97-003805 Division Of Alcoholic Beverages And Tobacco vs. Arthur Lee Johnson, D/B/A Ft. Meade Restaurant And Lounge Status: Closed Recommended Order on Tuesday, June 2, 1998.

Summary: Respondent failed to maintain 51 percent of gross sales from the sale of food and non-alcoholic beverages and therefore subject to revocation.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, DIVISION )

OF ALCOHOLIC BEVERAGES AND )

TOBACCO, )

)

Petitioner, )

)

vs. ) Case No. 97-3805

)

ARTHUR LEE JOHNSON, )

d/b/a FORT MEADE RESTUARANT )

AND LOUNGE, )

)

Respondent. )

____________________________________)

RECOMMENDED ORDER

Upon due notice, William R. Cave, an Administrative Law

Judge for the Division of Administrative Hearings, held a formal

hearing in this matter on January 22, 1998, in Lakeland, Florida.

APPEARANCES

For Petitioner: Madeline McGuckin, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1007

For Respondent: Kenneth Glover, Esquire

505 Martin Luther King, Jr. Avenue

Lakeland, Florida 33802

STATEMENT OF THE ISSUE

Should Respondent's Alcoholic Beverage License Number

63-04089 be revoked, suspended or otherwise disciplined?

PRELIMINARY MATTERS

By an Administrative Action dated May 9, 1997, and filed

with the Division of Administrative Hearings (Division) on

August 15, 1997, the Department of Business and Professional

Regulation, Division of Alcoholic Beverages and Tobacco (DABT) is

attempting to revoke, suspend or otherwise discipline

Respondent's Alcoholic Beverage License Number 63-040089. As

grounds therefor, DABT alleges that Respondent: (a) on April 18,

1997, and April 26, 1997, did sell and give perspectively an

alcoholic beverage packaged to go, for off-premises consumption,

and on April 26, 1997, allowed an open container of beer to be

carried out of the establishment for off-premises consumption in

violation of Section 561.20(2)(a), Florida Statutes, and Rule

61A-3.0141, Florida Administrative Code; and (b) during the

period of January 1997 through April 1997 failed to derive at

least 51 per cent of its gross revenue from the sales of food and

non-alcoholic beverages in violation of Section 561.230(2)(a),

Florida Statutes, and Rule 61A-3.0141, Florida Administrative

Code. Respondent denied the allegation contained in both counts

of the Administrative Action and requested a formal hearing under

Section 120.57(1), Florida Statutes. By letter dated August 13,

1997, DABT referred the matter to the Division for the assignment

of an Administrative Law Judge and for the conduct of a formal

hearing.

At the hearing, DABT presented the testimony of Cleveland

Curtis McKenzie, Bobby Smith, Bobby Neil, Bradley Nelson, Brenda

Harris, Arthur Johnson, and Carl W. Swope, Jr. DABT's Exhibits

Nos. 1 through 12 were received as evidence. Respondent

testified on his own behalf and presented the testimony of Larry

Fisher and Reginald Johnson. Respondent's Composite Exhibit

No. 1 was offered as evidence but after objection was rejected.

Respondent then made a proffer of his Composite Exhibit One.

After further review of the record and the exhibit, Respondent's

Composite Exhibit One is rejected.

A transcript of this proceeding was filed with the Division

on February 6, 1998. On February 16, 1998, DABT filed an

unopposed Motion for Extension of Time to File Proposed

Recommended Order. An extension of time until March 6, 1998, was

granted with the understanding that any time constraint imposed

under Rule 28-5.404, Florida Administrative Code, was waived in

accordance with Rule 60Q-2.031(2), Florida Administrative Code.

DABT timely filed its proposed recommended order under the

extended time frame of March 6, 1998. The Respondent did not

file a proposed recommended order with Division However, the

Respondent did file a proposed recommended order with DABT on

March 11, 1998. On March 26, 1998, DABT forwarded a copy of

Respondent's proposed recommended order to the Division which was

received on March 27, 1998.

FINDINGS OF FACT

Upon consideration of the oral and documentary evidence

adduced at the hearing, the following relevant findings of fact

are made:

1. DABT is the division within the Department of Business

and Professional Regulation charged with the responsibility of

administering and enforcing the Beverage Law of the State of

Florida.

2. At all times material to this proceeding, Respondent,

operated as a sole proprietorship known as Fort Meade Restaurant

and Lounge, located at 122 Fourth Street Southwest, Fort Meade,

Florida. Respondent held a series SRX4COP Alcoholic Beverage

License Number 63-04089, issued by DABT, which authorized

Respondent to sell beer, wine, and liquor for consumption on the

licensed premises in connection with the restaurant operation of

Fort Meade Restaurant and Lounge. Respondent's beverage license

did not authorize Respondent to sell any form of alcoholic

beverage for consumption off of the licensed premises.

3. By letter dated February 10, 1997, the Fort Meade Police

Department requested investigative assistance from DABT

concerning an allegation that controlled substances were being

sold at Respondent's licensed premises as well as another

location unrelated to Respondent.

4. As a result of the request for assistance from the Fort

Meade Police Department, DABT instituted an investigation

concerning the complaint. In addition to assigning the complaint

to a Special Agent, Cleveland McKenzie, DABT requested

assistance from the Polk County Sheriff's Department.

5. At approximately 9:45 p.m. on April 18, 1997, Agent

McKenzie, accompanied by Detective Bobby Neil, Polk County

Sheriff's Office, entered Respondent's licensed premises, located

at 122 Fourth Street Southwest, Fort Meade, Florida, in an

undercover capacity.

6. While in Respondent's licensed premises on April 18,

1997, Agent McKenzie asked the person tending bar (bartender) for

"a beer for the road." In response to Agent McKenzie's request,

the bartender placed an unopened 12-ounce bottle of Budweiser

beer in a paper bag and handed the bag, with the beer inside, to

McKenzie who then paid for the beer and left the licensed

premises without attempting to conceal the beer on his person and

without being stopped by any person providing services on the

licensed premises. Agent McKenzie and Detective Neil left the

licensed premises at approximately 11:00 p.m.

7. Both Agent McKenzie and Detective Neil described the

bartender as a stout, light-skinned, black male approximately 20

to 25 years of age. Neither Larry Fisher, manager of the

licensed premises, nor Reginald Johnson, Respondent's adult son,

fit this description. The person tending bar at the licensed

premises on April 18, 1997, and April 26, 1997, was neither Larry

Fisher nor Reginald Johnson, notwithstanding the testimony of

Larry Fisher or Reginald Johnson to the contrary which I find

lacks credibility.

8. At approximately 10:30 p.m. on April 26, 1997, Agent

McKenzie and Detective Neil entered Respondent's licensed

premises located at 122 Fourth Street Southwest, Fort Meade,

Florida, in an undercover capacity

9. Before leaving the licensed premises on April 26, 1997,

Agent McKenzie asked the bartender (the same individual tending

bar while Agent McKenzie was in the licensed premises on April

18, 1997) for "a beer to go." The bartender placed an unopened

12-ounce bottle of Budweiser beer in a paper bag and handed the

bag to Agent McKenzie. The bartender refused the offer of

payment for the beer from Agent McKenzie's indicating that the

beer was "on him."

10. Agent McKenzie and Detective Neil left the licensed

premises at approximately 11:55 p.m. on April 26, 1997. Upon

leaving the licensed premises, Agent McKenzie carried the

unopened bottle of beer in the paper bag without any attempt to

conceal the beer on his person. Likewise, upon leaving the

licensed premises, Detective Neil carried a half-full opened

bottle of beer which he had purchased earlier from the bartender

without any attempt to conceal the bottle on his person.

11. In order to leave the licensed premises on April 26,

1997, Agent McKenzie and Detective Neil had to go pass two

individuals who were providing services to Respondent's licensed

premises. Neither of these individual, nor any other person

providing services to Respondent's licensed premises on April 26,

1997, prevented Agent McKenzie or Detective Neil from leaving the

licensed premises with the beer.

12. There was no evidence presented By DABT to show that

while Agent McKenzie and Detective Neil were in Respondent's

licensed premises on April 18, 1997, and April 26, 1997, that the

bartender sold or gave any other customer an alcoholic beverage

packaged to go or that any other customer left the licensed

premises with an alcoholic beverage.

13. Respondent was not present in his licensed premises

during the time that Agent McKenzie and Detective Neil were there

on April 18, 1997, and April 26, 1997.

14. There is insufficient evidence to show that the

bartender's action on April 18, 1997, and April 26, 1997, was the

result of Respondent's negligence, intentional wrongdoing, lack

of diligence, lack of training for the employees, or lack of

notice to customers that any alcoholic beverage purchased had to

be consumed on the licensed premises.

15. After the visits to the licensed premises on April 18,

1997, and April 26, 1997, Agent McKenzie concluded that there was

no basis to the alleged complaint that controlled substances were

being sold on the licensed premises.

16. The designation "SRX" identifies a beverage license

issued to business which is to be operated as restaurant.

17. As a result of its investigation of Respondent's

licensed premises on April 18, 1997, and April 26, 1997, DABT, as

is its normal practice, examined the Respondent's licensed

premises for continuing requirements applicable to special

licenses such as a "SRX" license.

18. Respondent is an experienced business person with 15

years experience in operating licensee premises. Respondent knew

at the time of obtaining the license at issue in May 1995 that he

had an obligation to maintain records sufficient to demonstrate

that Respondent met the 51 percent requirement in each bi-monthly

period.

19. Respondent's Profit and Loss Statement for the months

of January 1997, February 1997, March 1997, and April 1997,

listed the total amount of revenue derived from the sale of food

and non-alcoholic beverages and alcoholic beverages. However,

this figure for alcoholic beverages was not supported by any

daily records of sales. Respondent maintained no records as to

the daily sales of alcoholic beverages on the licensed premises.

20. Although Respondent presented guest checks for the

daily sales of food and non-alcoholic beverages, the total of

these checks for each month in question did not support the

Respondent's Profit and Loss Statement for each corresponding

month.

21. Based on the Respondent's Profit and Loss Statement and

other records furnished by Respondent for the months of January,

February, March, and April 1997, the percentage of total gross

revenue (sales of food, non-alcoholic beverages, and alcoholic

beverages) derived from the sale of food and non-alcoholic

beverages for the months of January 1997, February 1997, March

1997, and April 1997 was approximately 45 percent, 46 percent,

46 percent, and 44 percent, respectively.

CONCLUSIONS OF LAW

22. The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter of this

proceeding pursuant to Sections 120.57(1), Florida Statutes.

23. Sections 561.20(2)a)4., Florida Statutes, Statutes

provide in pertinent part as follows:

(2)(a) No such limitation of the number of

licenses as herein provided shall henceforth

prohibit the issuance of a special license

to:

* * *

4. Any restaurant. . .deriving at least 51

percent of its gross revenue from the sale of

food and nonalcoholic beverages, however, no

restaurant granted a special license on or

after January 1, 1958, pursuant to general or

special law shall operate as a package

store. . .Any license issued under this

section shall be marked "Special," and

nothing herein provided shall limit,

restrict, or prevent the issuance of a

special license for any restaurant. . . .

24. Rules 61A-3.0141(1), (2)(d), (3)(a)1.2.3.4., Florida

Administrative Code, provide in pertinent part as follows:

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 licenses as set forth in

subsection (2) of this rule. Special

restaurant licenses 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.

(2) Special restaurant licenses shall be

issued only to applicants for licenses in

restaurants meeting the criteria set forth

herein.

* * *

(d) An applicant for an SRX license must

either hold, or have applies for, the

appropriate restaurant license issued by the

Division of Hotels and Restaurants prior to

issuance of the temporary SRX license. The

restaurant must hold the appropriate

restaurant license before it will be eligible

for a permanent SRX license.

* * *

(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. . . .

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. . .for a period of 3

years. . . .

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

25. Section 561.15(3), Florida Statutes, in pertinent part

provides as follows:

(3) This division may suspend or revoke the

license under the Beverage Law of, or may

refuse to issue a license under the Beverage

Law to:

* * *

Any license issued to a person, firm, or

corporation that would not qualify for the

issuance of a new license may be revoked by

the division. . . .

26. DABT is statutorily empowered to suspend or revoke an

alcoholic beverage license, such as the one held by Respondent,

based upon any of the grounds enumerated in Section 561.29(1)(a)

and (g), Florida Statutes, which in pertinent part provides:

(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:

(a) Violation by the licensee or his or its

agents, officers, servants, or employees, on

the licensed premises, or elsewhere while in

the scope of employment, of any of the laws

of this state. . . .

* * *

(g) A determination that any person required

to be qualified by the division as condition

for the issuance of the license is not

qualified.

27. A literal reading of the language in Section 561.29(1),

Florida Statutes, suggests that a licensee may have its license

suspended or revoked based on a violation of state law committed

by its agents, officers, servants, or employees on the licensed

premises, regardless of the licensee's own personal fault or

misconduct in connection with the unlawful activity. However,

the courts of this state have consistently held to the contrary.

Under the well-established case law, a licensee may be suspended

or revoked pursuant to Section 561.29(1)(a), Florida Statutes,

only if it is determined that the licensee is culpably

responsible for the violations as a result of his own negligence,

intentional wrongdoing, or lack of diligence. See Pic N' Save

v. Department of Business Regulation , 601 So. 2d 245 (Fla. 1st

DCA 1992) and the cases cited therein.

28. In a disciplinary proceeding, the burden is upon the

regulatory agency to establish facts upon which its allegations

of misconduct are based, Balino v. Department of Health and

Rehabilitative Services , 348 So. 2d 349 (Fla. 1st DCA 1977).

DABT must prove the material allegations of the Administrative

Action by clear and convincing evidence. Department of Banking

and Finance, Division of Securities and Investor Protection v.

Osborne Stern and Company et al. , 670 So. 2d 932 (Fla. 1996);

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

failed to met its burden as to Count I of the Administrative

Action in that DABT failed to prove that Respondent was culpably

responsible for the bartender's violation of the law as a result

of the Respondent's own negligence, intentional wrongdoing, or

lack of diligence. However DABT has met its burden as to Count

II of the Administrative Action in that it has shown by clear and

convincing evidence that Respondent failed to maintain food and

non-alcoholic beverage sales at 51 per cent of the total revenues

derived from food, non-alcoholic beverages, and alcoholic

beverages during the period of January 1997 through April 1997.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, and a review of the penalty guidelines in Rule 61A-2.022,

Florida Administrative Code, it is recommended that the

Department enter a final order revoking Respondent's Alcoholic

Beverage License, Number SRX4COP 63-04089

DONE AND ENTERED this 2nd day of June 1998, in Tallahassee,

Leon County, Florida.

WILLIAM R. CAVE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 2nd day of June, 1998.

COPIES FURNISHED:

Richard Boyd, Director

Division of Alcoholic Beverages

And Tobacco

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Linda Goodgame

General Counsel

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32299-0792

Madeline McGuckin, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1007

Kenneth Glover, Esquire

505 Martin Luther King, Jr. Avenue

Lakeland, Florida 33802

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.