The Issue The primary issue in this disciplinary proceeding is whether Respondent, which operates a convenience store and sells alcoholic beverages on the premises under a license issued by Petitioner, permitted a sale of drug paraphernalia to occur in the store, in violation of the statutes governing holders of beverage licenses. If Petitioner proves the alleged violation, then it will be necessary to consider whether penalties should be imposed on Respondent.
Findings Of Fact At all relevant times, Respondent Moti's, Inc., d/b/a Continental Market ("Continental"), has held a license to sell alcoholic beverages at retail. Consequently, Continental is subject to the regulatory and disciplinary jurisdiction of Petitioner Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco (the "Division"). On December 12, 2006, two undercover agents of the Division, together with a detective from the Broward County Sheriff's Office, conducted a "sting" operation at the convenience store that Continental owns. The sting was arranged in response to complaints that the Sheriff's Office had received regarding sales of drug paraphernalia (specifically "crack pipes" used for smoking crack cocaine), which were allegedly taking place at this store. The purpose of the sting was to purchase a "crack pipe" and arrest anyone involved in the sale. Pursuant to the plan, Special Agent Ralius Thompson entered the store in an undercover capacity. He was wearing a "wire" (concealed microphone) and a hidden camera. These devices, which were monitored by the other agent and the detective (both of whom remained outside the store), allowed the ensuing transaction to be recorded on a videotape. Once inside, Thompson headed first to the cooler, where he took a six-pack of beer from the shelf. He then proceeded to the counter, to purchase the beer. As the clerk, Aziar Baig, was ringing up the sale, Thompson whispered, "Got any pipes? Got any pipes?"i Baig reached down behind the counter and pulled up a "love rose." (A love rose is a trinket, a tiny fake flower encased in a thin glass tube, which latter is about 4 inches long. Though the tube containing a love rose can be used as a pipe, love roses are not necessarily drug paraphernalia; they can be legally sold, purchased, and possessed.) "You're talking about here?" Baig asked, displaying a love rose. "Yeah, smoke my crack in, man, smoke my crack in," replied Thompson. "A pipe——got a stem?" "Huh?" said Baig. "A stem," repeated Thompson. (According to the evidence, the term "stem" is street talk for filter. Filter material is inserted in one end of the pipe to prevent the user from inhaling the burning cocaine "rock.") "This one?" Baig inquired, holding up a Chore Boy® copper scrubber. (Chore Boy® scrubbers are clearly legal merchandise having an obvious, non-nefarious purpose. According to the evidence, however, the metal in these pot scrubbers can be used illicitly as a crack pipe filter.) "Yeah," said Thompson, who then paid $6.75 for the items. Shortly after making this sale, Baig was arrested on the charge of delivering drug paraphernalia, which is a third- degree felony under Section 893.147(2), Florida Statutes. The evidence presented in this case is sufficient, for present purposes, to support the inference——which the undersigned draws——that Baig either knew or reasonably should have known that his customer (Thompson) intended to use the love rose and copper scrubber to fashion a makeshift crack pipe.ii Thus, it is determined, as a matter of ultimate fact, that Baig committed the crime of delivering drug paraphernalia. There is, on the other hand, no persuasive evidence (or any evidence of any quality, for that matter) establishing that the corporate licensee (as opposed to its employee Baig) committed any misconduct, e.g. negligent failure to train or supervise employees; failure to exercise due diligence in attempting to prevent unlawful sales; or fostering or condoning such sales, for which the Division could impose discipline against Continental pursuant to Section 561.29(1), Florida Statutes. It is determined, therefore, as a matter of ultimate fact, that Continental is not guilty of the pending charge, namely permitting the sale of drug paraphernalia on the licensed premises.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Division enter a final order finding Continental not guilty of the instant charge. DONE AND ENTERED this 17th day of October, 2007, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM 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.stae.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of October, 2007.
The Issue Respondents' alleged violation of Section 477.02(6), Florida Statutes.
Findings Of Fact Respondents received a copy of the Administrative Complaint and Notice of Hearing as evidenced by receipt for certified mail. (Exhibit 1) Respondents Arvle and Malvey Sue Kiser operate Golden Touch Coiffeurs, 901 Fillmore Avenue, Lehigh Acres, Florida under Certificate of Registration to operate a cosmetology salon No. 20014 issued by Petitioner on May 27, 1974. On June 13, 1975, Petitioner's inspector visited Respondents' establishment and observed Pearl Raulerson Curry washing the hair of a patron. When asked if she had a Florida license to practice cosmetology, Curry responded that she did not have one. At that time Malvey Kiser informed the inspector that Curry was going to take the test for a license. Kiser knew that Curry didn't have one at that time. (Testimony of Rubin) Respondent Malvey Sue Kiser submitted a written statement in which she claims that the law requiring a licensed person to perform specialist duties in a beauty salon is discriminatory because the same requirement is not imposed on persons performing the same services in barber shops. In her statement she acknowledged that she was aware that the employee Curry did not possess a current license when she was permitted to work in the salon, and that she hired Curry only after having made unavailing complaints of discrimination to various state officials and an attorney. The result was that she decided to challenge the law in question. She further states that she did not receive a quick and speedy hearing which, in turn, weakened her defense inasmuch as witnesses were no longer available. She also claims that the Notice of Violation given to her on June 13th was misleading in that it stated that failure to cure the alleged violation might result in additional disciplinary proceedings or other legal penalties. She therefore believed that if she complied by insuring that the employee became licensed there would be no further proceedings. (Statement of Malvey Kiser)
Recommendation That Respondents' Arvle and Malvey Sue Kiser be issued a written reprimand for violation of Section 477.02(6), Florida Statutes. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Ronald C. LaFace, Esquire Arvle and Malvey Sue Kiser P.O. Box 1752 c/o Golden Touch Coiffeurs Tallahassee, Florida 901 Fillmore Avenue Lehigh Acres, Florida
The Issue The Division of Beverage seeks to assess a civil penalty against, or to suspend or revoke beverage license 23-748 issued to Respondent setting forth the following two reasons as alleged in the administrative complaint: 1/ That on June 2, 1975, investigation revealed that Respondent failed to disclose an interest of Daniel Guthry, in its sworn application dated February 4, 1971, contrary to Section 561.17, Florida Statutes. That, on or about June 16, 1975, investigation revealed that Respondent conspired to violate the beverage laws by permitting a person found not qualified, to engage in the business of selling or dealing in any way in alcoholic beverages, contrary to Florida Statutes, 562.23 to wit, Florida Statutes 561.17. Based upon my observation of the witnesses and their demeanor while testifying, I make the following:
Findings Of Fact Florence Fitzgerald is the mother of Daniel Guthry. Mr. Guthry is a graduate of the Cornell Hotel and Restaurant School and a graduate of the Miami Law School. While a student at the University of Miami Law School, Guthry opened a small restaurant known as the Ale House which was a college pub. It was successful until sometime in 1965 when a civil law suit was filed and the Ale House was closed. The contention of the Petitioner is that Guthry owned 100 percent of Specialty Taverns of America, Inc., and that he attempted to transfer the license from the Ale House to the Stable which was a restaurant located on 79th Street which was then owned by a Virginia Mariani. 2/ Petitioner alleges that Guthry attempted to effectuate this transfer while he had been previously denied a license based on a prior beverage law violation during his operation of the Ale House. Petitioner introduced checks indicating that Guthry had drawn checks to pay for salaries, beer and wine and other day to day operations of The Depot. Daniel Guthry was also the owner of Collegiate Marketing and Petitioner contends that Collegiate Marketing and Specialty Taverns, Inc., are interrelated corporations and through this interrelationship, bills are paid for The Depot. Evidence was also introduced indicating that Guthry paid bills for both Collegiate Marketing and The Depot including phone bills and other personal items such as parking tickets, haircuts, medical and dental expenditures, property taxes, repair bills, stocks and other incidental items. The contention is further made that Guthry holds himself out as being the owner of The Depot and that while he operated the Stable, he wanted a 4-COP license which is a license which allows the licensee to sell mixed drinks, beer and wine whereas he then owned a 2-COP license which only permitted him to sell beer and wine. A check was also introduced by Petitioner indicating that Guthry had drawn a check for $1,000 in payment to his mother, Mrs. Fitzgerald. Finally, the contention is made that by these acts, Guthry has free control of The Depot for all receivables and that there is absolutely no control by Fitzgerald over the licensed premises. It is further alleged that Guthry advised several persons including suppliers that he was the owner of The Depot. At the conclusion of the Petitioner's case, Respondent moved for a dismissal based on an allegation that Petitioner had advanced no evidence indicating that there was a conspiracy nor was there any evidence of any intent or interest on the part of Daniel Guthry. The undersigned denied the motion for dismissal inasmuch as there was, at least in the undersigned's opinion, sufficient evidence to indicate that a prima facie case had been established. Richard H. W. Maloy, an attorney practicing since 1953 in Dade County, Florida, indicated that he has represented Florence Fitzgerald in sundry matters since 1968 and he also represented Daniel Guthry during the late 1960's. Guthry approached Maloy sometime in the early `70's about forming a corporation to purchase the license on 79th Street (The Stable). Maloy checked with the Secretary of State to see if the corporate name, Specialty Taverns, Inc., was available and when he determined that it was, articles were drawn up showing that Guthry owned 80 percent of the shares while Maloy owned 10 percent and another undisclosed person owned the remaining 10 percent. The corporation was formed on February 4, 1970. According to Maloy, Guthry wanted to make application immediately with the Division of Beverage to effectuate a transfer and personal data forms were submitted on Guthry, Mr. Hanson and Mr. Maloy to the Division of Beverage. On February 5, 1970, a signed application was submitted to the Division of Beverage and on the following day a health inspection was made of the premises. Maloy was advised on February 11, that the stock was to be transferred to Fitzgerald and not Guthry. It should be noted that at that point, the license transfer application had been filed. This advice came to Maloy via a telephone call from Mrs. Fitzgerald who advised that she had tendered all the money and was liable for all the other obligations for the premises in question. At that time, all stock rights were given to Mrs. Fitzgerald and while Guthry remained as president, he owned no stock. He testified that he was unaware that Guthry had previously made application to the Division of Beverage and had been rejected when the above referenced application was submitted. According to the evidence, that application was filed on or about February 20, 1970 and Guthry listed himself as being the owner of the Stable. A report was rendered to the Division of Beverage on April 3, 1970, indicating that Guthry had violated the beverage laws while he operated the Ale House in the late 1960's. Maloy received a certified copy of Guthry's beverage violation at the Ale House on April 17, 1970. The Division of Beverage denied his application on May 12. Mr. Kimbrow advised Maloy that since Mrs. Fitzgerald owned all the stock etc., that she should submit her application for the license transfer and this was done on February 4, 1971. On May 22, 1970, Guthry resigned as president of Specialty Taverns of America, Inc. On April 14, 1971, the transfer application was approved and it was transferred from Mrs. Morioni, the prior owner to Mrs. Fitzgerald. On October 1, 1971, the license fee of $1,750 was paid. The license was held in escrow until February 11, 1972. During the period February to May of 1972, plans were made by Fitzgerald to purchase the restaurant and during that period, all ideas regarding its operation were formulated by Guthry. Maloy testified that he frequents the restaurant on a regular basis and he has witnessed both Daniel Guthry and Mrs. Fitzgerald present and he is personally aware that Mrs. Fitzgerald is the sole owner of the Depot's stock. He also testified that Guthry exercises managerial authority. Mrs. Fitzgerald testified that she is very active in the business and she hires and fires employees. She maintained records of checks and reconciles all cancelled checks. She owns the company outright and purchased it in part by obligating herself for a $50,000 mortgage from the First National Bank of South Miami. She testified that her son Daniel Guthry, only manages the restaurant. She testified that while he manages the restaurant, she maintains absolute control over the entire operation and that Guthry received no benefit from the appreciation of the business. Guthry testified that the Depot was opened on February 8, 1974. He testified that he can only hire and fire employees with his mother's consent and that he never invested any money in the Depot. Arnold Hampton, a certified public accountant, for the Depot, testified that the corporation has had a net loss carried forward at least since 1974, and that Fitzgerald advanced loans to the corporation on an as needed basis. He testified that checks were used to repay the loans that she had advanced, which according to him were the checks received into evidence. Barry Tamlon, an employee at the Depot and a prior employee of the Ale House since 1966, testified that he was the former manager of the Ale House. He testified that Fitzgerald manages the Depot on a continuous basis and that Guthry does so incidentally, during his extensive travels on an intermittent basis. Mrs. Fitzgerald testified that her son only derives prestige and fulfillment from operating a successful restaurant but that he receives no economic compensation other than incidental expenses. In conclusion she testified that he received no profits from the corporation and has no obligations to repay any of its bills. Based on the above facts, the undersigned finds that there is insufficient evidence to establish that Mrs. Florence Fitzgerald and her son Daniel Guthry engaged in a conspiracy to violate the beverage laws as alleged or that Respondent failed to disclose the interest of Daniel Guthry. It is clear from evidence introduced that Guthry has no ownership or other interest in the licensed premises. Mrs. Fitzgerald whose testimony as corroborated by Maloy lends support for Respondent's claim that Mrs. Fitzgerald is the sole owner of approximately eighty percent (80 percent) of the Depot's stock. While the evidence indicates that Guthry manages the Depot apparently without much restriction from Mrs. Fitzgerald, there has been no showing and no claim is made by Petitioner that a person who has previously violated a beverage law is incapable of managing a restaurant that has a beverage license. Based on these findings, I therefore conclude that Petitioner has failed to establish that Respondent has engaged in the conduct as alleged in its administrative complaint. I shall therefore recommend that it be dismissed in its entirety.
Recommendation Based on the above finding and conclusions, I recommend that the complaint filed herein be dismissed in its entirety. DONE and ENTERED this 21st day of September, 1976, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675
The Issue The issue in this case is whether certain statements by officials of Respondent Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco (ABT), constitute an unpromulgated rule that is invalid pursuant to Subsection 120.54(1)(a), Florida Statutes (2006).1/
Findings Of Fact The Parties Petitioner TWM is a licensed retail vendor of alcoholic beverages. It operates nine stores in Florida that sell alcoholic beverages, including distilled spirits, by the package. Respondent ABT is the state agency authorized by Section 561.02, Florida Statutes, to regulate the alcoholic beverage industry, including manufacturers, distributors and vendors of alcoholic beverages within the State of Florida. Intervenor ABC is a licensed retail vendor of alcoholic beverages, holding in excess of 100 licenses authorizing the sale of alcoholic beverages, including distilled spirits, by the package. The Alleged Unpromulgated Rule Florida has a three-tiered system of alcoholic beverage distribution. Manufacturers produce the product and sell to distributors, distributors sell the product at wholesale to licensed vendors, and vendors sell the product to the general public at retail. §§ 561.14(1)-(3), Fla. Stat. The term "in-store servicing" refers generally to activities by distributors or manufacturers on the vendor's premises, such as placing stock on shelves, rotating stock, and affixing prices. On April 4, 2007, Renee Alsobrook emailed a message to John Harris, a governmental consultant, which included the following statement: In researching the coupon rule, I reviewed prior opinions I had provided and determined that this opinion provided to you in March, 2006, was wrong. I WAS WRONG. Section 561.424, F.S., clearly excludes in-store servicing of distilled spirits. Please communicate the position of ABT to your wholesalers and Trone. On April 24, 2007, Stephen Hougland emailed the following message to Mr. Harris: John, after considerable research and consultation, ABT's opinion is that FL law does not permit in-store servicing for spirits. I'd be glad to talk to you about the decision as I am sure you are concerned about the impact on your clients. These two email messages were cited by TWM in its Petition as expressions of a new policy that has not been adopted as a rule and is, therefore, invalid and unenforceable. In the course of discovery, other written statements by ABT employees were found that were also made in April 2007, which TWM contends are expressions of the new policy. In a letter dated April 9, 2007, from Lisa Comingore, assistant general counsel for DBPR, to Charles Bailes of ABC, Ms. Comingore states: Wholesalers and manufacturers of distilled spirits are not authorized to provide in- store servicing by section 561.424, Florida Statutes and would be providing aid to retailers in the form of providing labor for the retailer. Such aid to the retailer could constitute a violation of section 561.42, Florida Statutes. In a letter dated April 30, 2007, from Director Hougland to Mr. and Mrs. John Schaeffer of Great Spirits Liquor & Fine Wine, Director Hougland states: Florida law allows in-store servicing of beer and malt beverages as well as vinous beverages, however, in-store servicing of distilled spirits is not authorized . . . Section 561.424(2), Florida Statutes, specifically excludes in-store servicing of distilled spirits. Wholesalers and manufacturers of distilled spirits are not authorized to provide in- store servicing by section 561.424, Florida Statutes and would be providing aid to retailers in the form of providing labor for the retailer. Such aid to the retailer could constitute a violation of section 561.42, Florida Statutes. The Governing Statutes The federal government and many states, including Florida, enacted "Tied House Evil" laws to prevent the "evils" that arose from relationships between vendors of alcoholic beverages and manufacturers and distributors which caused the vendors to be controlled by or "tied" to the distributors and manufacturers. Winn Dixie Stores, Inc., v. Schenck Co., 662 So. 2d 1021, 1023 (Fla. 5th DCA 1995); Musleh v. Fulton Distributing Co. of Florida, 254 So. 2d 815, 817 (Fla. 1st DCA 1971). Florida's Tied House Evil law, set forth in Subsection 561.42(1), Florida Statutes, provides: No licensed manufacturer or distributor of any of the beverages herein referred to shall have any financial interest, directly or indirectly, in the establishment or business of any vendor licensed under the beverage laws; nor shall such licensed manufacturer or distributor assist any vendor by any gifts or loans of money or property of any description or by the giving of any rebates of any kind whatsoever. No licensed vendor shall accept, directly or indirectly, any gift or loan of money or property of any description or any rebates from any such licensed manufacturer or distributor; provided, however, that this does not apply to any bottles, barrels, or other containers necessary for the legitimate transportation of such beverages or to advertising materials and does not apply to the extension of credit, for liquors sold, made strictly in compliance with the provisions of this section. ABT contends that Subsection 561.42(1), Florida Statutes, prohibits in-store servicing of alcoholic beverages by distributors or manufacturers because it constitutes a gift of "free labor" to the vendor. TWM does not dispute ABT's interpretation of Subsection 561.42(1), Florida Statutes, as prohibiting in-store servicing as a form of gift, but TWM contends that subsequent legislation resulted in the removal of the prohibition. In 1975, Section 561.423, Florida Statutes, created an exception for in-store servicing of beer and malt beverages: Nothing in s. 561.42 or any other provision of the Beverage Law shall prohibit a distributor of beer or malt beverages from providing in-store servicing of malt beverages. "In-store servicing" as used herein means quality control procedures which include, but are not limited to: rotation of malt beverages on the vendor's shelves, rotation and placing of malt beverages in vendor's coolers, proper stacking and maintenance of appearance and display of malt beverages on vendor's shelves, price stamping of malt beverages on vendor's licensed premises, and moving or resetting any product or display in order to display a distributor's own product when authorized by the vendor. In 1977, Subsection 561.424(2), Florida Statutes, created an exception for in-store servicing of wine: Nothing in s. 561.42 or any other provision of the Alcoholic Beverage Law shall prohibit a distributor of wine from providing in- store servicing of wine sold by such distributor to a vendor. "In-store servicing" as used herein means: placing the wine on the vendor's shelves and maintaining the appearance and display of said wine on the vendor's shelves in the vendor's licensed premises; placing the wine not so shelved or displayed in a storage area designated by the vendor, which is located in the vendor's licensed premises; rotation of vinous beverages; and price stamping of vinous beverages in a vendor's licensed premises. This section shall not apply to distilled spirits. (Emphasis added) No similar statute was created to expressly authorize in-store servicing of distilled spirits by distributors. After the enactment of Section 561.423 and Subsection 561.424(2), Florida Statutes, there should have been little doubt that the Tied House Evil law was intended by the Legislature to prohibit in-store servicing of alcoholic beverages and that only by express exception was in-store servicing of beer and wine by distributors permitted.2/ The only evidence in the record that tends to explain why distilled spirits were treated differently from beer and wine with regard to in-store servicing is a statement made by Charles Bailes of ABC in a letter to Ms. Alsobrook that, "Historically, in-store servicing of perishable products such as wine and beer have been allowed so as to maximize freshness and minimize the chances of consumers purchasing spoiled merchandise." Mr. Bailes goes on to state that distilled spirits are not perishable. Florida Administrative Code Rule 7A-4.058 The main cause of the current confusion about in-store servicing of distilled spirits can be traced to a rule adopted by ABT in 1985. The year before, Subsection 561.42(12), Florida Statutes, was amended to add the following directive: The Division shall make reasonable rules governing promotional displays and advertising, which rules shall not conflict with or be more stringent than the federal regulations pertaining to such promotional displays and advertising furnished vendors by distributors and manufacturers. ABT responded by promulgating Florida Administrative Code Rule 7A-4.058, entitled "Promotional Displays and Advertising," effective January 2, 1985. The rule adopted certain federal regulations by reference: The Division adopts by reference the provisions of subpart D, Chapter 6, of Title 27, Code of Federal Regulations, regulations 6.81 through 6.101 inclusive. It shall be a violation of Section 561.42, F.S., for any vendor to accept or for any manufacturer or distributor to give a retailer promotional displays, advertising or other such items, services or assistance governed by the regulations adopted by subsection (1) when given in a manner not in strict conformity with the adopted regulations. Subpart D was entitled "Exceptions" and established exceptions to the federal Tied House Evil law. It included exceptions clearly related to promotional displays and advertising, such as "Product Displays," "Inside Signs," "Retailer Advertising Specialties," "Consumer Advertising Specialties," and "Advertising Services." However, Subpart D also included exceptions on subjects that did not appear to involve promotional displays or advertising, such as "Educational Seminars" (for the employees of vendors), "Participation in Retailer Association Activities," "Joint Ventures," "Coil Cleaning Service," and "Stocking, Rotation and Pricing Services." Section 6.99 of the federal regulations, entitled "Stocking, Rotation and Pricing Services," provided: Industry members may, at a retail establishment, stock, rotate and affix the price to distilled spirits, wine, or malt beverages which they sell, provided products of other industry members are not altered or disturbed. The rearranging or resetting of all or part of a store or liquor department is not hereby authorized. Because stocking, rotation, and pricing services are synonymous with in-store servicing, ABT's adoption of Section 6.99 by reference in Florida Administrative Code Rule 7A-4.058 authorized in-store servicing of distilled spirits by distributors and manufacturers in Florida, in apparent conflict with the governing statutes. The adoption by reference of Section 6.99 also conflicted with Section 561.423 and Subsection 561.424(2), Florida Statutes, because these statutes only authorized in-store servicing of beer and wine by distributors, but the federal regulation authorized in-store servicing by "industry members," a term that includes manufacturers. Soon after the adoption of Florida Administrative Code Rule 7A-5.048, ABT's 1986 compliance guidelines included a statement that "27 CFR 6.99 and F.S.S. 561.424" authorize "manufacturers or distributors of distilled spirits or wine to stock, rotate and affix the price to their products at a licensed retailer's premises." ABT's 1988, 1993, and 1995 compliance guidelines contained the same statement.3/ Promotional Displays and Advertising The term "promotional displays and advertising" is not defined in Chapter 561, Florida Statutes, but insight into the Legislature's intended meaning for the term can be gleaned from the 1985 amendment of Subsection 561.42(12), Florida Statutes. Following the sentence that directs ABT to adopt rules regarding promotional displays and advertising, the 1985 amendment added "provided, however," followed by eight new paragraphs dealing with specific situations involving promotional displays and advertising: If a manufacturer or distributor of malt beverage provides a vendor with expendable retailer advertising specialties such as trays, coasters, mats, menu cards, napkins, cups, glasses, thermometers, and the like, such items shall be sold at a price not less than the actual cost to the industry member who initially purchased them, without limitation in total dollar value of such items sold to a vendor. Without limitation in total dollar value of such items provided to a vendor, a manufacturer or distributor of malt beverage may rent, loan without charge for an indefinite duration, or sell durable retailer advertising specialties such as clocks, pool table lights, and the like, which bear advertising matter. If a manufacturer or distributor of malt beverage provides a vendor with consumer advertising specialties such as ashtrays, T-shirts, bottle openers, shopping bags, and the like, such items shall be sold at a price not less than the actual cost to the industry member who initially purchased them, but may be sold without limitation in total value of such items sold to a vendor. A manufacturer or distributor of malt beverage may provide consumer advertising specialties described in paragraph (c) to consumers on any vendor’s licensed premises. Coupons redeemable by vendors shall not be furnished by distributors of beer to consumers. Manufacturers or distributors of beer shall not conduct any sampling activities that include tasting of their product at a vendor’s premises licensed for off-premises sales only. Manufacturers and distributors of beer shall not engage in cooperative advertising with vendors. Distributors of beer may sell to vendors draft equipment and tapping accessories at a price not less than the cost to the industry member who initially purchased them, except there is no required charge, and a distributor may exchange any parts which are not compatible with a competitor’s system and are necessary to dispense the distributor’s brands. A distributor of beer may furnish to a vendor at no charge replacement parts of nominal intrinsic value, including, but not limited to, washers, gaskets, tail pieces, hoses, hose connections, clamps, plungers, and tap markers. None of the examples in the statute suggest that in-store servicing of alcoholic beverages comes within the Legislature's intended meaning of promotional displays and advertising. The common meanings of the words "stocking," "rotation," and "pricing" do not match up with the common meanings of the words "promotional displays" and "advertising." As noted above, there were other federal exceptions adopted by reference in Florida Administrative Code Rule 7A-4.058 that involved neither promotional displays nor advertising. ABT offered no explanation for the agency's indiscriminate adoption by reference of all the federal regulations in Subpart D, including those regulations that were not related to promotional displays and advertising. ABT now acknowledges that the 1985 rule was "non-compliant" with statutory law. TWM presented no evidence to show that stocking, rotation, and pricing are, as a matter of fact, forms of promotional displays or advertising. Instead, TWM argues that ABT's 1985 adoption by reference of Section 6.99 and ABT's subsequent representations that in-store servicing of distilled spirits was authorized in Florida, "determined" and "defined" in-store servicing as a promotional display or advertising. ABT changed its position sometime after 1995. In 1997, ABT repealed Florida Administrative Code Rule 7A-4.058 (which had been renumbered 61A-4.058). Although ABT replaced that rule with a new rule that regulated promotional displays and advertising, the new rule did not adopt any federal regulations by reference and the subject of stocking, rotation, and pricing services was abandoned, along with some of the other subjects covered by the federal regulations previously adopted by reference.4/ ABT's repeal of Florida Administrative Code Rule 61A-4.058 and its adoption of Florida Administrative Code Rule 61A-1.010 in 1977 was announced in public notices published in the Florida Administrative Weekly and through industry bulletins. Two public hearings were held on Florida Administrative Code Rule 61A-1.010, which were attended by industry representatives. The rule prohibited any gift from distributors or manufacturers to vendors that was not specifically identified in the rule or specifically authorized by statute. In-store servicing of distilled spirits is not listed in the rule and, as discussed above, is not specifically authorized by statute. In 1998, ABT issued an industry bulletin to industry representatives on the specific subject of in-store servicing. The bulletin notes that there is no statutory exception for in-store servicing of distilled spirits as there is for beer and wine and states that "Unauthorized services to a vendor would be considered a gift of financial assistance, unless the vendor paid for the services provided to them [sic]." The 1998 bulletin concludes by stating that because of the "confusion about these in-store servicing provisions," no enforcement action would be taken against a vendor, distributor, or manufacturer for unauthorized services provided before the date of the bulletin. After the 1997 repeal of Florida Administrative Code Rule 61A-4.058, the main cause of confusion on the subject of in-store servicing of distilled spirits had been removed. However, the 1998 bulletin and any other efforts ABT made to inform and educate the regulated industry about its change of position were not completely successful. In-store servicing of distilled spirits by distributors continues to some extent today.5/ ABT does not dispute that the prohibition of in-store servicing of distilled spirits has general statewide application and that rulemaking on the subject is not infeasible or impractical. ABT's position is that the prohibition of in-store servicing of distilled spirits does not require a rule because the prohibition is established by statute.
The Issue Whether Judy Limekiller (Respondent) committed the violation alleged in the Administrative Complaint dated August 30, 2012, and, if so, what penalty should be imposed.
Findings Of Fact Petitioner is an agency of the State of Florida created by section 20.165, Florida Statutes. Petitioner is charged with the responsibility of regulating the real estate industry in Florida pursuant to chapters 455 and 475, Florida Statutes. As such, Petitioner is fully authorized to prosecute disciplinary cases against real estate licensees. Respondent was at all times material to this matter, the holder of a Florida real estate license, license number 3131887. At all times material to the allegations of this case Respondent was an active sales associate with Michael Saunders and Company. Respondent’s address of record is 1529 Pelican Point Drive, HA 205, Sarasota, Florida. In January 2012, Respondent was a sales associate handling a transaction with Regina Zahofnik (Ms. Zahofnik). Ms. Zahofnik was the seller of property located at 4527 MacEachen Boulevard, Sarasota, Florida. Respondent admits she signed Ms. Zahofnik’s name to a Cancellation of Contract and Release. Respondent did not have written authorization to sign for Ms. Zahofnik. Instead, she maintains Ms. Zahofnik gave her verbal authority to sign the document. In February 2012, Respondent was a sales associate handling a transaction with Lynda Kravitz. Ms. Kravitz was the seller of property located at 1526 Pelican Point Drive, BA 147, Sarasota, Florida. Respondent signed Ms. Kravitz’ name to a Seller’s Property Disclosure Statement. Ms. Kravitz did not authorize Respondent to sign the document. In February 2012, Respondent was a sales associate handling a transaction with Cherryne Kravitz. Ms. Kravitz was the seller of property located at 1526 Pelican Point Drive, BA 147, Sarasota, Florida. On or about February 10, 2012, Respondent signed Ms. Kravitz’ name to a Residential Contract for Sale and Purchase. Ms. Kravitz did not authorize Respondent to sign the document. In all situations, Respondent believed she was authorized to sign the documents. She claims either e-mail or text message gave her the go-ahead to sign documents so that they could be timely processed. In the case of Ms. Zahofnik, the “deal was dead” and could not close. Since the buyer elected to walk away from the purchase when the seller could not complete the transaction, Respondent maintains that no party was injured by the signing of the document and that by doing so the refund to the buyer was processed. In the case of the Kravitz sale, Respondent signed the property disclosure because she knew the property better than the sellers and an expedited completion of the paperwork was requested. Again, Respondent states Ms. Kravitz authorized the signature. And with regard to the signing of the contract, Respondent asserts that Ms. Kravitz was slow to return the contract and that she was getting pressure from the other Ms. Kravitz to get the paperwork completed. Eventually, both Kravitz daughters signed the contract. Respondent does not deny signing the contract. As a result of the allegations of this case, Michael Saunders and Company incurred expenses and lost commissions. Petitioner did not present evidence regarding the cost of investigating this matter.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Florida Real Estate Commission finding Respondent in violation of the provision of law set forth in the Administrative Complaint as alleged by Petitioner, imposing an administrative fine in the amount of $2,500.00, and imposing a suspension of Respondent’s real estate license for a period of 30 days, with probation to follow for such period of time as the commission deems appropriate. DONE AND ENTERED this 21st day of June, 2013, in Tallahassee, Leon County, Florida. S J. D. PARRISH 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 21st day of June, 2013. COPIES FURNISHED: Susan Leigh Matchett, Esquire Department of Business and Professional Regulation Suite 42 1940 North Monroe Street Tallahassee, Florida 32399 James P. Harwood, Esquire James Harwood, P.A. Suite 106 1277 North Semoran Boulevard Orlando, Florida 32807 J. Layne Smith, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Juana Watkins, Director Division of Real Estate 400 West Robinson Street, Suite N801 Orlando, Florida 32801 Darla Furst, Chair Real Estate Commission Department of Business and Professional Regulation 400 West Robinson Street, Suite N801 Orlando, Florida 32801
The Issue The issue in this case is whether disciplinary action should be taken against Respondent's contractor's license based upon the alleged violations of Sections 489.129(1)(h) and (m), Florida Statutes, set forth in the Administrative Complaint.
Findings Of Fact Based upon the oral and documentary evidence adduced at the hearing and the entire record in this proceeding, the following findings of fact are made. At all times pertinent to this proceeding, Respondent was licensed by the Construction Industry Licensing Board (the "Board") as a certified general contractor having been issued License No. CG C024612. Respondent has been a licensed contractor since 1983. On May 3, 1991, the Board filed a Final Order in Board Case Nos. 89-009986 and 89-013330 imposing a reprimand against Respondent. The Final Order was issued as part of the settlement of an amended administrative complaint filed against Respondent by Petitioner regarding certain unrelated transactions. Respondent was the qualifying agent for Willie William Construction Company, Inc. until October 1985. At that time, as a result of a corporate name change, Respondent became the qualified agent for Ashar Construction Company. On February 21, 1985, the Unsafe Structures Board of the Building and Zoning Department for Dade County advised Ruby Delancy that a hearing would be conducted on March 12, 1985 to determine whether a one story framed residence that Mrs. Delancy owned at 1005 NW 58th Street in Miami (the "House" or the "Property") should be demolished. The Notice indicated that the structure was "open, vacant, vandalized, filled with combustible materials; posing a serious fire hazard. Structure is a danger to human life and public welfare." The Notice estimated the present value of the building at $16,080 and the estimated cost of repairs at $51,120. The County's records indicate that a Notice of Violation regarding the Property had been issued to the owner on October 31, 1984. Facing imminent demolition of the House, Mrs. Delancy began to investigate possible ways to get the House repaired. She filed an application with the City of Miami for a low income, low interest loan that was funded through Federal HUD Community Development Funds. Her efforts to obtain funding to repair the House, delayed the proceedings that had been initiated to demolish the structure. In September of 1985, the City approved Mrs. Delancy for a grant of $10,000 and loan of $20,000 to repair the House. Mrs. Delancy has no other funds to pay for repairs to the Property other than the $30,000 she was obtaining through the City Program. Under the City's program, Mrs. Delancy was responsible for selecting a contractor. Mrs. Delancy contacted Respondent, who inspected the Property and prepared a construction estimate which was submitted to the City. Respondent entered into a contract (the "Contract") dated September 20, 1985 with Mrs. Delancy for home improvement work on the House. The total contract price was $29,870, which was to be paid in two installments: $10,835 on or before December 31, 1985 and a final payment of $19,035 on or before March 3, 1986. The evidence established that Respondent was initially reluctant to enter into the Contract and at least two other contractors refused to undertake the work given the limited funds available. However, Respondent agreed to take the job because of Mrs. Delancy's insistence and because of Respondent's sympathy for Mrs. Delancy's desperate situation in view of the imminent demolition of the House. The evidence also established that Mrs. Delancy requested Respondent to undertake additional work and/or services that were beyond the scope of the Contract. Among the extra items undertaken by Respondent was replacement of the floor in the family room. Additional expenses were also incurred because of unanticipated problems encountered during the renovation. For example one side of the house gave way during the renovation work. Upon investigation, it was discovered that there was no footing. Respondent was required to shore up that side of the House. In addition, the electrician was unable to get a meter because there was an outstanding electric bill for the Property. Respondent paid the old bill in order to get the meter connected. Similarly, she paid the gas company to get the stove hooked up. It does not appear Respondent received any additional compensation for the extra work. Except for $345 that Respondent paid for utilities on behalf of Mrs. Delancy, the evidence at the hearing was insufficient to place a dollar value on these extra services and expenses. The first installment under the Contract of $10,835 was paid to Respondent on or about December 31, 1985. In approximately January of 1986, Mrs. Delancy's son, Gerald Delancy, who had been living out of the state, returned to Miami and became involved in overseeing the construction on behalf of his mother. Gerald Delancy was not pleased with the quality of the construction and a great deal of tension developed between Gerald Delancy and Respondent. The final payment request form was submitted on February 20, 1986. Mrs. Delancy signed a document (the "Certificate of Completeness") indicating that the work was completed and the final payment was made to Respondent by the City on March 3, 1986. Gerald Delancy was present when his mother signed the Certificate of Completeness. She signed this Certificate against the advice of her son. At the time the document was signed, Respondent agreed in principal to complete any remaining work. The City Inspection Form which was posted on the project fails to indicate that a final inspection approval was obtained from the City. In addition, the evidence established that required roof inspections were not obtained prior to the final structural inspection. Gerald Delancy prepared a punch list of items which he felt were incomplete and submitted it to Respondent. It does not appear that this list was prepared until July of 1986. Because of the dispute between Respondent and Gerald Delancy as to what was required under the Contract, a copy of the punch list was also sent to the City. The punch list prepared by Gerald Delancy included a number of items which were beyond the scope of the Contract. For example, with respect to the plumbing, the complaints included the following: the water pressure was to low on the water line, the kitchen sink was too small, and the bathroom vanity was substandard. The Contract did not provide for a bathroom vanity. There were also complaints about ants and roaches and "missing shower rods and towel racks" even though these items were not specifically included within the Contract between Respondent and Mrs. Delancy. The City sent its estimator to the House to review the punch list items. The City's estimator felt that Respondent should provide another coat of paint and should complete some other minor repair work, but the estimator did not concur in many of Gerald Delancy's complaints. The City's rehabilitation estimator met with Respondent and Gerald Delancy at the House on July 15, 1986. At that meeting, Respondent agreed to correct certain matters and asked for one month to complete the work. On August 1, 1986, the work was not completed and Respondent requested an additional 30 days. On August 13, 1986, Respondent stated that she did not have the money to complete the work. According to the City's estimator, the cost to repair the construction deficiencies he noted would be approximately $2,500 to $3,000 as of the date of the hearing. During this period in August, Respondent did send some workers back to the house to complete some additional work. A dispute arose between those workers and Gerald Delancy. The exact nature and reasons for this dispute are not clear. Ultimately, Gerald Delancy refused to allow the workers to perform any work because he did not feel he received adequate answers to his inquiries as to the nature of the work they intended to perform. After the City refused to concur in all of his complaints, Gerald Delancy hired a building inspection company. He paid that company $534 and it rendered a report dated August 4, 1986 which detailed many other deficiencies in the construction. It is not clear whether this report was ever presented to Respondent. On or about November 3, 1986, Mrs. Delancy, at the urging of her son, filed a lawsuit against Respondent. On or about August 8, 1989, Mrs. Delancy obtained a final default judgement against Respondent in the amount of $65,000 plus costs of $102.50. Respondent claims that she was unaware of the lawsuit and the default final judgement until Petitioner's investigator questioned her about it on September 25, 1990. As of the date of the hearing in this case, Respondent has not appealed the judgement nor has she attempted to have it set aside or vacated. In addition to alleged construction defects, the default judgement included claims against Respondent for allegedly mishandling certain household goods and other property owned by Mrs. Delancy. The evidence presented in this case was confusing and inconclusive as to the nature and justification for these claims by the Delancys for property which Respondent was allegedly storing for Mrs. Delancy. Apparently, Respondent agreed to assist Mrs. Delancy by moving some of the furniture out of the house and placing it in storage during construction. The contract did not require Respondent to provide any moving or storage services and there is no evidence that Respondent was paid for this work. Some or all of the property that was moved out of the house was lost, stolen or destroyed. There is a dispute between the parties as to circumstances surrounding the loss of this property. The evidence presented in this case was insufficient to establish what happened to the property, who was responsible for it and/or how much it was worth. It does appear that the default judgement against Respondent includes a very high assessment for the property involved. However, as noted above, that judgement has not been vacated or appealed.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered dismissing Count I of the Administrative Complaint, finding the Respondent guilty of having violated Section 489.129(1)(m), Florida Statutes, as alleged in Count II of the Administrative Complaint, and imposing the following disciplinary action against the Respondent: Imposition of an administrative fine of $1,000. Suspension of the Respondent's license for a period of one year, followed by two years probation under such terms as may be imposed by the Board. DONE and ENTERED this 22nd day of August, 1994, at Tallahassee, Florida. J. STEPHEN MENTON 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 22nd day of August, 1994. APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 93-6438 Only Petitioner submitted a proposed recommended order. The following rulings are made with respect to the proposed findings of fact submitted by Petitioner. The Petitioner's Proposed Findings of Fact Adopted in substance in Findings of Fact 1. Adopted in substance in Findings of Fact 2. Adopted in substance in Findings of Fact 7 and 8. Adopted in substance in Findings of Fact 4, 11, and 12. Adopted in substance in Findings of Fact 3 through 9. Adopted in substance in Findings of Fact 10. Subordinate to Findings of Fact 14 through 18. Subordinate to Findings of Fact 18. Subordinate to Findings of Fact 16 through 18. Subordinate to Findings of Fact 17. Adopted in substance in Findings of Fact 20. Subordinate to Findings of Fact 20. Adopted in substance in Findings of Fact 20. Adopted in substance in Findings of Fact 20. Rejected as unnecessary. Adopted in substance in Findings of Fact 21 and 22. Subordinate to Findings of Fact 21. Subordinate to Findings of Fact 22. Subordinate to Findings of Fact 21 and 22. Subordinate to Findings of Fact 21 and 22. Adopted in substance in Findings of Fact 1. COPIES FURNISHED: Theodore R. Gay, Esquire Dept. of Bus. and Prof. Reg. 401 NW 2nd Ave., Ste N-607 Miami, FL 33128 Agnes Sangster 9925 NW 25th Ave. Miami, FL 33147 Jack McRay Acting General Counsel Dept. of Bus. and Prof. Reg. 1940 N. Monroe St. Tallahassee, FL 32399-0792 Richard Hickok, Exec. Dir. Construction Industry Licensing 7960 Arlington Expressway, Ste 300 Jacksonville, FL 32211-7467
