95-005126 Department Of Agriculture And Consumer Services vs. Bruce S. Beattie Ii, D/B/A Paradise Gym
 Status: Closed
Recommended Order on Thursday, April 11, 1996.

View Dockets  
Summary: Administrative fine of $100 recommended for gym which operated without being registered per 501.015(1). Maximum fine "per violation" not "per day".






17Petitioner, )


20vs. ) CASE NO. 95-5126



31d/b/a PARADISE GYM, )


36Respondent. )



41Pursuant to notice, a formal administrative hearing was held in this case

53on December 11, 1995, via video teleconference in Miami, Florida, and

64Tallahassee, Florida, before Patricia Hart Malono, a duly designated Hearing

74Officer of the Division of Administrative Hearings.


82For Petitioner: Lawrence J. Davis, Senior Attorney

89Department of Agriculture and

93Consumer Services

95515 Mayo Building

98Tallahassee, Florida 32399-0800

101For Respondent: S. Bruce Beattie, II, Owner

108Paradise Gym

1101236 South Dixie Highway

114Coral Gables, Florida 33146


122Whether the respondent is guilty of the violations alleged in the Notice of

135Intent to Impose Administrative Fine, and, if so, the amount of the fine which

149should be imposed.


154In a Notice of Intent to Impose Administrative Fine dated June 13, 1995,

167the Department of Agriculture and Consumer Services ("Department"), notified

178Bruce S. Beattie, II, 1/ that it intended to impose an administrative fine

191against the Paradise Gym for operating as a health studio without being

203registered as required by section 501.015, Florida Statutes. Mr. Beattie

213requested a formal administrative hearing, and the case was forwarded to the

225Division of Administrative Hearings for formal proceedings. By Notice of

235Hearing, this case was set for final hearing on December 11, 1995, via video


250The Department was present in the video conference room at the Division of

263Administrative Hearings in Tallahassee, Florida. The Department called four

272witnesses: Joe Alexionok, a consumer consultant analyst with the Department;

282James R. Kelly, Director of the Division of Consumer Services; Gloria Van

294Treese, Chief of the Bureau of Consumer Protection; and Douglas Jennings, an

306investigator for the Department. The Department's Exhibits 1 through 29 were

317received into evidence. Mr. Beattie was present in the video conference room in

330the Ruth Rohde Building in Miami, Florida; a court reporter was also present at

344that location. Mr. Beattie testified in behalf of the Paradise Gym, as part

357owner. Respondent's Exhibit 1 was received into evidence.

365The transcript was filed, and the Department timely submitted a proposed

376recommended order. Rulings on the Department's proposed findings of fact are

387contained in the Appendix to this Recommended Order.


398Based on the oral and documentary evidence presented at the final hearing

410and the entire record of this proceeding, the following findings of fact are


4241. The Department is the state agency charged with the administration of

436sections 501.012-.019, Florida Statutes, and is responsible for registering

445health studios. The Division of Consumer Services carries out this function.

4562. Mr. Beattie and his brother, Tim, are owners of the Paradise Gym, a

470health studio located at 1236 South Dixie Highway, Coral Gables, Florida. The

482gym has been in business since 1976 and in its present location for over six


4983. The Department contacted the Paradise Gym several times in 1992

509regarding the statutory requirement that it register as a health studio. The

521gym continued to operate without being registered, however. In the spring of

5331993, the Department obtained an injunction from the circuit court in Dade

545County, Florida, barring the gym from operating until it registered with the


5584. On July 9, 1993, the Department conducted an on-site undercover

569investigation at the Paradise Gym and found that it was operating as a health

583studio in violation of the injunction. After the Department scheduled a

594contempt hearing, the Paradise Gym finally submitted a completed registration

604application. The gym was registered with the Department on December 6, 1993,

616and assigned registration number 02370.

6215. The annual registration for the Paradise Gym expired on December 6,

6331994. The Department sent the Paradise Gym a registration packet enclosed with

645a letter dated October 24, 1994. The packet contained a registration form, and

658the letter contained instructions to send the completed form to the Department

"670together with a copy of the membership contract currently in use and the annual

684registration fee of $300." (Emphasis in original.) The Department did not

695receive a response to the October 24 letter.

7036. In a letter dated December 2, 1994, the Department notified the

715Paradise Gym that it must send the completed registration form and other

727documents within fifteen days of the date of the letter. The December 2 letter

741contained the warning that the gym must immediately cease "all non-exempt

752activities" until it came into compliance with the statutes governing health

763studios. The Department did not receive a response to the December 2 letter.

7767. On January 24, 1995, an employee of the Department telephoned Mr.

788Beattie and was told that the registration packet would be sent by January 27,

8021995, and that the application had not been mailed sooner because the gym's

815offices had flooded and suffered serious damage. The Department did not hear

827from Mr. Beattie until February 20, 1995, when it received the Paradise Gym's

840Application for Registration; Affidavit of Exemption from the requirement that a

851bond, Certificate of Deposit, or letter of credit be posted; and check in the

865amount of $300 for the annual registration fee. These documents were signed by

878Mr. Beattie on February 6, 1995.

8848. The gym's membership contract was not included with the registration

895materials, and the Department sent a letter to the Paradise Gym dated February

90821, 1995, stating that the Department could not process the application for

920registration until it received a copy of the contract. The Department received

932no response to the February 21 letter.

9399. In a letter dated March 21, 1995, the Department notified Mr. Beattie

952that the application for registration of the Paradise Gym was denied because the

965Department had not received a copy of the gym's membership contract. The letter

978contained a Notice of Rights and was sent via certified mail.

98910. The letter was received at the Paradise Gym, and the return receipt

1002signed, on March 27, 1995. The Department did not receive a response to the

1016letter, either in writing or by telephone, and the denial became final agency

1029action 21 days after it was received at the gym.

103911. On May 5, 1995, an investigator for the Department conducted an on-

1052site undercover inspection of the Paradise Gym. The inspection revealed that

1063the gym was operating as a health studio and was offering memberships payable

1076annually or by down payment and monthly installments.

108412. On June 13, 1995, the Department issued the Notice of Intent to Impose

1098Administrative Fine at issue in this case and sent it to Mr. Beattie via

1112certified mail. The notice included an offer to settle the matter upon payment

1125of an administrative fine of $3500. The Department did not receive a response

1138to the notice and did not receive a return receipt indicating that the notice

1152had been delivered.

115513. In late July, 1995, Douglas Jennings, an employee of the Department,

1167telephoned Mr. Beattie to inquire about his failure to respond to the notice.

1180Mr. Beattie stated that he had not received it, and Mr. Jennings sent him a copy

1196via certified mail. The notice was received at the Paradise Gym on August 3,

12101995, and the Department granted the request for hearing dated August 21, 1995.

122314. On September 19, 1995, Mr. Jennings received a telephone call from Mr.

1236Beattie in which he asked if the Department would drop the fine; on September

125022, 1995, the Department received a copy of a document bearing the logo of the

1265Paradise Gym and entitled "Waiver and Release from Liability and Indemnity

1276Agreement." The contents of this document were substantially different from the

1287contents of the document of the same title submitted in 1993 with the gym's

1301initial application for registration, although the consumer disclosures required

1310by statute remained the same.

131515. At hearing, Mr. Beattie explained his failure to submit the Paradise

1327Gym's membership contract until September 22, 1995. He asserted on the one hand

1340that there was no "membership contract" for the gym, just a waiver of liability,

1354and on the other hand that the Department had a copy of the Waiver and Release

1370from Liability and Indemnity Agreement he provided in 1993 with the gym's

1382original application for registration. He did not explain why the Paradise Gym

1394continued to operate after being notified in December 1994 that the gym could

1407not continue operating until it had registered with the Department or why the

1420gym continued to operate after March 21, 1995, when its application for

1432registration was denied.

143516. The Department has proven by clear and convincing evidence that the

1447Paradise Gym operated as a health studio without being registered with the



146317. The Division of Administrative Hearings has jurisdiction over the

1473subject matter of this proceeding and the parties hereto pursuant to section

1485120.57(1), Florida Statutes.

148818. Sections 501.014 and .015, Florida Statutes, give the Department

1498responsibility for licensing and regulating health studios. Pursuant to the

1508grant of rulemaking authority in section 501.014(2)(a), the Department has

1518promulgated rules "to implement, enforce, and interpret" its duties under

1528sections 501.012-.019, Florida Statutes.

153219. Section 501.015, Florida Statutes, states in pertinent part:

1541501.015 Health studios; registration requirement

1546and fees.--Each health studio shall:

1551(1) Register each of its business locations with

1559the department in a form and manner as required by

1569the department.

1571The Department has promulgated rule 5J-4.004, Florida Administrative Code, which


15825J-4.004 Registration. Any person who intends to

1589open or operate as a health studio shall, prior to

1599engaging in such activities, register with the

1606Department using Form 10300, Health Studio

1612Registration. . . .

161620. Section 501.019, Florida Statutes, authorizes the Department to impose

1626penalties on health studios which are not in compliance with the requirements of

1639sections 501.012-.019. Section 501.019 provides in pertinent part:

1647(4) The department may impose administrative

1653fines as prescribed below:

1657* * *

1660(c) For a violation of s. 501.015, a fine not

1670to exceed $100 per violation.

1675The Department has not promulgated any rules interpreting this statutory


168621. "Because the imposition of administrative fines . . . , like license

1698revocation proceedings, are penal in nature and implicate significant property

1708rights," the Department has the burden of proving the violation alleged in the

1721Notice of Intent to Impose Administrative Fine by clear and convincing evidence.

1733Department of Banking & Finance, Division of Securities & Investor Protection v.

1745Osborne Stern & Co., 21 Fla. L. Weekly S142, S143 (Fla. March 28, 1996).

175922. The Department has met its burden in this case by proving by clear and

1774convincing evidence that the Paradise Gym was operating in May 1995 without

1786being registered by the Department as required by section 501.015(1). 2/

179723. The Department presented considerable evidence detailing the

1805difficulties it has had over the years with the Paradise Gym. It has come

1819forward with persuasive evidence that Mr. Beattie d/b/a Paradise Gym has flouted

1831the registration requirements of sections 501.012-.019 both in 1992-1993 with

1841regard to the gym's initial registration and in 1994-1995 with regard to its

1854registration for 1994. The evidence demonstrates that Mr. Beattie submitted the

1865completed application for the gym's initial registration in 1993 only when the

1877gym was in jeopardy of being held in contempt of court for violating an

1891injunction barring it from operating without being registered; the evidence also

1902demonstrates that Mr. Beattie submitted the gym's membership contract in

1912September 1995 when the gym was in jeopardy of having an administrative fine

1925imposed for operating without being registered. The evidence is uncontroverted

1935that the Paradise Gym has operated as a health studio without being registered

1948and that Mr. Beattie has steadfastly refused to provide the Department with the

1961documents necessary for registration. Mr. Beattie offered no justification for

1971the gym's continuing to operate without being registered, and his explanation of

1983why he failed to provide the gym's membership contract to complete the 1994

1996registration application is not credible.

200124. The history of the Paradise Gym's relationship with the Department

2012justifies imposition of the maximum statutory penalty for operating without

2022being registered. The Department is authorized to impose an administrative fine

2033for the failure of a health studio to register in an amount "not to exceed $100

2049per violation," section 501.019(4)(c), Fla. Stat., and it may not impose a

2061penalty in excess of that specified by statute. See Florida League of Cities,

2074Inc. v. Administration Commission, 586 So. 2d 397, 412 (Fla. 1st DCA

20861991)(penalty imposed by agency must be supported by competent substantial

2096evidence and "within the statutory range as prescribed by law"). A health

2109studio which operates without being registered with the Department, in violation

2120of section 501.015(1), has committed one violation of section 501.015. The

2131maximum fine which can be imposed is $100. 3/


2141Based on the foregoing Findings of Fact and Conclusions of Law, it is:

2154RECOMMENDED that the Department of Agriculture and Consumer Services enter

2164a Final Order finding that the Paradise Gym violated section 501.015(1) by

2176operating without being registered with the Department and imposing an

2186administrative fine in the amount of $100.

2193DONE AND ENTERED in Tallahassee, Leon County, Florida, this 11th day of

2205April 1996.



2211Hearing Officer

2213Division of Administrative Hearings

2217The DeSoto Building

22201230 Apalachee Parkway

2223Tallahassee, Florida 32399-1550

2226(904) 488-9675

2228Filed with the Clerk of the

2234Division of Administrative Hearings

2238this 11th day of April 1996.


22451/ On December 7, 1995, the Department filed a Motion to Amend Pleading to

2259correct Mr. Beattie's name from Bruce S. Beattie to S. Bruce Beattie. The

2272motion was unopposed and was granted at the hearing.

22812/ The Department notified Mr. Beattie in the June 13, 1995, Notice of Intent

2295to Impose Administrative Fine that it intended to impose an administrative fine

2307against the Paradise Gym because, "[a]s a result of its investigation, the

2319Department has determined that you are operating as a health studio without

2331being registered as required by Section 501.015, Florida Statutes." In its

2342Proposed Recommended Order, however, the Department states that the Paradise Gym

2353should be found guilty of violating section 501.015(1) because it was operating

2365without being registered, section 501.015(5) because it did not post a current

2377registration certificate in a prominent place in the facility, and section

2388501.015(6) because it did not include a registration number on its membership


2401The Paradise Gym may be found guilty only of the offense alleged by the

2415Department in its charging document, that is, of operating as a health studio

2428without being registered. See Maddox v. Department of Professional Regulation,

2438592 So. 2d 717, 720 (Fla. 1st DCA 1991)(complaint must "make clear the nature of

2453the alleged violations and the statutory provisions allegedly violated"); see

2464also Kinney v. Department of State, Division of Licensing, 501 So. 2d 129, 133

2478(Fla. 5th DCA 1987); Wray v. Department of Professional Regulation, Board of

2490Medical Examiners, 435 So. 2d 312, 315 (Fla. 1st DCA 1983). The Department did

2504not specify in the Notice of Intent to Impose Administrative Fine any violations

2517of section 501.015 except the failure to register, and it did not request at the

2532hearing that it be allowed to amend the Notice to include violations of sections

2546501.015(5) and 501.015(6).

25493/ The Department has recommended that a $3500 administrative fine be imposed

2561against the Paradise Gym. Mr. Kelly, Director of the Department's Division of

2573Consumer Services, testified that this fine was within the range permitted by

2585section 501.019(4)(c), as that section is interpreted by the Department.

2595According to Mr. Kelly, the Department has "always interpreted $100 per

2606violation to [sic] $100 per day, otherwise, there is no incentive for someone to

2620get registered as required by law since the registration fee is $300."

2632The Florida Supreme Court in Osborne Stern equated the imposition of an

2644administrative fine to revocation of a license, holding that both are penal in

2657nature. 21 Fla. L. Weekly at S143. Therefore, statutes authorizing the

2668imposition of administrative fines "must be strictly construed, with any

2678ambiguity interpreted in favor of the licensee." Elmariah v. Department of

2689Professional Regulation, Board of Medicine, 574 So. 2d 164, 165 (Fla. 1st DCA


2703The maximum fine specified in section 501.019(4)(c) is $100 "per violation"

2714of section 501.015. There are several distinct provisions of section 501.015

2725which may be violated, and section 501.019(4)(c) could be strictly construed as

2737implicitly limiting to $100 the maximum fine which can be imposed on a health

2751studio for a violation of section 501.015(1)(operating without being

2760registered), and for a violation of section 501.015(5)(failing to post current

2771registration certificate at the front desk), and for a violation of section

2783501.015(6)(failing to include registration number on membership contracts).

2791There is, however, no explicit guidance in the statute as to what

2803constitutes a "violation" of section 501.015. If this lack causes section

2814501.019(4)(c) to be ambiguous, the ambiguity must be construed in favor of the

2827health studio. Accordingly, the statute must be interpreted to mean that $100

2839is the maximum administrative fine which may be imposed against a health studio

2852for violating section 501.015(1) by operating without being registered. It must

2863also be noted that a health studio is required to register and pay the $300

2878registration fee in addition to paying the administrative fine and that the

2890Department has available the alternative civil remedies set out in section

2901501.019(3), some of which it used against the Paradise Gym in 1993 when it was

2916operating in violation of the section 501.015(1) registration requirement.

2925In support of its interpretation of section 501.019(4)(c) to allow the

2936imposition of the maximum fine for each day a health studio operates without

2949being registered, the Department relies on the interpretation of the statutes

2960dealing with solicitation of charitable contributions contained in the

2969Recommended Order in Department of Agriculture & Consumer Services v. United

2980Rainbow Foundation, Inc., DOAH Case No. 92-5344 (April 26, 1993). In that case,

2993the hearing officer construed the following provisions as permitting the

3003imposition of a $1,000 administrative fine for each day on which an unregistered

3017charitable organization collected contributions:

3021496.419 Powers of the department [of Agriculture].--

3028* * *

3031(4) The department may enter an order imposing one or more of the

3044penalties set forth in subsection (5) if the department finds that a charitable

3057organization, . . . has:

3062(a) Violated or is operating in violation of any of the provisions of ss.

3076496.401-496.424 or of the rules or orders issued thereunder;

3085* * *

3088(5) Upon a finding as set forth in subsection (4), the department may

3101enter an order doing one or more of the following:

3111(a) Imposing an administrative fine not to exceed $1,000 for each act or

3125omission which constitutes a violation of ss. 496.401-.424 or a rule or order.

3138The language in section 496.419(5) is substantially different from the

3148language in section 501.019(4)(c), and the interpretation of section

3157496.419(5)(a) to permit imposition of the maximum fine for each day on which an

3171unregistered charitable organization solicits contributions does not support the

3180Department's interpretation that section 501.019(4)(c) likewise permits

3187imposition of the maximum fine for each day on which a health studio operates

3201without being registered.


3205The following rulings are made on the petitioner's proposed findings of


3217Paragraphs 1, 3-4, 8-14, 16-24, and 27-31: Adopted and incorporated in

3228substance but not verbatim in paragraphs 2-14.

3235Paragraphs 6, 7, and 15: Accepted but not incorporated in the findings of

3248facts because subordinate to the facts as found or unnecessary to resolution of

3261the issues presented.

3264Paragraph 5: Rejected as not supported by competent evidence and as


3276Paragraphs 2, 25 and 26: Adopted and incorporated in substance but not

3288verbatim in paragraphs 2, 11 and 12 except to the extent proposed findings of

3302fact are subordinate or unnecessary.

3307The respondent did not submit proposed findings of fact and conclusions of



3322S. Bruce Beattie, II, Owner

3327Paradise Gym

33291236 South Dixie Highway

3333Coral Gables, Florida 33146

3337Lawrence J. Davis, Senior Attorney

3342Department of Agriculture and

3346Consumer Services

3348515 Mayo Building

3351Tallahassee, Florida 32399-0800

3354Richard Tritschler, General Counsel

3358Department of Agriculture and

3362Consumer Services

3364The Capitol, PL-10

3367Tallahassee, Florida 32399-0810

3370The Honorable Bob Crawford

3374Commissioner of Agriculture

3377The Capitol, PL-10

3380Tallahassee, Florida 32399-0792


3389All parties have the right to submit written exceptions to this recommended

3401order. All agencies allow each party at least ten days in which to submit

3415written exceptions. Some agencies allow a larger period within which to submit

3427written exceptions. You should contact the agency that will issue the final

3439order in this case concerning agency rules on the deadline for filing exceptions

3452to this recommended order. Any exceptions to this recommended order should be

3464filed with the agency that will issue the final order in this case.

Select the PDF icon to view the document.
Date: 10/04/1996
Proceedings: (Petitioner) Consent Order; Joint Settlement Stipulation for Consent Order filed.
Date: 07/17/1996
Proceedings: Final Order filed.
Date: 07/12/1996
Proceedings: Agency Final Order
Date: 07/12/1996
Proceedings: Recommended Order
Date: 04/25/1996
Proceedings: Petitioner`s Exceptions filed.
Date: 04/11/1996
Proceedings: Recommended Order sent out. CASE CLOSED. Hearing held 12/11/95.
Date: 01/05/1996
Proceedings: Petitioner`s Proposed Recommended Order filed.
Date: 01/04/1996
Proceedings: (Transcript) filed.
Date: 12/12/1995
Proceedings: Post Hearing Order sent out.
Date: 12/11/1995
Proceedings: (Petitioner) Notice of Complying With Request filed.
Date: 12/07/1995
Proceedings: (Petitioner) Motion to Amend Pleading filed.
Date: 11/29/1995
Proceedings: (Petitioner) Exhibits filed.
Date: 11/27/1995
Proceedings: (Petitioner) Notice of Filing Discovery filed.
Date: 11/14/1995
Proceedings: Notice of Hearing sent out. (Video Hearing set for 12/11/95; 9:30am;Tallahassee & Miami)
Date: 11/14/1995
Proceedings: Order of Prehearing Instructions sent out.
Date: 11/02/1995
Proceedings: (Petitioner) Joint Response to Initial Order filed.
Date: 10/27/1995
Proceedings: Initial Order issued.
Date: 10/24/1995
Proceedings: Agency Action Letter; Agency referral letter; Request for Administrative Hearing, letter form filed.

Case Information

Date Filed:
Date Assignment:
Last Docket Entry:
Tallahassee, Florida

Related DOAH Cases(s) (2):

Related Florida Statute(s) (5):

Related Florida Rule(s) (1):