08-000250 Department Of Business And Professional Regulation, Division Of Alcoholic Beverages And Tobacco vs. Holiday Liquors 2002, Inc., D/B/A Holiday Liquors Status: Closed Recommended Order on Thursday, March 13, 2008.

Summary: Respondent was charged with selling beer to an underage person. Petitioner failed to prove that the alleged underage buyer was in fact, less than 21 years old. Therefore, Petitioner should find Respondent not guilty of the charge.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF ALCOHOLIC BEVERAGES )

AND TOBACCO, )

)

Petitioner, )

)

vs. ) Case No. 08-0250

)

HOLIDAY LIQUORS 2002, INC., d/b/a HOLIDAY LIQUORS, )

)

)

Respondent. )

)

RECOMMENDED ORDER

This case came before Administrative Law Judge John G.

Van Laningham for final hearing by video teleconference on

February 22, 2008, at sites in Tallahassee and West Palm Beach,

Florida.

APPEARANCES

For Petitioner: Michael J. Wheeler, Esquire

Department of Business and

Professional Regulation

Northwood Centre, Suite 6

1940 North Monroe Street

Tallahassee, Florida 32399-1020

For Respondent: Charles Wender, Esquire

190 West Palmetto Park Road

Boca Raton, Florida 33432

STATEMENT OF THE ISSUES

The primary issue in this disciplinary proceeding is

whether Respondent, which operates a liquor store and sells

alcoholic beverages on the premises under a license issued by

Petitioner, sold beer to a person under the age of 21, in

violation of the statutes governing holders of beverage

licenses. If Petitioner proves the alleged violation, then it

will be necessary to consider whether penalties should be

imposed on Respondent.

PRELIMINARY STATEMENT

On April 26, 2007, Petitioner Department of Business and

Professional Regulation, Division of Alcoholic Beverages and

Tobacco, issued an Administrative Action [Complaint] against

Respondent Holiday Liquors 2002, Inc., d/b/a Holiday Liquors,

charging the liquor licensee with one count of selling an

alcoholic beverage to a person less than 21 years of age.

Respondent timely requested a formal hearing to contest the

allegations, and, on January 15, 2008, the matter was filed with

the Division of Administrative Hearings ("DOAH").

On January 20, 2008, the Administrative Law Judge ("ALJ")

originally assigned to this case (not the undersigned)

consolidated the matter with DOAH Case No. 08-0249, which

involved the same parties and counsel.

The final hearing of the consolidated cases took place on

February 22, 2008, as scheduled, with both parties present. At

the outset of the hearing, Respondent, through counsel, made a

"full admission" of guilt as to the charge at issue in DOAH Case

No. 08-0249. Consequently, the undersigned later severed the

uncontested case and relinquished jurisdiction over it, there

being no disputed issues of material fact for an ALJ to resolve

in a formal administrative proceeding.

Petitioner offered two exhibits, numbered 1 and 2, and each

was received in evidence. In addition, Petitioner called as a

witness Special Agent Eric Scarbrough. Respondent presented no

evidence.

The final hearing was recorded, but neither party ordered a

transcript of the proceeding. The parties were instructed to

submit their respective Proposed Recommended Orders on or before

March 7, 2008, which they did.

Unless otherwise indicated, citations to the Florida

Statutes refer to the 2007 Florida Statutes.

FINDINGS OF FACT

1. At all relevant times, Respondent Holiday Liquors 2002,

Inc., d/b/a Holiday Liquors ("Holiday"), has held a license to

sell alcoholic beverages at retail. Consequently, Holiday is

subject to the regulatory and disciplinary jurisdiction of

Petitioner Department of Business and Professional Regulation,

Division of Alcoholic Beverages and Tobacco (the "Division").

2. On March 23, 2007, five agents of the Division placed

under surveillance the liquor store that Holiday operates,

covertly watching for sales to underage buyers. At around 10:45

p.m., Special Agent Eric Scarbrough observed a woman enter the

store and purchase a six-pack of beer. To Agent Eric Scarbrough

the woman appeared to be young——too young, perhaps, to purchase

alcohol legally.

3. Agent Scarbrough and his partner followed the woman's

car as she drove away from the store's premises. Soon, they

pulled her over, making a "traffic stop." The agents could see

the six-pack in the car, in plain view. According to Agent

Scarbrough, whose testimony in this regard the undersigned

credits as true, the woman identified herself to him as Edith

Rosario and produced her driver license, which showed

November 6, 1986, as her date of birth. Agent Scarbrough

confiscated the beer and issued the woman a Notice to Appear.

Later that night, he also gave a Notice to Appear to the

licensee's agent, Jakia Bergum, charging her with one count of

selling alcohol to a person under the age of 21. 1

4. Notwithstanding the foregoing, the undersigned is

unable to find that the alleged underage buyer ("Ms. Rosario")

was, in fact, under the age of 21 on March 23, 2007. This is

because the Division did not offer any nonhearsay evidence in

support of the woman's age. (Ms. Rosario did not testify at

hearing.)

5. The evidence being insufficient as to a material

element of the Division's case ( i.e. the age of the alleged

underage buyer), it must be concluded, as a matter of ultimate

fact, that Holiday is not guilty of selling alcoholic beverages

to a person less than 21 years of age, as charged in the

Administrative Action [Complaint].

CONCLUSIONS OF LAW

6. DOAH has personal and subject matter jurisdiction in

this proceeding pursuant to Sections 120.569 and 120.57(1),

Florida Statutes.

7. Section 561.29, Florida Statutes, sets forth the acts

for which the Division may impose discipline. This statute

provides, in pertinent part:

(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 her

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 or of the

United States, or violation of any municipal

or county regulation in regard to the hours

of sale, service, or consumption of

alcoholic beverages or license requirements

of special licenses issued under s. 561.20,

or engaging in or permitting disorderly

conduct on the licensed premises, or

permitting another on the licensed premises

to violate any of the laws of this state or

of the United States. A conviction of the

licensee or his or her or its agents,

officers, servants, or employees in any

criminal court of any violation as set forth

in this paragraph shall not be considered in

proceedings before the division for

suspension or revocation of a license except

as permitted by chapter 92 or the rules of

evidence.

8. Holiday stands accused of violating Section

562.11(1)(a)1., Florida Statutes, which provides as follows:

It is unlawful for any person to sell, give,

serve, or permit to be served alcoholic

beverages to a person under 21 years of age

or to permit a person under 21 years of age

to consume such beverages on the licensed

premises. A person who violates this

subparagraph commits a misdemeanor of the

second degree, punishable as provided in s.

775.082 or s. 775.083.

9. A proceeding, such as this one, to suspend, revoke, or

impose other discipline upon a professional license is penal in

nature. State ex rel. Vining v. Florida Real Estate Commission ,

281 So. 2d 487, 491 (Fla. 1973). Accordingly, to impose

discipline, the Division must prove the charge against the

licensee by clear and convincing evidence. Department of

Banking and Finance, Div. of Securities and Investor Protection

v. Osborne Stern & Co. , 670 So. 2d 932, 933-34 (Fla.

1996)(citing Ferris v. Turlington , 510 So. 2d 292, 294-95 (Fla.

1987)); Nair v. Department of Business & Professional

Regulation , 654 So. 2d 205, 207 (Fla. 1st DCA 1995).

10. Regarding the standard of proof, in Slomowitz v.

Walker , 429 So. 2d 797, 800 (Fla. 4th DCA 1983), the Court of

Appeal, Fourth District, canvassed the cases to develop a

"workable definition of clear and convincing evidence" and found

that of necessity such a definition would need to contain "both

qualitative and quantitative standards." The court held that:

clear and convincing evidence requires that

the evidence must be found to be credible;

the facts to which the witnesses testify

must be distinctly remembered; the testimony

must be precise and explicit and the

witnesses must be lacking in confusion as to

the facts in issue. The evidence must be of

such weight that it produces in the mind of

the trier of fact a firm belief or

conviction, without hesitancy, as to the

truth of the allegations sought to be

established.

Id. The Florida Supreme Court later adopted the fourth

district's description of the clear and convincing evidence

standard of proof. Inquiry Concerning a Judge No. 93-62 , 645

So. 2d 398, 404 (Fla. 1994). The First District Court of Appeal

also has followed the Slomowitz test, adding the interpretive

comment that "[a]lthough this standard of proof may be met where

the evidence is in conflict, . . . it seems to preclude evidence

that is ambiguous." Westinghouse Elec. Corp., Inc. v. Shuler

Bros., Inc. , 590 So. 2d 986, 988 (Fla. 1st DCA 1991), rev .

denied , 599 So. 2d 1279 (Fla. 1992)(citation omitted).

11. The fatal flaw in the Division's case is that the only

evidence presented at hearing concerning the age of the woman to

whom Holiday allegedly made the unlawful sale is hearsay, to

wit: (1) the woman's statements to Agent Scarbrough regarding

her age, which "out of court" declarations he repeated in his

testimony; and (2) the woman's driver license, the "out of

court" documentary source that supplied Agent Scarbrough the

woman's date of birth, which information he later passed along

in his testimony.

12. Hearsay is generally admissible in administrative

proceedings, but unless a predicate is laid for the admission of

the hearsay under a recognized exception to the hearsay rule,

such "evidence" (which would be rejected as unreliable in a

court of law) can be used only to supplement or explain other

nonhearsay evidence (or hearsay received pursuant to an

exception). See § 120.57(1)(c), Fla. Stat. Thus, while the

rules of evidence are relaxed in this forum, an "out of court"

declaration offered for the truth of the matters asserted

therein is yet insufficient, in itself, to support a finding of

fact.

13. There is no evidence in the instant record bearing on

the buyer's age except the hearsay described above.

Consequently, there is no nonhearsay evidence that the hearsay

could fairly be said to supplement or explain. 2 Faced with that,

the Division argues that Ms. Rosario's "out of court" revelation

of her age (to Agent Scarbrough) constituted a "statement

against interest" coming within the hearsay exception for such

declarations.

14. As defined in the Evidence Code, a "statement against

interest" is one which,

at the time of its making, was so far

contrary to the declarant's pecuniary or

proprietary interest or tended to subject

the declarant to liability or to render

invalid a claim by the declarant against

another, so that a person in the declarant's

position would not have made the statement

unless he or she believed it to be true.

§ 90.804(2)(c), Fla. Stat.

15. Ms. Rosario's "out of court" declarations might

qualify as "statements against interest." The hearsay exception

for such declarations, however, applies only when "the declarant

is unavailable as a witness." § 90.804(2), Fla. Stat.

"Unavailability" in this context is a term of art, meaning not

simply that the declarant wasn't present at the hearing, but

that the declarant:

(a) Is exempted by a ruling of a court on

the ground of privilege from testifying

concerning the subject matter of the

declarant's statement;

(b) Persists in refusing to testify

concerning the subject matter of the

declarant's statement despite an order of

the court to do so;

(c) Has suffered a lack of memory of the

subject matter of his or her statement so as

to destroy the declarant's effectiveness as

a witness during the trial;

(d) Is unable to be present or to testify

at the hearing because of death or because

of then-existing physical or mental illness

or infirmity; or

(e) Is absent from the hearing, and the

proponent of a statement has been unable to

procure the declarant's attendance or

testimony by process or other reasonable

means.

However, a declarant is not unavailable as a

witness if such exemption, refusal, claim of

lack of memory, inability to be present, or

absence is due to the procurement or

wrongdoing of the party who is the proponent

of his or her statement in preventing the

witness from attending or testifying.

§ 90.804(1), Fla. Stat.

16. The Division did not attempt to lay a foundation for

establishing that Ms. Rosario was "unavailable as a witness,"

and the result, predictably, is that none of the foregoing

conditions was shown to exist. Indeed, the Division did not

even identify Ms. Rosario as a possible witness on its pre-

hearing witness list, which tells the undersigned that the

Division considered her, not "unavailable," but unnecessary as a

witness. In any event, the bottom line is: Ms. Rosario's "out

of court" statements cannot be received under Section

90.804(2)(c), for lack of proof of "unavailability."

17. At hearing, the undersigned received in evidence, as

Petitioner's Exhibit 2, a copy of the Notice to Appear that had

been issued to Ms. Bergum, which was described as a one-page

document. 3 (Actually, the undersigned thought at the time, not

having a copy of the document to examine, that the Division was

offering the Notice to Appear that Agent Scarbrough had issued

to Ms. Rosario.) When introducing the exhibit, the Division

asserted that the Notice to Appear——which charges Ms. Bergum

with selling beer "to a 20 year old female"——could be admitted

as a "business record" and hence provide the basis for a finding

that Ms. Rosario was underage at the time of the alleged

unlawful purchase. The undersigned expressed skepticism that

the buyer's age could be thus proved under the business records

exception to the hearsay rule but told the Division he would

revisit the question in connection with the preparation of a

Recommended Order. Although the Division did not discuss the

issue in its Proposed Recommended Order and might thereby be

deemed to have abandoned the argument, the undersigned will

address the matter, as he said he would.

18. To be admissible as a business record pursuant to

section 90.803(6), the record must be shown to have been:

1. made at or near the time of the event

recorded,

2. by or from information transmitted by a

person with knowledge, and

3. kept in the course of a regularly

conducted business activity and

4. that it was the regular practice of that

business to make such a record.

Quinn v. State , 662 So. 2d 947, 953 (Fla. 5th DCA 1995)(footnote

omitted).

19. Assuming that the Notice to Appear qualified as a

business record within the subject exception, the only

declarations therein that might be admissible under Section

90.803(6), Florida Statutes, would be those written by a person

who, while conducting the regular affairs of the business ,

inscribed either (a) facts of which he or she had personal

knowledge , or (b) facts that had been "transmitted" in the

ordinary course of the business by another person having

personal knowledge thereof. In this instance, the "business" is

the Division, and Agent Scarbrough is the one who made the

record on behalf of the business. It is conceivable that

statements in the Notice to Appear which reflect Agent

Scarbrough's personal knowledge could be admitted under the

business records exception.

20. The problem for the Division is that Agent Scarbrough

did not have personal knowledge regarding Ms. Rosario's age.

His knowledge of that fact——which of course is the fact that the

Notice to Appear was offered to prove——is based solely on the

hearsay that the Division wants the undersigned to consider as

substantive evidence. That hearsay (Ms. Rosario's declarations

and the facts written on her driver license) is hearsay within

hearsay (the Notice of Appear, remember, is itself hearsay). To

be admissible, the embedded hearsay must conform to an exception

to the hearsay rule. See § 90.805, Fla. Stat.

21. The business records exception does not apply either

to Ms. Rosario's declarations or the facts written on her driver

license because the source(s) of the relevant information ( i.e.

Ms. Rosario's age or date of birth) were not employees or agents

of the Division and were not acting within the regular course of

Division's business; that is, the relevant sources with personal

knowledge of the material fact (Ms. Rosario's age) were not

under a "business duty" to report the information accurately to

the Division. See Quinn v. State , 662 So. 2d 947, 953-54 (Fla.

5th DCA 1995); Harris v. Game and Fresh Water Fish Com'n , 495

So. 2d 806, 808-09 (Fla. 1st DCA 1986); see also Franzen v.

State , 746 So. 2d 473, 474 (Fla. 2d DCA 1998)(Casanueva, J.,

explaining, in a concurring opinion, that the predicate for

admitting a business record includes the requirement "that the

source of the information be an employee or agent of the

business possessing the requisite knowledge of the data or

information."). The "statement against interest" exception does

not apply either, for reasons already discussed. No other

possible exception was invoked.

22. It is concluded that the relevant hearsay is not

admissible under an exception to the hearsay rule and therefore

cannot be used as the exclusive basis for a finding of fact.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Division enter a final order

finding Holiday not guilty of the instant charge.

DONE AND ENTERED this 13th day of March, 2008, in

Tallahassee, Leon County, Florida.

JOHN G. VAN LANINGHAM

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.stae.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 13th day of March, 2008.

ENDNOTES

1 / In its Proposed Recommended Order, the Division urged the

undersigned to find that, when confronted by Agent Scarbrough

following the arrest of Ms. Rosario, Ms. Bergum admitted having

"made a mistake" ——the implication being that she mistakenly had

sold beer to an underage customer. Agent Scarbrough testified,

however, that Ms. Bergum (who did not testify at hearing) had

told him she disagreed with the accusation that she had sold

beer to a person under the age of 21, and that she had been

asking purchasers for identification all night. Indeed, Ms.

Bergum had refused earlier that same evening to make a sale to

an underage, undercover agent of the Division who was

attempting, as part of a sting, to catch Holiday violating the

law. Because, it is found, the evidence does not clearly and

convincingly prove that the licensee admitted facts sufficient

to establish guilt, the undersigned expressly rejects the

Division's proposed finding to the contrary.

2 / Although (to its credit) the Division did not press the

argument, the undersigned considered the possibility that the

hearsay might be used to "supplement" or "explain" Agent

Scarbrough's nonhearsay testimony that the buyer appeared,

subjectively to him, to be underage. Such use of the hearsay,

however, effectively would supplant (to the point of making

superfluous) the other evidence, becoming the primary——and the

only convincing——evidential basis for a finding that the woman

was under age 21. Given that § 120.57(1)(c) is obviously

intended to accord otherwise inadmissible hearsay merely a

supporting role, the undersigned concludes that an "out of

court" declarant (Ms. Rosario) cannot be the star witness, and

that likewise an "out of court" exhibit (the driver license)

cannot be the "smoking gun."

3 / The Division delivered its two exhibits to the undersigned

several weeks after the hearing. Upon taking possession of the

exhibits, the undersigned discovered, attached to the Notice to

Appear (Petitioner's Exhibit 2), a separate record, not part of

the Notice, which purports to be a one-page printout from the

State of Florida Department of Highway Safety and Motor Vehicles

Driver and Vehicle Information Database (DAVID). This record

contains specific personal information about Ms. Rosario,

including her address, date of birth, height, and Social

Security number, together with a photograph of the woman. There

was no testimony regarding this document, and it was neither

offered nor received in evidence. Because the DAVID printout is

not part of the evidence of record, the undersigned cannot base

any findings of fact on it, and has not done so. See §

120.57(1)(j), Fla. Stat.

COPIES FURNISHED :

Michael J. Wheeler, Esquire

Department of Business and

Professional Regulation

Northwood Centre, Suite 6

1940 North Monroe Street

Tallahassee, Florida 32399-1020

Charles Wender, Esquire

190 West Palmetto Park Road

Boca Raton, Florida 33432

Steven M. Hougland, Ph.D., Director

Division of Alcoholic Beverages and Tobacco

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Ned Lucynski, General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-2202

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.