07-002508 Abkey, Ltd, D/B/A Fuddruckers Restaurant vs. Department Of Business And Professional Regulation, Division Of Alcoholic Beverages And Tobacco Status: Closed Recommended Order on Wednesday, April 30, 2008.

Summary: Recommend approval of Petitioners` applications for delinquent renewal of their SR licenses, where the agency, in its notices of intent to deny, had relied solely on a "rule" successfully challenged in a Section 120.56(4), Florida Statutes, proceeding.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ABKEY, LTD, d/b/a FUDDRUCKERS )

RESTAURANT, )

)

Petitioner, )

)

vs. ) Case No. 07-2508

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF ALCOHOLIC BEVERAGES )

AND TOBACCO, )

)

Respondent. )

__________________________________)

NICK MANEROS, II, INC., d/b/a )

MANEROS OF HALLANDALE, )

)

Petitioner, )

)

vs. ) Case No. 07-4602

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF ALCOHOLIC BEVERAGES )

AND TOBACCO, )

)

Respondent. )

__________________________________)

AMY CAT, INC., d/b/a CYPRESS )

MANOR, )

)

Petitioner, )

)

vs. ) Case No. 07-4692

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF ALCOHOLIC BEVERAGES )

AND TOBACCO, )

)

Respondent. )

__________________________________)

RECOMMENDED ORDER

Pursuant to notice, a hearing was conducted in these

consolidated cases pursuant to Sections 120.569 and 120.57(1),

Florida Statutes, 1 before Stuart M. Lerner, a duly-designated

administrative law judge of the Division of Administrative

Hearings (DOAH), on January 25, 2008, in Tallahassee, Florida.

APPEARANCES

For Petitioners: Harold F. X. Purnell, Esquire

Rutledge, Ecenia, Purnell and

Hoffman, P.A.

Post Office Box 551

Tallahassee, Florida 32302-0551

For Respondent: Michael J. Wheeler, Esquire

Department of Business and

Professional Regulation

Northwood Centre, Suite 40

Tallahassee, Florida 32399-2202

STATEMENT OF THE ISSUE

Whether Petitioners' applications for the delinquent

renewal of their special restaurant licenses pursuant to Section

561.27(2), Florida Statutes, should be denied for the reasons

set forth in the Notices of Intent to Deny.

PRELIMINARY STATEMENT

On April 2, 2007, the Department of Business and

Professional Regulation, Division of Alcoholic Beverages and

Tobacco (DABT) issued a Notice of Intent to Deny the application

that Abkey, Ltd., d/b/a Fuddruckers (Abkey) had filed on

February 21, 2007, seeking the delinquent renewal of its special

restaurant license. On or about April 23, 2007, Abkey filed

with DABT a request for an administrative hearing on the

proposed denial of its application. The matter was referred to

DOAH on June 5, 2007, and docketed as DOAH Case No. 07-2508.

On June 8, 2007, DABT issued a Notice of Intent to Deny the

application that Nick Maneros, II, Inc., d/b/a Maneros of

Hallandale (Maneros) had filed on June 4, 2007, seeking the

delinquent renewal of its special restaurant license. On or

about June 21, 2007, Maneros filed with DABT a request for an

administrative hearing on the proposed denial of its

application. The matter was referred to DOAH on October 5,

2007, and docketed as DOAH Case No. 07-4602.

On June 8, 2007, DABT issued a Notice of Intent to Deny the

application that Amy Cat, Inc. d/b/a Cypress Manor (Amy Cat) had

filed on December 6, 2006, seeking the delinquent renewal of its

special restaurant license. On or about July 9, 2007, Amy Cat

filed with DABT a request for an administrative hearing on the

proposed denial of its application. The matter was referred to

DOAH on October 11, 2007, and docketed as DOAH Case No. 07-4692.

On December 5, 2007, DABT, on behalf of itself, Abkey,

Maneros, and Amy Cat, filed a motion requesting that DOAH Case

Nos. 07-2508, 07-4602, and 07-4692 be consolidated. By order

issued that same day, the motion was granted.

On January 10, 2008, Maneros filed an opposed motion in

DOAH Case No. 07-4602 requesting that jurisdiction of the matter

"be relinquished to [DABT] for recommended issuance of an order

approving [Maneros'] delinquent renewal application," with

"jurisdiction be[ing] retained for the sole purpose of the

filing and consideration of a motion for attorney fees by

[Maneros]." Argument on the motion was heard by telephone

conference call on January 14, 2008. On January 15, 2008, the

undersigned issued an order denying the motion because there

remained disputed issues of material fact in DOAH Case No.

07-4602 that needed to be resolved.

On January 10, 2008, Abkey and Amy Cat filed a petition

with DOAH pursuant to Section 120.56(4), Florida Statutes,

challenging as violative of Section 120.54(1)(a), Florida

Statutes, the statement "interpreting [S]ection 561.20(5),

[Florida Statutes]" made in DABT's notices announcing its

intention to deny Amy Cat's and Abkey's requests for the

delinquent renewal of their special restaurant licenses. The

matter was docketed as DOAH Case No. 08-0212RU. On January 14,

2008, Amy Cat and Abkey filed a motion requesting that DOAH Case

No. 08-0212RU be consolidated with DOAH Case Nos. 07-2508,

07-4602, and 07-4692 (which had previously been consolidated).

On January 16, 2008, DABT filed a response to the motion, in

which it stated the following:

For the purpose of judicial economy and

being that the parties and issues are

similar, the Respondent defers to the

discretion of the Court regarding [the]

pending motion [to consolidate].

On January 18, 2008, the undersigned issued an order, which

provided as follows:

1. DOAH Case No. 07-0212RU is consolidated,

for purposes of hearing, with DOAH Case Nos.

07-2508, 07-4602, and 07-4692 pursuant to

Florida Administrative Code 28-106.108.

2. The hearing in these four consolidated

cases will be held on January 25, 2008, as

more specifically described in the Notice of

Hearing issued in DOAH Case Nos. 07-2508,

07-4602, and 07-4692 on December 5, 2007.

On January 17, 2008, a Pre-Hearing Stipulation was filed in

DOAH Case Nos. 07-2508, 07-4602, and 07-4692.

As noted above, the final hearing in DOAH Case Nos.

07-2508, 07-4602, 07-4692, and 08-0212RU was held on January 25,

2008, as scheduled. One witness, Eileen Klinger, the chief of

DABT's Bureau of Licensing, testified at the hearing. In

addition to Ms. Klinger's testimony, 20 exhibits (Petitioners'

Exhibits 1 through 19, and Respondent's Exhibit 1) were offered

and received into evidence.

The deadline for the filing of proposed recommended orders

in DOAH Case Nos. 07-2508, 07-4602, and 07-4692 was set at 15

days from the date of the filing with DOAH of the hearing

transcript.

The hearing Transcript (consisting of one volume) was filed

with DOAH on February 8, 2008.

On February 22, 2008, Abkey, Maneros, and Amy Cat

(hereinafter referred to collectively as "Petitioners") filed an

unopposed motion requesting an extension of the deadline for the

filing of proposed recommended orders. By order issued

February 25, 2008, the motion was granted, and the parties were

given until March 14, 2008, to file proposed recommended orders.

Petitioners and DABT timely filed their Proposed

Recommended Orders on March 14, 2008. 2 They also, on that same

date, filed a post-hearing stipulation, agreeing that

"Petitioners' SR licenses in the above cases are per general law

and not pursuant to any special or local act."

The parties were subsequently given the opportunity to

present oral argument in support of their respective positions

in these cases. Such argument was presented by telephone

conference call on April 14, 2008.

The parties were also given the opportunity to file post-

oral argument supplements to their Proposed Recommended Orders,

provided they did so no later than April 29, 2008. Abkey filed

a Supplemental Proposed Recommended Order on August 29, 2008.

No other post-oral argument pleading has been filed.

FINDINGS OF FACT

Based on the evidence adduced at hearing, and the record as

a whole, the following findings of fact are made:

1. There are various types of DABT-issued licenses

authorizing the retail sale of alcoholic beverages. Among them

are quota licenses, SRX licenses, and SR licenses. All three of

these licenses allow the licensee to sell liquor, as well as

beer and wine.

2. Quota licenses, as their name suggests, are limited in

number. The number of quota licenses available in each county

is based upon that county's population.

3. SRX and SR licenses are "special" licenses authorizing

the retail sale of beer, wine, and liquor by restaurants. There

are no restrictions on the number of these "special" licenses

that may be in effect (countywide or statewide) at any one time.

4. SRX licenses are "special restaurant" licenses that

were originally issued in or after 1958. 3

5. SR licenses are "special restaurant" licenses that were

originally issued prior to 1958.

6. For restaurants originally licensed after April 18,

1972, at least 51 percent of the licensed restaurant's total

gross revenues must be from the retail sale of food and non-

alcoholic beverages. 4

7. Restaurants for which an SR license has been obtained,

on the other hand, do not have to derive any set percentage or

amount of their total gross revenues from the retail sale of

food and non-alcoholic beverages.

8. DABT-issued alcoholic beverage licenses are subject to

annual renewal. 5

9. License holders who have not timely renewed their

licenses, but wish to remain licensed, may file an Application

for Delinquent Renewal (on DABT Form 6015).

10. Until recently, it was DABT's longstanding policy and

practice to routinely grant applications for the delinquent

renewal of SR and other alcoholic beverage licenses, regardless

of the reason for the delinquency.

11. DABT still routinely grants applications to

delinquently renew alcoholic beverage licenses other than SR

licenses, but it now has a "new policy" in place with respect to

applications for the delinquent renewal of SR licenses. The

"new policy" is to deny all such applications based upon these

SR licenses' not having been in "continuous operation," action

that, according to DABT, is dictated by operation of Section

561.20(5), Florida Statutes, a statutory provision DABT now

claims it had previously misinterpreted when it was routinely

granting these applications.

12. Relying on Section 561.20(5), Florida Statutes, to

blanketly deny all applications for the delinquent renewal of SR

licenses was the idea of Eileen Klinger, the head of DABT's

Bureau of Licensing. She directed her licensing staff to

implement the "new policy" after being told by agency attorneys

that this "was the appropriate thing [from a legal perspective]

to do."

13. Abkey and Amy Cat have SR licenses that were

originally issued in 1956 "per general law and not pursuant to

any special or local act."

14. Maneros has an SR license that was originally issued

in 1952 "per general law and not pursuant to any special or

local act."

15. As applicants applying to delinquently renew their SR

licenses, Petitioners are substantially affected by DABT's "new

policy" that SR licenses cannot be delinquently renewed because

they have not been in "continuous operation," as that term is

used in Section 561.20(5), Florida Statutes. Their applications

for the delinquent renewal of their licenses would have been

approved had the status quo been maintained and this "new

policy" not been implemented.

16. Abkey filed its application (on DABT Form 6015) for

the delinquent renewal of its SR license (which had been due for

renewal on March 31, 2005) on February 21, 2007. On the

application form, Abkey gave the following "explanation for not

having renewed during the renewal period": "Building was sold.

Lost our lease."

17. On April 2, 2007, DABT issued a Notice of Intent to

Deny Abkey's application. DABT's notice gave the following

reason for its intended action:

The request for delinquent renewal of this

license is denied. Florida Statute

561.20(5) exempted restaurant licenses

issued prior to January 1, 1958 from

operating under the provisions in 561.20(4)

as long as the place of business was in

continuous operation. This business failed

to renew its license on or before March 31,

2005, therefore it did not comply with the

requirements and is no longer valid.

18. Maneros filed its application (on DABT Form 6015) for

the delinquent renewal of its SR license (which had been due for

renewal on March 31, 2005) on June 4, 2007. On the application

form, Maneros gave no "explanation for not having renewed during

the renewal period"; however, the application was accompanied by

a letter from a Maneros representative, which read, in pertinent

part, as follows:

I am today submitting a delinquent renewal

application for the above-referenced

alcoholic beverage license. The building

has been demolished, and there is a vacant

lot at the site at this time. Redevelopment

is scheduled for this area, and I expect new

construction to begin shortly. The license

was first issued to this location 55 years

ago. I have inquired with the City of

Hallandale Beach, Florida, and there remains

a question as to whether zoning approval for

this type of alcoholic beverage license

would be permitted under current uses once

reconstruction is complete. The licensee of

record wishes to reinstate and possibly use

or transfer the license. . . .

19. On June 8, 2007, DABT issued a Notice of Intent to

Deny Maneros' application. DABT's notice gave the following

reason for its intended action:

The request for delinquent renewal of this

license is denied. Florida Statute

561.20(5) exempted restaurant licenses

issued prior to January 1, 1958 from

operating under the provisions in 561.20(4)

as long as the place of business was in

continuous operation. This business failed

to renew its license on or before March 31,

2005, therefore it did not comply with the

requirements and is no longer valid.

SR licenses will not be allowed to be moved

from the location where the license was

originally issued.

20. Amy Cat filed its application (on DABT Form 6015) for

the delinquent renewal of its SR license (which had been due for

renewal on March 31, 1999) on December 6, 2006. On the

application form, Amy Cat gave the following "explanation for

not having renewed during the renewal period": "Building was

closed."

21. On June 8, 2007, DABT issued a Notice of Intent to

Deny Amy Cat's application. DABT's notice gave the following

reason for its intended action:

The request for delinquent renewal of this

license is denied. Florida Statute

561.20(5) exempted restaurant licenses

issued prior to January 1, 1958 from

operating under the provisions in 561.20(4)

as long as the place of business was in

continuous operation. This business failed

to renew its license on or before March 31,

1999, therefore it did not comply with the

requirements and is no longer valid.

SR licenses will not be allowed to be moved

from the location where the license was

originally issued.

CONCLUSIONS OF LAW

22. DOAH has jurisdiction over the subject matter of this

proceeding and of the parties hereto pursuant to Chapter 120,

Florida Statutes.

23. Petitioners are seeking to delinquently renew their SR

licenses pursuant to Section 561.27, Florida Statutes, which

provides as follows:

(1) A licensee under the Beverage Law shall

be entitled to a renewal of his or her

annual license from year to year, as a

matter of course, in accordance with a

schedule of license renewals as established

by [DABT] and by paying the annual license

tax and giving any bond required of such

licensee under the Beverage Law.

(2) A license may be renewed subsequent to

expiration each year upon payment of a

penalty of $5 for each month or fraction of

a month of delinquency, or upon payment of a

penalty of 5 percent of the license fee,

whichever amount is the greater. Any

license not renewed within 60 days of

expiration will be canceled by [DABT] unless

such license is involved in litigation or an

administrative action; however, [DABT] may

allow a licensee to renew the license

subsequent to the 60-day period after good

and sufficient cause for the delinquency has

been shown to [DABT] by the licensee.

24. When presented with an application for the delinquent

renewal of an SR license, DABT is required by Section 120.60(3),

Florida Statutes, to give the applicant "written notice either

personally or by mail that [it] intends to grant or deny, or has

granted or denied, the application. . . . The notice must state

with particularity the grounds or basis for the issuance or

denial of the license . . . ."

25. If DABT notifies an applicant that it intends to deny

the applicant's application and there are disputed issues of

material fact, the applicant is entitled, at its request, to an

evidentiary administrative hearing conducted pursuant to

Sections 120.569 and 120.57(1), Florida Statutes, on such

proposed action before DABT takes any final action on the

application. See Silver Show, Inc. v. Department of Business

and Professional Regulation, Division of Alcoholic Beverages and

Tobacco , 706 So. 2d 386, 389 (Fla. 4th DCA 1998)("[F]ormal

hearings under sections 120.569 and 120.57 are part of the

application process--particularly, as here, where an applicant

seeks to contest facts relied on by [DABT] to deny an

application. . . . When a formal hearing has been requested

under sections 120.569 and 120.57, as here, the definitive act

of denial will not occur until [DABT] enters a final order at

the conclusion of the formal hearing. That will happen only when

the evidence has been heard, the hearing officer has filed a

recommended order, and the agency has entered its final order.

Anything before the entry of the final order in contested

license hearings is tentative and thus merely proposed.").

26. The hearing is "a de novo proceeding intended to

formulate agency action, and not to review action taken earlier

or preliminarily." Beverly Enterprises-Florida, Inc. v.

Department of Health and Rehabilitative Services , 573 So. 2d 19,

23 (Fla. 1st DCA 1990). The applicant has the opportunity at

the hearing, through its presentation, to attempt to persuade

DABT to change its mind and issue a final order granting its

application to delinquently renew its license. See Capeletti

Brothers Inc. v. Department of General Services , 432 So. 2d

1359, 1363 (Fla. 1st DCA 1983)("Capeletti misconceives the

purpose of the [Section] 120.57 hearing. The rejection of bids

never became final agency action. As we have previously held,

APA hearing requirements are designed to give affected parties

an opportunity to change the agency's mind."); and Couch

Construction Company Inc. v. Department of Transportation , 361

So. 2d 172, 176 (Fla. 1st DCA 1978)("APA hearing requirements

are designed to give affected parties an opportunity to change

the agency's mind.").

27. Any final order denying renewal of the applicant's

license must be based solely on the grounds asserted in the

notice of intent to deny given the applicant. See M. H. v.

Department of Children and Family Services , No. 2D07-1006, 2008

Fla. App. LEXIS 4391 *6 (Fla. 2d DCA March 28, 2008)("[T]he

notice's exclusive focus on 'significant pulling force' as

causing a nonaccidental injury precluded DCF from urging

negligence as an alternative ground for denying the renewal of

the license at the administrative proceeding.").

28. In the instant consolidated cases, Petitioners

received Section 120.60(3)-required notices advising them of

DABT's intent to deny their applications for the delinquent

renewal of their SR licenses. The notices reflected that the

proposed denials of Petitioners' applications were based solely

on DABT's "new policy" (described above) of treating SR licenses

that have not remained in "continuous operation," within the

meaning of Section 561.20(5), Florida Statutes, as invalid and

nonrenewable under all circumstances.

29. In the Final Order he has issued this date in DOAH

Case No. 08-0212RU, the undersigned has determined that the

existence of this "new policy" violates Section 120.54(1)(a),

Florida Statutes. Accordingly, pursuant to Section

120.56(4)(d), Florida Statutes, which provides as follows, DABT

may not rely on this "new policy" or "any substantially similar

statement as a basis for agency action" in these consolidated

cases:

When an administrative law judge enters a

final order that all or part of an agency

statement violates s. 120.54(1)(a), the

agency shall immediately discontinue all

reliance upon the statement or any

substantially similar statement as a basis

for agency action.

30. Inasmuch as DABT did not cite in the notices it

provided Petitioners in accordance with Section 120.60(3),

Florida Statutes, any other ground as a basis for denying

Petitioners' applications for the delinquent renewal of their SR

licenses, these applications must be granted (as they initially

would have been had DABT not changed its policy concerning the

delinquent renewal of SR licenses).

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is hereby

RECOMMENDED that the Department issue a Final Order

granting Petitioners' applications for the delinquent renewal of

their SR licenses.

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

Tallahassee, Leon County, Florida.

S

___________________________________

STUART M. LERNER

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 April, 2008.

ENDNOTES

1 Unless otherwise noted, all references in this Recommended

Order to Florida Statutes are to Florida Statutes (2007).

2 In Petitioners' Proposed Recommended Order, Amy Cat, for the

first time in this proceeding, argues that because DABT failed

to act on its delinquent renewal application "within 90 days of

receipt of the application," the application "is deemed approved

pursuant to [S]ection 120.60(1), [Florida Statutes]," which

provides as follows:

Upon receipt of an application for a

license, an agency shall examine the

application and, within 30 days after such

receipt, notify the applicant of any

apparent errors or omissions and request any

additional information the agency is

permitted by law to require. An agency

shall not deny a license for failure to

correct an error or omission or to supply

additional information unless the agency

timely notified the applicant within this

30-day period. An application shall be

considered complete upon receipt of all

requested information and correction of any

error or omission for which the applicant

was timely notified or when the time for

such notification has expired. Every

application for a license shall be approved

or denied within 90 days after receipt of a

completed application unless a shorter

period of time for agency action is provided

by law. The 90-day time period shall be

tolled by the initiation of a proceeding

under ss. 120.569 and 120.57. Any

application for a license that is not

approved or denied within the 90-day or

shorter time period, within 15 days after

conclusion of a public hearing held on the

application, or within 45 days after a

recommended order is submitted to the agency

and the parties, whichever action and

timeframe is latest and applicable, is

considered approved unless the recommended

order recommends that the agency deny the

license. Subject to the satisfactory

completion of an examination if required as

a prerequisite to licensure, any license

that is considered approved shall be issued

and may include such reasonable conditions

as are authorized by law. Any applicant for

licensure seeking to claim licensure by

default under this subsection shall notify

the agency clerk of the licensing agency, in

writing, of the intent to rely upon the

default license provision of this

subsection, and shall not take any action

based upon the default license until after

receipt of such notice by the agency clerk.

3 See Fla. Admin. Code R. 61A-3.0141(1)("The suffix 'SRX' shall

be made a part of the license numbers of all such [special

restaurant] licenses issued after January 1, 1958.").

4 See Fla. Admin. Code R. 61A-3.0141(3).

5 See Fla. Admin. Code R. 61A-3.0101(1).

COPIES FURNISHED :

Harold F. X. Purnell, Esquire

Rutledge, Ecenia, Purnell and Hoffman, P.A.

Post Office Box 551

Tallahassee, Florida 32302-0551

Michael J. Wheeler, Esquire

Department of Business and Professional Regulation

Northwood Centre, Suite 40

1940 North Monroe Street

Tallahassee, Florida 32399-2202

Cynthia Hill, Director

Division of Alcoholic Beverages and Tobacco

Department of Business and Professional Regulation

Northwood Centre, Suite 40

1940 North Monroe Street

Tallahassee, Florida 32399-2202

Ned Luczynski, General Counsel

Department of Business and Professional Regulation

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 these cases.