The Issue Whether proposed Rules 61A-7.003, 61A-7.007, 61A-7.008, and 61A-7.009 constitute invalid exercises of delegated legislative authority, pursuant to Section 120.52(8), Florida Statutes,1/ for the reasons described by Petitioner in its Petition.
Findings Of Fact Petitioner and Intervenor are companies whose substantial interests will be affected by the proposed rules and they have standing to bring this rule challenge. The State of Florida, Department of Business and Professional Regulation (the Department), is the state agency responsible for adopting the proposed rules which are the subject matter of this proceeding. The Division of Alcoholic Beverages and Tobacco (the Division) is vested with general regulatory authority over the alcoholic beverage industry within the state. The Division issues both general and special alcoholic beverage licenses. See Chapters 561-565, Fla. Stat. The general licenses which permit consumption on the premises are: 1COP licenses which permit consumption of beer and certain wine and distilled spirit products; 2COP licenses which permit consumption of beer, wine, and certain distilled spirit products; and 4COP licenses which permit the consumption of beer, wine, and all distilled spirits. See §§ 563.02(1)(b)-(f), 564.06(5)(b), and 561.20(1), Fla. Stat. The 4COP licenses are known as quota licenses, are issued based on the population of the county, and are limited in number. § 561.20(1), Fla. Stat. Quota liquor licenses range in value, depending on the county involved, from a low of approximately $20,000, to a high of approximately $300,000. (stipulation of parties) The SBX or special bowling license is issued by the Division pursuant to Section 561.20(2)(c), Florida Statutes. The owner or lessee of a bowling establishment having 12 or more lanes and necessary equipment to operate them may obtain this special license which permits consumption of beer, wine, and distilled spirits. Alcohol can only be sold for consumption on the licensed premises. Another special alcoholic beverage license listed in proposed Rule 61A-7.003 is the 12RT license. The holder of such a license must be a caterer at a dog track, horse track, or jai alai fronton. In this context, Section 565.02(5), Florida Statutes, reads in pertinent part as follows: (5) A caterer at a horse or dog racetrack or jai alai fronton may obtain a license upon the payment of an annual state license tax of $675. Such caterer’s license shall permit sales only within the enclosure in which such races or jai alai games are conducted, and such licensee shall be permitted to sell only during the period beginning 10 days before and ending 10 days after racing or jai alai under the authority of the Division of Pari- mutual Wagering of the Department of Business and Professional Regulation is conducted at such racetrack or jai alai fronton. . . . Petitioner participated, to some degree, in the rule development process. The extent of that participation is unclear from the record. The text of the proposed rules as published in their final form in the Florida Administrative Weekly on October 10, 2003, is as follows: 61A-7.003 Premises Not Eligible For Smoking Designation. Licensed premises shall not be designated as a stand-alone bar if the qualifications for licensure require the premises be devoted predominantly to activities other than the service of alcohol. The following licenses are not eligible for a stand-alone bar designation: S = Special Hotel SH = Special Hotel in counties with population of 50,000 or less SR = Special Restaurant issued on or after January 1, 1958 SRX = Special Restaurant SBX = Special Bowling SAL = Special Airport SCX = Special Civic Center SCC = Special County Commission SPX = Pleasure, Excursion, Sightseeing, or Charter boats X = Airplanes, Buses, and Steamships IX = Railroad Cars XL = Passenger Waiting Lounge operated by an airline PVP = Passenger Vessels engaged in foreign commerce FEX = Special Public Fairs/Expositions HBX = Special Horse Breeders HBX = Special County Commission 11AL = American Legion Post permitted to sell to general public 11C = Social, Tennis, Racquetball, Beach, or Cabana Club 11CE = Licensed vendors exempt from payment of surcharge tax 11CS = Special Act Club License 11CT = John and Mable Ringling Museum 11GC = Golf Club 11PA = Symphony, Live Performance Theatre, Performing Arts Center 12RT = Dog or Horse Track or Jai Alai Fronton 13CT = Catering Specific Authority 386.2125, 561.695(9) FS. Law Implemented 386.203(11), 561.695 FS. History--New 61A-7.007 Formula For Compliance With Required Percentage of Gross Food Sales Revenues. In order to determine compliance, the division shall use the formula of gross food sales revenue, including but not limited to non-alcoholic beverages, divided by gross total sales revenue, in any consecutive six- month period. The results of the formula will represent the percentage of food sales revenues as defined herein and in s. 561.695, Florida Statutes. Specific Authority 386.2125, 561.695(9) FS. Law Implemented 386.203(11), 561.695(6) FS. History--New 61A-7.008 For Percentage of Gross Alcohol Sales Revenue Formula. In order to determine compliance, the division shall use the formula of gross alcohol sales revenue divided by gross total sales revenue, in any consecutive six-month period. Specific Authority 386.2125, 561.695(9) FS. Law Implemented 386.203(11), 561.695(6) FS. History--New 61A-7.009 Method Used to Determine Whether an Establishment is Predominantly Dedicated to the Serving of Alcoholic Beverages. In order to determine whether an establishment, other than one holding a specialty license designated in Rule 61A- 7.003, F.A.C., is predominantly dedicated to the serving of alcoholic beverages, the division shall compare the percentage of gross food sales revenue with the percentage of gross alcohol sales revenue. If the percentage of gross alcohol sales revenue is greater than that of the gross food sales revenue, an establishment is deemed predominantly dedicated to the serving of alcoholic beverages. Specific Authority 386.2125, 561.695(9) FS. Law Implemented 386.203(11), 561.695(1)(9) FS. History--New Article X, Section 20, Florida Constitution, was adopted by the electorate in 2002, and generally prohibits smoking in enclosed indoor workplaces. This constitutional provision includes certain exceptions from this general prohibition including the "stand-alone bar" exception. Section 20(d) instructs the Florida Legislature to adopt legislation to implement its provisions and specifies that the Legislature is not precluded from enacting any law constituting or allowing a more restrictive regulation of tobacco smoking than is provided in Section 20. The legislature implemented the constitutional amendment by amending Part II, Chapter 386, Florida Statutes. Section 386.204 prohibits smoking in enclosed indoor workplaces, except as provided in Section 386.2045. Section 386.2045 enumerates exceptions to the general prohibition, including the exception of a stand-alone bar. Section 386.2045(4), Florida Statutes, reads as follows: (4) STAND-ALONE BAR- A business that meets the definition of a stand-alone bar as defined in s. 386.203(11) and that otherwise complies with all applicable provisions of the Beverage Law and this part. A stand-alone bar is defined in Section 386.203(11) as follows: (11) 'Stand-alone bar' means any licensed premises devoted during any time of operation predominately or totally to serving alcoholic beverages, intoxicating beverages, or intoxicating liquors, or any combination thereof, for consumption on the licensed premises; in which the serving of food, if any, is merely incidental to the consumption of any such beverage; and the licensed premises is not located within, and does not share any common entryway or common indoor area with, any other enclosed indoor workplace, including any business for which the sale of food or any other product or service is more than an incidental source of gross revenue. A place of business constitutes a stand-alone bar in which the service of food is merely incidental in accordance with this subsection if the licensed premises derives no more than 10 percent of its gross revenue from the sale of food consumed on the licensed premises. Deborah Pender is the chief of licensing for the Division. According to Ms. Pender, the Division included the SBX or special bowling license in the list of special licenses that cannot qualify for stand alone bar status in proposed Rule 61A- 7.003 because its predominant business is a bowling alley. Similarly, the 12RT license was included because its predominant business is a racetrack: "Because that’s a specialty license that is issued at race tracks, and if it wasn’t a race track business, the caterer . . . couldn’t have a license anywhere else." Marie Carpenter is the chief of the Bureau of Auditing of the Division. According to Ms. Carpenter, the provision regarding the six consecutive months in proposed rules 61A-7.007 and 61A-7.008 was intended to give the Division enough of a period of time to get a good picture of whether the business met the criteria for compliance and to give licensees an opportunity to build up business records that were not previously required to be kept.2/ The licensee would be required to keep daily records. Ms. Carpenter acknowledged that in using the six month auditing period in the proposed rule, a licensee could exceed the 10 percent requirement on one or more occasions during the audit period. Sandy Finkelstein is President of Petitioner and is the operating partner of Shore Lanes Bowling Center in Merritt Island, Florida. According to Mr. Finkelstein, there is at least one bowling facility in Florida that was issued a 4COP license. A bowling facility with a 4COP license is not automatically excluded from the stand-alone bar designation, whereas a bowling facility with an SBX license is automatically excluded from the stand-alone bar designation by virtue of proposed rule 61A-7.003.
The Issue Whether or not on or about October 31, 1978, the Respondent, Cesar Augustus Rodriguez, a licensed vendor or distributor, or his authorized agent, did sell alcoholic beverages with an improper license, to-wit: Selling under authority of a license when the license fee required for renewal had not been properly paid, contrary to Section 562.12, Florida Statutes.
Findings Of Fact On September 30, 1978, the Respondent, Cesar Augustus Rodriguez, issued or caused to be issued a check in the amount of $1,750.00 made in behalf of the Petitioner, State of Florida, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco. The purpose of this check was to pay for the annual renewal of Respondent's beverage license, Number 39-994, 4-COP, under which the Respondent was trading as Tom's Place. The requirement for payment of the renewal of the license is established by Section 561.27, Florida Statutes. The check for payment was drawn on the Barnett Bank of Tampa. When presented by the Petitioner for payment, the check was returned on the basis that there were insufficient funds for the check to be honored. The check number in question was check No. 407, drawn on account No. 01704386. (The facts as stated above were arrived at pursuant to a stipulation entered into by the parties and placed on the record during the process of a formal hearing conducted pursuant to Section 120.57, Florida Statutes.) Representatives of the Petitioner tried on a number of occasions to get the Respondent to pay the required license fee by an instrument that was negotiable. Those representatives were unsuccessful in their attempts, and on October 30, 1978, Captain R. Caplano, District VI Supervisor, Division of Alcoholic Beverages and Tobacco dispatched officers to retrieve the aforementioned beverage license from the premises known as Tom's Place. The license was brought back to the District headquarters. Around 4:55 p.m. on October 30, 1978, the Respondent came to the District office of the Petitioner with the intention of redeeming the license to Tom's Place and two other licensed premises owned and operated by him, namely, Port Tampa Bar and Rene's Lounge. Rodriguez offered to pay the licensing fee in cash; however, there was insufficient cash to pay the entire fee required and the necessary penalty established under Section 561.27, Florida Statutes. Moreover, the language of of Rule 7A-2.15, Florida Administrative Code, establishes that the Petitioner shall accept only a cashier's check, money order or certified check in payment for the license fee once an insufficient funds check has been tendered for that payment initially. During the course of the meeting between the Respondent and Captain Caplano on the afternoon of October 30, 1978, held in the District office, Mr. Rodriguez indicated his concern that he not be able to operate during the interim period necessary to obtain the proper form of payment for the license fee and penalty. After that discussion, the license to Tom's Place and the other licenses discussed were returned to the Respondent with the understanding that the Respondent was to bring in the proper license fees and penalty payments on the following morning, October 31, 1978; immediately after the banking institutions had opened, to allow the Respondent to obtain the necessary cashier's checks. The Respondent was under the impression that between the hours that his licenses had been returned to him and the time on the morning of October 31, 1978, to make the proper payment, he was at liberty to operate the licensed premises to the extent of selling alcoholic beverages. Captain Caplano, through his testimony in the course of the hearing, established that the act of returning the license on the evening of October 30, 1978, was tantamount to allowing the Respondent to operate, conditioned upon the immediate payment of the license fees on the following morning of October 31, 1978. The licensed premises, Tom's Place, was opened the next morning at 7:05 a.m. It opened after the license had been seized on the prior afternoon of October 30, 1978, at 4:31 p.m. and after advising the employee on duty for the Respondent that no more alcoholic beverages could be sold following the seizure. This arrangement was superseded by the arrangement between the Respondent and Captain Caplano, which was made in the late afternoon of October 30, 1978. Turning back to a consideration of the situation on October 31, 1978, at the time Tom's Place was opened, a different employee was on duty than that person who was there on the afternoon of October 30, 1978. This new employee was one Corine Lewis. At about the time the premises opened, she called the stepson of the Respondent to ascertain whether or not alcoholic beverages could be sold. The response of the stepson, who was acting under the authority of the Respondent, was to the effect that the "boss" was on the way with the license, creating the belief in the mind of Ms. Lewis that she could sell alcoholic beverages. At around 8:30 a.m., the same Ms. Lewis called the Petitioner's office and spoke to Beverage Officer John Allen, the same officer who had removed the license from the premises on the afternoon of October 30, 1978. Officer Allen instructed Ms. Lewis not to sell any alcoholic beverages without the license being available. Following the conversation between Ms. Lewis and Officer Allen, the Respondent came to the District headquarters around 10:00 a.m. on October 31, 1978, with the necessary funds to pay for the renewal of the licenses pertaining to Port Tampa Bar and Rene's Lounge. He did not have the necessary funds to pay for the renewal of the license for Tom's Place. He indicated to officials at the District office of the Petitioner, that it would be necessary for him to obtain a cashier's check from a separate bank for the payment of the license for Tom's Place, meaning by that a separate bank than the one from which the cashier's checks were issued for the purpose of paying the licenses for Port Tampa Bar and Rene's Lounge. Rodriguez indicated that he would leave the license for Tom's Place until he could obtain the money for the license fee. He did in fact leave that license with the Division of Alcoholic Beverages and Tobacco and the fee was paid sometime in the early afternoon of October 31, 1978. At around the time the conversation was occurring between the Respondent and Captain Caplano, the representative of the Petitioner, Officer Allen had returned to Tom's Place. When he entered the licensed premises, he discovered a number of patrons in the premises and opened beer bottles in evidence. Officer Allen inquired of Ms. Lewis about the license and Ms. Lewis informed him that she did not have the license. Officer Allen then left the licensed premises and called Captain Caplano to ascertain the whereabouts of the license. He also advised Captain Caplano that alcoholic beverages had been sold in the licensed premises on the morning of October 31, 1978. Captain Caplano indicated that he had the license and that the license fee had not been paid and that Officer Allen should write a citation for selling alcohol without a license if in fact that had occurred at a time when the premises was not operating under an authorized beverage license. Officer Allen followed those instructions, and cited the licensee for a violation of Section 562.12, Florida Statutes, which pertains to selling alcoholic beverages with an improper license. While Officer Allen was still at the licensed premises the morning of October 31, 1978, the stepson of the Respondent arrived at that location to close the bar, and did close it. Under the circumstances, the Respondent was of the persuasion that he could operate the bar until such time as the license fee had been properly paid after the bank had been opened on the morning of October 31, 1978. He did not feel that he had the opportunity to visit two banks to get the necessary cashier's checks, prior to reporting to the District office of the Petitioner to pay the license fees and penalties. Captain Caplano was of the belief that the licensee could operate on the evening of October 30, 1978, but did not envision the right of the licensee to operate on the morning of October 31, 1978, if the licensee did not immediately tender payment for the license fees on the morning of October 31, 1978. In the mind of Captain Caplano, the idea of selling any form of alcoholic beverages on the morning of October 31, 1978, without first paying the license fee for Tom's Place constituted the sale of alcoholic beverages under an improper license. It is unclear exactly when the alcoholic beverage was sold on the morning of October 31, 1978, in Tom's Place. Ms. Lewis' testimony is to the effect that one beer was sold sometime between 7:05 a.m. and 8:30 a.m., with 8:30 a.m. being the time at which Officer Allen advised Ms. Lewis that no alcoholic beverages should be sold on that morning without the license being on the premises and this testimony is unrefuted by the Petitioner. In view of the totality of the facts, it has not been demonstrated by the Petitioner that the Respondent was acting in derivation of the inherent authority to sell alcoholic beverages extended to him when the licenses were returned to him on the afternoon of October 30, 1978, through the person of Captain Caplano. Therefore, there has been no showing of a violation of Section 562.12, Florida Statutes.
Recommendation It is recommended that the case before the State of Florida, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, Number 33276- A, be dismissed. DONE AND ENTERED this 6th day of March, 1978, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Mary Jo M. Gallay, Esquire Staff Attorney Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32304 Cesar Augustus Rodriguez t/a Tom's Place 2605 West Kennedy Boulevard Tampa, Florida 33609
The Issue Whether respondent's alcoholic beverage license should be disciplined on the charge that it violated Sections 212.15(2)(b) and 561.29(1)(a), Florida Statutes (1981), by failing to remit taxes collected pursuant to Chapter 212, Florida Statutes (1981).
Findings Of Fact On May 4, 1981, respondent was issued alcoholic beverage license No. 16-2232 SRX, Series 4 COP. The license has now expired. (Testimony of Boyd; P- 1.) On June 26, 1951, the Florida Department of Revenue issued a warrant for the collection of delinquent sales and use tax due and unpaid by respondent. The warrant states that respondent is indebted to the Department of Revenue for delinquent sales tax, penalty, and interest, totaling $22,710.66. This indebtedness remains outstanding and unpaid. (Testimony of Fox; P-2.)
Recommendation Based on the foregoing, it is RECOMMENDED: That the notice to show cause filed against respondent be dismissed. DONE AND RECOMMENDED this 15th day of September, 1982, 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 15th day of September, 1982.
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 Respondent committed the violation alleged in the Administrative Action, and, if so, what disciplinary action should be taken.
Findings Of Fact Based upon the evidence adduced at the final hearing and the record as a whole, the following findings of fact are made: At all times material to the instant case, Respondent operated a restaurant, Atlantic Street Station, located in Delray Beach, Florida. Since 1998, Respondent has held a Special Restaurant License (license number 60-11520 4COP SRX), authorizing it to sell alcoholic beverages on the premises of Atlantic Street Station. During the months of January and February 2000, $66,729.49, or slightly less than 33% of Atlantic Street Station's total gross revenues of $205,679.76, came from the retail sale on the licensed premises of food and non-alcoholic beverages.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that DABT enter a final order finding Respondent violated Section 561.20(2)(a)4., Florida Statutes, as alleged in the Administrative Action, and disciplining Respondent therefor by revoking its license "without prejudice to obtain any other type of license, but with prejudice to obtain the same type of special license for 5 years," and fining Respondent $1,000.00. DONE AND ENTERED this 16th day of February, 2001, in Tallahassee, Leon County, Florida. ____________________________ STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 16th day of February, 2001.
The Issue The issue in this case is whether Petitioner should revoke Respondent's alcohol beverage license, pursuant to Section 561.501, Florida Statutes (1995), 1/ and Florida Administrative Rule 61A-2.02 2/ because Respondent failed to pay tax, interest, and penalties of $179,146.56.
Findings Of Fact Petitioner is the state agency responsible for regulating alcohol beverage licenses. Respondent holds alcoholic beverage license number 69-00735, series 4-COP, for Lake Monroe Inn, 2485 North Highway 17-92, Sanford, Florida. Until sometime after December 1996, Respondent sold alcoholic beverages for consumption on the licensed premises. Respondent was required by Section 561.501 to pay a surcharge tax on such alcoholic beverages. In October, 1996, Petitioner audited Respondent's books and records to determine Respondent's compliance with the surcharge tax. The audit period was January 1, 1996, through August 31, 1996. Petitioner's auditors conducted the audit in accordance with generally accepted audit procedures. Petitioner determined the following surcharge tax liability: Surcharge Tax $ 47,472.98 Interest $ 7,961.66 Penalty $123,711.92 Total Liability $179,146.56 On October 10, 1996, Petitioner presented an audit report to Respondent, and the auditors discussed the audit findings with Respondent. Respondent does not contest the audit report and concedes the total liability. Respondent admits that the failure to collect and remit the tax was willful. Subsequent to the filing of the Administrative Action, Respondent went out of business. A lienholder foreclosed on Respondent's license. Another business now operates at Respondent's location.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order revoking Respondent's alcohol and tobacco license. DONE AND ENTERED this 21st day of August, 1997, in Tallahassee, Leon County, Florida. DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 21st day of August, 1997.
The Issue The issues in these cases are whether Respondent, Club Manhattan Bar and Grill, LLC, d/b/a Club Manhattan Bar and Grill (Respondent), committed the acts alleged in the administrative complaints dated September 13, 2010, and December 1, 2010, and, if so, what disciplinary action, if any, should be taken against Respondent.
Findings Of Fact The Department is the state agency charged with the responsibility of regulating persons holding alcoholic beverage licenses. § 561.02, Fla. Stat. Respondent is licensed under the Florida beverage law by the Department. Respondent holds a 4COP/SRX special restaurant license issued by the Department with Alcoholic Beverage License No. 68-04347. Ms. Stokes is the licensee of record for Respondent. Consequently, Respondent is subject to the Department's regulatory jurisdiction. Respondent's series 4COP/SRX is a special restaurant license that permits it to sell beer, wine, and liquor for consumption on the licensed premises. Additionally, the licensee must satisfy seating and record-keeping requirements and must comply with 51 percent of its gross sales being food and non- alcoholic beverages. See § 561.20(2)(a)4., Fla. Stat. Respondent's restaurant is located in Sarasota County, Florida, and, pursuant to the 4COP/SRX license, must have seating and capability to serve 150 customers at any one time. On August 5, 2010, Special Agent Flynn conducted an inspection of Respondent's business premises. He conducted the inspection based on complaints made to the Department that Respondent was operating as an after-hours bar, rather than a restaurant. At this initial inspection, which occurred at 2:30 p.m. on August 5, 2010, Special Agent Flynn found the restaurant did not have any customers or menus. Further, he noticed that the premises had seating for only 92 people and a large dance floor. Further, he observed that the walls had signs advertising drink specials and late-night parties. Special Agent Flynn met Ms. Stokes, Respondent's manager and holder of the license, and informed her that the beverage license required that Respondent be able to serve 150 customers at one time. Also, Special Agent Flynn requested the required business records concerning the purchase of alcoholic beverage invoices from the distributors for a 60-day proceeding period. Ms. Stokes did not have the requested records on the premises. On August 19, 2010, Special Agent Flynn sent Ms. Stokes a written request, requesting alcoholic purchase invoices for a 60-day period before August 19, 2010. The request allowed Ms. Stokes 14 days to compile the records and to provide the records to the Department. The record here showed by clear and convincing evidence that Respondent did not produce records for the audit period. On September 8, 2010, at approximately 3:00 p.m., Special Agent Flynn returned to Respondent's premises. Again, he found that Respondent did not have the required seating number and ability to serve 150 customers at one time. Special Agent Flynn offered credible testimony that, during the September 8, 2010, inspection, he found Respondent had only 106 available seats. Further, consistent with his inspection on August 5, 2010, Special Agent Flynn observed facts showing that Respondent was a late-night bar, as opposed to a restaurant. The evidence showed that on September 8, 2010, Special Agent Flynn observed that Respondent did not have any customers, menus, and very little food in its small kitchen. Special Agent Flynn, however, did observe that Respondent continued to have its large dance floor, disc jockey booth, advertised drink specials, and posters advertising late-night parties. Clearly, Respondent was being operated as a bar, rather than a restaurant as required by its license. At the September 8, 2010, inspection, Special Agent Flynn again requested Respondent's business records that he had previously requested for the 60-day time period before August 19, 2010. Ms. Stokes provided a few invoices for purchases of food and non-alcoholic beverages. These invoices were dated after the August 19, 2010, date that Special Agent Flynn had requested and did not cover the requested 60 days prior to the August 19, 2010, request. These records included food and beverage purchases by Respondent from retailers, but did not contain any records concerning the points of sale at the restaurant. Ms. Nadeau, an auditor for the Department, offered credible testimony concerning the Department's request for business records from Respondent for the audit period of April 1, 2010, through July 31, 2010. On August 27, 2010, Ms. Nadeau set up an audit request for the period of April 1, 2010, through July 31, 2010, based on information provided by Special Agent Flynn. The Department provided Ms. Stokes with an audit engagement letter that requested business records. Ms. Nadeau testified that on September 10, 2010, she was contacted by Ms. Stokes. Ms. Stokes informed Ms. Nadeau that Ms. Stokes had become the owner of the restaurant in June 2010 and that she did not have the required records. Ms. Nadeau informed Ms. Stokes to provide all the records requested in the audit engagement letter that Ms. Stokes had and to try to obtain the prior records from the previous managing member of Respondent. On September 22, 2010, Ms. Stokes mailed to the Department records she claimed met the audit period. The records consisted of guest checks for July and August 2010, which only showed food purchases and no alcoholic beverage purchases. Further, Ms. Nadeau found that the records were not reliable, because the records contained numerous personal items not related to the restaurant, such as baby wipes, cotton swabs, and boxer shorts. Consequently, the record clearly and convincingly shows that Respondent failed to provide the required business records for the audit period of April 1, 2010, through July 31, 2010. Next, based on Respondent's failure to provide any reliable records, the Department was unable to conduct an audit of the business. Records provided by Respondent indicated that the only sales that occurred on the premises were for food. However, the testimony showed that Respondent's business included the sale of alcohol and marketed the sale of alcoholic beverages for late-night parties. Mr. Torres, the senior auditor for the Department, credibly testified that he conducted an independent review of Ms. Nadeau's initial audit findings. Mr. Torres, who has been employed with the Department for 27 years, reviewed the records provided by Respondent. He credibly testified that Respondent's guest checks were very questionable because they showed all food sales, but no alcohol, which was not consistent with Special Agent Flynn's observations. The evidence further showed that Ms. Stokes became the managing member of Respondent in June 2010. Ms. Stokes provided the Department with a change of corporate officers and named herself as registered agent, rather than apply for a new license. This distinction would later become important because, as explained by Ms. Nadeau, in the Department's eyes, there is a continuation of ownership. Under a continuation of ownership, Ms. Stokes was required to have business records for the time period before she became the managing member of Respondent. Ms. Stokes credibly testified that she did not have any records before June 20, 2010; thus, Respondent was unable to provide records for the audit period. Ms. Stokes candidly admitted that her restaurant had been struggling financially, which is why she had worked to catering special events to draw foot traffic.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco, enter a final order revoking Respondent's alcoholic beverage license and finding that Respondent violated: 1. Section 561.20(2)(a)4., within section 561.29(1)(a), on September 8, 2010, by failing to provide the required service area, seating, and equipment to serve 150 persons full-course meals at tables at one time as required by its license; 2. Rule 61A-3.0141(3)(a)1., within section 561.29(1)(a), the audit period of April 1, 2010, through July 31, 2010, by not providing the requested business records; and 3. Rule 61A-3.0141(3)(a)1., within section 561.29(1)(a), on September 8, 2010, by not providing the requested business records. It is further RECOMMENDED that the final order find that the Department did not prove by clear and convincing evidence that Respondent violated section 561.20(2)(a)4., within section 561.29(1)(a). DONE AND ENTERED this 23rd day of September, 2011, in Tallahassee, Leon County, Florida. S THOMAS P. CRAPPS 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 23rd day of September, 2011.
The Issue The issue is whether, pursuant to section 561.32(1)(a) and (b), Florida Statutes, Respondent is required to approve the transfer of alcoholic beverage license to Petitioner after its purported purchase of the license at a sheriff's sale.
Findings Of Fact Prior to the events set forth below, La Cidra Corporation (La Cidra) owned the License. As issued by Respondent, the License authorized La Cidra to sell alcoholic beverages at a bar known as L'Boulevard Café Supper Club,2 which was located in leased premises at 3632-34 Northwest 25th Avenue in Miami (Premises). On October 28, 2013, Steven Beltre (Beltre) obtained a final judgment in the Eleventh Judicial Circuit Court in the amount of about $3.4 million against La Cidra, doing business as L'Boulevard Cafe Supperclub. Respondent has adopted a form, DBPR ABT-6022, for persons to record liens against alcoholic beverage licenses. However, at no material time did anyone record with Respondent a lien against the License in connection with the Beltre judgment. The record does not disclose when La Cidra ceased operating the bar. However, on January 21, 2014, Intervenor registered "L'Boulevard Café Supperclub" as a fictitious name, and Intervenor and La Cidra signed an "Application for Transfer of Ownership of an Alcoholic Beverage License" concerning the License. On February 13, 2014, Intervenor purchased from La Cidra all of its assets, including the License. At closing, La Cidra assigned the Premises lease by an assignment that was signed by La Cidra, Intervenor, and the lessor. The assignment acknowledges that Intervenor has paid the lessor a security deposit of $10,000. A closing statement reflects a purchase price of $100,000, which is represented by a $15,000 deposit and $85,000 promissory note. On February 20, Intervenor filed with Respondent the application described in the preceding paragraph, and Respondent, on the same date, issued to Intervenor a temporary license based on the License. Five days after the closing described in the preceding paragraph, on February 18, 2014, the Clerk of the Eleventh Judicial Circuit Court issued a Writ of Execution directing all sheriffs in the state of Florida "to levy upon property subject to execution of . . . La Cidra . . . to satisfy the sum of [approximately $3.4 million]." The Miami-Dade County Sheriff's Office levied upon property on March 8, 2014--23 days after the closing of the conveyance of the License from La Cidra to Intervenor. The seized property included alcoholic beverages, bar equipment, computers, televisions, phones, stage lights, radios, smoke machines, and shop equipment, as well as the following intangible personal property: a certificate evidencing La Cidra as the licensee under the License, an $85,000 "secured" promissory note that is not further identified, and currency totaling $17,206 in denominations as large as $100 bills. After the seizure, the sheriff advertised the sale of the property by auction on April 30. The list of property to be sold included the License, but not the promissory note or cash, whose disposition is undisclosed in the record. On April 30, 2014--over two months after the La Cidra/Intervenor conveyance--the sheriff executed a Sheriff's Bill of Sale transferring all "right, title and interest" of La Cidra to all of the advertised property to Respondent for the sum of $2000 plus $140 sales tax, which represented the highest bid at the sheriff's sale. Immediately after the sheriff's levy, in March, Respondent was contacted by various parties, including the sheriff's office, which provided Respondent with a copy of the writ of execution and list of seized property.3 On April 7, 2014, Respondent received a letter from Daniel W. Courtney, an attorney whose cover letter states that he represents Intervenor. The letter recites that Respondent properly had issued a temporary license to Intervenor, but later had withheld the issuance of the permanent License to Intervenor due to its receipt of information from the sheriff concerning the purported seizure of the License. The letter asserts that this was an improper seizure because the License was not the property of La Cidra at the time of the seizure and requests that Respondent issue the permanent License to Intervenor without delay. Unmoved by Mr. Courtney's letter, on June 4, 2014, Respondent issued a Notice of Intent to Deny License to Intervenor. The notice cites the writ of execution issued on February 18 and reasons that "neither the putative transferor nor putative transferee possess[es] title for the transfer of the [License]." This reasoning does not account for the simple chronology of events in which the La Cidra/Intervenor conveyance preceded the sheriff's levy and sale. On June 14, 2014, Intervenor requested an administrative hearing on the proposed denial. By Order of Dismissal entered April 30, 2015, Respondent acknowledged that its failure for more than 90 days to issue a decision on Intervenor's transfer application for a permanent License required Respondent to deem that the application had been approved, pursuant to section 120.60(1).4 The Order of Dismissal rescinds, without prejudice, the Notice of Intent to Deny License issued on June 4, 2014, and notes that Respondent approved the transfer of the permanent License to Intervenor on January 30, 2015.5 At about the time that it requested an administrative hearing on Respondent's earlier denial of its transfer application for a permanent License, Intervenor commenced judicial proceedings to obtain relief from Petitioner's claims arising out of the sheriff's sale. Intervenor sought to intervene in supplemental proceedings pertaining to the underlying tort action between Beltre and La Cidra. Intervenor also commenced a legal action against Beltre. The trial court denied the motion to intervene without prejudice, pending resolution of the separate action against Beltre. Intervenor appealed this order, but the appellate court affirmed the trial court on June 3, 2015. On October 6, 2015, the trial court dismissed Intervenor's action against Beltre for lack of prosecution. At the same time that Intervenor was pursuing judicial and administrative relief, on June 6, 2014, Petitioner filed a transfer application for Respondent's approval of the transfer of the License to Petitioner. The page for the signature of the transferor is blank, but Petitioner attached to the application a copy of the above-described Sheriff's Bill of Sale. On July 9, 2014, Respondent issued the above-described Notice of Intent to Deny License to Petitioner that cites Intervenor's documentation of the La Cidra/Intervenor conveyance as the ground for the denial. The evidentiary record omits any evidence of the fair market value of the License and, more importantly, as noted by Respondent in its proposed recommended order, the fact that, on November 13, 2013, Beltre filed with the Department of State a judgment lien certificate.
Recommendation It is RECOMMENDED that Respondent deny the application of Petitioner for a statutory transfer of the License. DONE AND ENTERED this 31st day of May, 2016, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE 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 31st day of May, 2016.
The Issue The issue presented is whether Respondent failed to maintain separate records of purchases and gross sales of all alcoholic and non-alcoholic beverages and food in violation of Section 561.20, Florida Statutes, and Florida Administrative Code Rule 61A-3.0141, and if so, what penalty, if any, is appropriate. (All Chapter and Section references are to Florida Statutes (1997) unless otherwise stated. Unless otherwise stated, all references to rules are to rules promulgated in the Florida Administrative Code in effect of the date of this Recommended Order).
Findings Of Fact Respondent holds license number 69-02639, series 4COP SRX. An SRX license authorizes Respondent to sell alcoholic beverages on the premises of Jon's Bar & Grill, located at 2485 N. Highway 17-92, Lake Monroe, Florida ("the licensed premises"). Persons issued "SRX" licenses must meet certain statutory requirements to ensure that they are operating bona fide restaurants. Among other requirements, Respondent must maintain separate records of all purchases and gross sales of all alcoholic and non-alcoholic beverages and food. Respondent's license application specifically informed Respondent that he must meet the specific requirements of this type of license. On March 17, 1997, Petitioner's Special Agent Richard Hurlburt met with Respondent for the purpose of conducting an SRX inspection to determine Respondent's compliance with SRX license requirements. An SRX inspection includes an audit of the licensee's records to determine the percentage of gross revenue derived from the sale of food and non-alcoholic beverages. Respondent was unable to produce the records he is statutorily required to maintain. Agent Hurlburt issued a notice to produce records relating to the operation of the restaurant. On August 12, 1997, Petitioner issued a notice of administrative complaint against Respondent for failure to maintain separate records of all purchases and gross sales for non-alcoholic and alcoholic beverages and food in violation of Section 561.20. Respondent has not produced the records he is statutorily required to maintain.
Recommendation Based on the forgoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order imposing a $1,000 civil penalty against Respondent and revoking alcoholic beverage license no. 69-02639, series 4COP SRX, without prejudice to obtain any other type license, but with prejudice to obtain another SRX special license for 5 years from date of the Final Order. DONE AND ENTERED this 6th day of August, 1998, in Tallahassee, Leon county, Tallahassee, Florida. DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 6th day of August, 1998. COPIES FURNISHED: Richard Boyd, Director Division of Alcoholic Beverages and Tobacco Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Lynda L. Goodgame, General Counsel Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 George Lewis, Assistant General Counsel Department of Business and Professional Regulation 1940 North Monroe street Tallahassee, Florida 32399 Jon Gustafson, pro se 956 Lake Ashby Road New Smyrna, Florida 32069
Findings Of Fact Based on the exhibits introduced into evidence and the testimony of the witnesses at the hearing, I make the following findings of fact: On January 3, 1984, an application for transfer of alcoholic beverage license number 16-262, in the name of I. T. Chips, Inc., to JNJ, Inc., d/b/a Apples, was delivered to the Lauderhill District Office of the Division of Alcoholic Beverages and Tobacco by Michael Rapp. The application and personal questionnaire of Michael Rapp, Vice President of JNJ, Inc., revealed that he had been convicted of a felony within the last 15 years. Upon being informed by Sgt. Pat Roberts that the application for transfer would be denied because Rapp's conviction was disqualifying, Rapp withdrew the application. On January 6, 1984, Michael Rapp submitted an amended application for transfer of this same alcoholic beverage license to JNJ, Inc., d/b/a Apples. The amended application listed Janet Swift, a/k/a Janet Swift Rapp, as sole corporate officer and shareholder. An agreement for purchase and sale submitted with the application revealed that JNJ, Inc., was purchasing from MAM Restaurant Corporation all assets located at 1201 East Hallandale Beach Boulevard, Hallandale, Florida, the address of the licensee, I. T. Chips, Inc., for a total price of $418,600.00. The purchase and sale agreement acknowledged that a down payment in the amount of $18,600.00 had been made by JNJ, Inc., and provided for the remaining debt of $400,000.00 to be paid in monthly installments of $4,800.00 and be secured by a mortgage. The application stated that Frederick Cusolito and Janet Swift would be the sole financial investors in the business and that the corporation's banking business would be conducted at the Bank of Hallandale & Trust Company. Janet Swift swore that the information provided on the application was true. Whatever, Inc., is a corporation with the same business address as JNJ, Inc. Michael Rapp is the President and Secretary of Whatever, Inc. Whatever, Inc., had a bank account at the Bank of Hallandale & Trust Company and Michael Rapp was an authorized signer on the account. During January of 1984, Whatever, Inc., was writing checks to pay some of the operating expenses of the business located at 1201 East Hallandale Beach Boulevard. JNJ, Inc., with an address of 1201 East Hallandale Beach Boulevard, Hallandale, Florida, had a bank account at Flagship Bank of Miami. The bank records show Janet Swift as president of the corporation and Michael Rapp as Vice President. During December of 1983, the following deposits were made to the JNJ, Inc., account at the Flagship Bank of Miami: $92,500.00 from Martin I. Roth at L & M Consultants, $27,000.00 from David J. S. Gottfried, $39,000.00 from the Hanseatic Development Corporation (described as a "loan"), and $87,000.00 from an unidentified account at the Bank of Ireland in New York. None of the people or entities from whom these deposits were received were listed as financial investors of JNJ, Inc., on the sworn application filed by Janet Swift for the transfer to JNJ, Inc. None of them were listed as financial investors of I. T. Chips, Inc., on the sworn application filed by Janet Swift for change of business name and change of officers of I. T. Chips, Inc. Martin I. Roth, the authorized signer on the bank account of L & M Consultants who actually signed the L & M Consultants checks which were deposited in the JNJ, Inc., account, was convicted of a felony in 1981. On January 19, 1984, JNJ, Inc., borrowed $75,000.00 from Schmidt Industries, Inc., a Missouri corporation. To secure that loan, JNJ, Inc., entered into a Security Agreement (chattel mortgage) pursuant to which JNJ, Inc., pledged liquor license series number 4 COP, permit number 16-262, as security for the repayment of the $75,000.00 loan. Liquor license series number 4 COP, permit number 16-262 is the liquor license issued to I. T. Chips, Inc. 1/ The facts described in paragraphs 3, 4, 5, and 6, above, came to the attention of DABT Investigator Michael D'Ambrosia during the course of his investigation of the January 6, 1984, application to transfer the I. T. Chips, Inc., license to JNJ, Inc. D'Ambrosia met with representatives of JNJ, Inc., discussed with them the information he had acquired during the course of his investigations, and requested that he be provided with certain additional information. Thereafter, District Supervisor Richard Boyd recommended disapproval of the January 6, 1984, application on April 3, 1984. On April 4, 1984, before any final agency action was taken on the application, JNJ, Inc., withdrew the application to transfer the I. T. Chips, Inc., license to JNJ, Inc. On April 4, 1984, Janet Swift signed an application for a change of business name and a change of corporate officers of the licensee corporation, I. Chips, Inc. 2/ This application was filed on April 11, 1984, with the Division of Alcoholic Beverages and Tobacco. Janet Swift was again listed as sole corporate officer and shareholder. The sworn application filed in April of 1984 contained the following financial information: JNJ, Inc., which held a temporary license, which has since been withdrawn, executed an Agreement for Purchase and Sale with MAM Restaurant Corporation on 12/8/83. JNJ, Inc., the stock of which is owned exclusively by Janet Swift, has abandoned the premises, since Janet Swift has purchased all of the stock in I. T. Chips, Inc., for which she paid no consideration other than assuming the existing debts. I. T. Chips, Inc. has agreed to assume the mortgage referred to in the Agreement for Purchase and Sale; to wit, the initial principal sum of $400,000.00, payable at the rate of $4,800.00 per month, which will be paid from the proceeds of the operation of the business herein. Janet Swift is the sole and exclusive owner of T. Chips, Inc., and no other person, firm or entity has any interest, direct or indirect, in the said business. The application which was signed on April 4, 1984, and filed on April 11, 1984, did not contain any information about the financing of the business other than what is quoted immediately above, and did not list any person as having an interest in the business other than Janet Swift. On April 4, 1984, Janet Swift swore to the truth of the following statement which is printed on the application form: I swear or affirm under penalty of perjury as provided for in Florida Statutes 837.06 and 559.791, that the foregoing information is true to the best of my knowledge, and that no other person, persons, firm or corporation, except as herein indicated, has an interest in the alcoholic beverage license or cigarette permit for which these statements are made. On April 4, 1984, Schmidt Industries, Inc., had an interest in the alcoholic beverage license which was the subject of the application signed by Janet Swift, because that same license was pledged as collateral for a $75,000.00 loan, and pursuant to a chattel mortgage, Schmidt Industries, Inc., had a security interest in that license to guarantee the payment of the loan. 3/ On April 4, 1984, JNJ, Inc., was a financial investor in the I. T. Chips, Inc., license or business because I. T. Chips, Inc., received the benefit of the $18,500.00 down payment that JNJ, Inc., made to MAM Restaurant Corporation and I. T. Chips, Inc., received the benefit of the $75,000.00 that JNJ, Inc., borrowed from Schmidt Industries, Inc. On April 4, 1984, the persons and entities described in paragraph 4, above, who wrote checks deposited in the JNJ, Inc., bank account were indirect financial investors in the I. T. Chips, Inc., license or business because I. T. Chips, Inc., was either the successor to or the alter ego of JNJ, Inc. On April 4, 1984, Frederick Consolito was an indirect financial investor in the I. T. Chips, Inc., license or business because I. T. Chips, Inc., was either the successor to or the alter ego of JNJ, Inc. 4/ The foregoing findings of fact incorporate the substance of the vast majority of the findings of fact proposed by the parties. In those few instances where I have made findings contrary to the proposed findings, it is because the persuasive competent substantial evidence was to use contrary of the proposed findings. In those few instances where I have omitted the substance of findings proposed by a party, it is because the proposed finding was irrelevant, immaterial, cumulative, or not supported by persuasive competent substantial evidence.
Recommendation Based upon all of the foregoing it is recommended that the Division of Alcoholic Beverages and Tobacco enter a final order denying the application for change of business name and change of corporate officers of I. T. Chips, Inc. DONE AND ORDERED this 1st day of April, 1985, in Tallahassee, Florida. MICHAEL M. PARRISH 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 1st day of March, 1985.
