Surf Attractions, Inc. v. Department of Business Regulation, Div. of Alcoholic Beverages and Tobacco

• Decision Date: 16 December 1985
• Docket Number: No. BF-197,BF-197
• Citation: 10 Fla. L. Weekly 2769,480 So.2d 1354
• Parties: 10 Fla. L. Weekly 2769 SURF ATTRACTIONS, INC., d/b/a One Stop Food, Appellant, v. DEPARTMENT OF BUSINESS REGULATION, DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO, Appellee.
• Court: Florida District Court of Appeals

Page 1354

480 So.2d 1354

10 Fla. L. Weekly 2769

SURF ATTRACTIONS, INC., d/b/a One Stop Food, Appellant, v. DEPARTMENT OF BUSINESS REGULATION, DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO, Appellee.

No. BF-197.

District Court of Appeal of Florida,

First District.

Dec. 16, 1985.

Rehearing Denied Jan. 20, 1986.

Jeffrey C. Bassett of Barron, Redding, Hughes, Fite, Bassett & Fensom, P.A., Panama City, for appellant.

Louisa E. Hargrett, Staff Atty., Tallahassee, for appellee.

BARFIELD, Judge.

Surf Attractions, Inc. (licensee) appeals from a final order of the Department of Business Regulation, Division of Alcoholic Beverages and Tobacco (agency). We reverse.

The licensee operates a convenience store on Panama City Beach and holds a beverage license issued by the agency. On April 21, 1984, beverage agents observed two young men exiting the licensee's store, carrying a case of beer which they had purchased. The young men were unable to provide appropriate proof of age and were arrested. The agency issued a show cause order expressing its intention to impose sanctions against the licensee and the licensee requested a formal hearing pursuant to section 120.57(1), Florida Statutes (1983).

The evidence at hearing revealed that Lawrence Presley, the licensee's treasurer, approved the sale of beer based on the purchaser's use of a Missouri traffic ticket and a photo identification card from a community center. The hearing officer found that the sale violated section 562.11(1), Florida Statutes (1983) and that the licensee was therefore subject to sanctions under section 561.29(1) and (3). He concluded that since the violation was committed by a corporate officer, there was "no need to prove more than one violation or to prove the separate and independent culpable responsibility of the licensee corporation ...." The order recommended a $500 fine, with $400 of that to be suspended on conditions that there be no further violations and the licensee impose stricter controls on approval of identifications. The agency issued its final order which accepted the hearing officer's findings of fact and conclusions of law but which increased the penalty to a fine of $1,000.

Appellant argues on appeal that the agency erred in imposing a strict liability standard on the licensee in penalizing it pursuant to section 561.29(3). ¹ The appellant points to a long and well-established line of Florida cases, beginning with Cohen v. Schott, 48 So.2d 154 (Fla.1950), which holds that the agency must show a lack of due diligence on the part of a beverage licensee before sanctions may be imposed. See, e.g., Lash, Inc. v. State, Department of Business Regulation, 411 So.2d 276 (Fla. 3d DCA 1982); Golden Dolphin No. 2, Inc. v. State, Division of Alcoholic Beverages & Tobacco, 403 So.2d 1372 (Fla. 5th DCA 1981); Woodbury v. State Beverage Department, 219 So.2d 47 (Fla. 1st DCA 1969); Pauline v. Lee, 147 So.2d 359 (Fla. 2d DCA 1962), cert. denied, 156 So.2d 389 (Fla.1963); Trader Jon, Inc. v. State Beverage Department, 119 So.2d 735 (Fla. 1st DCA 1960).

The agency's response is that where, as here, the violation is committed by a corporate officer, there is no need to show negligence or lack of due diligence in the commission of the violation. Since we find no support for this proposition in the law of agency or the case law concerning beverage license penalties, nor do we find any logical force behind it, we reject it. It is true that where the violation is committed by employees, it may be necessary for the agency to show a series of violations to impute lack of due diligence to the licensee. Golden Dolphin; Pauline. We find, however, that while sanctions may be imposed for a single violation by a corporate officer, the agency must still prove lack of due diligence by the officer. G & B, Inc. v. State, Department of Business Regulation, Division of Beverage, 362 So.2d 959 (Fla. 1st DCA 1978); R & R. Lounge v. Wynne, 286 So.2d 13 (Fla. 1st DCA 1973).

A second issue which has concerned this court in reaching proper dispostion of this appeal is whether the "due diligence" standard of Cohen v. Schott and its progency is applicable to imposition of fines by the agency under section 561.29(3). The statutes here in issue, sections 561.29(3) and 562.11(1)(a) appear to impose strict liability standards. Yet the Florida Supreme Court and the district courts, in numerous opinions, have interpreted section 561.29(1)(a), which authorizes the agency to suspend and revoke licenses and which also contains no requirement of mens rea or fault, to require a showing of lack of due diligence by the licensee. Is that interpretation properly extended to imposition of fines pursuant to section 561.29(3)? ² We believe that it is.

Foremost among our reasons for doing so is that the agency conceded the question at oral argument, seeking to rely on the argument regarding corporate officers which we have rejected above. Additionally, we find several other persuasive reasons for the interpretation we place on the statute.

First, such an interpretation is consistent with constitutional principles. In Bach v. Florida State Board of Dentistry, 378 So.2d 34, 36 (Fla. 1st DCA 1979), Judge Ervin suggested that the rationale of Cohen v. Schott was necessary to sustain section 561.29(1)(a) against constitutional attack. While the constitutionality of section 561.29(3) is not directly before us in this appeal, we find that due process considerations favor a requirement of "fault" by the violator. ³

An additional reason for this interpretation, one advanced by the appellant, is that the term "violation" should be interpreted in a similar manner where it appears in both subsections (1)(a) and (3) of section 561.29. We agree. See 49 Fla.Jur.2d, Statutes § 133 (1984).

Another rationale for requiring a finding of lack of due diligence to support a fine is to provide some parameters for the exercise of the agency's prosecutorial discretion. The "track record" of the agency in this case and others brought to the attention of this court leaves much to be desired. Village Saloon, Inc. v. Division of Alcoholic Beverages and Tobacco, 463 So.2d 278, 283 (Fla. 1st DCA 1984). Our confidence in the agency's discretion was not bolstered by its counsel's admission at oral argument that it has a policy of not imposing sanctions against a licensee who sells to minors when the licensee checks one of the forms of identification enumerated in section 562.11(1)(b), Florida Statutes (1983), (providing a complete defense to civil actions but expressly not applicable to actions by the agency). The agency's adherence to such a policy without providing prior notice to licensees raises due process concerns and, of course, the likelihood that the agency stands in violation of Florida's Administrative Procedure Act. McDonald v. Department of Banking and Finance, 346 So.2d 569 (Fla. 1st DCA 1977). Finally, we are persuaded of the correctness of our holding by opinions of this court which have applied, without discussion, the "lack of due diligence" standard to appeals from agency-imposed fines for violations of the beverage laws. Charlotte County Lodge v. State, Department of Business Regulations, Division of Alcoholic Beverages and Tobacco, 463 So.2d 1208 (Fla. 1st DCA 1985); G & B, Inc.; R & R Lounge.

In summary, we find that the agency erred in adopting the hearing officer's conclusion of law that the licensee could be held strictly liable for a violation of the beverage laws. Accordingly, we reverse the order appealed and remand to the agency for further action under a correct interpretation of the law. § 120.68(9)(b), Fla.Stat. (1983).

REVERSED.

JOANOS, J., concurs specially with an opinion.

ERVIN, J., dissents with written opinion.

JOANOS, Judge, concurring specially.

I concur in the result reached by Judge Barfield's opinion in reversing the order appealed and remanding to the agency for further action under a correct interpretation of the law. Further, I concur in the opinion except with the expressed reasoning that the result is based partly upon a need to "... provide some parameters for the exercise of the agency's prosecutorial discretion" and the remarks concerning the "track record" of the agency in this case. I do not believe that it is necessary in the opinion to pass judgment on matters not before the court in the instant proceeding. I would, therefore, refrain from joinder in that portion of Judge Barfield's opinion.

ERVIN, Judge, dissenting.

I respectfully dissent. Those cases imposing a requirement of a lack of due diligence on the Division of Alcoholic Beverages and Tobacco, as a condition to the imposition of disciplinary sanctions, e.g., Lash, Inc. v. State, Department of Business Regulation, 411 So.2d 276 (Fla. 3d DCA 1982); Cohen v. Schott, 48 So.2d 154 (Fla.1950); Trader Jon, Inc. v. State Beverage Department, 119 So.2d 735 (Fla. 1st DCA 1960), involved only a construction of Section 561.29(1), Florida Statutes, giving the Division the general power to revoke or suspend a beverage license, due to violation of the laws of the state, the United States, or any municipal regulation by the licensee or his agents, officers, servants or employees, on the premises. The facts recited in those cases revealed no direct, personal involvement by the licensee in the particular violation, but rather related to the Division's attempt to impute negligence upon the licensee because of the active negligence of his employees. ¹ Significantly, none of the cases cited by the majority dealt with the effect of Section 562.11(1)(b), Florida Statutes (1983). Section 562.11(1) states:

(1)(a) It is unlawful for any person to sell, give, serve, or permit to be served alcoholic beverages to a person under 19 years of age or to permit a person under 19 years of age to consume said beverages on the licensed premises. Anyone convicted of violation of the provisions hereof shall be guilty of a...