FINAL ORDER

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Introduction

This case was brought on for hearing before the Kentucky Alcoholic Beverage Control Board on April 12, 2005, pursuant to an Order directing the Licensee to show cause, if any it could, why its alcoholic beverage licenses should not be suspended or revoked because of an alleged violations of: (1) KRS 244.080(1), Sale or Permitted Delivery to a Minor on December 17, 2004; (2) KRS 244.080(1), Sale or Permitted Delivery to a Minor on January 7, 2005; (3) KRS 244.085(6), Minors on Premises on December 17, 2004; (4) KRS 244.085(6), Minors on Premises on January 7, 2005; and, (5) KRS 243.390, Failure to Notify of Change in Application.

The hearing was held with the full Board present, Malt Beverage Administrator John Barton presiding. Notice of hearing was mailed by certified mail and signed for by Mr. Francis E. Riggs, Process Agent and President of the Licensee corporation. Notice of hearing was also mailed by Certified Mail and signed for by the Hon. Candace Engle-Gray.[1] Despite said notice, no officer or representative of the Licensee voluntarily appeared at the hearing. The Hon. David W. Barr represented the Office of Alcoholic Beverage Control (hereinafter “Office”).

Findings of Fact/Conclusions of Law

Based upon the testimony and evidence presented at the hearing, the record herein, having considered the arguments, and being otherwise sufficiently advised, the Board, pursuant to KRS 243.550, hereby makes the following findings:

The Licensee, Black Jack Bar-N-Cue, Inc., d/b/a, Black Jack Bar-N-Cue[2] (hereinafter “Black Jack”), holds a Restaurant Drink License and a Retail Beer License, and is located at 4828 Raywick Road, Raywick, Kentucky. Black Jack operates as a nightclub/bar with very limited (lunch) food service.

On December 17, 2004, KSP Trooper Donnie Moses contacted ABC Investigator Mark Roney concerning a compliant that minors were drinking alcoholic beverages at Black Jack. When Investigator Roney arrived at Black Jack, he observed an SUV sitting a few feet from the front door of Black Jack. Investigator Roney stopped, got out of his vehicle and approached the SUV. The driver of the SUV was sitting in the vehicle drinking a 12-ounce can of Miller Lite beer. Investigator Roney criminally charged Paul D. Spaulding, DOB 9/11/85, and Christopher McMillin, DOB 1/20/86, both minors, with a violation of KRS 244.085(3), Minor not to possess alcohol. Mr. Spaulding entered a plea of guilty in Marion District Court and paid a $225.50 fine. Mr. McMillin entered a plea of guilty in Marion District Court and paid a $225.50 fine.

Investigator Roney and Trooper Moses went to the rear of the parking lot and noticed a passenger drinking beer in a car. As they drove by, the person took a drink of the beer. Investigator Roney criminally charged Ms. Carrie Mattingly, DOB 8/14/84, a minor, for a violation of KRS 244.085(3), Minor not to possess alcohol. Trooper Moses charged Brittany Ballard, DOB 8/18/85, a minor, for a violation of KRS 244.085(3), Minor not to possess alcohol. To resolve their criminal cases, Ms. Mattingly and Ms. Ballard both paid $250.00 fines to Project Graduation.

As the officers were sitting in the front seat of Trooper Moses’ vehicle, Mr. Robbie Bickett placed a subject in the back seat of the cruiser for them to arrest. Mr. Bickett told the Officers that the man, Mr. Steven C. Releford, Jr., was involved in a fight inside the premises. Mr. Releford was arrested and charged with alcohol intoxication. As Trooper Moses was arresting Mr. Releford, Mr. John T. Tompkins approached the cruiser yelling and cursing the officers. Mr. Tompkins was arrested for alcohol intoxication in a public place and disorderly conduct. Mr. Tompkins entered a plea of guilty in Marion District Court and paid a $150.50 fine. Investigator Roney did not observe any food being prepared, sold or served at the premises during the time he was there.

On January 7, 2005, Investigator Roney was again at Black Jack conducting a walk through of the premises and checking IDs. He observed Paul D. Spalding, DOB 9/11/85, drinking a Miller Lite beer.[3] Mr. Spalding originally gave Investigator Roney a false identification but later provided his true ID. Mr. Spalding was arrested and charged with a violation of KRS 244.085(3), Minor not to possess alcohol; violation of KRS 244.085(5), Misrepresenting as one’s own another’s operators license, and alcohol intoxication in a public place. Mr. Spalding entered into a plea agreement in Marion District Court and paid a $225.50 fine. On December 17, 2004, and again on January 7, 2005, Mr. Robbie Bickett was present at Black Jack’s premises.

At the hearing, Paul D. Spaulding admitted that he was drinking alcoholic beverages in a vehicle in Black Jack’s parking lot on January 7, 2005. He had twelve (12) beers in the vehicle and two (2) unopened beers in his pocket. Mr. Spaulding testified that he attempted to gain entrance to Black Jack earlier that evening with a fake identification, but was turned away. He returned later with his real ID, paid a $5.00 cover charge, received an “X” hand stamp and entered. Mr. Spaulding testified he has been at Black Jack several times in the past.

Ms. Carrie Mattingly testified that on December 17, 2004, she was at Black Jack’s parking lot inside a car drinking beer with some friends, all under 21. She stated she had an open can of beer in her possession. Ms. Mattingly testified that she paid a cover charge, had her ID checked, her hand stamped and entered Black Jack. She admitted she has been to Black Jack quite a few times before. She testified she had never observed any food served or eaten inside Black Jack. Ms. Mattingly believed that Black Jack is a club for young people.

Ms. Brittany Ballard, a minor, admitted that on December 17, 2004, she was sitting with friends in a car in Black Jack’s back parking lot. There were four (4) people in the car and the driver was a Juvenile. She stated they had just pulled in the lot when they were approached by Investigator Roney and Trooper Moses. She was drinking Smirnoff malt beverage. The girls had a 6 pack Smirnoff malt beverages and one-half (1/2) case of beer. Ms. Ballard testified that after she was cited, she went to Black Jack, paid a cover charge and had her hand stamped and entered. Ms. Ballard testified that she did not observe anyone eating while she was inside the premises.

The Office alleged that Black Jack violated KRS 244.080(1), which provides, in pertinent part:

[A] retail licensee shall not sell, give away, or deliver any alcoholic beverages, or procure or permit any alcoholic beverages to be sold, given away, or delivered to (a) A minor [.]”

Based, upon the testimony and evidence presented, the record and being otherwise sufficiently advised, the Board finds that Black Jack violated KRS 244.080(1), by either selling alcoholic beverages to minors, or permitting the delivery of alcoholic beverages to minors on its licensed premises on December 17, 2004, and on January 7, 2005.

The Office next alleged that Black Jack violated KRS 244.085(6), which provides, in pertinent part:

[A] licensee, or his or her agent, servant, or employees shall not permit any person under twenty-one (21) years of age to remain on any premises where alcoholic beverages are sold by the drink or consumed on the premises [.]

Pursuant to KRS 13B.090(7), the Office has the burden of proving a violation of this statute. Since it is undisputed that minors were present on the licensed premises on or about December 17, 2004, and on January 7, 2005, Black Jack did violate KRS 244.085(6) absent any applicable exception. The burden of proving an exception is with Black Jack.

KRS 244.085(6)(a) does provide exceptions and a possible defense to Black Jack.[4] Minors are allowed on the premises if, “the usual and customary business of the establishment is a …restaurant.” Id.

The Board heard the evidence in this case on the same date that it heard evidence in other cases against Black Jack as follows: (1) Case No. 04-ABC-246 for violations on February 20, 2004; (2) Case No. 04-ABC-247 for violations occurring on June 4, 2004, and, (3) Case No. 05-ABC-032 for violations on December 5, 2004. The Board takes administrative notice of the evidence presented in Case No. 04-ABC-246, Case No. 04-ABC-247 and Case No. 05-ABC-032.

Evidence shows that on the evening of December 17, 2004, and January 7, 2005, the atmosphere and activities at Black Jack more closely resembled a bar than a restaurant. Patrons were charged a $5.00 cover charge to enter the premises, a practice associated with bars, not restaurants. After paying this fee, patrons under the age of twenty-one (21) years received an “X” on their hand made by a black marker pen and persons over twenty-one (21) years of age received a wrist bracelet: a bar practice. Loud music was played. Minor patrons packed the premises (around 200 to 250, mostly minors). Many patrons were walking, drinking and talking to each other. There were few tables and chairs. No food was sold, served or being eaten by patrons seated at tables, etc. Again, all of these are bar practices and activities.

The Board fully understands and appreciates the legal distinction between whether a business is “a restaurant that sells beer,” or “a bar that sells food.” Although the line separating a bar from a restaurant is sometimes blurry, the legal consequences in alcoholic beverage law are significant. KRS 241.010(37) defines a “restaurant” as:

[A] facility where the usual and customary business is the serving of meals to consumers that has a bona fide kitchen facility, and that receives at least fifty percent (50%) of its gross receipts from the sale of food.

The Board is an administrative agency, and is required to examine a licensee’s business practices to ascertain whether they are a “sham” designed to subvert public policy or to circumvent “regulatory obligations.” See, Commonwealth of Kentucky, Natural Resources and Environmental Protection Cabinet v. Neace, Ky., 14 S.W.3d 15, 19 (2000).

In Daniel v. Paul, 395 U.S. 298, 89 S.Ct. 1697, 23 L.Ed. 318 (1969), the United States Supreme Court dealt with a situation where an amusement park did not want to comply with the newly enacted Civil Rights Act of 1964, Title II. In an attempt to avoid the new law, the park began calling itself a “private club” and charged a twenty-five cent ($.25) membership fee to each “member.” For this fee, “members” received a membership card, and were allowed to enter the park. Not surprising, blacks were not allowed to join the “private club.” The Supreme Court held that it was proper to ignore what a business calls itself and to examine the true nature of the business. Based on a review of business operations, the Court held that the conclusion that the park was, “not a private club is plainly correct.” Id., at 302.

In Hendriks v. Commonwealth, Ky., 865 S.W.2d 332 (1993), the Kentucky Supreme Court dealt with a similar issue. In Hendricks, an adult entertainment establishment wanted to avoid a Newport city ordinance, which prohibited public nude dancing, so the business began calling itself a “private club.” A state trooper entered the premises, paid a five dollar ($5.00) cover charge, received a membership card and entered the premises. The Court examined the business practices and determined that the business was not a private club, and that its operational change, “was established for the sole purpose of avoiding the requirements of a newly enacted city ordinance regarding nudity in a public place.” Id., at 335.

In the present case, the Board acknowledges that Black Jack has a kitchen. However, simply having a kitchen does not make a business a restaurant. A reasonable person of ordinary prudence, upon entering an establishment purporting to be a restaurant, would not expect to pay a $5.00 cover charge. Black Jack charged this non-refundable cover charge even if a patron did not eat any food, or did not intend to eat any food. A reasonable person would expect a restaurant to have a minimal menu available, but Black Jack did not have one. A reasonable person would expect a restaurant to have its kitchen open and food cooking. Black Jack’s kitchen was closed and locked. A reasonable person would expect to see most, if not all, restaurant patrons seated and eating at tables. Few patrons were observed sitting at tables, most were milling around the premises, talking and drinking. A reasonable person would not expect a restaurant to permit patrons to dance in steel cages. Black Jack permitted minors to dance in steel cages.

Based, upon the testimony and evidence presented, the record and being otherwise sufficiently advised, the Board finds that Black Jack violated KRS 244.085(6), by allowing minors in the premises. The Board further finds that Black Jack failed to meets it burden of proving an affirmative defense that it was a restaurant. The Board finds that evidence demonstrates that Black Jack is a bar/nightclub, not a restaurant as defined in KRS 241.010 (37).

The Office also alleged that Black Jack violated KRS 243.390, Section (2) states in pertinent part:

If, after a license has been issued, there is a change in any of the facts required to be set forth in the application, a verified supplemental statement in writing giving notice of the change shall be filed with the board within ten (10) days after the change.

At time of their application, Black Jack maintained good standing with the Secretary of State’s office. The evidence shows that Black Jack failed to notify the Office that its corporate status is in bad standing with the Office of Secretary of State. Based, upon the testimony and evidence presented, the record and being otherwise sufficiently advised, the Board finds that Black Jack violated KRS 243.390, Section (2).

Mr. Robert “Robbie” Wayne Bickett was employed by Black Jack as an Administrative Assistant from February 2004 through August 2004.[5] Strangely, Mr. Bickett testified that he was not working at Black Jack on December 17, 2004, when he placed Mr. Steven Releford into Trooper Moses’ car for arrest. Rather Mr. Bickett alleges that he placed Mr. Releford into Trooper Moses’ car in his capacity as a “concerned citizen.” Mr. Bickett admitted that when he had worked for Black Jack, he was there every other Friday doing administrative type activities, i.e., payroll. Mr. Bickett owns a one-fourth (1/4^th) undivided interest in the real property where the licensed premises are located.[6] On April 11, 2004, Mr. Robbie Bickett came to the Office’s Frankfort office and attempted to surrender the licenses. However, the Board refused said surrender since Mr. Bickett was not an officer of the licensee corporation and surrender was otherwise prohibited by KRS 243.630(9).

The premises located at 4828 Raywick Road in Raywick, Marion County, Kentucky, has quite a history and is well known by the Board. Said premises were originally licensed as Bickett’s Inn, d/b/a Bickett’s, and also held a Restaurant Drink License and a Retail Beer License. The Restaurant Drink License was revoked on March 16, 1998, and Bickett’s failed to renew the beer license in July 1998.

On November 24, 1998, Squire’s, Inc. applied for a retail beer license but then Malt Beverage Administrator Stephen G. Horner denied application based on numerous protest letters received. Squire’s appealed the denial and the Board held a hearing on the appeal. On August 11, 1998, the Board entered a final order in Case No. 98-ABC-104, and Squire’s was granted a beer license with stipulations. Stipulation (3) in Order No. 98-ABC-104 stated “Charlie Bickett, Kathleen Cecil and Robert Wayne Bickett shall not be employed by the applicant, shall have no ownership interest in the applicant nor shall they be involved in the management or business affairs of the applicant in any way, direct or indirectly;”. The reason for this stipulation was that Cecil and Robert Wayne Bickett were listed as Lessors on the Lease that was filed with the application. A retail beer license was issued to Squire’s on November 24, 1998. The president of Squires was Mr. Earl Ray Bickett.

Squires continued the Bickett “family tradition” of violating ABC law. The Board takes administrative notice that in Case No. 01-ABC-285, Squires was charged with violations of KRS 244.080(1), Sales to minors; and, KRS 244.085(6), Minors on Premises - 10 counts. In Case No. 03-ABC-138, Squires was next charged with the following violations: (1) KRS 244.080(1), Sale to a Minor; (2) KRS 244.480, Unauthorized Sunday Sales; (3) KRS 244.085(6), Minor on Premise, three (3) counts; (4) KRS 243.500(4)(b), Two (2) Alcohol-Related Misdemeanor Convictions; and, (5) KRS 243.390(2), Bad Standing. By letter dated August 4, 2003, Mr. Louis Earl Bickett, admitted the violations and physically surrendered its retail beer license to resolve this case under threat of revocation.

Black Jack filed its application for a Restaurant Drink License and a Retail Beer License on April 15, 2004. Robert Wayne Bickett was listed on the Lease, filed with the Office on April 27, 2004, as a Lessor. Relatives of Mr. Bickett have owned, operated, or leased the premises located at 4828 Raywick Road, Raywick, Kentucky since 1998 when the premises was initially licensed for alcoholic beverage sales. Since that time the licensed premises has continued to violate ABC law.

The Board takes administrative notice of the fact that by separate orders of even date, the Board has found as follows:

Case No. 04-ABC-246

On February 20 to 21, 2004, Black Jack committed the following violations: (1) KRS 244.120, Disorderly Premises; (2) KRS 244.085(6), Minors on Premises; and, (3) KRS 244.080(1), Sales or Permitted Delivery to a Minor.

Case No. 04-ABC-247

On June 5, 2004, Black Jack committed the following violations: (1) KRS 244.290(3)(a) and 804 KAR 7:030, Remaining Open and Selling Distilled Spirits or Wine after Midnight; (2) KRS 244.085(6) (two hundred (200) counts), Minors on Premises; (3) KRS 244.080(1), Sales or Permitted Delivery to Minors; (4) KRS 244.080(2), Sale to an Intoxicated Person; (5) KRS 244.360 and 804 KAR 7:050, Failure to Print Name and Numbers on Front of Premises; (6) KRS 244.083, Failure to Post Minor Warning Sign; (7) KRS 243.895, Failure to Post Pregnancy Warning Sign; (8) KRS, Disorderly Premises; (9) 804 KAR 9:010 Section 2 (4)(b), Failure to Maintain a Minimum Seating; and, (10) KRS 243.390(2) Failure to Notify of Change In Application.

and,

Case No. 05-ABC-032

On December 4, 2004, Black Jack committed the following violations: (1) KRS 244.080(1), Sale or Permitted Delivery to a Minor; (2) KRS 244.085(6), Minors on Premises; (3) KRS 243.390(2) Failure to Notify of Change In Application.; (4) KRS 244.290(3)(a), Remaining Open and Selling Distilled Spirits or Wine after Midnight; (5) KRS 244.480, Selling Malt Beverages after Midnight; (6) 804 KAR 9:010, Section 2 (4)(b), Failure to Maintain Minimum Seating; and, (7) 804 KAR 9:010, Section 2 (4)(c), Failure to Present Satisfactory Proof as Restaurant.

Given the numerous and repeated violations by Black Jack, the Board believes that Black Jack will continue to violate the alcoholic beverage laws if allowed to keep its licenses. As such, the Board finds that Black Jack’s alcoholic beverage licenses should be revoked.

Conclusion

IT IS, THEREFORE, ORDERED that Restaurant Drink License No. 078-RD-2277 and Retail Beer License No. 078-B-7393, issued to Black Jack Bar-N-Cue, d/b/a, Black Jack Bar-N-Cue, be and are hereby REVOKED, effective the close of business on Tuesday, July 12, 2005.

Appellate Rights

All final orders of the Board may be appealed to Franklin Circuit Court in accordance with KRS 13B.140(1). To appeal, you should file a petition in Franklin Circuit Court within thirty (30) days after the mailing date of this Final Order. Copies of the petition must be served upon the Office and all parties of record in this proceeding. The petition shall include the names and addresses of all parties of record in this proceeding, including the Office. The petition shall also present a statement of the grounds upon which the review is requested. A copy of this Final Order shall accompany the petition.

SO ORDERED this the _________ day of _______________, 2005.

ALCOHOLIC BEVERAGE CONTROL BOARD

_____________________________________

V. LAVOYED HUDGINS

CHAIRMAN

_____________________________________

STEVEN A. EDWARDS

DISTILLED SPIRITS ADMINISTRATOR

_____________________________________

JOHN C. BARTON

MALT BEVERAGE ADMINISTRATOR

ATTEST:

_______________________________

ANGELA F. DONAHUE

BOARD SECRETARY

SERVICE LIST:

CERTIFILED MAIL:

Black Jack Bar-N-Cue, Inc.

DBA Black Jack Bar-N-Cue

4828 Raywick Road

Raywick, KY 40060

Frances Edward Riggs, Process Agent

Black Jack Bar-N-Cue, Inc.

4828 Raywick Road

Raywick, KY 40060

REGULAR MAIL:

David R. Hourigan

County Judge Exec. & ABC Administrator

102 West Main Street

Lebanon, KY 40033

Investigator Roney

Files

[1] Ms. Engle-Gray notified Hon. Barr, by phone, prior to April 12, 2005, that she would not be present at the hearing to represent the Licensee.

[2] The premises was licensed previously as Squires, Inc., d/b/a, Bicketts and is still known locally as “Bicketts”.

[3] This is the same Paul D. Spalding that Investigator Roney charged on December 17, 2004 with minor not to possess alcoholic beverages.

[4] An affirmative defense is one in which a party seeks to avoid liability or guilt on some ground recognized by law. See, CR 8.05. A defense proceeding by way of confession and avoidance is an affirmative defense. Chaney v. Slone, Ky., 345 S.W.2d 484, 486 (1961). Where a statute prohibits certain conduct, but also contains an exception, which excuses or justifies the prohibited conduct, the listed statutory exception is considered an affirmative defense. Smith v. Sizemore, Ky., 300 S.W.2d 225, 228 (1957)(word “unless” creating exception); Banner Transfer Co. v. Morse, Ky., 274 S.W.2d 380, 381 (1954)(words “shall not apply” creating exception); Shamrock Coal Co. v. Taylor, Ky. App., 697 S.W.2d 952, 954 (1985).

[5] By Board Order No. 98-ABC-104, entered August 11, 1998, the board issued a retail beer license to Squire’s, Inc., 4828 Raywick Road, Raywick, Kentucky. In that Order, stipulation number 3 stated: “Charlie Bickett, Kathleen Cecil and Robert Wayne Bickett shall not be employed by the applicant, shall have no ownership interest in the applicant nor shall they be involved in the management or business affairs of the applicant in any way, direct or indirect;.. .”

[6] Deed, filed February 18, 2008, in Marion County. Mr. Bickett and his wife, Melissa Cecil, each acquired a one-fourth (1/4^th) undivided interest. Kathleen Cecil and Daniel Cecil, her husband, also each acquired a one-fourth (1/4^th) undivided interest.