08-003110 Department Of Business And Professional Regulation, Division Of Alcoholic Beverages And Tobacco vs. Gn Hotel And Restaurant, Inc., D/B/A Pineapple Grille Status: Closed Recommended Order on Tuesday, September 30, 2008.

Summary: The Petitoner proved that the Respondent failed to provide records of the purchases and sales of alcoholic and non-alcoholic beverages and food within 10 days of the date the records were requested. Recommended penalty of $500.00 fine recommended.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF ALCOHOLIC BEVERAGES )

AND TOBACCO, )

)

Petitioner, )

)

vs. ) Case No. 08-3110

)

GN HOTEL AND RESTAURANT, INC., )

d/b/a PINEAPPLE GRILLE, )

)

Respondent. )

_________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case

on August 25, 2008, by video teleconference, with the Petitioner

appearing in West Palm Beach, Florida, and the Respondent

appearing in Tallahassee, Florida, before Patricia M. Hart, a

duly-designated Administrative Law Judge of the Division of

Administrative Hearings, who presided in Tallahassee, Florida.

APPEARANCES

For Petitioner: Michael John Wheeler, Esquire

Department of Business and

Professional Regulation

Northwood Center, Suite 40

1940 North Monroe Street

Tallahassee, Florida 32303

For Respondent: Ovide Paul, Owner

GN Hotels & Restaurant, Inc.

800 Palm Trail

Delray Beach, Florida 33483

STATEMENT OF THE ISSUE

Whether the Respondent committed the violations alleged in

the Administrative Action dated April 28, 2008, as amended by

the Division at the final hearing, and, if so, the penalty that

should be imposed.

PRELIMINARY STATEMENT

In an Administrative Action dated April 28, 2008, the

Department of Business and Professional Regulation, Division of

Alcoholic Beverages and Tobacco (Division"), charged GN Hotels &

Restaurant, Inc., d/b/a Pineapple Grille (Pineapple Grille), as

follows:

1. ON OR ABOUT 03/18/08 , YOU, THE

AFOREMENTIONED LICENSEE, HOLDING A LICENSE

UNDER THE BEVERAGE LAW, OR YOUR AGENT(S),

OFFICER(S), SERVANT(S), OR EMPLOYEE(S), TO

WIT: GURPAL SINGH, DID UNLAWFULLY ON YOUR

LICENSED PREMISES FAIL TO MAINTAIN SEPARATE

RECORDS OF ALL PURCHASES AND GROSS RETAIL

SALES OF FOOD AND NON-ALCOHOLIC BEVERAGES

AND ALL PURCHASES AND GROSS RETAIL SALES OF

[SIC] ON YOUR LICENSED PREMISES FOR A PERIOD

OF 3 YEARS OR FAILED TO PRODUCE SUCH RECORDS

TO THE DIVISION OF ALCOHOLIC BEVERAGES AND

TOBACCO WITHIN 14 DAYS OF REQUEST FOR SUCH

RECORDS, THIS ACT BEING CONTRARY TO AND IN

VIOLATION OF 561.20(2)(a)(4) FSS/RULE 61A-

3.0141(3)(A)1, FLORIDA ADMINISTRATIVE CODE.

[sic] WITHIN 561.29(1)(A), FLORIDA STATUTES.

Ovide Paul, Vice President of the Pineapple Grille, disputed the

facts alleged and requested a formal administrative hearing.

The Division transmitted the matter to the Division of

Administrative Hearings for the assignment of an administrative

law judge. Pursuant to notice, the final hearing was held on

August 25, 2008.

At the hearing, counsel for the Division stated that the

subject records were provided to the Division on August 6, 2008,

and that the sole factual issue be resolved in this

administrative proceeding is whether the Pineapple Grille failed

to timely produce the records requested by the Division and, if

so, the penalty that should be imposed. The Division presented

the testimony of Eric R. Scarborough, a special agent employed

by the Division. The Pineapple Grille presented the testimony

of Mr. Paul. Neither party offered any exhibits into evidence.

No transcript of the proceedings was filed with the

Division. Both parties submitted proposed findings of fact and

conclusions of law, which have been considered in the

preparation of this Recommended Order.

FINDINGS OF FACT

Based on the oral and documentary evidence presented at the

final hearing and on the entire record of this proceeding, the

following findings of fact are made:

1. The Division is the state agency responsible for

regulating the sale of alcoholic beverages in the State of

Florida, and for investigating and imposing discipline on

persons holding licenses under Florida's Beverage Law.

See §§ 561.02 and 561.29, Fla. Stat.(2007). 1

2. The Pineapple Grille, which is located in Delray Beach,

Florida, is a restaurant that serves food and alcoholic

beverages. It holds a special restaurant license under

Florida's Beverage Law, having been issued license number 60-

14514, Series 4COP.

3. On or about February 25, 2008, Eric Scarborough, a

special agent with the Division, visited the Pineapple Grille to

investigate a complaint from an anonymous source alleging that

employees of the Pineapple Grille had been refilling call-brand

bottles in the bar with lower-grade liquor. Special Agent

Scarborough's investigation revealed that the complaint received

from the anonymous source was completely without foundation.

4. During the visit on February 25, 2008, Special Agent

Scarborough met with Renee Resemme, the manager and chef of the

Pineapple Grille, and, as a matter of routine, served her with a

notice requiring the Pineapple Grille to provide him with the

previous six months' records of its sales and purchases of

alcoholic and non-alcoholic beverages and food no later than

March 3, 2008. Special Agent Scarborough requested these

records as a matter of course because, under its license, the

Pineapple Grille is required to have sales of food and non-

alcoholic beverages comprise 51 percent of its gross revenue and

because the Pineapple Grille must purchase alcohol from

authorized distributors.

5. Gurpal Singh and Ovide Paul are the owners of the

Pineapple Grille. At the times material to this proceeding,

Mr. Singh was the individual responsible for keeping the records

of the business; Mr. Paul had been an owner of the business for

only a short time before the notice was served and was not

familiar with the manner in which the business's records were

kept. At the time of Special Agent Scarborough's visit to the

Pineapple Grille and for a significant period of time after the

visit, Mr. Singh was in Seattle, Washington, on family business.

6. When he received the notice served on Ms. Rosemme,

Mr. Paul contacted the Pineapple Grille's certified public

accountant, who had possession of the business records requested

by Special Agent Scarborough.

7. The certified public accountant told Mr. Paul that he

was very busy, but he began gathering the records requested.

8. The records had not been provided to Special Agent

Scarborough by March 18, 2008, so he made a return visit to the

Pineapple Grille on that date. Mr. Paul met with Special Agent

Scarborough, and he told Special Agent Scarborough that he was

not in charge of the documents but that the certified public

accountant was getting them together.

9. While the certified public accountant was trying to put

the documents in order, the Division sent a letter requiring

that records for the previous three years' sales of alcoholic

and non-alcoholic beverages and food were to be produced. Upon

receiving this letter, the certified public accountant wrote a

letter to the Division requesting an extension of time to

provide the records but there was no response to this request

for an extension.

10. The records were produced to the Division on August 6,

2008. During the five months in which Mr. Paul and the

certified public accountant were working to get the records

together, Mr. Paul made a number of telephone calls to Special

Agent Scarborough's office to explain the delay in producing the

records. Mr. Paul left his name and telephone number on the

voice mail system whenever he telephoned, but he received no

response from the Division.

CONCLUSIONS OF LAW

11. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and of

the parties thereto pursuant to Sections 120.569 and 120.57(1),

Florida Statutes (2008).

12. Because the Division seeks to suspend or revoke the

license of the Pineapple Grille to sell alcoholic beverages

and/or to impose an administrative fine or other penalties, it

has the burden of proving by clear and convincing evidence that

the Pineapple Grille committed the violation charged in the

Administrative Action, as amended by the Division at the final

hearing in this matter. Department of Banking & Finance,

Division of Securities & Investor Protection v. Osbourne Stern &

Co. , 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington , 510 So.

2d 292 (Fla. 1987).

13. The Pineapple Grille's license to sell alcoholic

beverages was issued pursuant to Section 561.20(2)(a)4., Florida

Statutes, which provides in pertinent part that an alcoholic

beverage license may be issued to "[a]ny restaurant having 2,500

square feet of service area and equipped to serve 150 persons

full course meals at tables at one time, and deriving at least

51 percent of its gross revenue from the sale of food and

nonalcoholic beverages."

14. Section 561.29, Florida Statutes, provides in

pertinent part:

(1) The division is given full power and

authority to revoke or suspend the license

of any person holding a license under the

Beverage Law, when it is determined or found

by the division upon sufficient cause

appearing of:

* * *

(j) Failure of any licensee issued a

license under s. 561.20(1) to maintain

records of all monthly sales and all monthly

purchases of alcoholic beverages and to

produce such records for inspection by any

division employee within 10 days of written

request therefor.

15. Florida Administrative Code Rule 61A-3.0141(3)(a)2.

requires that persons holding special restaurant licenses such

as that held by the Pineapple Grille must produce records of

purchases and sales of alcoholic and non-alcoholic beverages and

food within 14 days of the date the records are requested.

16. Based on the findings of fact herein and in accordance

with the issue as set forth by the Division at the final

hearing, the Pineapple Grille failed to provide the previous six

months' records of purchases and sales of alcoholic and non-

alcoholic and food within either 10 or 14 days of the date

Special Agent Scarborough served the notice to produce such

records on Ms. Rosemme. The Department has, therefore, proven

by clear and convincing evidence that the Pineapple Grille

violated Section 561.29(1)(j), Florida Statutes, and Florida

Administrative Code Rule 61A-3.0141(3)(a)2., by failing to

provide copies of the requested records within the time

specified in the statute and/or rule.

17. Florida Administrative Code Rule 61A-2.022 provides

that all businesses issued alcoholic beverage licenses by the

Division "are subject to discipline (warnings, corrective

action, civil penalties, suspensions, revocations, reimbursement

of cost, and forfeiture)," and the rule "sets forth the penalty

guidelines that shall be imposed upon alcoholic beverage

licensee and permittees who are supervised by the division" for

violations of Florida's Beverage Law. Fla. Admin. Code R. 61A-

2.022(1) and (2). The table incorporated into Florida

Administrative Code Rule 61A-2.022 provides for revocation of a

person's alcoholic beverage license for " failure to maintain and

produce records of monthly sales and purchases of alcoholic

beverages," identified as a violation of Section 561.29(1)(j),

Florida Statutes.

18. Pursuant to the above-stated penalty guideline, the

Division has recommended the penalty of revocation of the

Pineapple Grille's license to sell alcoholic beverages. This

penalty is too severe under the circumstances of this case.

First, it is uncontroverted that the Pineapple Grille did

maintain and produce the required records, and the only portion

of Section 561.29(j), Florida Statutes, or Florida

Administrative Code Rule 61A-3.0141(3)(a)2. that Pineapple

Grille violated was the provision that the records be produced

within 10 days/14 days of the date of the request. Second,

based on the findings of fact herein, Mr. Paul attempted to

contact the Division and explain the delay in producing the

records but was unable to get a response from the Division to

the messages he left on the Division's voice mail system.

Third, the Division expanded its request to include records for

the previous three years and then failed to respond to the

written request for an extension of time submitted by the

Pineapple Grille's certified public accountant.

19. The Division has the discretion to impose a lesser

penalty than revocation in this case. In Section 561.29(3),

Florida Statutes, the Division is given the discretion to

"impose a civil penalty against a licensee for any violation

mentioned in the Beverage Law, or any rule issued pursuant

thereto, not to exceed $1,000 for violations arising out of a

single transaction." In Section 561.29(3), Florida Statutes,

the Division is given the discretion to "compromise any alleged

violations of the Beverage Law, by accepting from the licensee

involved an amount not to exceed $1,000 for violations arising

out of a single transaction." In Section 561.29(3), Florida

Statutes, the Division is given the discretion to "suspend the

imposition of any penalty conditioned upon terms the division

should in its discretion deem appropriate."

20. The table incorporated into Florida Administrative

Code Rule 61A-2.022 provides for revocation of a person's

alcoholic beverage license only for the " failure to maintain and

produce " the records requested from the Pineapple Grille.

Because the Pineapple Grille did maintain and produce the

records, revocation of its license to sell alcoholic beverages

would be an abuse of the Division's discretion. Based on

consideration of the facts as found herein and of the range of

penalties set forth in the table incorporated into Florida

Administrative Code Rule 61A-2.022 for various violations of

Florida's Beverage Law, it is concluded that the appropriate

penalty in this case would be the imposition of an

administrative fine in the amount of $500.00.

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 finding that GN Hotels &

Restaurant, Inc., d/b/a Pineapple Grille, violated

Section 561.29(j), Florida Statutes, by failing to produce

records of the purchase and sales of alcoholic and non-alcoholic

beverages and food within 10 days of the request for such

records and imposing an administrative fine in the amount of

$500.00.

DONE AND ENTERED this 30th day of September, 2008, in

Tallahassee, Leon County, Florida.

___________________________________

PATRICIA M. HART

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 30th day of September, 2008.

ENDNOTE

1 / All references to the Florida Statutes are to the 2007

edition unless otherwise noted.

COPIES FURNISHED:

Michael John Wheeler, Esquire

Department of Business and

Professional Regulation

Northwood Center, Suite 40

1940 North Monroe Street

Tallahassee, Florida 32303

Ovide Paul

GN Hotels & Restaurant, Inc.

800 Palm Trail

Delray Beach, Florida 33483

Cynthia Hill, Director

Division of Alcoholic Beverages

and Tobacco

Department of Business and

Professional Regulation

Northwood Center

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Ned Luczynski, General Counsel

Department of Business and

Professional Regulation

Northwood Center

1940 North Monroe Street

Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this recommended order. Any exceptions

to this recommended order should be filed with the agency that

will issue the final order in this case.