The Issue The issue is whether Respondent's Policy Statement, that the inclusion of revoked quota licenses in Section 561.19, Florida Statutes, double-random selection by public drawing, constitutes an unpromulgated rule contrary to Sections 120.54 and 120.56(4), Florida Statutes.
Findings Of Fact Based upon observation of the witness and his demeanor while testifying, the documentary materials received in evidence, stipulations by the parties, and the entire record complied herein, the following relevant and material facts are found. The Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco, is the state Agency responsible for implementation of Chapter 561, Florida Statutes, Beverage Law Administration. In July 2001, Petitioner (BHI) made applications to the Agency for four quota alcoholic beverage licenses made available by revocation. Among those licenses, BHI made application for license number 47-00190, a quota license, initially issued before 1980 pursuant to the Leon County Special Act governing quota licenses; Chapters 63-1561 and 63-1976, Laws of Florida. License number 47-00190, a quota license revoked by the Agency approximately two years before BHI's application in 2001, became and remained available for reissuance at the time BHI filed its petition. The Agency denied BHI's application for revoked quota license no. 47-00190 in Leon County. A quota license is an alcoholic beverage license issued in a county whose population count, at the time of issuance, supports its issuance. In 1979, the Florida Legislature determined each county's population count to be 2,500 persons per quota license. In 2000, the Legislature determined each county's population count to be 7,500 persons per quota license. However, Section 561.19, Florida Statutes (2000), does not specifically direct the Agency to conduct a county's population re-count of 7,500 persons before the reissuance of a revoked quota license issued under the prior population count of 2,500 persons per county. The double-random selection drawing conducted by the Agency pursuant to Section 561.19, Florida Statutes, on October 31, 2001, included an alcoholic beverage license for use in Leon County that became available by virtue of the revocation of that alcoholic beverage license bearing license number 47-00190, which was issued before the change in the population count and the random selection method now contained in Section 561.19, Florida Statutes. The Agency based its denial of Leon County quota license 47-00190 in its Policy Statement of general applicability. The injury to BHI related to the denial of that quota license is within the zone of interest to be regulated and protected under Chapter 561, Florida Statutes, and Petitioner has standing to initiate and prosecute this proceeding. As alluded to before, BHI also made applications in July 2001 for revoked quota license number 26-00921 and revoked quota license number 26-00208 in Duval County; application for revoked quota license number 63-00525 in Polk County; and application for revoked quota license number 45-00073 in Lake County. Each revoked quota license was issued pursuant to the special act applicable to each county and was issued before the 1980 Amendment to Section 561.19, Florida Statutes. The Agency argues in its Proposed Final Order that Duval County (2) and Lake County (1) have exceeded their respective quota license limits, but does not address the quota license limits of the Polk County and the Leon County revoked quota licenses. It is assumed, based upon the fact the revoked quota licenses in those two counties were made available for reissuance, those quota licenses did not exceed the current quota limit of the 7,500 population count. The quota licenses above were revoked several years ago by the Agency and became available for reissuance. Regarding each application filed, BHI received a notice from the Agency stating that: There is no license currently available for issuance in a (specific) County. When licenses become available by reason of increase in population or revocation of a quota license, these licenses are re-issued pursuant to a double-random selection by public drawing. (Emphasis added) The parties entered into a stipulation concerning . . . the Division's policy statement that revoked alcoholic beverage licenses are to be included in drawings conducted pursuant to Florida Statutes, 561.19. . . . BHI challenged the Agency's Policy Statement of general applicability that revoked quota alcoholic beverage licenses are required to be included in a random drawing pursuant to Section 561.19, Florida Statutes. BHI argues that Section 561.19, Florida Statutes, authorizes double-random selection drawings for issuance of alcoholic beverage licenses in only two situations: (a) where licenses become available by an increase in population of a county; or (b) where a dry county, by special act, becomes a wet county. The Agency has embarked on a stated policy, not adopted as a rule, in which, contrary to Section 561.19, Florida Statutes, it includes all revoked quota licenses in the double- random selection drawing. The Agency has thus instituted an unwritten rule policy contrary to Sections 120.54 and 120.56(4), Florida Statutes. The policy statement was applied to BHI's applications for revoked licenses by letters from the Agency denying BHI's four applications for revoked quota licenses stating revoked quota licenses are to be placed in a random selection drawing pursuant to Subsection 561.19(2), Florida Statutes. The Agency, in its pubic legal notice, concerning a double-random selection drawing, set forth the total number of licenses available in each county that are to be awarded by the random selection drawing. Several of the counties listed in the legal notice have an asterisk next to the total licenses available for that county. The explanation by the Agency for the public notice asterisk is to identify those revoked quota licenses included in the total number of available licenses. The following findings of fact are based, in part, on the stipulation of the parties concerning this dispute. The Agency does not have an adopted rule that addresses inclusion of all revoked license in double-random selection drawings. The Agency agreed that the above Policy Statement had not been adopted as a rule by appropriate rulemaking procedures as defined in Sections 120.54 and 120.56(4), Florida Statutes. The Agency takes the position that Section 561.19, Florida Statutes, authorizes double-random selection by public drawing to be used when a quota license becomes available by an increase of 7,500 in a county's population. The Agency's position is that Section 561.02, Florida Statutes, grants the Division Director discretionary authority to enforce the Alcoholic Beverage Law, Chapter 561, Florida Statutes, in accordance with the Legislative intent. Accordingly, Section 561.19, Florida Statutes, is the grant of authority for the Agency's Policy Statement herein challenged. Additionally, the Legislative intent of Section 561.19, Florida Statutes, argues the Agency, is twofold: (1) it removed sole discretion from the Division Director to issue quota licenses, and (2) created a system to ensure licenses issued after 1980 would be in a fair and equitable manner to all applicants. The answer to the threshold question, of whether the Agency's Policy Statement at issue is intended to have the effect of law, is in the affirmative. Prior to the 1980 Amendment to Section 561.19, Florida Statutes, revoked quota license were reissued in accordance with Section 561.02, Florida Statutes (1979). An application was made for a specific revoked license; the application was reviewed and investigated, and if found in compliance with statutory requirements by the Agency, the Director issued the quota license to the approved applicant. The parties agreed that in the event that two applications were made for one license, the first application filed and approved would be granted the license.
The Issue Whether the Petitioners are entitled to a transfer of the quota license they attempted to apply for in their initial application. Whether the Petitioners are entitled to an alcoholic beverage license for a restaurant based upon their second application. Whether the Petitioners are entitled to an alcoholic beverage license based upon their third application in spite of the county's refusal to approve the zoning of the proposed location until a pending declaratory judgment before the circuit court is resolved. Whether the Respondent is estopped to deny any of the applications because of the representations made by a field agent for the agency that to his knowledge, there were no problems at the proposed location.
Findings Of Fact The joint stipulation of facts entered into by the parties on December 21, 1988, are adopted as the findings of fact in this proceeding. A copy of the stipulation is attached and made part of this Recommended Order.
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 Whether petitioner's application for transfer of an alcoholic beverage license should be granted, or denied on the ground that the license has been revoked.
Findings Of Fact On January 25, 1977, Armando Calo, through counsel, filed a Notice of Lien with DABT stating that he was a bona fide mortgagee on an alcoholic beverage license (4-COP, lic. no. 23-1901) held by the Intimo Lounge, Inc., 1601 Collins Avenue, Miami Beach, Florida. Citing Section 561.65, Florida Statutes, he enclosed a copy of his chattel mortgage and a check payable to DABT in the amount of $5.00. (P-1) By return letter dated February 4, 1977, C. L. Ivey, Jr., DABT's Licensing Supervisor, acknowledged receipt of Mr. Calo's Notice of Lien and stated that it would be made part of the Intimo Lounge, Inc. license file. At that time, administrative license revocation proceedings were pending against Intimo Lounge, Inc. So Mr. Ivey sent a copy of his February 4, 1977 acknowledgment letter to DABT's Miami Office, and included this notation: P.S. John: You need to immediately notify Attorney Solomon's [Calo's attorney's] office if and when an order to revoke is issued. He will then go to court to seek a judicial transfer. (P-2) On March 22, 1977, Charles A. Nuzum, DABT's Director, executed an order revoking Intimo Lounge, Inc.`s alcoholic beverage license. (R-1) Eight days later, on March 30, 1977, Armando Calo sued Intimo Lounge, Inc., seeking to foreclose his chattel mortgage on its alcoholic beverage license. By letter of the same date, counsel for Mr. Calo, citing Section 561.65, Florida Statutes, notified DABT of the filing of the foreclosure action; he also asserted that Mr. Calo had no knowledge of or participation in the causes for which the Intimo Lounge, Inc. beverage license was revoked. Copies of subsequent pleadings filed in the action were sent to DABT's legal department. DABT thus knew the suit was filed and was aware of its continued progress. (Testimony of Barone; P-3, P-4, P-11) The Circuit Court of Dade County ultimately entered a final judgment of foreclosure in Mr. Calo's favor. On August 17, 1979, pursuant to such judgment, the Clerk of the Court sold the Intimo Lounge, Inc. beverage license, at public sale, to intervenor Rene Valdes, 1710 N.W. 7th Street, Suite 7201, Miami, Florida for $25,000. Notice of the sale was published in the Miami Review, a newspaper circulated in Dade County. On August 28, 1979, the Clerk issued a Certificate of Title pursuant to Chapter 45, Florida Statutes. This Certificate certified that Intimo Lounge, Inc.`s alcoholic beverage license (4-COP, license no. 23-1901) had been sold to Rene Valdes on August 17, 1979, and that "no objections to the sale have been filed within the time allowed for filing objections." (Testimony of Valdes; P-5, P-6) Although DABT was aware of the protracted mortgage foreclosure litigation involving the Intimo Lounge, Inc. beverage license --which it had earlier revoked -- it never protested or sought to block the foreclosure action. It was not a party to the action; neither did it attempt to become one. (Testimony of Barone, Valdes) In September, 1979, a month after the judicial foreclosure sale, Nathaniel Barone, counsel for Intimo Lounge, Inc., wrote R. B. Burroughs, Jr., Secretary of the Department of Business Regulation, asking what steps were necessary to keep the Intimo Lounge, Inc. beverage license viable. An internal memorandum suggests that DABT was, at first, unprepared to answer that question and preferred, instead, to delay answering until an application for the license was filed. But, on October 4, 1979, Harold F. X. Purnell, the Department's General Counsel replied on behalf of Secretary Burroughs: It is the Division's position that the . . . license has been and presently is revoked pursuant to the actions pre- viously taken by [DABT]. Further, that in the absence of an order of appropriate jurisdiction entered in a proceeding to which the Division is a party we are powerless to transfer such license. (Testimony of Barone; P-7, P-10) Meanwhile, Rene Valdes, notified DABT of his purchase of the Intimo Lounge, Inc. beverage license and asked that it be held in escrow while he found a suitable purchaser and location. When DABT refused, Mr. Valdes petitioned the court, which had rendered the foreclosure judgment, to require DABT to process and transfer the license. The court denied his petition, at least in part, because DABT was not a party to the proceeding. After the court hearing, Mr. Valdes, together with his attorney, Charles Kelly, and DABT's counsel, Mr. Purnell, met outside the chambers and discussed their next step. Mr. Kelly discussed seeking a mandamus ordering DABT to issue the license. Mr. Purnell suggested, instead, that Mr. Valdes find a location and purchaser for the license, then submit an application to DABT -- something which Mr. Valdes had not yet done. Although Mr. Purnell did not assure them that the application would be approved, both Mr. Valdes and Mr. Barone gained an impression that it would be. 2/ Mr. Valdes, following Mr. Purnell's suggestion, found a location and buyer, then applied for a transfer of the license. DABT's denial resulted in this proceeding. (Testimony of Barone, Valdes) Under Section 561.65(1), Florida Statutes (1977), a lender licensed by the state holding a lien on an alcoholic beverage license had the right to enforcement of his lien against the license within 12 days after any order of revocation, provided it was revoked for causes which the lienholder had no knowledge and did not participate. If the lienholder purchased the license at foreclosure sale, he could operate under it or transfer it to a qualified person. Until August 17, 1980, it was DABT's long-standing practice and policy to make no distinction between licensed and unlicensed lenders (lien-holders). It allowed both licensed and unlicensed lienholders to file notice of liens against beverage licenses and honored the subsequent transfer of the license if the lien was enforced within 12 days of revocation. This practice was abruptly changed on the basis of an agency legal opinion. On August 17, 1980, one month before Gui-Dom filed its application, DABT's General Counsel rendered a legal opinion limiting Section 561.65 relief to lenders licensed by the state. After that date, until 1981, when the legislature removed the "licensed lender" language of Section 561.65, DABT applied Section 561.65 literally and only accepted liens filed by licensed lenders. (Testimony of LaRosa; P-13) But in October, 1980, DABT did not deny Gui-Dom's application for transfer of the Intimo Lounge, Inc. license because Armando Calo, the lienholder, lacked a lender's license. Instead, the application was denied because the license had been earlier revoked. As later explained by Barry Schoenfeld, DABT's Chief of Licensing: 2 [DABT] felt at the time that . . . there really was no license, that the license had already been revoked, and that there was no license for the court to sell [to Valdes]. (P-13, p. 25). But Section 561.65 specifically permits liens, under specified conditions, to survive license revocation. When asked to explain DABT's position in light of Section 561.65, Mr. Schoenfeld replied, "I don't know that I can explain it." (P-13, p. 16) Neither could Mr. Schoenfeld adequately explain why, in cases similar to this, DABT has approved license transfers while, here, they have not. (P-13, p. 23) It was not until after the denial of Gui-Dom's application that DABT contended that Section 561.65, Florida Statutes (1977), provides no relief because Armando Calo was not a licensed lender. (P- 9, P-13). Rene Valdes, a beverage license broker, operates a business known as "Beverage License, Inc." He specializes in obtaining and transferring alcoholic beverage licenses for clients and has a working knowledge of the Beverage Law, including DABT rules and practice. When he purchased the Intimo Lounge, Inc. license at the judicial sale, he did not know that it had been revoked by DABT. He did, however, know that there was license revocation litigation between Intimo Lounge, Inc. and DABT. He also knew that DABT had issued an emergency order suspending Intimo Lounge, Inc.'s license; and he knew that there were circuit court foreclosure proceedings involving the license. Yet he failed to ascertain the status of the license -- either by checking the files of DABT or the circuit court. But even if he had discovered that the license had been revoked, under DABT's long-standing practice and interpretation of Section 561.65, it would have made no difference. The license would have "survived" revocation because Armando Calo had timely enforced his lien. And it could have been sold at a judicial sale and transferred to a new qualified purchaser. (Testimony of Valdes, Harris; P-13) DABT has provided no record foundation for its abrupt discontinuance of prior agency practice and policy in August, 1980, a policy which allowed both licensed and unlicensed lien holders to file and timely enforce liens against beverage licenses. This policy enabled a lien to survive license revocation; and the license, which had been revoked earlier could then be transferred by judicial sale. The only explanation given for the change in policy, a change which DABT now relies on as cause for denying Gui-Dom's application, is that the agency changed its legal interpretation of Section 561.65 (1977). (Testimony of LaRosa; P-13)
Recommendation Based on the foregoing, it is RECOMMENDED: That Gui-Dom's application for transfer of alcoholic beverage license no. 23-1901, series 4-COP, be granted. DONE AND RECOMMENDED this 3rd day of February, 1983, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of February, 1983.
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.
Findings Of Fact Respondent Lois Davis, who does business under the name of The Cotton Club, holds License No. 60-00245, a Series 2-COP license issued by petitioner authorizing her to sell beer and wine for consumption on the licensed premises, which are located at 233 Southwest Fifth Street, Belle Glade, Florida. At one time Ms. Davis held License No. 60-576 which authorized sale of hard liquor as well as wine and beer for consumption on the premises of The Cotton Club. On January 25, 1980, as a result of foreclosure proceedings against respondent's landlords, an order was entered directing that "all right, title and interest to Alcoholic Beverage License 60-576" be conveyed to Mr. and Mrs. Robert Daniel. Robert Daniel, et ux. v. Gilbert Adams, et al. v. Lois Davis, No. 78-4667 CA (L) 01 G (Fla. 17th Cir.). At the time respondent applied for her current license, shortly before the previous license expired, she asked that the latter be extended so that she could sell off her stock of hard or spirituous liquors. Petitioner's Lieutenant Little explained that the matter was before a court but agreed to approach the judge. In September of 1980, L. Dell Grieve, a six-year veteran of the Belle Glade Police Department, visited The Cotton Club, saw liquor in a storeroom, and told the bartender that it should be removed. The bartender protested that it was all right to store the liquor while something was being worked out about the license, or words to that effect. Beverage Officers Ramey and Rabie accompanied Officer Grieve on November 15, 1980, on a visit to The Cotton Club, where they found Andre Lavince Moore, respondent's son, tending bar. In the storeroom, they found numerous bottles of spirituous liquors which they confiscated. Petitioner's Exhibit No. Wine and beer were stored in a separate place in the same storeroom. At no time after she lost License No. 60-576 did respondent or her agents or employees sell any alcoholic beverages other than wine or beer at The Cotton Club, or have any intention of doing so without petitioner's permission.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner dismiss the administrative complaint. DONE AND ENTERED this 14th day of May, 1981, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of May, 1981. COPIES FURNISHED: Daniel C. Brown, Esquire Lt. J. E. Little 725 South Bronough Street Post Office Drawer 2750 Tallahassee, Florida 32301 West Palm Beach, FL 33402 Lois Davis The Cotton Club 233 Southwest Fifth Street Belle Glade, Florida
Findings Of Fact Millard Futch is presently the district supervisor for District 4, Division of Beverage and formerly district supervisor for District 6, Division of Beverage, at the time the Petitioner made application for an increase in the series of his beverage license. Mr. Futch indicated the reason that the request for increase in series was disapproved, was because that a series 4-COP license is a quota license and that at present all quota licenses in Pinellas County, Florida are held by other license holders, either as active licenses or licenses under administrative restraint. Therefore, as of the date of the hearing and the date of the request for increase in series, a quota license in Pinellas County was not available. The witness further testified that the 2-COP license being held by the Petitioner enables the Petitioner to sell beer and wine on the premises in package and to sell spiritous liquor for consumption off the premises. The principal difference, according to the witness between 2-COP license and the increase series 4-COP license was that 4-COP license would allow the consumption of spiritous liquors on the premises. The witness indicated that the only available methods for the Petitioner to receive a 4-COP license was for other quota licenses to be authorized at the time of the completion of the 1980 federal census. It was stated that upon the completion of that census the Petitioner together with other applicants could apply for such additional quota licenses as would be authorized by the increase in population in Pinellas County, Florida. It was also indicated that the possibility would be available for the Petitioner to purchase an existing quota license in Pinellas County, Florida, if the Petitioner was otherwise qualified under the guidelines of the Division of Beverage. Finally the witness, Mr. Futch, did not indicate any further reason for the disapproval of the increase in series as applied for by the Petitioner. The Petitioner, after hearing the testimony offered by Mr. Futch in explanation of the Respondent's position, declined to make any presentation in his own behalf.
Recommendation Based upon the facts as presented in the course of the hearing, it is recommended that the Petitioner, Walter Booze, t/a HobNob Tavern be denied his request for an increase in series of his beverage license from one of 2-COP to 4-COP. DONE and ENTERED this 11th day of February, 1976, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Walter Booze 318 North Garden Avenue Clearwater, Florida 33515 William Hatch, Esquire Department of Business Regulation 725 Bronough Street Tallahassee, Florida 32304
Findings Of Fact Petitioner originally held alcoholic beverage license no. 26-532, Series 4-COP, as an individual. He transferred this license to M & S, Inc., a Florida corporation, about one year ago. Petitioner is a 50 percent shareholder in this corporation. Jimmy G. Maddox holds the other 50 percent stock interest. Petitioner and Maddox are currently engaged in civil litigation involving the corporate licensee. Respondent referred to this civil suit in its notice disapproving the transfer application, citing the pending litigation as a basis for disapproval. Petitioner has not purchased the license from the corporation or entered into any agreement in contemplation of license transfer. Rather, he believes he is entitled to the return of the license because he received no consideration for the prior transfer from either the corporation or Maddox. Alternatively, Petitioner asks that the prior transfer to the corporation be set aside due to this lack of consideration.
Recommendation From the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That Respondent enter a Final Order denying Petitioner's request for transfer of alcoholic beverage license no. 26-532, Series 4-COP. DONE and ENTERED this 6th day of April, 1982 in Tallahassee, Florida. R. T. CARPENTER, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of April, 1982. COPIES FURNISHED: James A. Fischette, Esquire Suite 1916 Gulf Life Tower Jacksonville, Florida 32207 James N. Watson, Jr., Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Herbert T. Sussman, Esquire 3030 Independent Life Building Jacksonville, Florida 32202 Mr. Charles A. Nuzum, Director Division of Alcoholic Beverages and Tobacco 725 South Bronough Street Tallahassee, Florida 32301
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.
The Issue Whether Sections 301 and 302 of the DABT's policy manual and form DBR 700L are unpromulgated rules which cannot be used as a basis for the DABT's decision to refuse three applications for alcoholic beverage licenses submitted by the Petitioners. Whether the agency's requirement that an applicant have county zoning approval before a state alcoholic beverage license will be granted is an invalid exercise of delegated legislative authority, under Chapter 120, Florida Statutes. Whether form DBR 700L is an invalid rule because of DBR's failure to file forms with the Secretary of State.
Findings Of Fact The joint stipulation of facts entered into by the parties on December 21, 1988, are adopted as the findings of fact in this proceeding. A copy of the stipulation is attached and made part of this Final Order.
