01-003014 Department Of Transportation vs. Cafe Erotica, We Dare To Bare, Adult Toys/Great Food, Exit 94, Inc. Status: Closed Recommended Order on Thursday, December 20, 2001.

Summary: Evidence showed that Respondent`s sign consisted primarily of corporate name entitled to exemption even though secondary benefit to another corporation of Respondent.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF TRANSPORTATION, )

)

Petitioner, )

)

vs. ) Ca se No. 01 - 3014T

)

CAFE EROTICA, WE DARE TO BARE, )

ADULT TOYS/GREAT FOOD, EXIT 94, )

INC., )

)

Respondent. )

)

RECOMMENDED ORDER

Upon due notice, a hearing was held on October 2, 2001, in

Gainesville, Florida, before Diane Cleavinger, a duly - assigned

Administrative Law Judge of the Division of Administrative

Hearings.

APPEARANCES

For Petition er: Robert M. Burdick, Esquire

Department of Transportation

605 Suwannee Street

Haydon Burns Building, Mail Station 58

Tallahassee, Florida 32399 - 0450

For Respondent: Gary S. Ed inger, Esquire

305 Northeast First Street

Gainesville, Florida 32601

STATEMENT OF THE ISSUE

Is the Notice of Violation against Respondent valid; and if

valid, may the Department of Transportation require that the

allegedly offending signs be removed?

PRELIMINARY STATEMENT

This proceeding was initiated by the filing of requests for

a formal hearing by Respondent Café Erotica, Dare to Bare Adult

Toys/Great Food, Exit 94, Inc. (Exit 94), pursuant to

Sect ion 120.57(1), Florida Statutes, in response to a Notice of

Violation issued by the Florida Department of Transportation

(DOT) for the erection of an allegedly illegal sign. The case

was referred to the Division of Administrative Hearings.

At the hearing, DOT presented the oral testimony of three

witnesses and introduced five exhibits into evidence.

Respondent presented the oral testimony of two witnesses and

introduced nine exhibits into evidence.

After the hearing, Petitioner and Respondent filed Prop osed

Recommended Orders on November 1, 2001, and October 31, 2001,

respectively.

FINDINGS OF FACT

1. On June 7, 2001, DOT issued Notice of Violation 10B ST

2001 412, against a billboard sign located adjacent to

Interstate 95 (I - 95), approximately 1.3 mile s north of the

intersection of I - 95 and U.S. Highway 1 at Exit 92. The notice

alleged that the sign violates Chapter 479, Florida Statutes, in

that it is unpermitted. DOT contends that the sign advertises

for the Caf é Erotica restaurant, a business estab lishment not

located on the same premises as the sign, and that there is no

visible business occurring on the premises where the sign is

located.

2. I - 95 is part of the Interstate Highway System. The

sign is located within 660 feet of the nearest edge of the

right - of - way of I - 95 and can be seen without visual aid by

motorists of normal visual acuity traveling on I - 95.

3. The sign is a "permanent" one and has never been

permitted by DOT. Exit 94 has not applied to DOT for a sign

permit for the subject si gn or paid any sign permit fees for it.

No sign permit has been issued to any entity for the sign.

4. The sign displays the words "Café Erotica/We Dare to

Bare/Adult Toys/Great Food/Exit 94, Inc." The phrases on the

sign are displayed on two stacked fac es without the slashes.

5. The letters are all capitalized; the size of the

letters and the paint colors of yellow and black call the

viewer's attention to the phrases, "CAFE ¢ EROTICA," "WE DARE TO

BARE," "ADULT TOYS," "GREAT FOOD," and "EXIT 94." The wo rds "WE

DARE TO BARE" and "EXIT 94" are in very large black type and

cover most of the two faces of the sign. The phrases "CAFÉ

EROTICA," "ADULT TOYS," "GREAT FOOD," and the abbreviation

"INC.," are the phrases smallest in size, located at the very

top le ft, middle right, middle left and bottom right of the

sign. All the small phrases are in black type and are

relatively inconspicuous compared with the rest of the sign.

There are no addresses, telephone numbers, arrows, or other

identifying information o n the sign.

6. Respondent, Cafe Erotica, We Dare to Bare, Adult

Toys/Great Food, Exit 94, Inc., is a Florida corporation. It

was incorporated in 1998. At all times material, Café Erotica,

We Dare to Bare, Adult Toys/Great Food, Exit 94, Inc., has been

a corporation in good standing with the Florida Department of

State, which has registered and approved its corporate name

pursuant to Section 607.0401, Florida Statutes. Asher G.

Sullivan, Jr., a/k/a Jerry Sullivan, is incorporator, president,

shareholder, and director of Respondent. Mr. Sullivan chose the

name of the company because the words and phrases "get your

attention," are memorable, and are words and phrases

Mr. Sullivan has used a lot over the years to advertise for the

Café Erotica.

7. Exit 94 does not sell food or adult toys. It does not

offer dancers for public viewing. The business of Exit 94 is

the development of hunting and fishing camps on various pieces

of property it owns or leases in Florida and Georgia.

8. Café Erotica of F lorida, Inc., d/b/a Café Erotica (Café

Erotica), is a Florida corporation which holds the license and

owns the assets of the Café Erotica restaurant. Jerry Sullivan

also is president, shareholder, and owner of Café Erotica.

9. Exit 94 leases the land wh ere the sign is located from

James Grady Wainright, the owner of the property. The rental

property consists of approximately ten acres. The lease was

signed on April 20, 2001. The annual rent is $3000.00 per year.

Mr. Wainright has received all the ren t for 2001 from

Mr. Sullivan. Mr. Sullivan was reimbursed by Respondent shortly

after he paid the rent to Mr. Wainright.

10. The stated purpose of the lease is the construction

and maintenance of a hunting and fishing camp. The lease also

authori zes Exit 94 to erect advertising signs on the property,

states that any such signs will remain the property of Exit 94,

forbids Mr. Wainright from obstructing the highway view of such

signs, and grants Exit 94 permission to remove any vegetation

that may o bstruct the view of such signs.

11. Mr. Wainright originally contacted Mr. Sullivan about

leasing the property because he was interested in obtaining

income from having a sign on his property. However, his

interest resulted in the current hunting and fi shing camp lease.

12. The Café Erotica restaurant is a 24 - hour per day,

full - service restaurant which features dancers clad in bathing

suits and which sells adult toys.

13. The Café Erotica restaurant is located at 2620 State

Road 207 (SR 207), at the inte rsection of SR 207 and the exit 94

off - ramp from I - 95. The real property owned by Café Erotica is

not contiguous to the subject real property owned by Exit 94.

The real property owned by Exit 94, which is the subject of

DOT's Notice of Violation, is appr oximately nine miles from the

Café Erotica restaurant.

14. Mr. Sullivan makes the advertising decisions for Café

Erotica. In the past, Café Erotica has advertised "we dare to

bare," "adult toys," and "exit 94" on other billboards located

adjacent to I - 95 in St. Johns County. Until about two weeks

before the hearing of this matter, Café Erotica maintained a

billboard at the café that displayed the words "PRIVATE DANCES,"

"GREAT FOOD," and "ADULT TOYS."

15. At the time of hearing the billboards at Café Erot ica

now include words disparaging of the Department.

16. Café Erotica does not own any interest in the subject

sign and no citizen testified that the sign had caused him/her

to patronize Café Erotica. However, given the similarity of the

corporate name o f Exit 94 to advertising used by Café Erotica

and the location of Café Erotica at Exit 94, it is likely that

Respondent's corporate advertising could also be interpreted as

intended for Café Erotica and therefore be of incidental benefit

to Café Erotica. On the other hand, the sign is intended to

advertise Exit 94's hunting and fishing camps. In short,

Mr. Sullivan and his corporations receive a dual benefit from

the sign at issue here.

17. Exit 94 lists addresses and locations other than the

subje ct property as its business address(es) for various

purposes. Mr. Sullivan's and Exit 94's main business address

and office is on SR 206 off Exit 93 on I - 95. Exit 94 maintains

no office or telephone on the subject property.

18. Jerry Sullivan has direct ed all activity on the

Exit 94 property. His son is a licensed hunting and fishing

guide. Jerry Sullivan anticipates creating, maintaining, and

charging people for the privilege of using the subject property

as a fishing and hunting camp with guide se rvices, if desired,

provided by his son. He also intends to reward employees and

clients of his various enterprises with free privileges at the

camp. Currently, Exit 94's only revenues have been payments

from other companies owned by Mr. Sullivan or his wife for use

of the hunting and fishing camps maintained by Exit 94. The

company has operated at a loss since its inception. The loss is

made up by Mr. Sullivan as is needed.

19. There is no public access to the property Exit 94

leases from Mr. Wainright . The property is accessible by going

through property owned by a timber company. The closest exit

off I - 95 to get to the property is Exit 92, where U.S. Highway 1

intersects with I - 95. As of the hearing of this matter, Exit 94

was not operating a fishi ng camp open to the public on the

property leased from Mr. Wainright. However, such a public

enterprise is not required in order for Exit 94 to be a

legitimate business.

20. The parties do not dispute the fact that there is a

pond on the subject property. The evidence varied as to the

size and quality of the pond with the lower estimate by the

Department at 1/2 to 3/4 of an acre and the higher estimate of

two acres provided by the landowner. Respondent estimated the

size of the pond to be slightly less t han two acres.

21. The pond was not stocked with fish, but did have some

fish present. Respondent has ordered special hybrid bream to

stock the pond for "catch and release" by Respondent's customers

and guests. The property was not stocked with game anim als,

although such stocks would not be necessary for hunting since

wild game including turkey, boars, and ducks are already

present. There was also one very ramshackle deer blind on the

property. There were no public restrooms, offices, or

facilities to clean game on the premises. No fishing equipment

was available for purchase. A small trailer was located on the

premises. The trailer was placed there and is owned by

Mr. Wainright. It is unknown if the trailer is available for

overnight lodging. However, the trailer is not necessary for

the property to function as an overnight camp and no witness

testified to having camped overnight on the subject property.

Petitioner routinely distributes corn for seeding the woods for

deer and other game. Gi ven the location of the subject

property, game attraction is certainly feasible.

22. Bill Harry showed DOT personnel around the subject

property.

23. The Department's witness, Tom Simmons, was generally

critical of the quality of the hunting and fishing fa cilities.

While there were no people using the pond during his brief

inspection, Mr. Simmons has no personal knowledge as to whether

people actually hunted or fished on the property at any other

time.

24. The Department's representative acknowledged that he

saw feed corn scattered on the property for use in luring

wildlife to the premises.

25. Exit 94 holds an occupational license from

St. Johns County as a "fish camp." In issuing this license, the

county accepted Exit 94's designation of its business.

2 6. Exit 94 has applied for a "fish farm" license from the

Florida Game and Freshwater Fish Commission.

27. Exit 94 produced invoices sent to clients for hunting

and fishing privileges on the subject property, corresponding

checks in payment, and tax return s.

28. Exit 94 is a legitimate business. It is in the

business of providing and developing hunting and fishing camps

for use as directed by Exit 94. No reason was demonstrated to

pierce the corporate veil of Exit 94.

29. The sign located on the proper ty at issue here only

and primarily contains the name of the corporation and is exempt

from the general sign permitting requirements. Therefore, the

Notice of Violation should be dismissed.

CONCLUSIONS OF LAW

30. The Division of Administrative Hearings ha s

jurisdiction over the parties and subject matter of this cause.

Section 120.57(1), Florida Statutes, and Chapter 479, Part III,

Florida Statutes.

31. DOT contends that the sign does not advertise the

business of Exit 94 and that, therefore, the sign ca nnot be an

"on - premises" sign, but are, in fact, "off - premises"

advertisements for Café Erotica, and so must be permitted by

DOT, for a fee, or removed by the sign owner. Respondent

maintains that the sign is related to Exit 94's, business on the

subject property which Exit 94 leases and is using and

developing as a fishing and hunting camp.

32. The remedy sought in this case is not a "penal" one as

contemplated by the recent case of Chancellor Media Whiteco

Outdoor v. Department of Transportation , 2001 W.L. 201517, 26

Fla. L. Weekly D627 (Fla. 5th DCA March 2, 2001), because there

is no sign permit to revoke. However, the effect is the same in

that DOT seeks to deny Respondent Exit 94 the right to use its

own personal property on its own real property. Accordingly,

this case involves a valuable economic property right, and DOT

should be held to the higher burden of proof established in that

case of "clear and convincing evidence." However, even if DOT

merely has the duty of going forward and proving ea ch violation

by a preponderance of the evidence, it cannot prevail. See

Florida Department of Transportation v. J.W.C., Co. Inc., and

the Department of Environmental Regulation , 396 So. 2d 778 (Fla.

1st DCA 1981).

33. Section 479.01(17), Florida Statutes, provides, in

pertinent part,

"Sign" means any combination of structure

and message in the form of an outdoor

advertising sign, display, device, figure,

painting, drawing, message, placard, poster,

billboard, advertising structure,

advertisement, logo, sym bol, or other form,

whether placed individually or on a V - type,

back - to - back, side - to - side, stacked, or

double - faced display or automatic changeable

facing, designed, intended, or used to

advertise or inform, any part of the

advertising message or informat ive contents

of which is visible from any place on the

main - traveled way.

34. Section 479.01(6), Florida Statutes, provides,

"Erect" means to construct, build, raise,

assemble, place, affix, attach, create,

paint, draw, or in any other way bring into

bei ng or establish; but it does not include

any of the foregoing activities when

performed as an incident to the change of

advertising message or customary maintenance

or repair of a sign.

35. Section 479.07(1), Florida Statutes, provides,

Except as provide d in Sections 479.105(1)(e)

and 479.16, a person may not erect, operate,

use or maintain, or cause to be erected,

operated, used or maintained, any sign on

the State Highway System outside an

incorporated area or on any portion of the

interstate or federal - aid primary highway

system without first obtaining a permit for

the sign from the department and paying the

annual fee as provided in this section. For

purposes of this section, "on any portion of

the State Highway System or on any portion

of the interst ate or federal - aid primary

system" shall mean a sign located within the

controlled area which is visible from any

portion of the main - traveled way of such

system.

36. Section 479.01(4), Florida Statutes, defines

"controlled area" to mean "660 feet or les s from the nearest

edge of the right - of - way of any portion of the State Highway

System, interstate, or federal - aid primary system. . . ."

37. Section 479.150(1), Florida Statutes, provides,

Any sign which is located adjacent to the

right - of - way of any hig hway on the State

Highway System outside an incorporated area

or adjacent to the right - of - way on any

portion of the interstate or federal - aid

primary highway system which sign was

erected, operated, or maintained without the

permit required by Section 479. 07(1) having

been issued by the department, is declared

to be a public nuisance and a private

nuisance and shall be removed as provided in

this section.

38. An exemption from the permitting requirements of

Section 479.07(1), Florida Statutes, exists for "on - premises"

signs as defined in Section 479.16(1), Florida Statutes.

39. Section 479.16(1), Florida Statutes, provides in

pertinent part:

The following signs are exempt from the

requirement that a permit be obtained under

the provisions of this chapter b ut are

required to comply with the provisions of

Section 479.11(4) - (8):

(1) Signs erected on the premises of an

establishment, which signs consist primarily

of the name of the establishment or which

identify the principal or accessory

merchandise, servic es, activities, or

entertainment sold, produced, manufactured,

or furnished on the premises of the

establishment and which comply with the

lighting restrictions under department rule

adopted pursuant to Section

479.11(5), . . . . (emphasis added)

40. The burden to establish an exemption falls upon the

party seeking to establish the exemption, in this case, Exit 94.

See Florida Department of Transportation v. J.W.C. Co. Inc., and

the Department of Environmental Regulation , supra .

41. Section 479.0 2(1), Florida Statutes, provides for DOT

to:

(1) Administer and enforce the provisions

of this chapter and the agreement between

the state and the United States Department

of Transportation relating to the size,

lighting, and spacing of signs in accordanc e

with Title I of the Highway Beautification

Act of 1965 and Title 23, United States

Code, and federal regulations in effect as

of the effective date of this act.

42. 23 C.F.R. Section 750.709 regulates on - property or

on - premises advertising and provides in pertinent part:

(a) A sign which consists solely of the

name of the establishment or which

identifies the establishment's principal or

accessory products or services offered on

the property is an on - property sign. . . .

* * *

(d) Signs are ex empt from control under 23

U.S.C. Section 131 if they . . . advertise

activities conducted on the property on

which they are located. . . . State laws or

regulations shall contain criteria for

determining exemptions. These criteria may

include:

(1) A p roperty test for determining whether

a sign is located on the same property as

the activity or property advertised; and

(2) A purpose test for determining whether

a sign has as its sole purpose the

identification of the activity located on

the property or its products or

services . . . .

(3) The criteria must be sufficiently

specific to curb attempts to improperly

qualify outdoor advertising as "on - property"

signs, such as signs on narrow strips of

land contiguous to the advertised activity

when the purpose is clearly to circumvent 23

U.S.C. Section 131.

43. However, the quoted federal statute and regulations

urged by DOT only permit state laws and state regulations to

contain criteria, including a property test and a purpose test,

sufficiently specific to "curb attempts to improperly qualify

outdoor advertising on 'on - property' signs, such as a sign on

narrow strips of land contiguous to the advertised activity when

the purpose is clearly to circumvent 23 U.S.C. Section 131."

44. In Florida's regulatory scheme, any such tests to

determine that a corporation's purpose is clearly to circumvent

the law would have to either clearly appear in the statute or be

promulgated by DOT as rules under Chapter 120, Florida Statutes.

45. There are no DOT rule s providing further tests to

determine when a purpose exists to circumvent the law. The sole

criteria for the exemption are contained in Section 479.16(1),

Florida Statutes cited above.

46. In this case, the corporate name of the signs' owner

may not make any logical sense for a hunting and fishing camp as

far as DOT is concerned, and DOT may correctly speculate that it

has some incidental value to Mr. Sullivan's other corporations,

but denial of use of a duly - registered corporate name is not

DOT's preroga tive. A corporation has a right to use the full

corporate name approved by the Department of State. The use of

the name on a sign has been specifically exempted from

permitting requirements when it is contained in an on - premises

sign.

47. In light of the corporate books and materials provided

by Exit 94 and other evidence in this case, Exit 94 is a

legitimate corporation. The evidence does not demonstrate any

legitimate reason to "pierce the corporate veil" or to determine

that Exit 94 is a bogus or f raudulent "front" for something

else. Many individuals hold ownership and managerial interests

in more than one corporation and exercise those interests to the

mutual benefit of more than one corporation while limiting their

personal liability. The law p ermits this use of a corporate

shield. DOT asserts that 23 U.S.C. Section 131 and 23 C.F.R.

Sections 750.704 and 750.709 permit piercing of the corporate

veil whenever necessary to "curb attempts to improperly qualify

outdoor advertising as 'on - property s igns'." 23 U.S.C.

Section 131(c). See also 23 C.F.R. Section 750.704. However,

as noted earlier, these federal regulations do not provide DOT

with any power outside what is provided by the Florida Statutes

and regulations adopted thereunder.

48. Whil e DOT witnesses may consider the wild game on the

subject property to be inferior, scarce, or non - existent, may

consider the equipment inferior, and may consider the location

poor, these opinions do not refute Exit 94's evidence

establishing that a pond ex ists and is being developed and

stocked; that the property has been legally licensed for a camp;

that an application for a fishing farm has been made; that a

deer stand has been erected; and that people have actually

hunted there, been billed, and have pai d Exit 94 for the

privilege of using its property for hunting. The fact that

there remains a great deal more to do to get the camp project

out of the red and showing a profit does not preclude an

exemption for an on - premises sign, although the length of t ime

the property will be "in development" and the validity of the

steps already taken toward creating or expanding a fully -

functioning business entity should be weighed. See the Final

Order in Department of Transportation v. Florida Roadmaster Inn

Service s, Corp. , DOAH Case No. 91 - 4785T (Recommended Order

March 24, 1992; Final Order June 1, 1992), affirmed in

Roadmaster Inn Services, Corp. v. Department of Transportation ,

621 So. 2d 435 (Fla. 1st DCA 1993), distinguishing Harrison v.

Department of Transpo rtation , 349 So. 2d 720 (Fla. 1st DCA

1977), decided under a previous statute and rejecting the

proposition that intent to develop a business in the future,

without more, is sufficient cause to invoke the on - premises

exemption. Herein, it was shown that s ignificant activity

toward establishing a business activity on the property has

already occurred and that such activity has in fact taken place.

Therefore, Respondent has demonstrated that it is entitled to an

exemption from permitting for its on - premises sign and the

Notice of Violation should be dismissed.

RECOMMENDATION

Upon the foregoing findings of fact and conclusions of law,

it is

RECOMMENDED

That the Department of Transportation enter its final order

finding Café Erotica, We Dare to Bar e, Adult Toys/Great Food,

Exit 94, Inc., not guilty of having an unpermitted sign and

dismissing the Notices of Violation against it.

DONE AND ENTERED this 20th day of December, 2001, in

Tallahassee, Leon County, Florida.

________________________________ ___

DIANE CLEAVINGER

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 Cl erk of the

Division of Administrative Hearings

this 20th day of December, 2001.

COPIES FURNISHED :

Robert M. Burdick, Esquire

Department of Transportation

605 Suwannee Street

Haydon Burns Building, Mail Station 58

Tallahassee, Florida 32399 - 0450

Gary S . Edinger, Esquire

305 Northeast 1st Street

Gainesville, Florida 32601

James C. Myers, Clerk of Agency Proceedings

Department of Transportation

605 Suwannee Street

Haydon Burns Building, Mail Station 58

Tallahassee, Florida 32399 - 0450

Pamela Leslie, Ge neral Counsel

Department of Transportation

605 Suwannee Street

Haydon Burns Building, Mail Station 58

Tallahassee, Florida 32399 - 0450

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the d ate 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.