96-005599 Division Of Alcoholic Beverages And Tobacco vs. B And K Restaurant, Inc., D/B/A Nipper's Restaurant Status: Closed Recommended Order on Monday, June 16, 1997.

Summary: Respondent failed to maintain minimum requirements for licensee: separate records of sales and minimum seats/fine and revocation with revocation suspended.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF ALCOHOLIC BEVERAGES )

AND TOBACCO, )

)

Petitioner, )

)

vs. ) CASE NO. 96-5599

)

B & K RESTAURANT, INC., d/b/a )

NIPPER'S RESTAURANT, )

)

Respondent. )

________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case

on April 1, 1997, at West Palm Beach, Florida, by video

teleconference before Errol H. Powell, a duly designated

Administrative Law Judge of the Division of Administrative

Hearings.

APPEARANCES

For Petitioner: Miguel Oxamendi

Assistant General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-1007

For Respondent: Arthur Barakos, President

B & K Restaurant, Inc.,

d/b/a Nipper's Restaurant

21069 Military Trail

Boca Raton, Florida 33486-1043

STATEMENT OF THE ISSUES

The issue for determination is whether Respondent committed

the offenses set forth in the administrative complaint and, if

so, what action should be taken.

PRELIMINARY STATEMENT

By a two-count Administrative Action dated October 9, 1996,

the Department of Business and Professional Regulation, Division

of Alcoholic Beverages and Tobacco (Petitioner) charged B & K

Restaurant, Inc., d/b/a Nipper's Restaurant (Respondent) with:

Count 1 -- violating Subsections 561.20(2)(a)4 and 561.29(1)(e),

Florida Statutes, and Rule 61A-3.0141(3)(a)1 and 2, Florida

Administrative Code, by failing to maintain separate records for

gross retail sales of food and non-alcoholic beverages and gross

retail sales of alcoholic beverages; and Count 2 -- violating

Subsections 561.20(2)(a)4 and 561.29(1)(e), Florida Statutes, by

failing to maintain seating to accommodate the minimum seating

capacity of 150 seats at tables. Respondent disputed the

allegations of fact and requested a formal hearing. On November

27, 1996, this matter was referred to the Division of

Administrative Hearings.

At hearing, Petitioner presented the testimony of two

witnesses and entered one exhibit into evidence. Respondent

testified on his own behalf, presented the testimony of one

witness, and entered no exhibits into evidence.

A transcript of the hearing was not ordered. The parties

submitted proposed findings of fact which have been considered in

this recommended order. 1 Although the time for filing post-

hearing submissions was set for ten days following the hearing,

Respondent filed its proposed findings of fact beyond the ten-day

time period. Petitioner did not file a pleading in opposition to

the filing and consideration of Respondent's proposed findings of

fact.

FINDINGS OF FACT

1. At all times material hereto, B & K Restaurant, Inc.,

d/b/a Nipper's Restaurant (Respondent) held Alcoholic Beverage,

Special Restaurant License No. 60-02856 SRX (SRX License).

Respondent's SRX License was issued on July 7, 1988.

2. Respondent's SRX License requires Respondent to

maintain, among other things, 2,500 square feet of serving area,

a minimum of 150 seats for seating, and 51 percent of gross

revenue from food and non-alcoholic beverages sales.

3. Respondent has a president, Arthur Barakos, who is a 51

percent shareholder.

4. On September 30, 1996, a special agent of the Department

of Business and Professional Regulation, Division of Alcoholic

Beverages and Tobacco (Petitioner) performed an SRX License

inspection of Respondent.

5. Petitioner's agent requested Barakos to produce, among

other things, Respondent's last three months of alcohol and food

records, z-tapes, 2 guest receipts, and ledger books, if any. He

was unable to produce the requested records, indicating that his

accountant had possession of them.

6. Petitioner's agent reminded Barakos that, as a

requirement of the SRX License, the records must be maintained on

Respondent's premises. She informed him that she would return at

a later date to review the requested records.

7. On October 8, 1996, Petitioner's agent returned to

Respondent to perform the SRX License inspection. She requested

to review the same records. As before, Barakos informed

Petitioner's agent that he did not have the requested records.

8. Barakos indicated to Petitioner's agent that the only

records that he maintained were guest checks which had credit

card charges; he did not maintain other guest checks or z-tapes.

Further, he indicated that his procedure was to copy the

information from z-tapes and guest receipts on separate sheets of

paper, referred to as sales sheets, and to provide his accountant

with the sales sheets.

9. Respondent's accountant performs a "compilation" on a

monthly basis of monthly sales from information provided to her

by Barakos. Monthly, the accountant meets with Barakos and

obtains from him sales sheets showing daily receipts and total

sales per day for the entire month. Also, Barakos provides the

accountant with bank statements, purchase orders, stubs from

guest checks with credit card charges and, occasionally, z-tapes.

At times, the accountant obtains some of the information over the

telephone from Barakos. She inputs the information from the

sales sheets on computer. From the information provided, the

accountant totals the daily receipts and computes sales tax.

Afterwards, she returns to Barakos all of the items that he

provided to her.

10. The accountant is unable to verify or certify the

accuracy of the monthly sales records.

11. At the inspection, Barakos did provide Petitioner's

agent with sales sheets. However, the sales sheets failed to

differentiate between food and alcoholic beverages.

12. Without the requested records which are the original

documentation, no verification of food and alcohol revenue could

be made by Petitioner's agent. Therefore, she was unable to

determine whether 51 percent of Respondent's gross revenue was

from food and non-alcoholic beverages sales.

13. Further, regarding maintaining past records, Barakos

had maintained his almost nine years of records, including z-

tapes, in boxes located in a shed. He discarded the boxes of

records after they got wet and became moldy, not believing that

he would ever be audited by Petitioner. Barakos discarded the

records without improper motive. Because he had discarded the

records, Barakos was unable to produce them to Petitioner's

agent.

14. At no time material hereto did Petitioner receive from

Respondent a request to maintain its records at a location other

than on Respondent's premises.

15. Additionally, at the inspection, Petitioner's agent

inspected Respondent's seating. She found Respondent not to be

in compliance with the required minimum seating of 150 seats,

having only 125 seats. Barakos indicated that he would add the

additional seats without delay to bring Respondent into

compliance.

16. Further, Petitioner's agent inspected Respondent's

square footage. She found Respondent to be in compliance with

the minimum square footage requirement of 2,500 square feet.

CONCLUSIONS OF LAW

17. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and the

parties thereto, pursuant to Subsection 120.57(1), Florida

Statutes.

18. License revocation proceedings are penal in nature.

The burden of proof is on Petitioner to establish the

truthfulness of the allegations in the administrative complaint

by clear and convincing evidence. Ferris v. Turlington , 510

So.2d 292 (Fla. 1987); Balino v. Department of Health and

Rehabilitative Services , 348 So.2d 349 (Fla. 1st DCA 1977).

19. Section 561.20, Florida Statutes, provides in pertinent

part:

(2)(a) No such limitation of the number of

licenses as herein provided shall henceforth

prohibit the issuance of a special license

to:

* * *

4. Any restaurant having 2,500 square feet

of service area and equipped to serve 150

persons full course meals at tables at one

time, and deriving at least 51 percent of its

gross revenue from the sale of food and

nonalcoholic beverages . . . Any license

issued under this section shall be marked

"Special," . . . .

Respondent's license was issued as a exception to the quota

license limitation.

20. Rule 61A-3.0141, Florida Administrative Code, provides

in pertinent part:

(1) Special restaurant licenses . . . must

continually comply with each and every

requirement of both subsections (2) and (3)

of this rule as a condition of holding a

license. . . The suffix "SRX" shall be made a

part of the license numbers of all such

licenses issued after January 1, 1958.

(2) Special restaurant licenses shall be

issued only to applicants for licenses in

restaurants meeting the criteria set forth

herein.

* * *

(b) [A] qualifying restaurant must have

accommodations for the service and seating of

150 or more patrons at tables at one time.

1. The tables and seating must be located

within the floor space provided for in

paragraph (2)(a) [2,500 or more square feet]

of this rule.

2. The tables must be of adequate size to

accommodate the service of full course meals

in accordance with the number of chairs or

other seating facilities provided at the

table.

3. Seating at counters used to serve food

shall be included in the minimum seating

requirements.

* * *

(3) Qualifying restaurants receiving a

special restaurant license after April 18,

1972 must, . . . also maintain the required

percentage, as set forth in paragraph (a) or

(b) below, on a bi-monthly basis.

Additionally, qualifying restaurants must

meet at all times the following operating

requirements:

(a) At least 51 percent of total gross

revenues must come from retail sale on the

licensed premises of food and non-alcoholic

beverages. . .

1. Qualifying restaurants must maintain

separate records of all purchases and gross

retail sales of food and non-alcoholic

beverages and all purchases and gross retail

sales of alcoholic beverages.

2. The records required in subparagraph

(3)(a)1 of this rule must be maintained on

the premises, or other designated place

approved in writing by the division for a

period of 3 years and shall be made available

within 14 days upon demand by an officer of

the division. The division shall approve

written requests to maintain the

aforementioned records off the premises when

the place to be designated is the business

office, open 8 hours per work day, . . . of a

. . . accountant; . . . located in the State

of Florida; and . . . precisely identified by

complete mailing address.

21. Petitioner has demonstrated by clear and convincing

evidence that Respondent violated Subsection 561.20(2)(a)4 and

Rule 61A-3.0141(3)(a)1 and 2 by failing to maintain separate

records for purchases and gross retail sales of food and non-

alcoholic beverages and purchases and gross retail sales of

alcoholic beverages and by failing to maintain minimum seating of

150 seats.

22. Section 561.29, Florida Statutes, 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:

* * *

(e) Violation by the licensee, or, if a

corporation, by any officer or stockholder

thereof, of any rule or rules promulgated by

the division in accordance with the

provisions of this chapter . . . , or a

violation of any such rule or law by any

agent, servant, or employee of the licensee

on the licensed premises or in the scope of

such employment.

23. Petitioner has demonstrated by clear and convincing

evidence that Respondent violated Subsection 561.29(1)(e) by

violating Rule 61A-3.0141(3)(a)1 and 2.

24. Regarding penalty, Section 561.29, Florida Statutes,

provides further in pertinent part:

(3) The division may impose a civil penalty

against a licensee for any violation

mentioned in the Beverage Law, or any rule

issued pursuant thereto, not to exceed $1,000

for violations arising out of a single

transaction. If the licensee fails to pay

the civil penalty, his license shall be

suspended for such period of time as the

division may specify. . . .

* * *

(5) The division may suspend the imposition

of any penalty conditioned upon terms the

division should in its discretion deem

appropriate.

25. Rule 61A-2.022, Florida Administrative Code, provides

the penalty guidelines for violations and provides that, for a

violation of Section 561.20, "failure to meet the minimum

qualifications of a special license," the penalty is a $1,000

civil penalty and revocation of the license without prejudice to

obtain any other type license, but with prejudice to obtain the

same type of special license for 5 years.

26. Factors which should be considered in this situation is

that Respondent has been licensed for almost nine years without

any history of a disciplinary action; that Respondent did

maintain records over the years, but that they were discarded,

with no improper motive, shortly before the inspection on

September 30, 1996; and that Barakos was ready, willing, and able

to add the additional 25 seats without delay.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Department of Business and Professional

Regulation, Division of Alcoholic Beverages and Tobacco enter a

final order:

1. Imposing a $1,000 civil penalty against B & K

Restaurant, Inc., d/b/a Nipper's Restaurant; and

2. Revoking the Alcoholic Beverage Special Restaurant

License of B & K Restaurant, Inc., d/b/a Nipper's Restaurant,

i.e., License No. 60-02856 SRX without prejudice to obtain any

other type license, but with prejudice to obtain another SRX

special license for 5 years, with the revocation being suspended

under terms and conditions that the Department of Business and

Professional Regulation, Division of Alcoholic Beverages and

Tobacco deems appropriate.

DONE AND ENTERED this 16th day of June, 1997, in

Tallahassee, Florida.

___________________________________

ERROL H. POWELL

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 16th day of June, 1997.

ENDNOTES

1/ proposed findings of fact contains some facts Respondent's

for which no evidence was presented at hearing, and those

unsupported facts are not considered in this recommended order.

2/ Z-tape is a tape in the cash register which contains a A

record of the current day's food and alcohol sales.

COPIES FURNISHED:

Miguel Oxamendi

Senior Attorney

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1007

Arthur Barakos, President

21069 Military Trail

Boca Raton, Florida 33486.

Cpt. Debbie Beck

400 North Congress Avenue, Suite 150

West Palm Beach, Florida 33401

Richard Boyd, Director

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Lynda 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 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.