09-004146 Department Of Business And Professional Regulation, Division Of Alcoholic Beverages And Tobacco vs. Urban Hospitality Ventures, Inc., D/B/A Decosey's Restaurant And Lounge Status: Closed Recommended Order on Wednesday, January 27, 2010.

Summary: Respondent maintained no credible records to establish that a sales ratio requirement was met.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF ALCOHOLIC BEVERAGES )

AND TOBACCO, )

)

Petitioner, )

)

vs. ) Case No. 09-4146

)

URBAN HOSPITALITY VENTURES, INC., d/b/a DECOSEY’S )

RESTAURANT AND LOUNGE, )

)

)

Respondent. )

)

RECOMMENDED ORDER

On December 1, 2009, a formal administrative hearing in

this case was held by video teleconference in Tampa and

Tallahassee, Florida, before William F. Quattlebaum,

Administrative Law Judge, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Michael B. Golen, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 40

Tallahassee, Florida 32399

For Respondent: Robert DeCosey, pro se

Urban Hospitality Ventures, Inc., d/b/a

DeCosey’s Restaurant and Lounge

2349 Lake Debra Drive, No. 617

Orlando, Florida 32835

STATEMENT OF THE ISSUES

The issues in the case are whether the allegations of the

Administrative Complaint are correct, and, if so, what penalty

should be imposed.

PRELIMINARY STATEMENT

By Administrative Complaint dated October 10, 2008, the

Department of Business and Professional Regulation, Division of

Alcoholic Beverages and Tobacco (Petitioner), alleged that Urban

Hospitality Ventures, Inc., d/b/a DeCosey's Restaurant and

Lounge (Respondent), failed to derive at least 51 percent of

gross revenue from sales of food and non-alcoholic beverages

during the period from April 1, 2008, to July 31, 2008. The

Respondent disputed the allegation and requested an

administrative hearing. On August 3, 2009, the Petitioner

forwarded the request to the Division of Administrative

Hearings, and the dispute was scheduled for hearing. The

hearing was continued and rescheduled upon a joint motion for

continuance filed by the parties.

At the hearing, the Petitioner presented the testimony of

three witnesses and had Exhibits numbered 1A through 1H admitted

into evidence. The Respondent testified on his own behalf.

The Transcript of the hearing was filed on December 18,

2009. On that same date, the Respondent filed a letter dated

December 12, 2009, that has been treated as a Proposed

Recommended Order. The Petitioner filed a Proposed Recommended

Order on December 28, 2009.

FINDINGS OF FACT

1. The Petitioner is the state agency responsible for

regulation of establishments licensed for the sale of alcoholic

beverages in the State of Florida.

2. Robert DeCosey is the sole owner and operator of the

Respondent.

3. At all times material to this case, the Respondent held

Special Restaurant License No. 63-05489, Series 4-COP/SRX.

4. Pursuant to law, the Respondent must derive at least

51 percent of his gross sales from food and non-alcoholic

beverages in order to maintain the license, and the Respondent

is required to maintain sufficient records to document such

sales.

5. The Petitioner conducted an audit for the period of

April 1, 2008, through July 31, 2008.

6. Based upon information that the Respondent provided to

the auditor, the auditor estimated that 41.2 percent of the

Respondent's gross revenue came from the sales of food and non-

alcoholic beverages.

7. The sales information provided to the auditor by the

Respondent lacked supporting documentation and was not reliable.

8. The Respondent maintained no verifiable information

regarding his gross sales during the audit period. The

Respondent provided no credible information regarding inventory

levels, and, accordingly, the auditor was unable to calculate

the Respondent's expenses. Sales prices were not provided

during the audit, and, therefore, the calculation of revenue was

little more than speculative.

9. At the hearing, the Respondent testified that the

"business model" he utilized focused on "special events" and

that he did not open the restaurant on a routine basis. He

testified that food was available during the events and served

buffet-style. There was no documentation to support the

testimony, and it has been rejected.

10. The Respondent testified that he rented the facility

during non-business hours to patrons who wanted to bring in

their own food and alcoholic beverages, some of whom may have

left food or alcohol behind after the private event concluded.

He also testified that he opened the facility for events during

which no food was available. Although the Petitioner asserted

subsequent to the hearing that such practices were violations of

state beverage law, the violations were not alleged in the

Administrative Complaint and are outside the scope of this

proceeding.

CONCLUSIONS OF LAW

11. The Division of Administrative Hearings has

jurisdiction over the parties to and subject matter of this

proceeding. §§ 120.569 and 120.57(1), Fla. Stat. (2009).

12. The Petitioner has the burden of proving by clear and

convincing evidence the factual allegations set forth in the

Administrative Complaint against the Respondent. Department of

Banking and Finance, Division of Securities and Investor

Protection v. Osborne Stern and Co. , 670 So. 2d 932 (Fla. 1996);

Ferris v. Turlington , 510 So. 2d 292 (Fla. 1987).

13. Subsection 561.20(2)(a)4., Florida Statutes (2007),

provides that a "special license" to sell alcoholic beverages

may be issued to a restaurant of appropriate size and service

capacity as long as the restaurant derives at least 51 percent

of its gross revenue from the sale of food and nonalcoholic

beverages.

14. Florida Administrative Code Rule 61A-3.0141 provides,

in relevant part, as follows:

61A-3.0141 Special Restaurant Licenses.

(1) Special restaurant licenses in excess

of the quota limitation set forth in

subsection 561.20(1), Florida Statutes,

shall be issued to otherwise qualified

applicants for establishments that are bona

fide restaurants engaged primarily in the

service of food and non-alcoholic beverages,

if they qualify as special restaurant

licensees as set forth in subsection (2) of

this rule. Special restaurant licensees

must continually comply with each and every

requirement of both subsections (2) and (3)

of this rule as a condition of holding a

license. Qualifying restaurants must meet

the requirements of this rule in addition to

any other requirements of the beverage law.

The suffix “SRX” shall be made a part of the

license numbers of all such licenses issued

after January 1, 1958.

* * *

(3) Qualifying restaurants receiving a

special restaurant license after April 18,

1972 must, in addition to continuing to

comply with the requirements set forth for

initial licensure, also maintain the

required percentage, as set forth in

paragraph (a) or (b) below, on a bi-monthly

basis. Additionally, qualifying restaurants

must meet at all times the following

operating requirements :

(a) At least 51 percent of total gross

revenues must come from retail sale on the

licensed premises of food and non-alcoholic

beverages. Proceeds of catering sales shall

not be included in the calculation of total

gross revenues. Catering sales include food

or non-alcoholic beverage sales prepared by

the licensee on the licensed premises for

service by the licensee outside the licensed

premises.

1. Qualifying restaurants must maintain

separate records of all purchases and gross

retail sales of food and non-alcoholic

beverages and all purchases and gross retail

sales of alcoholic beverages.

2. The records required in subparagraph

(3)(a)1. of this rule must be maintained on

the premises, or other designated place

approved in writing by the division for a

period of 3 years and shall be made

available within 14 days upon demand by an

officer of the division. The division shall

approve written requests to maintain the

aforementioned records off the premises when

the place to be designated is the business

office, open 8 hours per work day, of a

corporate officer, attorney, or accountant;

the place to be designated is located in the

State of Florida; and the place to be

designated is precisely identified by

complete mailing address.

3. Since the burden is on the holder of the

special restaurant license to demonstrate

compliance with the requirements for the

license , the records required to be kept

shall be legible, clear, and in the English

language.

4. The required percentage shall be

computed by adding all gross sales of food,

non-alcoholic beverages, and alcoholic

beverages and thereafter dividing that sum

into the total of the gross sales of food

plus non-alcoholic beverages. (Emphasis

added)

* * *

(d) Full course meals must be available at

all times when the restaurant is serving

alcoholic beverages except alcoholic

beverage service may continue until food

service is completed to the final seating of

restaurant patrons for full course meals. A

full course meal as required by this rule

must include the following:

1. Salad or vegetable;

2. Entree;

3. Beverage; and

4. Bread.

(e) For purposes of determining required

percentages, an alcoholic beverage means the

retail price of a serving of beer, wine,

straight distilled spirits, or a mixed

drink.

15. The evidence in this case clearly establishes that the

Respondent violated Subsection 561.20(2)(a)4., Florida Statutes

(2007), and Florida Administrative Code Rule 61A-3.0141 by

failing to comply with the requirements for maintaining the

license. The Respondent failed to maintain records sufficient

to establish that at least 51 percent of total gross revenues

were derived from retail sale on the licensed premises of food

and non-alcoholic beverages.

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 the special license held by

Urban Hospitality Ventures, Inc., d/b/a DeCosey's Restaurant and

Lounge.

DONE AND ENTERED this 27th day of January, 2010, in

Tallahassee, Leon County, Florida.

S

WILLIAM F. QUATTLEBAUM

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 27th day of January, 2010.

COPIES FURNISHED :

Robert DeCosey

Urban Hospitality Ventures, Inc., d/b/a

DeCosey’s Restaurant and Lounge

2349 Lake Debra Drive, No. 617

Orlando, Florida 32835

Michael B. Golen, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 40

Tallahassee, Florida 32399

Reginald Dixon, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

John R. Powell, Director

Division of Alcoholic Beverages

and Tobacco

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-1020

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.