18-003101 Department Of Business And Professional Regulation, Division Of Alcoholic Beverages And Tobacco vs. Celtic Management Concepts, Llc, D/B/A Connolly's Pub Status: Closed Recommended Order on Tuesday, September 25, 2018.

Summary: DBPR proved Respondent violated section 561.29(1)(a), when it failed to remit adequate taxes to the Department of Revenue(DOR); Respondent should be required to comply with the payment plan approved by DOR.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION,

DIVISION OF ALCOHOLIC BEVERAGES

AND TOBACCO,

Petitioner,

vs. Case No. 18 - 3101

CELTIC MANAGEMENT CONCEPTS, LLC,

d/b/a CONNOLLY Ó S PUB,

Respondent.

______ _________________________/

RECOMMENDED ORDER

On August 10, 2018, Administrative Law Judge Hetal Desai of

the Division of Administrative Hearings (DOAH) conducted the

final hearing in this case by video teleconference in Orlando and

Tallahassee, Florida.

APPEARANCES

For Petitioner: Alicia Bhambhani , Esquire

Daniel Johnathon McGinn , Esquire

Department of Business and

Professional Regulations

2601 Blair Stone R oad

Tallahassee , Florida 323 99

For Respondent: Leonard Nolan

Celtic Management Concepts, LLC,

d/b/a Connolly Ó s Pub

323 North Ronald Regan Boulevard

Longwood, Florida 32750

STATEMENT OF THE ISSUE

Whether Celtic Management Concepts, LLC , d/b/a Connolly Ó s

Pub (CMC) , violated section 561.29(1)(a), Florida Statutes

(2017) , 1/ when it failed to remit proper taxes to the Division of

Revenue (DOR); and, if so, the penalty th at should be imposed.

PRELIMINARY STATEMENT

Petitioner, the Department of Business and Professional

Regulation (DBPR) , Division of Alcoholic Beverages and Tobacco

(Division) , issued an Administrative Complaint (Complaint) dated

November 9, 2017, charging CMC with one count :

On or about 05/23/2017 you, the

aforementioned licensee, holding a license

issued by the Division of Alcoholic Beverages

and Tobacc o [ ] to wit: CELTIC MANAGEM ENT

CONCEPTS LLC, D/B/A CONNOLL YS PUB, did

unlawfully on your premises or els ewhere

while in the scope of employment, fail to

comply with the reporting requirements and

submission of sales taxes collected and to

timely remit taxes collected to the Florida

Department of Revenue, this act being

contrary to and in violation of section s

212.14 and 212 . 15, Florida Statutes, within

section 561 . 29(1)(a), Florida Statutes.

The Complaint was silent as to whether this proceeding involved

CMC Ó s first offense, how much CMC owed DOR, or how long CMC

failed to comply with the reporting requireme nts and/or pay the

proper amount of taxes .

As for the penalty the Division was seeking, the Complaint

was vague. 2/ I t stated:

Petitioner intends to revoke; suspend; annul;

impose civil penalties, investigative costs,

and late penalties; or any combinat ion of

these authorized penalties.

In response to the Complaint , on December 19, 2017, CMC filed

a Ð Request for Hearing Ñ form indicating it disputed an issue of

fact in the Complaint , and it believed CMC was owed a tax credit

from DOR for past overpayment s.

The Division referred the matter to DOAH on June 15, 2018,

along with page 2 of Respondent Ó s Ð Request for Hearing Ñ form and

pages 7 and 8 of the Complaint. The undersigned noticed a final

hearing for August 10, 2018, and a pre - hearing telephone

confe rence for August 1, 2018. Petitione r failed to attend the

pre - hearing conference .

At the final hearing, the Division presented the testimony of

Angelica Rivera, a DBPR Administrative Assistant II in the Orlando

field office ; and S teven Amole, a DOR Admin istrator III in the

Orlando field office . CMC presented the testimony of Leonard

Nolan, its owner; and Pam Bowan, a tax preparer and personal

friend of Mr. Nolan. The undersigned took official recognition of

Petitioner Ó s Exhibits 2 and 3, and Petitioner Ó s Exhibit 4 was

entered into evidence. CMC offered as evidence a Stipulation

Agreement between CMC and DO R and was allowed to supplement the

record with this document after the hearing. That Stipulation

Agreement has been admitted into evidence as Respon dent Exhibit 1.

CMC also submitted additional documents after the hearing. None

of Respondent Ó s other documents have been admitted into evidence

or considered by the undersigned.

T h e T r a nsc r ipt of the f i n a l h ea ri n g w a s filed on A u gust 31,

2018. B oth pa r t ie s timely filed p r opos e d r ec om m e nd e d or d e r s , and

both have b e e n c onsid e r e d in p re p a r a t i on of th i s O rd e r.

Motions to Relinquish Jurisdiction

O n August 2, 2018, the Division filed a Motion to Relinquish

Jurisdiction. The undersigned denied this motion at the

commencement of the final hearing on August 10, 2018, finding it

had been filed too close to the final hearing date. Pursuant to

Florida Administrative Code Rule 28 - 106.204, Respondent had seven

days to respond to the motion, but because it w as serve d only by

U.S. Mail, it had an extra five days to respond. See Fla. Admin.

Code R. 28 - 106.103. This placed CMC Ó s response due beyond the

August 10 , 2018, hearing date.

A t the final hearing , the Division renewed its Motion to

Relinquish Jurisdiction arguin g that a DOR tax warrant against

CMC left no disputed fact regarding the charge in the Complaint.

Although the tax warrant established CMC owed outstanding taxes

to DOR, CMC claimed any failure to pay taxes was inadvertent and

it had enter ed into a paymen t plan with DOR. Therefore, CMC

argued, it should either not be penalized or it should receive a

less severe penalty due to mitigating circumstances . This

created disputed issues of material fact related to CMC Ó s intent

and the appropriate penalty. The undersigned denied the oral

request to relinquish jurisdiction at the hearing because of the

vagueness of th e administrative complaint relating to the

penalty; the lack of any stipulations between the parties ; and to

allow CMC to presen t evidence as to its intent and the corrective

measures it ha d taken .

After the final hearing, o n September 6, 2018, the Division

filed a Second Motion to Relinquish Jurisdiction arguing again the

exi stence of the tax warrant eliminated any issues of disputed

fact . CMC fai led to file a response to the Motion in the time

allotted by r ule 28 - 106.204(1).

As an initial matter, the Division had the burden to prove

CMC intended to defraud the state in order to establish a

violation of section 212.15, Florida Statutes , as alleged in the

Complaint. The existence of the tax warrant did not establish

this element or resolve the dispute created by CMC Ó s evidence that

it did not know it was delinquent in its tax obligations.

Next, even if the tax warrant established Respondent

violate d section 212.14 (which does not require a showing of

intent) , there was still a disputed issue of fact regarding the

penalty. Ordinarily, matters that are offered in mitigation of

uncontested administrative charges can be presented directly to

the agency at an informal hearing. See , e.g. , McGraw v. Dep Ó t.

of State , 491 So. 2d 1193, 1195 (Fla. 1st DCA 1986)( Ð To the

extent that appellant Ó s petition for hearing sought to present

mitigation, an informal hearing under Section 120.57(2) would

have provided a f orum more than adequate for such purpose. Ñ ).

If, however, as here, the charge is contested and there is a

disputed issue of material fact relevant to t he penalty , then the

factual disputes should be determined by DOAH in a formal

hearing. See Altee v. Du val Cnt y. Sch. Bd. , 990 So. 2d 1124,

1129 - 30 (Fla. 1st DCA 2008)( Ð We conclude that the School Board Ó s

motion raised a disputed factual issue as to the appropriate

penalty or remedy . . . . At the very least, due process requires

the ALJ to hold a hearing t o afford the parties an opportunity to

present evidence on t hese disputed material facts. Ñ ) ; c f . , Dep Ó t

of Bus. and Prof Ó l R eg., Div. of Alcoholic Bev erages and Tobacco

v. Pineapple Grille , Case No. 08 - 3110, 2008 Fla. Div. Adm. Hear.

LEXIS 846, at *10 (Fla . DOAH Sept. 30, 2008; Fla. DBPR

November 17, 2008)(noting the Division has discretion to impose a

lesser penalty pursuant to section 561.29(3) , based on the

facts); Dep Ó t of Bus. Reg., Div. of Alcoholic Bev erages and

Tobacco v. Sloane Ó s Bar - B - Q, Inc. , Ca se No. 83 - 2657, 1983 Fla.

Div. Adm. Hear. LEXIS 6253, at *5 (Fla. DOAH Oct. 28,

1983)( Ð There are mitigating circumstances present in the case at

bar. The violations were clearly not intentional and were

attributable to circumstances beyond Respondents Ó co ntrol.

Moreover, Respondents have entered into an arrangement with the

Department of Revenue for full repayment of the taxes due. Ñ ). As

such, t he Division Ó s Second Motion to Relinquish Jurisdiction is

denied, a nd the undersigned enters this R ecommended O rder.

FINDING S OF FACT

1. CMC is the holder of a series 2 - COP beverage license,

number BEV6910406 (License), issued by the Division in 2011 .

2. CMC was required by c hapte r 212, Florida Statutes, to

remit to DOR the taxes associated with alcoholic bever ages sold

pursuant to its License. It failed to do so.

3. On May 23, 2017, DOR issued a tax warrant against CMC in

the amount of $15,279.45 for the amount of taxes owed by CMC,

along with interest, penalties, and fees pursuant to c h a pter 212 .

CMC acknow ledges the tax warrant and that it owes DOR outstanding

taxes.

4. The undersigned rejects the testimony by Leonard Nolan,

CMC Ó s president and s tockholder, that CMC was unaware it was

delinquent in paying state taxes because all of the DOR and

Division pap erwork was handled by its accounting firm. Mr. Nolan

knew or should have known as of May 23, 2017 (the date of the tax

warrant) that it had an outstanding tax obligation. Moreover,

the claim that Mr. Nolan did not receive any correspondence from

the Divi sion is also not credible. He responded to the Complaint

and the same address was used for other correspondence. CMC Ó s

conduct of ignoring the notices of past due taxes and failing to

address the delinquency in a more timely manner was intentional.

5. CMC established, however, it has recently taken steps to

become fully compliant . It entered into a Stipulation Agreement,

Form DR - 68, with DOR on August 6, 2018. The Stipulation

Agreement provides that CMC will make three payments beginning

August 27, 20 18, and ending October 25, 2018. In total, CMC will

pay $35,721.35; this is more than the amount of the 2017 tax

warrant.

6. Th is is CMC Ó s first violation of c hapter 212.

CONCLUSIONS OF LAW

7. The Division is authorized to impose penalties against

CMC Ó s License when the licensee is determined to have violated

any of the laws of the State of Florida. See § 561.29(1)(a),

Fla. Stat.

8. In disciplinary proceedings involving beverage licenses,

the Division bears the burden to prove a violation has occurred

by c lear and convincing evidence . See Silver Show, Inc. v. Dep Ó t

of Bus. & Prof Ó l Reg., Di v. of Alcoholic Beverages & Tobacco ,

763 So. 2d 348, 349 (Fla. 4th DCA 1998) (explaining the

differences between the burdens of proof in agency licensing and

discip linary proceedings ).

9. The Ð clear and convincing standard Ñ is defined as an

intermediate burden of proof requiring that:

the evidence must be found to be credible;

the facts to which the witnesses testify must

be distinctly remembered; the testimony mu st

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.

S. Fla. Water Mgmt. v. RLI Live Oak, LLC , 139 So. 3d 869, 872

(Fla. 2014) (citations omitted).

10. Section 212.14(2) provides :

Wherever returns are required to be made to

the department hereunder the full amount of

the taxes required to be paid as shown by

said return shall be paid and accompany said

return, and the failure to remit said full

amount of taxes at the time of making said

return shall cause said taxes to become

delinquent.

11. Section 212.15(2) provi des :

Any person who, with intent to unlawfully

deprive or defraud the state of its moneys

or the use or benefit thereof, fails to

remit taxes collected under this chapter is

gu ilty of theft of state funds.

12. By intentionally failing to pay taxes it ow ed to DOR,

CMC vio l a ted sections 212.14 and 212.15, a nd , the r e fo r e , is

subj ec t t o a dm i nis t r a t i ve ac t i on a g a inst its L ic e n s e pursuant to

s e c t i on 561.29.

13. F lorida Admin i str a t i ve Cod e R ule 61 A - 2.022 provides the

p e n a l t y g uideli n e for the first violation o f chapter 212 by an

a lcoho l ic b e v e ra g e l i ce n s e holder is Ð Co r re c t i ve a c t i on a nd

s a t i sf ac t i on of d e bt t o D O R , or approved payment plan. Ñ Here,

CMC has entered into such an approved payment plan with DOR .

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the D e p a rtme n t o f B us i n e ss and

Pro fe ss i on a l R e g ulation, Div i sion of Al c ohol i c B e v e ra g e s and

Tob acc o , enter a final order:

1. Finding Respondent, Celtic Management Concepts, LLC

d/b/a Connolly Ó s Pub , is s ubject to penalties pursuant to section

561.29 (1)(a), for violations of sections 212.14 and 212.15,

related to delinquent taxes owed to the State Department of

Revenue; and

2. Requiring Respondent to comply with the terms of the

Stipulation Agreement it entered into with the Department of

Revenue dated August 6, 2018.

DONE AND ENTERED this 2 5 th day of September , 2018 , in

Tallahassee, Leon County, Florida.

S

HETAL DESAI

Administrative Law Judge

Division of Administrativ e Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

t his 2 5 th day of September , 2018 .

ENDNOT E S

1/ All references to the Florida Statutes and Florida

Administrative Code are to the 2017 versions in effect at the

time of the violation as described in the Administrative

Complaint.

2/ Until the hearing , i t was unclear which of these penalties ( or

combinations there of ) the Division was seeking. It was not until

the undersigned asked the Department about the penalty it was

pursuing at the close of opening arguments , that Respondent

learn ed Ð [t]he Department Ó s guideline penalty for this particular

o ffense requires that the Respondent provide the Department with

evidence of having either satisfied the tax warrant or entered

into a payment plan with the Florida Department of Revenue. Ñ

COPIES FURNISHED:

Alicia Bhambhani, Esquire

Department of Busines s and

Professional Regulation

2601 Blair Stone Road

Tallahassee, Florida 323 99

(eServed)

Leonard Nolan

Celtic Management Concepts, LLC,

d/b/a Connolly Ó s Pub

323 North Ronald Regan Boulevard

Longwood, Florida 32750

Daniel Johnathon McGinn, Esquire

D epartment of Business and

Professional Regulation

Suite C452

2601 Blair Stone Road

Tallahassee, Florida 32399

(eServed)

Jason Maine, General Counsel

Department of Business and

Professional Regulation

Capital Commerce Center

2601 Blair Stone Road

T allahassee, Florida 323 99 - 2202

(eServed)

Thomas Philpot, Director

Division of Alcoholic Beverages and Tobacco

Department of Business and

Professional Regulation

Capital Commerce Center

2601 Blair Stone Road

Tallahassee, Florida 323 99 - 2202

(eServed)

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.