mr. Schoenfeld did not conduct any independent investigation of his own and never conferred with either Mr. Sasser, the Applicant, Ms. Bartlett, or Mr. Bartlett. His conclusion, and Mr. Fisher's conclusion that no right of occupancy of the Sasser premises existed was evidently based on the Division's Exhibit No. 3, which was not admitted into evidence. In any event, if indeed Mr. Sasser was seeking to recant his agreements with the Applicant and that fact was within the knowledge of Mr. Fisher or someone else in the Tampa field office or the Tallahassee office of the Division, no Division staff member ever contacted the Applicant to advise them of that purported situation, nor to seek additional information from the Applicant concerning it. Even if Mr. Sasser could successfully repudiate his agreement to escrow his liquor license and his agreement to allow the Applicant to use his premises, the Applicant has successfully established its right of occupancy and use of the alternative premises depicted and described in Applicant's Exhibit 8, however, which is zoned commercially such that on-premises consumption of any alcoholic beverage is permitted.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, and the candor and demeanor of the witnesses, as well as the pleadings and arguments of the parties, it is, therefore RECOMMENDED that the application of Ida Know, Inc. d/b/a The Anchorage, be approved and that the subject 4-COP quota liquor license be issued to that applicant in a manner consistent with the conditions and alternatives posited in the paragraph last above. DONE and RECOMMENDED this 1st day of April, 1986 in Tallahassee, Florida. P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of April 1986.
The Issue Whether Rule 7A-2.017(6), Florida Administrative Code, constitutes an invalid exercise of delegated legislative authority? Whether Section 301 or Section 302 or both sections of DABT's policy manual for field offices amount to rules never validly promulgated? Whether DABT forms DBR 700L and DBR 710L, or either of them, is an invalid rule for DABT's failure to file forms with the Secretary of State? Whether petitioners or either of them has standing to raise any of the foregoing questions?
Findings Of Fact On January 17, 1984, DABT received John Harry Michaels' preliminary application for a new quota alcoholic beverage license in Martin County. Joint Exhibit No. 1. By letter dated September 18, 1984, DABT advised Mr. Michaels that he was "one of the preliminary applicants selected in the drawing for an available liquor license in Martin County"; that he "must file a full and complete application within 45 days of the date of this letter pursuant to Rule 7A-2.17, Florida Administrative Rule"; and that "[f]ailure to file your complete application within such 45 day period will be deemed as a waiver of your right to file for the new quota license." Joint Exhibit No. 2. On the 45th day, November 2, 1984, DABT received a letter from Sandra Elizabeth Allen, an attorney representing "John Michaels of Martin County Liquors, Inc." which reported that Mr. Michaels was out of the country and "request[ed] a forty-five day extension for Mr. Michaels to obtain a zoned location." Joint Exhibit No. 3. Along with the letter, DABT received forms DBR 700L and DBR 710L, as revised in July 1984, which named Martin County Liquors, Inc. as the applicant, and designated a $10,000 commercial loan from Florida Home Equity as the source of all the corporation's capital, but failed to specify a location for the store. On November 7, 1984, DABT personnel reviewed the submissions received five days earlier, and noted on a transmittal form, DBR 709L, "applicant failed to submit financial documentation; applicant filed incomplete application - no location listed." Joint Exhibit No. 4. Form DBR 700L requires that "documentation to support the financial arrangements must be submitted with this application," and asks several questions concerning the premises in which an applicant proposes to locate. Under the heading "RIGHT OF OCCUPANCY," the form asks for details concerning leases and inquires whether the applicant has "a legal right of occupancy to the premises." By letter dated February 5, 1985, DABT advised petitioners' counsel, Ms. Allen, that "John H. Michaels, has been granted a 45 day extension to submit his application ... up to and including March 22, 1985." Joint Exhibit No. 6. On March 22, 1985, DABT received a second letter from Ms. Allen requesting a second 45 day extension. Joint Exhibit No. 7. By letter dated April 3, 1985, DABT's L.B. Schoenfeld indicated that DABT would not be "granting any further extensions ... [and] that in the very near future a letter of denial for Mr. Michaels application will be forthcoming." Joint Exhibit No. 10. DABT received, nevertheless, on April 23, 1985, an amended application, again naming Martin County Liquors, Inc. as the applicant, which gave "11230 Fed. Hwy (Hobe Sound)" as the address proposed for the store, and included both a sketch of the premises and a county zoning administrator's signature attesting that the location complied with zoning requirements for the sale of alcoholic beverages. Joint Exhibit No. 11. On April 25, 1985, DABT received a COP of a lease executed by a Mr. Jack Biederwolf on behalf of the lessors and by Ocie Allen as attorney-in-fact for John Harry Michaels for "space located at ... Hobe Sound ... [to] commence upon issuance to lessee ... of .... an alcoholic beverage license ... and upon vacation of the present tenant ... [provided, however] that, beginning from the date of issuance of liquor license to the Lessee, this Lease Agreement may be cancelled and rendered null and void upon a twenty-four (24) hour written notice by either party." Joint Exhibit No. 12. The April submissions notwithstanding, DABT sent a formal letter of denial, as promised. Addressed to Martin County Liquors, Inc., and dated May 31, 1985, the letter cited Section 561.18, Florida Statutes, as authority for disapproving the application, and stated: Application incomplete in that applicant has failed to file a right of occupancy for a specific location within the extended time period as granted by the Agency. Also, applicant has failed to provide complete verification of his financial interest. In response, John Harry Michaels (by Ocie Clyde Allen) requested an administrative hearing, a request which DABT eventually transmitted to the Division of Administrative Hearings. Proceedings in the substantial interest case at the Division of Administrative Hearings, Martin County Liquors vs. Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, No. 88-1185, eventuated in a recommended order (Donnelly, H.O.) which DABT adopted "in toto" [by final order entered October 4, 1988. The recommended order concluded that When the Petitioner did not provide a business location to the Respondent, the right to file for a quota license was waived under Rule 7A-2.17(6) ..... Respondent has acted according to law in its denial of the license for failure to file a right of occupancy for a specific location within the expended time period. Recommended Order entered September 22, 1988, at pages 7 and 9. Both the recommended order and DABT's denial letter cited the corporate petitioner's failure "to file a right of occupancy for a specific location within the extended time period." The denial letter, but not the recommended order, cited a failure "to provide complete verification of his financial interest," as an additional basis for denial. Neither DABT nor Hearing Officer Donnelly made explicit reference to the forms, DBR 700L or DBR 710L, or to Sections 301 or 302 of the policy manual. The Challenged Provisions Rule 7A-2.017(6), Florida Administrative Code, formerly numbered 7A- 2.17(6), provides: All applicants in the drawing whose number corresponds with the available number of quota liquor licenses shall file a full and complete application for an alcoholic beverage license, following their selection in the drawing. Such applications are available from the District Field Office having jurisdiction over such county and must be filed within 45 days of the date of their selection. Failure to file an application within such 45-day period shall be deemed a waiver of the applicant's right to file for a quota liquor license. The Division shall then notify the next person in order of priority from the random drawing by certified mail of their entitlement to apply for a quota license in accordance with the procedures for notifying the originally selected parties. The Division shall follow such procedure until all available licenses have been applied for and awarded. Petitioner's Exhibit No. 2. The only provisions of Section 301 of DABT's "standardized policy and procedure" which petitioners assail are the following: Background Information 1. The Division of Alcoholic Beverages and Tobacco will inform applicants for licenses of requirements for licensure in writing pursuant to this policy and procedure. General Information 3. Once the field office has determined what requirements are necessary and has completed the DBR761L by checking the appropriate blocks, the original DRB761L is given to the applicant along with the appropriate application forms and a copy of the Instructions for Completing Application for Alcoholic Beverage License. Petitioners challenge Section 302 which was revised February 2, 1987, as it existed until that date and after August 15, 1984, as follows: SUBJECT: DEFINITION OF COMPLETED APPLICATION SECTION: 302 PAGES: 3 CLASS: New Policy and Procedure PURPOSE: This section establishes a standardized policy and procedure to be followed by all field offices in connection with the definition of a completed application. Any deviation from this policy and procedure must be with the approval of the Bureau of Licensing and Records. EFFECTIVE DATE: August 15, 1984 Background Information: The Division of Alcoholic Beverages and Tobacco will only accept for filing applications which are complete. The Division of Alcoholic Beverages and Tobacco does not accept applications for filing on "piece at a time basis." General Information: A completed application is defined as follows: The DBR 700L must be complete and requirements furnished in accordance with the list of license application requirements (DBR 761L) given to the applicant. Also, any agreements or financial documentation which are required as attachments as a result of the completion of Section III of the DBR 700L application for alcoholic beverage license must also be furnished. Completed (DBR 710L) personal questionnaire(s) for all applicants and persons connected directly with the business. A set of fingerprints on regular United States Department of Justice forms for each applicant person(s) connected directly with the business or anyone designated by the Division of Alcoholic Beverages and Tobacco. * * * The following information may be required during the application background investigation: Additional documentation of financial interest. Criminal history information. Right of occupancy documentation. Additional documentation of qualifications. Application Requirements Any application which is submitted in accordance with this policy and procedure must be accepted for filing by the field office. This includes situations where the applicant in good faith attempts to file the application and a review shows a need for additional financial documentation. If no financial documentation is included and is necessary based on the application, it should not be accepted and the applicant instructed accordingly. Acceptance of the application will make the applicant eligible for a temporary license if authorized by law based on the type of application filed. Form DBR 761L was not offered in evidence. Forms DBR 700L and DB 710L (1984 revisions) are in evidence. Neither they nor their predecessor versions were ever filed with the Secretary of State.
Findings Of Fact Petitioner was notified by DABT on September 18, 1984, that its name had been drawn in the lottery for a new quota liquor license in Hillsborough County, Florida. The prescribed application form was timely filed by Petitioner on November 2, 1984. The lease for the premises at which the license was to be operated was a three-month lease which expired before DABT took action on the application. Thereafter, Petitioner did not have a lease on premises from which to operate the license. On March 7, 1985, Petitioner waived the 180-day period given in the statute which DABT had to rule upon the application. On August 8, 1986, Petitioner requested DABT issue the license in escrow. On August 13, 1986, DABT denied the request to issue a new quota license in escrow and gave Petitioner 45 days in which to file a new application, Part II. Petitioner timely filed this second application September 26, 1986. Upon review by DABT this application was deemed incomplete by reason of lack of approved zoning of the site and Petitioner was so notified. All information requested by DABT was provided with respect to the zoning of the proposed site, except certification by zoning officials that the site was wet zoned. On February 9, 1987, Petitioner's application was denied for the reason that the applicant had failed to obtain zoning approval for the proposed site. Patsy Frenchman is the sole owner of the stock in Hillsborough County Liquors, Inc., and has operated package stores in Alachua County for some time. Following the waiver of the 180-day period in which DABT had to rule on the application the file "fell through a crack" and no action was taken by Respondent for over a year. When this file again became active it was determined to allow Petitioner to resubmit a new application and the 45-day period in which to do so was started. Petitioner prepared the new application, found a site in Ruskin, Florida that had previously been used as a package store, took the landlord to the County Zoning Department in Ruskin who confirmed the prior zoning of the site, and then negotiated a lease for this site. When she returned the following day to the Ruskin Zoning Office to get her application signed off by the Zoning Department that the site was properly zoned, she was told that it was necessary to have the application signed off by the main Hillsborough County Zoning Office in Tampa, Florida. Petitioner then took the application to Tampa where no record that this site was wet zoned could be located. Petitioner was advised that she could apply for zoning and was given the proper forms with which to do so. After being told by the main zoning office that the site was not zoned to allow the sale of alcoholic beverages, Petitioner obtained the services of an attorney to help straighten out the problem. Petitioner submitted the application with a letter from the zoning official stating the zoning of this property was zoned C-1 (neighborhood commercial) and this zoning would allow the sale of alcoholic beverages after going through the alcoholic beverage zoning process (Exhibit 2). This application was deemed incomplete by Respondent because it did not contain a site for the license which was properly zoned. However, DABT did not disapprove the application but gave Petitioner time to sort out the zoning problems. Hillsborough County has what is referred to as spot zoning. A site can be zoned to accommodate a liquor store but once the operator moves from the site the zoning reverts to a general commercial zoning and cannot be used as a package store site without again obtaining zoning for such a purpose. Apparently, Petitioner did not fully understand this concept but continued to assume that once the site was zoned for a package store it could again be so used without the necessity of going through the procedures and expenses of rezoning. Near the end of the 180-day period for Respondent to act on the application, DABT requested a waiver of this 180-day period but Petitioner declined to so waive. A final check with the Hillsborough County Zoning Department made by Respondent's Tampa Office on February 4, 1987 revealed that the site selected by Petitioner was not wet zoned and that Petitioner had never submitted an application to have the site zoned for use as a package store. All of this information was submitted to Respondent's Tallahassee office and on February 9, 1987, the 180th day from the second authorization to Petitioner to file, the application was denied. Once a new quota liquor license has been issued the holder can place the license in escrow for 18 months. In many cases the initial site shown on the application for a new quota license is a small space inadequate for the licensee to operate from, but which meets the zoning requirements for licensure. Upon issuance of a new quota license, some licensees have immediately requested same be placed in escrow for up to 18 months while an adequate site is located. While the first application was pending, Petitioner testified she inquired of the Tampa Beverage Office if she could amend her application to a new site since the 3 month lease on the originally approved site could not be renewed and was advised she could not. DABT personnel have no recollection of having given such information and no documentation of such an inquiry was presented. DABT has in the past allowed an applicant for a new quota license to change to a new location while the application was being processed. (Exhibit 5). Here Petitioner never obtained an approved new location nor applied to have the application amended to show the new location. Section 361.19(2), Florida Statutes, provides for the issuance of new quota licenses by the Division. This section provides in part that if the applicant is found qualified, the new quota license shall be granted; however, it shall not be issued until the applicant establishes to the satisfaction of the Division that the premises to be licensed qualify under the Beverage Law. The long-standing interpretation of this section by the Division is that the granting and issuing of a new quota license is done simultaneously when the applicant and the location meet all requirements, and is not bifurcated into a process of granting a license and then issuing a license.
The Issue The issue to be determined is whether Petitioner’s request to renew a lien against alcoholic beverage license number 62- 08383 on or about July 8, 2011, should be approved or denied.
Findings Of Fact Based on the demeanor and credibility of the witnesses and other evidence presented at hearing, and upon the entire record of this proceeding, the following facts are found: Respondent is the state agency charged with the licensing, regulation, and enforcement of Florida’s alcoholic beverage laws pursuant to section 20.165(2)(b) and chapters 561- 568, Florida Statutes, including recordation of liens against alcoholic beverage licenses and provision of notice to lienholders pursuant to section 561.65. Petitioner is the holder of a recorded lien against alcoholic beverage license number 62-08383, a 4COP spirituous alcoholic beverage license, commonly referred to as a quota license, which was issued pursuant to sections 561.20(1) and 565.02(1)(a)-(f) for use in Pinellas County. Liens and Security Interests in Alcoholic Beverage Licenses Section 561.65 governs mortgages, liens, and security interests against spirituous alcoholic beverage licenses. DABT has a lien section within its Bureau of Licensing that is responsible for the oversight of lien recordings and lien searches. To perfect a lien or security interest in a spirituous alcoholic beverage license that may be enforceable against the license, the entity holding the security interest or lien must record it with DABT within 90 days of the date of creation of the lien or security interest, using forms authorized by DABT. The forms adopted by DABT require the names of the parties and the terms of the obligation being recorded. § 561.65(4), Fla. Stat. Form DBPR ABT-6022, Application for Mortgagee’s Interest in Spirituous Alcoholic Beverage License, is used to record a new lien, a lien assignment or assumption, or a lien renewal or extension. The form is adopted by rule. Fla. Admin. Code R. 61A-5.0012. Upon receipt of a request to record a lien or the renewal of an existing lien, DABT will review the provided documentation and, if the documentation is in order on approved forms and accompanied by the security agreement and statutorily- required payment, will record the lien or lien renewal. If there is a deficiency noted during review of the lien documentation submitted, DABT will issue a 14-day deficiency notice to the requesting entity to provide any missing information. If timely corrected, DABT will record the lien or lien renewal. Section 561.65(4) provides that any lien or security interest filed with DABT on or after July 1, 1995, expires five years after recordation by DABT unless renewed by the lienholder within six months prior to its expiration date. Statutory Notice Requirements to Lienholders Recording a lien not only makes it enforceable, but provides assurance to the lienholder that it will receive notice of pending actions by DABT against the license that may compromise the lien’s vitality. Section 561.65 also sets forth requirements for DABT to provide notice to lienholders of both pending actions against encumbered licenses and any suspension or revocation of a license subject to a lien. Specifically, section 561.65(3) provides that “such lienholder shall be notified in writing of the filing of an order to show cause as to why the license should not be suspended or revoked; and also the lienholder shall be furnished a copy of any order of suspension or revocation.” (Emphasis added). In other words, two separate notices are required: one when the agency institutes proceedings against the licensee and a second if the agency action against the licensee results in a suspension or revocation of the license. Respondent does not assert and no evidence was presented to demonstrate that Petitioner had knowledge of or participated in the cause for revocation of the license at issue in this proceeding, or that Petitioner would not otherwise be entitled to notice of the revocation proceeding. The holder of a recorded lien is entitled to notice because the lienholder has the right to enforce the lien against the licensee within 180 days after the entry of any order of revocation or suspension of the license. Section 561.65(3) specifies that “the 180 days within which to file for enforcement of the lien by the lienholder shall commence running from the date of the mailing of the copy of the order of revocation or suspension.” Thus, the 180-day period runs from when notice is sent to the lienholder, not from the entry of the final order of suspension or revocation. Once notice is provided to the lienholder, any enforcement of the lien is through foreclosure proceedings in circuit court. The process for foreclosure proceedings is outlined in section 561.65(5). Most importantly, both section 561.19(2) and section 561.65(1) provide that no revoked quota beverage license encumbered by a lien or security interest perfected in accordance with section 561.65 shall be issued until the 180-day period (from mailing of the suspension or revocation order) has elapsed or until such enforcement proceeding is final. Re-issuance Through Double Random Drawings Quota licenses may become available three ways: 1) when a dry county goes wet (i.e., a county that previously prohibited the sale of alcohol decides to allow it), three initial quota licenses are issued for the county; 2) when there are population increases in a county, an additional quota license is issued for every population increase of 7,500; and 3) when a quota license in a county has been revoked. When any of those instances occur, pursuant to the directive in section 561.19(2), quota licenses are issued through the use of a double random public drawing. While a revoked quota license may be reissued in a double random quota drawing, if a revoked quota license is encumbered by a perfected and recorded lien or security interest, as discussed previously, it may not be reissued until the 180-day period has elapsed or until enforcement/foreclosure proceedings are final. Damon Larry is currently the assistant bureau chief of licensing, and oversees the annual quota drawing. Each year, he runs a report of all revoked quota licenses and, if the revocation is final, determines whether the 180-day period has elapsed. Before a revoked quota license is placed in the double random drawing, there is communication between staff in different sections within the Department to determine if a license is eligible for inclusion in the quota drawing. The communications involve the quota drawing section, the licensing section, the administrative case unit, the Office of the General Counsel, and the lien section. During this process, DABT staff will determine whether there is a lien attached to the license and, if so, whether there was notice to the lienholder, and whether the 180 days has elapsed or foreclosure proceedings no longer remain pending. If all of these conditions have been met, the revoked license is placed in the quota drawing for reissuance under a new license number. The revoked license number is then deleted from the Department’s database. Petitioner’s Lien Against Alcoholic Beverage License No. 62-08383 Turning to the facts of this case, Daniel A. King, as debtor, executed and delivered a Demand Promissory Note in favor of Rebco on or about April 18, 1997, in the principal amount of $61,000, and simultaneously executed a security agreement in favor of Rebco, as the secured party, pledging license number 62-08383 (the License) as collateral for repayment of the sums due and owing under the Promissory Note. Rebco submitted the promissory note and security agreement to DABT for initial recordation as a lien against the License on or about May 1, 1997, within 90 days of the date of the creation of the lien, on forms approved by the Division. The forms clearly identified the parties and the obligation. DABT recorded the lien against the License effective May 8, 1997. If not timely renewed, the lien would expire on May 8, 2002. Rebco submitted a request to renew its existing lien against the License for recordation on or about November 7, 2001, within six months of expiration of the lien, on forms approved by the Division. The request for renewal was accompanied by the promissory note and security agreement, and the forms clearly identified the parties and the obligation. DABT recorded the lien renewal against the License effective November 7, 2001. If not timely renewed, the lien would expire on November 7, 2006. Rebco submitted a second request to renew its existing lien against the License for recordation on or about July 26, 2006, within six months of expiration of the lien, on forms approved by the Division. The request for renewal was accompanied by the promissory note and security agreement and the forms clearly identified the parties and the obligation. DABT recorded the lien renewal against the License effective August 1, 2006. If not timely renewed, the lien would expire on August 1, 2011. The License Revocation Proceedings On or about November 16, 2006, at a time when the lien was recorded in the records of DABT, DABT filed administrative charges against Daniel J. King, holder of the License, in Case number 2006-049240, alleging that the licensee failed to operate the License in accordance with section 561.29(1)(f). DABT was unable to achieve personal service on Mr. King, so it published notice of the administrative action in the St. Petersburg Times on May 2, 9, 16, and 23, 2007. The published notice did not identify Petitioner, and no evidence was presented to indicate that DABT sent a copy of the notice to Rebco. Rebco clearly had a recorded lien against the License when the disciplinary action was filed against the License. DABT did not notify Petitioner of the pending action. On or about June 22, 2007, after receiving no written defense in the disciplinary proceeding, DABT issued a Final Order revoking the License effective July 31, 2007. The Final Order of Revocation was not served on Rebco, the owner of the security interest in the License. Petitioner had a recorded lien against the License on file with DABT both when proceedings were instituted against the License and on the date of the entry of the Final Order of Revocation. Stephanie Coxwell works in the administrative case unit of DABT and has done so for at least the last 14 years. The administrative case unit is responsible for determining whether an alcoholic beverage license that is pending revocation or suspension is encumbered by a lien and for notifying any lienholder of the revocation or suspension of an encumbered license. DABT’s practice was to mail any lienholder notice of the license suspension or revocation, along with a copy of the final order, soon after entry of the final order. It is this mailing of the notice and final order that commences the 180 days referenced in section 561.65. For at least the last 14 years, DABT has used a form “notice to lienholder” to notify lienholders of the revocation or suspension of an alcoholic beverage license, accompanied by a copy of the final order revoking or suspending the license. The notification form is a public record maintained by DABT. It is this notification, and not the publication of the pending action, that provides notice to the lienholder. Internal correspondence from Ms. Coxwell within the licensure file for the License indicates that in December 2006, she requested a lien search with respect to the License. Ms. Coxwell was advised by return e-mail that Rebco had a recorded lien against the license. On or about March 21, 2007, Ms. Coxwell requested research for any bankruptcy proceedings affecting the License. She was again informed by intra-agency e-mail that Rebco had a recorded lien against the License. Ms. Coxwell replied by e-mail that she was aware that there was a lien, but that they would notify the lienholder of the administrative action “in the usual way.” However, Ms. Coxwell’s March 27 e-mail was sent three months before the final order revoking the license, not simultaneous to the Order. There is no record that notification was sent to Rebco, either at the time of the administrative action, or after issuance of the final order. Beverly Peebles works in Rebco’s corporate office located at 701 Tennessee River Drive, Muscle Shoals, Alabama 35661, and has done so since 1990. She is responsible for receiving, retaining, and disbursing any mail received by Rebco. Ms. Peebles testified regarding the process used to copy, scan into the company’s electronic database, and distribute any mail received by Rebco. Rebco did not receive any notice concerning the administrative action or the revocation of the License until Rebco received the letter denying the recordation of its lien renewal against the license in 2011. Rebco’s address was at all times on file with the DABT since the inception of the lien against the license in 1997. It is found that the DABT did not notify Rebco that there was an administrative action filed against the License, and did not notify Rebco of the Final Order of Revocation against the License. The licensure file contains all other expected documents from the first recordation of the lien in 1997 to the present. It does not include a copy of notice to Rebco of either the pending action or the Final Order of revocation. Moreover, both a letter dated August 19, 2011, to counsel for Rebco, as well as an e-mail dated March 21, 2007, from Ms. Coxwell, contain handwritten notes regarding the failure to send proper notification. The notes, which are clearly hearsay, are part of public records maintained in the normal course of business, and corroborate Ms. Peebles’ testimony that no notification was received. They also corroborate evidence of the absence of any record of notification to Rebco in DABT’s records of regularly-conducted activity. The August 19, 2011, letter contains a handwritten note at the top stating, “$61K lien no lien ltr sent,” and the e-mail dated March 21, 2007, referenced in paragraph 32, contains the following note: “are we the only group/people who check for current liens recorded before deleting the license? It was deleted on 5/4/2011. Lien was still recorded at that time.”2/ Respondent has presented no credible evidence to indicate that the notice was somehow sent despite the lack of any documentation to that effect contained in the DABT’s records. While the handwritten notes standing alone do not establish that no notice was sent, they do indicate that a question was raised internally regarding whether adequate notice was provided. Despite the failure to notify Rebco of the revocation of the License, the License was placed in the 2010 double random drawing held on March 10, 2011, at a time when a valid lien against the License was duly recorded. Only one license for Pinellas County was included in the drawing for that year, and no licenses for Pinellas County have been issued in a double random quota drawing since then. Shortly after the random drawing, the license number assigned to the License was removed from the Department’s system and a new number assigned to the license issued as a result of the drawing. While there is no direct testimony on the issue, it can be inferred that the purchaser of the new license received the license with no notice that there was any outstanding lien on the right to engage in the sale of alcoholic beverages in Pinellas County under the new license. While it is DABT’s practice to delete a revoked license number from its database, no evidence or statutory reference was presented to support the premise that there is a legal impediment to renewing an existing lien for a revoked license when no notice of the revocation was provided. Given the Department’s failure to notify Rebco of the revocation of the License, the 180-day period identified in section 560.65 never began to run. On or about July 6, 2011, Rebco timely submitted a third request to DABT to renew its existing lien against the License for recordation, within six months of expiration of the lien, on forms approved by the Division, which request was accompanied by the promissory note and security agreement. DABT notified Rebco by letter dated July 19, 2011, that it was unable to record the lien renewal because it was not submitted for recordation within 90 days of its creation. The July 19, 2011, notice of denial was issued based upon a review of the lien renewal request submitted to DABT, because the executed ABT6022 lien-recording form submitted with Rebco’s third renewal request mistakenly identified the effective date of the lien renewal as April 18, 1997, the date of the creation of the original lien. On or about July 25, 2011, Rebco submitted an amended form ABT6022 correcting the effective date for renewal of the lien as August 1, 2011. On August 3, 2011, DABT notified Rebco that it was unable to record the renewal of the lien against the License because “the alcoholic beverage license being pledged as collateral was revoked by the Division on July 31, 2007,” following service of a Notice of Action through publication in the St. Petersburg Times on May 2, 9, 16, and 23, 2007. No action taken by Rebco compromised the vitality of its recorded lien against the License. To the contrary, Rebco faithfully adhered to the recording requirements outlined by statute to record and renew its lien. DABT, however, failed to take the action required by section 561.65 to provide notice to Rebco of the pending action and subsequent revocation of the License. As a result, the 180- day period required by section 561.65 did not run before the License was placed in the quota drawing.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation enter a Final Order approving the renewal of Rebco’s lien in the License at issue in this case. DONE AND ENTERED this 17th day of July, 2015, in Tallahassee, Leon County, Florida. S LISA SHEARER NELSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of July, 2015.
The Issue Whether Petitioners' applications for the delinquent renewal of their special restaurant licenses pursuant to Section 561.27(2), Florida Statutes, should be denied for the reasons set forth in the Notices of Intent to Deny.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: There are various types of DABT-issued licenses authorizing the retail sale of alcoholic beverages. Among them are quota licenses, SRX licenses, and SR licenses. All three of these licenses allow the licensee to sell liquor, as well as beer and wine. Quota licenses, as their name suggests, are limited in number. The number of quota licenses available in each county is based upon that county's population. SRX and SR licenses are "special" licenses authorizing the retail sale of beer, wine, and liquor by restaurants. There are no restrictions on the number of these "special" licenses that may be in effect (countywide or statewide) at any one time. SRX licenses are "special restaurant" licenses that were originally issued in or after 1958.3 SR licenses are "special restaurant" licenses that were originally issued prior to 1958. For restaurants originally licensed after April 18, 1972, at least 51 percent of the licensed restaurant's total gross revenues must be from the retail sale of food and non- alcoholic beverages.4 Restaurants for which an SR license has been obtained, on the other hand, do not have to derive any set percentage or amount of their total gross revenues from the retail sale of food and non-alcoholic beverages. DABT-issued alcoholic beverage licenses are subject to annual renewal.5 License holders who have not timely renewed their licenses, but wish to remain licensed, may file an Application for Delinquent Renewal (on DABT Form 6015). Until recently, it was DABT's longstanding policy and practice to routinely grant applications for the delinquent renewal of SR and other alcoholic beverage licenses, regardless of the reason for the delinquency. DABT still routinely grants applications to delinquently renew alcoholic beverage licenses other than SR licenses, but it now has a "new policy" in place with respect to applications for the delinquent renewal of SR licenses. The "new policy" is to deny all such applications based upon these SR licenses' not having been in "continuous operation," action that, according to DABT, is dictated by operation of Section 561.20(5), Florida Statutes, a statutory provision DABT now claims it had previously misinterpreted when it was routinely granting these applications. Relying on Section 561.20(5), Florida Statutes, to blanketly deny all applications for the delinquent renewal of SR licenses was the idea of Eileen Klinger, the head of DABT's Bureau of Licensing. She directed her licensing staff to implement the "new policy" after being told by agency attorneys that this "was the appropriate thing [from a legal perspective] to do." Abkey and Amy Cat have SR licenses that were originally issued in 1956 "per general law and not pursuant to any special or local act." Maneros has an SR license that was originally issued in 1952 "per general law and not pursuant to any special or local act." As applicants applying to delinquently renew their SR licenses, Petitioners are substantially affected by DABT's "new policy" that SR licenses cannot be delinquently renewed because they have not been in "continuous operation," as that term is used in Section 561.20(5), Florida Statutes. Their applications for the delinquent renewal of their licenses would have been approved had the status quo been maintained and this "new policy" not been implemented. Abkey filed its application (on DABT Form 6015) for the delinquent renewal of its SR license (which had been due for renewal on March 31, 2005) on February 21, 2007. On the application form, Abkey gave the following "explanation for not having renewed during the renewal period": "Building was sold. Lost our lease." On April 2, 2007, DABT issued a Notice of Intent to Deny Abkey's application. DABT's notice gave the following reason for its intended action: The request for delinquent renewal of this license is denied. Florida Statute 561.20(5) exempted restaurant licenses issued prior to January 1, 1958 from operating under the provisions in 561.20(4) as long as the place of business was in continuous operation. This business failed to renew its license on or before March 31, 2005, therefore it did not comply with the requirements and is no longer valid. Maneros filed its application (on DABT Form 6015) for the delinquent renewal of its SR license (which had been due for renewal on March 31, 2005) on June 4, 2007. On the application form, Maneros gave no "explanation for not having renewed during the renewal period"; however, the application was accompanied by a letter from a Maneros representative, which read, in pertinent part, as follows: I am today submitting a delinquent renewal application for the above-referenced alcoholic beverage license. The building has been demolished, and there is a vacant lot at the site at this time. Redevelopment is scheduled for this area, and I expect new construction to begin shortly. The license was first issued to this location 55 years ago. I have inquired with the City of Hallandale Beach, Florida, and there remains a question as to whether zoning approval for this type of alcoholic beverage license would be permitted under current uses once reconstruction is complete. The licensee of record wishes to reinstate and possibly use or transfer the license. . . . On June 8, 2007, DABT issued a Notice of Intent to Deny Maneros' application. DABT's notice gave the following reason for its intended action: The request for delinquent renewal of this license is denied. Florida Statute 561.20(5) exempted restaurant licenses issued prior to January 1, 1958 from operating under the provisions in 561.20(4) as long as the place of business was in continuous operation. This business failed to renew its license on or before March 31, 2005, therefore it did not comply with the requirements and is no longer valid. SR licenses will not be allowed to be moved from the location where the license was originally issued. Amy Cat filed its application (on DABT Form 6015) for the delinquent renewal of its SR license (which had been due for renewal on March 31, 1999) on December 6, 2006. On the application form, Amy Cat gave the following "explanation for not having renewed during the renewal period": "Building was closed." On June 8, 2007, DABT issued a Notice of Intent to Deny Amy Cat's application. DABT's notice gave the following reason for its intended action: The request for delinquent renewal of this license is denied. Florida Statute 561.20(5) exempted restaurant licenses issued prior to January 1, 1958 from operating under the provisions in 561.20(4) as long as the place of business was in continuous operation. This business failed to renew its license on or before March 31, 1999, therefore it did not comply with the requirements and is no longer valid. SR licenses will not be allowed to be moved from the location where the license was originally issued.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department issue a Final Order granting Petitioners' applications for the delinquent renewal of their SR licenses. DONE AND ENTERED this 30th day of April, 2008, in Tallahassee, Leon County, Florida. S STUART M. LERNER 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 30th day of April, 2008.
The Issue Whether Petitioner's application for an alcoholic beverage license should be granted or denied on the grounds stated in Respondent's letter of denial dated November 18, 1982.
Findings Of Fact During September, 1979, Del Percio was asked by an acquaintance of his in Orlando, Florida, Kenneth McCall, to assist in the running of a lounge which McCall owned there called "The Foxy Lady." Del Percio agreed to do this, and a written agreement was signed by the parties whereby Del Percio bought into a newly formed corporation, Success and Prosperity, Inc., with both Del Percio and McCall to each receive 50 percent of the corporate stock and with Del Percio to be president and McCall, vice president. Leonard P. Del Percio was a 50 percent owner of Success and Prosperity, Inc., and had the right and duty to manage the business operated by it called "The Shingle Shack." McCall was to have no management responsibilities. The Shingle Shack was the new name of the lounge owned previous to September, 1979, by Kenneth McCall known as "The Foxy Lady," which operated under license numbered 58-1076, at 3135 South Orange Avenue, Orlando, Florida. Notwithstanding Del Percio's allegation that his 50 percent ownership of the corporate stock was for his protection in managing the business, the stockholders' agreement signed on August 13, 1979, by both McCall and Petitioner reflects that Del Percio loaned McCall a certain amount of money and McCall sold Del Percio one-half of all the shares of the corporation for an amount equal to the loan. On September 13, 1979, Del Percio, as corporate president, filled out and signed various papers requesting that 2-COP license numbered 58-1076, issued in the name of Kenneth McCall, be transferred to Success and Prosperity, Inc., for a lounge called "The Shingle Shack" doing business at the same location as its predecessor business, The Foxy Lady, which was utilizing the license at that time. These application forms were never submitted to the appropriate authorities for transfer, and the license was never issued in Del Percio's name or the name of Success and Prosperity, Inc., although the business was formed and the lounge name was changed from The Foxy Lady to The Shingle Shack. Del Percio became actively engaged in management of the business during September, 1979. The license was to be the only asset of any major value to the corporation, but it never became an asset of the corporation. On April 20, 1980, Kenneth McCall signed a stipulation calling for the revocation of license numbered 58-1076 because of repeated violations of Florida Statutes taking place at the lounge in question during the month of November, 1979, and because of the failure to file the application for the transfer of the license after a bona fide sale of the business in whose name the license was issued.
Recommendation On the basis of the facts and conclusions above, it is RECOMMENDED: That Leonard P. Del Percio, doing business as the Yum Yum Tree, be issued a license as applied for. RECOMMENDED this 20th day of April, 1983, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings Department of Administration 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of April, 1983. COPIES FURNISHED: Mr. Leonard P. Del Percio Post Office Box 6202, Station A Daytona Beach, Florida 32022 James N. Watson, Jr., Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Mr. Howard M. Rasmussen Executive Director Division of Alcoholic Beverages and Tobacco Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Mr. Gary R. Rutledge Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 =================================================================
Findings Of Fact Cressie Ryles, t/a Ryles Place, holds a 1-COP beverage license which authorizes the sale of beer only for consumption on the licensed premises. On December 6, 1976 a beverage agent in company with an officer of the Tallahassee Police Department went to the vicinity of Ryles Place with one Guy Williams who entered Ryles Place while the officers watched from a vantage point across the street. Williams entered Ryles Place and asked Cressie Ryles for a half pint bottle of vodka. Shortly after Williams entered the licensed premises the officer saw Ms. Ryles come out of the premises, go to a car parked nearby, remove therefrom a small item and reenter the licensed premises. Williams then paid Ms. Ryles $2.50 for a half pint bottle of Taaka vodka with which he departed the licensed premises. Upon leaving Ryles Place Williams proceeded directly to the officers and delivered the bottle of vodka to them. The bottle was immediately marked for future identification and was duly produced and identified at the hearing. Having observed the location of the illicit liquor cache the officers proceeded back to their respective places of operation and on December 12, 1976, armed with a search warrant, returned to Ryles Place. On this occasion the premises and car were searched and in the car were found some 36 assorted half pints of Smirnoff vodka, Taaka vodka, and Canadian Club whiskey, which was seized, marked for identification and duly produced as evidence at the hearing. These beverages were admitted into evidence, described in the record and returned to the Division of Beverage.
Findings Of Fact From 1972 until 1982, Bay Street, Inc., a Florida corporation, held a COP-type quota liquor license for the operation of a bar known as Howard's G- String at 102 East Bay Street in Jacksonville, Florida. Arthur Eisen and Bobby Joe McClain were owners of the stock in Bay Street, Inc., and Howard's G-String was operated by McClain as manager. After Bay Street's liquor license was revoked in October 1982, for reasons not pertinent here, a beer and wine license was issued to Lloyd Barrow, McClain's father-in-law, for an operation at the same East Bay Street location. The owner of the building at 102 East Bay Street is Arthur Eisen. Lloyd Barrow pays Eisen $1,000 per week for rental of the premises. On June 14, 1983, pursuant to foreclosure, the liquor license held by Jax's Bar, Inc., doing business as Terminal Bar (the license at issue here), was sold for $28,500 on the Duval County Courthouse steps. Purchaser of the license was Karen Alford. The money used to make this purchase was a loan from Arthur Eisen. This loan was repaid by Karen Alford by means of an undated check numbered 4-0486533 drawn on the Hollywood Federal Savings and Loan Association in the amount of $28,500 payable to the order of Harry Katz Escrow Account. Mr. Katz, in turn, transferred the sum of $28,500 by his escrow account check numbered 4125 to the said Arthur Eisen on November 3, 1983. Ms. Alford purchased the Hollywood Federal check with money drawn from two other accounts at the Hollywood Federal Savings and Loan Association. One portion, totalling $19,528, came from account number 341343 in the name of Karen Alford as trustee for Rosemond Eisen. The additional amount of $9,761 was drawn from account number 387056. This latter account was a joint account in the names of Karen Alford and Rosemond Eisen. The $789 difference between the $29,289 (the total of the two components) and the $28,500 repayment check was deposited into a third account in the name of Karen Alford, account number 141730. Petitioner introduced a copy of certificate of deposit number 8590 dated June 8, 1978, in the name of Karen J. Alford in the amount of $55,761 which, on January 9, 1979, was redeposited into account number 341356, which reflected that Karen J. Alford was trustee for Rosemond Eisen as beneficiary. Accompanying that certificate and deposit card is a notarized statement dated February 27, 1984, from Alicia Dyce, assistant manager/assistant secretary of the Hollywood Federal Savings and Loan Association, which indicates that Karen J. Alford was the sole owner of certificate account number 341375. The statement further indicates that when an account reads "in trust for" (ITF) it is to designate a beneficiary in the case of the death of the owner of the account. The statement further says that if the account had been owned by both parties the account would have stated the two names connected by the word "and" and not "ITF." Ms. Alford contends that the $55,761 utilized to purchase the initial certificate of deposit from which the subsequent $28,500 payment was made came from a divorce settlement received from her estranged and former husband and not from Arthur Eisen. Respondent was unable to present any evidence to contradict this contention by Petitioner. There is, however, other evidence dealing with the business relationship between Ms. Alford, as president of the Petitioner corporation, and Bobby McClain and Arthur Eisen, as manager and landlord respectively, which causes some question to arise as to the true relationship between the parties. Ms. Alford contends that as a result of the business arrangement she was to receive a draw of $500 per week from the operation plus a return on the investment of $750 per month. On a four-week month, this would amount to a return of approximately $2,750. In addition, out of the operation Ms. Alford was to make weekly rental payments of $1,000 to Arthur Eisen and, at Eisen's suggestion, was to pay Bobby Joe McClain a salary of $500 per week and an automobile expense of $50 per week. McClain was to make daily bank deposits from the business proceeds and was to send Ms. Alford weekly computer printouts reflecting the income and expenses for the period. Only one of these computer printouts was introduced. Covering the period from January 30, 1984, through February 4, 1984, the printout showed a gross profit before expenses of $2,868.03 and expenses of $2,923.44, with a net loss of $55.41. However, using the figures contained on the printout and computing profit on the basis of gross sales less cost of goods sold reflects a gross profit of $2,722.43 which, when thereafter subtracting the weekly expenses of $2,923.44, reflects a net loss of $201.01. It should be noted that the weekly expenses include such items as rent of $1,000, payroll of $1,235.30, utilities of $243.08, sales tax of $195.06, and a miscellaneous payment of $250. If this printout is a representation of the continuing success of the business, it is obvious that Ms. Alford will never see her stated profit, much less a return of her investment, while Arthur Eisen is drawing $1,000 per week ($4,000 per month) in rent receipts and his former associate, McClain, is receiving a handsome income from the business as well. Taken together, these figures tend to raise an inference that not only Eisen, but McClain as well, has an interest in the business, which is supported by the evidence that it was Eisen who suggested the investment to Ms. Alford in the first place, made the investment for her using his own funds, and insisted that he not be repaid until the redemption time had expired on the license foreclosure. It is also noteworthy that Eisen was the individual who suggested to Ms. Alford that she hire Bobby Joe McClain to manage the bar; and, notwithstanding Ms. Alford's contention that she had known McClain for close to 20 years, the fact also remains that McClain was a former associate and co-owner of another bar with Arthur Eisen. There are other inconsistencies in Ms. Alford's testimony and in the Petitioner's case which give rise to a suspicion that Ms. Alford is not in fact the true "owner" of the business but that the entire transaction is a screen to hide the interest by Arthur Eisen who, because of his prior license revocation location, would be ineligible to hold this license. Ms. Alford indicated that she put the money in question in trust for her sister so that, if anything would happen to her, the sister, Miss Rosemond Eisen, would be able to retrieve the money and, at her discretion, distribute it to Ms. Alford's children. Ms. Alford contends that her children are not equipped to handle money of this magnitude, yet she relates that one is an investment counselor and stock broker and another son is a geophysicist. Another inconsistency is that Ms. Alford contends she has invested as much as $35,000 in this business; yet she does not know how many people were hired by McClain, she does not know on what account checks were written, the checking accounts involved were in McClain's name and not hers, and she does not even recall the name on the checks she received. She contends that while it was in operation the bar grossed between $4,000 and $4,200 a week; yet, as was shown previously, the one income statement introduced by Petitioner reflected a gross income of substantially less than that and a net loss. Ms. Alford further contends that she does not know from a review of the weekly computer printouts what the liquor expense was. Her reason for this was that her son, who she claims is incapable of handling inherited funds, would review all the submissions made by McClain. She further contends that she has visited the bar three or four times since it has been in operation but cannot recall when these visits were. She did not see the business before she invested her money in it but relied solely on the advice given her by her former brother-in-law, Arthur Eisen. By her own admission, it was Eisen who did all the preliminary work relative to buying the license and setting up the business without her, and she had no participation save for the investment of money until she came up to apply for the licenses, at which time she met and worked with Mr. Katz. Eisen contends he asked Ms. Alford to invest in this business because he knew she had the money and knew she would be receptive to it. He called her by telephone and told her he had a business proposition for her, and, when she indicated some interest, he went to Miami to see her and tell her about it. He told her how much it would cost and what she should earn if she made the investment and operated it properly. He told her that McClain would manage it for her and that he did not want to do it himself because of his extended interests in the Houston area, on which he wanted to concentrate. Eisen states he felt safe in representing McClain because they had worked together for 18 years previously and that his only participation in this business owned by Ms. Alford is the lease which brings him $1,000.00 per week. This was, he claims the primary motivation for the deal. Eisen contends no participation in the business, either operational or financial. Notwithstanding this denial, the overwhelming circumstantial evidence indicating otherwise prevails.
The Issue At issue in this proceeding is whether respondent committed the offenses set forth in the notice to show cause and, if so, what disciplinary action should be imposed.
Findings Of Fact At all times material hereto, respondent, Cesar J. Reyes, held alcoholic beverage license number 23-05034, series 2-COP, for the premises known as Busy Cafeteria Bar (the "premises"), located at 4601 West Flagler Street, Miami, Dade County, Florida. In November 1993, Special Agent Joe Lopez of the Division of Alcoholic Beverages and Tobacco, together with the assistance of a confidential informant (CI), began an undercover investigation of the premises. Such investigation was predicated on information Special Agent Lopez had received from federal authorities which indicated that narcotics were being sold upon the premises. On December 1, 1993, Special Agent Lopez and the CI entered the licensed premises. While inside the premises, the CI met with respondent and purchased a small plastic package containing 1/2 gram of cocaine for $30.00. On the same occasion, Special Agent Lopez met with respondent, and he also purchased a small plastic package containing 1/2 gram of cocaine for $30.00. 1/ On December 2, 1993, Special Agent Lopez and the CI returned to the licensed premises. While inside the licensed premises, they again met with respondent and purchased a small plastic package containing 1/2 gram of cocaine for $30.00. On December 7, 1993, Special Agent Brian Weiner of the Division of Alcoholic Beverages and Tobacco served respondent with an emergency order suspending his alcoholic beverage license, and placed respondent under arrest for the sale of cocaine. Incident to such arrest, Special Agent Weiner searched respondent's person and discovered six small plastic packages, each containing 1/2 gram of cocaine, in a small box tucked under respondent's waist band.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be rendered dismissing Counts 1 and 2 of the notice to show cause, finding respondent guilty of Counts 3, 4, 5 and 6 of the notice to show cause, and revoking respondent's alcoholic beverage license. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 28th day of December 1993. WILLIAM J. KENDRICK 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 1993.
