95-005916 Division Of Alcoholic Beverages And Tobacco vs. Shelma Torrech, D/B/A Quick Serv Status: Closed Recommended Order on Friday, July 19, 1996.

Summary: Applicant did disclose nature of interest of benefactor in license application. Licensee unaware of illegal acts of agent.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, DEPARTMENT )

OF BUSINESS AND PROFESSIONAL )

REGULATION, DIVISION OF )

ALCOHOLIC BEVERAGES AND )

TOBACCO, )

)

Petitioner, )

)

vs. ) CASE NO. 95-5916

)

SHELMA TORRECH, )

d/b/a QUICK SERV, )

)

Respondent. )

_______________________________)

RECOMMENDED ORDER

Notice was provided; and on June 5, 1996, a formal hearing was held in this

case. Authority for conducting the hearing is set forth in Section 120.57(1),

Florida Statutes. The hearing location was Ocala, Florida. Charles C. Adams

was the Hearing Officer.

APPEARANCES

For Petitioner: Thomas D. Winokur, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1007

For Respondent: Donna M. Meek, Esquire

20 South Main Street

Gainesville, Florida 32601

STATEMENT OF THE ISSUES

Should Petitioner discipline Respondent's Series 2-APS alcoholic beverage

license for allegedly failing to disclose the direct interest in the beverage

license held by M. Kashani, for falsely swearing to a material statement in the

application for Respondent's alcoholic beverage license, and for allowing an

employee to exchange U.S.D.A. food coupons for cash?

PRELIMINARY STATEMENT

Respondent had contested the administrative action by the State of Florida,

Division of Alcoholic Beverages and Tobacco, Case No. CA 52 930718. That

contest involved disputed issues of fact. As a consequence, the case was

transmitted to the Division of Administrative Hearings to conduct a formal

hearing.

While the case was pending before the Division of Administrative Hearings,

Petitioner sought to amend the administrative action to add additional counts.

That motion was granted. The case proceeded to address the amended

administrative action.

At hearing, Petitioner called Dean Bescia, George Carson, and George Evans

as witnesses. Petitioner's Exhibits 1 and 2 were admitted as evidence.

Petitioner's Exhibit 3 was identified, but not admitted. Respondent testified

in her own behalf. She did not call other witnesses, nor submit exhibits for

consideration.

Respondent having failed to respond in opposition to the request for

admissions propounded by Petitioner, the request for admissions were deemed

admitted and available for fact-finding purposes.

A hearing transcript was filed on June 18, 1996. The parties timely

submitted Proposed Recommended Orders. The fact finding set forth in those

proposals is addressed in the Appendix attached to this Recommended Order.

FINDINGS OF FACT

1. Effective October 12, 1993, the alcoholic beverage license number 52-

01222, Series 2-APS, held by Mohammad Kashani, d/b/a Quick Serv, for the

location at 2066 West Silver Springs Boulevard, Ocala, Marion County, Florida,

was revoked by Petitioner. The basis for the revocation concerned Mr. Kashani's

conviction of criminal possession of a controlled substance in New York State,

which disqualified Mr. Kashani from holding a Florida alcoholic beverage

license.

2. On October 13, 1993, Petitioner received Respondent's application for

an alcoholic beverage license, Series 2-APS, for the license establishment known

as Quick Serv, located at 2066 West Silver Springs Boulevard, Ocala, Marion

County, Florida.

3. When Respondent made the application, she was unaware that the

alcoholic beverage license number 52-01222, Series 2-APS, held by Mr. Kashani,

had been subject to investigation and revocation.

4. Respondent first learned of the revocation of Mr. Kashani's alcoholic

beverage license on the hearing date.

5. Although Respondent was unaware of the investigation of the alcoholic

beverage license held by Mr. Kashani and the revocation of that license for a

criminal offense, Respondent was aware that a different pending criminal case

for which Mr. Kashani stood accused might effect Mr. Kashani's ability to

continue to hold the alcoholic beverage license for the establishment at West

Silver Springs Boulevard.

6. When Respondent submitted the application for the alcoholic beverage

license, she had been living with Mr. Kashani, although they were not married.

The couple had children together at the time the application was made.

Subsequently, Respondent and Mr. Kashani were married and had been married for

approximately two and one-half years when the hearing was held.

7. Before Respondent made the application for the beverage license, she

had worked at the establishment at 2066 West Silver Springs Boulevard, while Mr.

Kashani was in jail awaiting trial for alleged violation of laws unrelated to

the New York offense.

8. Mr. Kashani's predicament concerning the pending criminal trial led

Respondent to discuss with him the possibility that Respondent would take over

the business at 2066 West Silver Springs Boulevard as a means to support

Respondent and her children should Mr. Kashani be incarcerated following his

trial.

9. It took a period of time for Respondent to obtain the necessary

information to complete the application for the alcoholic beverage license.

10. Before the application was submitted, Mr. Kashani had been released

from jail on bond pending his trial.

11. The trial was conducted on January 3, 1994, and Mr. Kashani was found

not guilty.

12. Respondent was issued alcoholic beverage license number 52-01290,

Series 2-APS, to do business as Quick Serv at the West Silver Springs Boulevard

location. It is that license which is subject to administrative discipline in

this case.

13. In preparing the sworn application, Petitioner sought the advice of an

attorney. She also entered into certain business arrangements with Mr. Kashani,

which were disclosed in her application for alcoholic beverage license.

14. Among the arrangements between Respondent and Mr. Kashani, which were

entered into when Mr. Kashani was still incarcerated, awaiting trial, was a

transfer of the assets of the Quick Serv business and the execution of a lease

between Respondent and Mr. Kashani, in which Respondent was the lessee for the

property which Mr. Kashani owned, where the business was located on West Silver

Springs Boulevard.

15. Mr. Kashani is the owner of the property upon which the Quick Serv

establishment is located and is responsible for the payment of a mortgage on the

property and the property taxes for that parcel.

16. In particular, on September 21, 1993, while Mr. Kashani was

incarcerated, a Bill of Sale, selling to Respondent all merchandise, inventory

and store equipment at the Quick Serv, for a nominal consideration, $10.00, was

executed by Mr. Kashani. A lease was entered into on that date for the period

of September 1, 1993 through March 31, 1996. The rental amount contemplated by

the lease was $400.00 per month. Under the terms of the lease, the Respondent

was required to pay for all water, gas, electricity, and other utilities

associated with the licensed premises. Finally, on September 21, 1993, an

assignment was made from Mr. Kashani to Respondent of the Quick Serv telephone

numbers and trade name.

17. In taking over the Quick Serv business, Respondent opened a business

bank account. This account was opened before Respondent obtained the alcoholic

beverage license.

18. In its details, the application which Respondent submitted to obtain

her alcoholic beverage license disclosed that she had invested no funds,

personal or otherwise, in Quick Serv. The application disclosed the existence

of the Bill of Sale dated September 21, 1993. It disclosed the existence of the

lease between Respondent and Mr. Kashani.

19. In the application, Respondent did not specifically disclose the name

of Mr. Kashani, or any other person, as having an interest, directly or

indirectly. The application also reminded the applicant to list the names of

persons whose interest was that of lender, joint account holder, or co-signer.

Nothing was stated in response to that item.

20. The application disclosed that the basis for purchasing the business

was a "gift". No money was disclosed as having been invested by the Respondent.

21. With the application, Respondent revealed the assignment of the Quick

Serv telephone numbers and trade name to her from Mr. Kashani. In the

application, Respondent indicated that she was the 100 percent owner of any

stock in the business, notwithstanding that there was no indication that the

business had been incorporated. This information was imparted under the

application section having to do with the disclosure of liens, titles and

interest of all officers, directors, stockholders, limited partners and general

partners of the business for which the license was sought.

22. Although Respondent did not specify in the section designed to reveal

the names and types of interest that Mr. Kashani would have in the Quick Serv

business, either directly or indirectly, the other information concerning his

association with the business that has been described did identify Mr. Kashani's

involvement with the business, as contributing the assets for operating Quick

Serv and remaining as landlord for the property under the lease terms.

23. Contrary to the business arrangements which have been described

between Respondent and Mr. Kashani, the contract for electric services at Quick

Serv has always been in Mr. Kashani's name at pertinent times, as has the

contract for telephone services at that establishment.

24. Mr. Kashani holds a membership in Sam's Club as a primary member,

issued in the name of Quick Serv on October 21, 1993.

25. On or about February 18, 1994, Mr. Kashani's name was added to the

signature card for the bank account which Respondent had opened for the Quick

Serv business. That signature authorizes Mr. Kashani to draw checks on the bank

account. He has drawn checks on the bank account to pay for, among other items,

the purchase of inventory for the Quick Serv business from Sam's Club.

Generally, Mr. Kashani has routinely written checks on the bank account to

purchase inventory for the Quick Serv business.

26. In addition, Mr. Kashani has written checks on the Quick Serv bank

account opened by Respondent to pay his real estate mortgage for the Quick Serv

location. While Mr. Kashani has made mortgage payments from the bank account,

Respondent has never made lease payments to Mr. Kashani, in accordance with the

lease between Respondent and Mr. Kashani.

27. Following his trial on January 3, 1994, Mr. Kashani began to perform

duties in operating the Quick Serv business. His association was not that of an

employee who was compensated for his services, nor under terms of a managerial

contract with Respondent. As Respondent describes it, Mr. Kashani has been

"helping me out". The duties that Mr. Kashani has performed in the store are

the same as Respondent has performed. This includes stocking and operating the

cash register. Mr. Kashani's involvement extends to advising Respondent of what

to do in the business. Respondent described this arrangement as one in which

"he knows better business than I do".

28. After Respondent obtained the alcoholic beverage license, Petitioner's

investigator has been to the Quick Serv on more than 10 occasions. When the

visits were made Mr. Kashani was usually behind the counter working. Respondent

was only seen on one occasion.

29. The United States Department of Agriculture (U.S.D.A.) instituted an

investigation of the Quick Serv store during the period of December 8, 1994

through August 1, 1995 to ascertain whether food stamps were being improperly

exchanged for cash at that location.

30. To achieve its purpose, its investigator, George Carson, employed the

assistance of an investigative aide, George Evans. Essentially, Mr. Carson gave

Mr. Evans U.S.D.A. food stamps to be presented to an employee at Quick Serv, in

exchange for cash, if the employee was willing.

31. On December 8, 1994, Mr. Evans entered the Quick Serv and spoke to Mr.

Kashani. Mr. Evans asked Mr. Kashani if Mr. Kashani wanted to buy any food

stamps. Mr. Kashani replied that he did not know Mr. Evans. Another man was in

the store. Mr. Kashani called out to that individual and asked the unidentified

man, if he, the unidentified person, knew Mr. Evans. The response was "yes".

Mr. Kashani then asked for the food stamps. Mr. Evans handed them to him. Mr.

Kashani obtained money from his pocket and from an undisclosed location within

the store and gave cash in exchange for the food stamps. The food stamp value

was $80.00. The cash exchanged was $40.00.

32. On March 10, 1995, Mr. Evans returned to the Quick Serv. On this

occasion, he had $195.00 in food stamps. Once in the store, Mr. Evans addressed

Mr. Kashani and asked him if he was buying food stamps again. Mr. Kashani said

that he did not know him. Mr. Evans told him that he did know him and that he

had bought "some" from Mr. Kashani a while back, after which Mr. Evans handed

Mr. Kashani $195.00 in food stamps. In turn, Mr. Kashani gave Mr. Evans $95.00

in cash. The $95.00 was obtained from Mr. Kashani's pocket.

33. On August 1, 1995, Mr. Evans returned to the store. He again asked

Mr. Kashani if he would buy food stamps. Mr. Kashani told Mr. Evans that he did

not know him. Mr. Evans replied "you bought some from me a couple of weeks ago,

three or four times", to which Mr. Kashani replied "I was just testing you".

Mr. Evans then handed Mr. Kashani $325.00 in food stamps, and Mr. Kashani gave

Mr. Evans $150.00 in cash from the cash register in exchange.

34. Respondent was not in attendance on any of the occasions at which food

stamps were exchanged for cash.

CONCLUSIONS OF LAW

35. The Division of Administrative Hearings has jurisdiction over the

subject matter and the parties hereto pursuant to Section 120.57(1), Florida

Statutes.

36. To sustain its burden in the attempt to impose discipline against

Respondent, Petitioner must prove its case by clear and convincing evidence.

See, Pic N' Save v. Dept. of Business Reg., 601 So.2d 245 (Fla. 1st DCA 1992).

37. In determining Respondent's responsibility for the alleged violations

she may be held accountable based upon her own negligence, intentional

wrongdoing, or lack of diligence. See, Pauline v. Lee, 147 So.2d 359 (Fla. 2d

DCA 1962).

38. Knowledge or negligence may be inferred in the instance where a

licensee's employees repeatedly and flagrantly violate the law. See, Lash, Inc.

v. State, Dept. of Business Reg., 411 So.2d 276 (Fla. 3rd DCA 1982). The

licensee may not remove himself, herself, or itself from responsibility for the

activities in the licensed premises by not being present or by claiming

ignorance of repeated violations. See, G&B of Jacksonville, Inc. v. State,

Etc:, 371 So.2d 139 (Fla. 1st DCA 1979).

39. In determining the need to disclose the interests of other persons in

the alcoholic beverage license which has been applied for, the representations

set forth in the application under oath are examined as to their materiality.

See, Wilkenfeld v. Meiklejohn, 216 So.2d 237 (Fla. 1st DCA 1968).

40. Count 1 of the Administrative Complaint alleges:

On October 13, 1993, you, SHELMA TORRECH, d/b/a

Quick Serv, submitted an application to the

Division of Alcoholic Beverages and Tobacco.

Investigation revealed that Mohammed Kashani

has a direct interest in the beverage license

and that M. Kashani's qualifications are impaired

to have an interest in a beverage license based

on M. Kashani's plea of guilty to possession of

a controlled substance in New York state and

the revocation of Kashani's license, 52-01222,

contrary to section 561.15(2) Florida Statutes

and 61A-1.017 Florida Administrative Code.

41. Section 561.15(2), Florida Statutes, in pertinent part, states:

No license under the Beverage Law shall be issued

to any person who has been convicted within the

past five years of any offense against the

beverage laws of this state, the United States,

or any other state; who has been convicted within

the past five years in this state or any other

state or the United States of . . . any criminal

violation of chapter 893 or the controlled substance

act of any state or the Federal Government; or who

has been convicted in the past 15 years of any

felony in this state or any other state or the

United States.

42. Rule 61A-1.017, Florida Administrative Code, sets forth similar

disqualifying factors.

43. These provisions would disqualify Mr. Kashani from holding a beverage

license based upon the facts presented. It would not, by its terms, disqualify

Respondent from holding a license. The provision, by its terms, does not

address the consequences of Mr. Kashani having a direct interest in the beverage

license held by Respondent. In summary, Petitioner has failed to prove the

violation alleged in Count 1.

44. Count 2 of the Administrative Complaint states:

On or about October 13, 1993, you, SHELMA

TORRECH, d/b/a Quick Serv, licensed under the

Beverages Laws, during the application process

failed to disclose the name of person interested

directly or indirectly with you in the business

for which your beverage license was issued, more

specifically, the interest of Mohammed Kashani,

contrary to section 561.17 Florida Statutes.

45. Section 561.17(1), Florida Statutes, in pertinent part, states:

Any person, before engaging in the business

of . . . selling, or in any way dealing in

alcoholic beverages, shall file, . . . a sworn

application . . . If the applicant or any person

who is interested with the applicant either

directly or indirectly in the business . . is

not qualified, the application shall be denied

by the division. . . .

46. This provision addresses the opportunity for Petitioner to deny an

alcoholic beverage license to an applicant when a person who is interested in

the business with the applicant, either directly or indirectly, is not

qualified. This created the opportunity to deny the license to Respondent based

upon the interest which Mr. Kashani held in the business as an unqualified

person based upon his criminal law conviction and revocation of his alcoholic

beverage license. The provision does not contemplate removing the license that

was issued subsequent to the application, in which Respondent adequately

disclosed Mr. Kashani's interest in the business. To discipline Respondent for

Mr. Kashani's association with the alcoholic beverage license, it must be

pursued, if at all, consistent with Section 561.29(1)(f), Florida Statutes,

which allows discipline to be imposed upon "a determination that a person who is

interested directly or indirectly in the license or licensed business authorized

to sell spirituous beverages is not qualified". In summary, Petitioner has

failed to prove the violation alleged in Count 2.

47. Count 3 of the Administrative Complaint alleges:

On or about October 13, 1993, you, SHELMA

TORRECH, d/b/a Quick Serv, licensed under

the Beverage Laws, falsely swore to a material

statement on an application for an alcoholic

beverage license, to wit: Application for

Alcoholic Beverage and Cigarette Permit

(DBR 42-001) which failed to disclose the

name of person connected directly or indirectly

with your business, more specifically, the

interest of Mohammed Kashani, contrary to

559.791, Florida Statutes.

48. Section 559.791, Florida Statutes, states:

False swearing on application; penalties.

Any license issued by the Department of Business

and Professional Regulation which is issued or

renewed in response to an application upon which

the person signing under oath or affirmation

has falsely sworn to a material statement,

including, but not limited to, the names and

addresses of the owners or managers of the licensee

or applicant, shall be subject to denial of the

application or suspension or revocation of the

license, and the person falsely swearing shall

be subject to any other penalties provided by law.

49. It has not been shown that Respondent falsely swore to a material

statement on the application or failed to disclose information concerning Mr.

Kashani and his direct or indirect interest in the business. Respondent did

disclose information concerning his interest. In summary, Petitioner has failed

to establish a violation of Count 3.

50. Counts 4-6 of the Administrative Complaint state:

Count Number 4: On or about December 8, 1994,

you, SHELMA TORRECH, d/b/a Quick Serv, or your

agent, servant, or employee, knowingly acquired

$80.00 in U.S.D.A. food coupons in exchange for

$40.00 in cash; contrary to 7 U.S.C. Section 2024,

7 C.F.R. Section 278.2(a), and Sections 409.325(2)

and 409.327, Fla. Stat., within Section 561.29,

Fla. Stat.

Count Number 5: On or about March 10, 1995,

you, SHELMA TORRECH, d/b/a Quick Serv, or your

agent, servant or employee, knowingly acquired

$195.00 in U.S.D.A. food coupons in exchange for

$105.00 in cash; contrary to 7 U.S.C. Section 2024,

7 C.F.R. Section 278.2(a), and Sections 409.325(2)

and 409.327, Fla. Stat., within Section 561.29,

Fla. Stat.

Count Number 6: On or about August 1, 1995,

you, SHELMA TORRECH, d/b/a Quick Serv, or your

agent, servant or employee, knowingly acquired

$325.00 in U.S.D.A. food coupons in exchange for

$175.00 in cash; contrary to 7 U.S.C. Section 2024,

7 C.F.R. Section 278.2(a), and Sections 409.325(2)

and 409.327, Fla. Stat., within Section 561.29,

Fla. Stat.

51. Mr. Kashani has acted in violation of 7 U.S.C. Section 2024, 7 C.F.R.

Section 278.2(a), and Sections 409.325(2) and 409.327, Florida Statutes. His

actions were without Respondent's knowledge, not premised upon her negligence or

the consequence of the lack of diligence on her part. The frequency of the

violations by Mr. Kashani, when considered over the period of time in which the

violations transpired, absent Respondent's direct knowledge, are not sufficient

to impute negligence or lack of diligence, making Respondent accountable in

accordance with Section 561.29(1)(a), Florida Statutes, for the acts of her

agent, servant, or employee in violating laws of the United States and the State

of Florida. In summary, Petitioner has failed to prove the allegations in

Counts 4-6.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that a Final Order be entered dismissing the amended

administrative action against Respondent.

DONE AND ENTERED this 19th day of July, 1996, in Tallahassee, Florida.

___________________________________

CHARLES C. ADAMS, Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 19th day of July, 1996.

APPENDIX TO RECOMMENDED ORDER

The following discussion is given concerning the proposed findings of fact

of the parties.

Petitioner's Proposed Findings of Fact

1-4. Subordinate to facts found.

5. With the exception of paragraph 5(e), subordinate to facts found. The

reference in paragraph 5(e) to information about spouses does not pertain, in

that, at the time the application was made, Respondent and Mr. Kashani were not

married.

6. Subordinate to facts found.

7. With the exception of the last sentence in paragraph 7, subordinate to

facts found. The last sentence is not supported by competent evidence.

8-15. With the exception of the reference to a traffic ticket being paid

by check, subordinate to facts found. The reference to the traffic ticket is

not supported by competent evidence.

16. Subordinate to facts found.

17. Not supported by competent evidence.

18-22. Subordinate to facts found.

Respondent's Proposed Findings of Fact

1-11. Subordinate to facts found.

12. Not necessary to the resolution of the dispute.

13-16. Subordinate to facts found.

17-18. Rejected, in the suggestion that Mr. Kashani did not have an

interest, either direct or indirect, in the business.

19. Not necessary to the resolution of the dispute.

20-22. Subordinate to facts found.

23. Subordinate to facts found, with the exception that the date should

read January 3, 1994.

24-28. Subordinate to facts found.

29. Not supported by competent evidence.

30. Subordinate to facts found.

31. Contrary to facts found.

32. Subordinate to facts found.

33-34. Constitute conclusions of law.

COPIES FURNISHED:

Thomas D. Winokur, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1007

Donna M. Meek, Esquire

20 South Main Street

Gainesville, Florida 32601

John J. Harris, Director

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Lynda L. Goodgame, 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 to the agency written exceptions to this

Recommended Order. All agencies allow each party at least ten days in which to

submit written exceptions. Some agencies allow a larger period within which to

submit written exceptions. You should contact the agency that will issue the

Final Order in this case concerning agency rules on the deadline for filing

exceptions to this Recommended Order. Any exceptions to this Recommended Order

should be filed with the agency that will issue the Final Order in this case.