state of iowa alcoholic beverages division in re: … y mariscos maravilla(2014).pdf · alcoholic...

STATE OF IOWA

BEFORE THE DEPARTMENT OF COMMERCE

ALCOHOLIC BEVERAGES DIVISION

IN RE: DOCKET NO. A-2013-00166

DIA NO. 13ABD040

Enrique Maravilla

d/b/a Tacos y Mariscos Maravilla

9-11 E. State St. Rear

Marshalltown, Iowa 50158 PROPOSED DECISION

Permit No. BB-34223

On December 2, 2013, the Marshalltown City Council (local authority) denied the

beer permit renewal application filed by Enrique Maravilla d/b/a Tacos y

Mariscos Maravilla (permittee) for Beer Permit BB-34223. The permittee filed a

timely appeal with the Iowa Alcoholic Beverages Division (Division). A hearing

was held before the undersigned administrative law judge on January 29, 2014.

Permittee Enrique Maravilla appeared and was represented by attorney Barry

Kaplan. Ramon Avalos served as the interpreter for Mr. Maravilla by agreement

of the parties. The local authority was represented by City Attorney Curtis

Ward.

THE RECORD

The record includes the Electronic Beer Permit Renewal Application; the

Division’s December 3, 2013 Notice of Denial to Permittee; Notice of Appeal;

Notice of Hearing; the testimony of Officer Juan Tejada, Police Chief Michael

Wade Tupper, and Enrique Maravilla; and Local Authority Exhibits 1-6.

.

ISSUE

Whether the Marshalltown City Council (local authority) properly denied the

renewal application filed by Enrique Maravilla, d/b/a Tacos y Mariscos Maravilla

for Beer Permit No. BB-34223 based on two sales of alcoholic beverages to

underage persons in the prior year?

DIA No. 13ABD040

FINDINGS OF FACT

Enrique Maravilla is the 100% owner of Tacos y Mariscos Maravilla, which is

located at 9-11 E. State Street Rear in Marshalltown, Iowa. Mr. Maravilla was

initially issued Beer Permit No. BB-34223 on November 20, 2012. (Electronic Beer

Permit Renewal Application)

Tacos y Mariscos Maravilla is a restaurant that serves a variety of Mexican food.

The only alcoholic beverage that is sold at the restaurant is beer. The restaurant

is open Monday-Friday from 10 a.m. to 10 p.m. and Saturday and Sunday from 8

a.m. until 11 or 12 p.m. The restaurant has four employees. (Testimony of

Enrique Maravilla)

1st Sale of an Alcoholic Beverage to an Underage Person

On April 5, 2013, the Marshalltown Police Department conducted an undercover

alcoholic compliance check of various Marshalltown businesses that sell

alcoholic beverages. Two confidential informants (ages 18 and 19) attempted to

purchase alcoholic beverages while under police supervision. On April 5, 2013 at

9:37 p.m., the two confidential informants each purchased a beer from an

employee (Rebecca Ortiz) of Tacos y Mariscos Maravilla. Based on this sale, Ms.

Ortiz was criminally charged with selling alcohol to an underage person, in

violation of Iowa Code section 123.49(2)(h). She pled guilty to the charge on

April 15, 2013 and paid a criminal penalty of $470. (Exhibits 1, 2)

On May 16, 2013, the local authority mailed a Hearing Complaint, a Notice of

Hearing-1st Violation, and an Acknowledgment/Settlement Agreement to

Henrique (sic) Maravilla at 9-11 E. State St. Rear, Marshalltown, IA 50158. The

Hearing Complaint asserted that the permittee’s employee had been convicted of

selling alcohol products to a person under twenty-one years of age, and a copy of

Ms. Ortiz’s criminal conviction was attached. In accordance with Iowa Code

section 123.50(3)(a), the Hearing Complaint requested assessment of a $500 civil

penalty against Henrique Maravilla for this first violation of Iowa Code section

123.49(2)(h). The Notice of Hearing notified Mr. Maravilla that he could arrange

for a public hearing before the Iowa Alcoholic Beverage Division or he could

settle the case in lieu of a public hearing by signing the attached

Acknowledgment/Settlement Agreement. Mr. Maravilla has not responded to

this Hearing Complaint and Notice of Hearing, either by requesting a hearing or

by returning a signed settlement. Mr. Maravilla has not yet paid the $500 civil

DIA No. 13ABD040

penalty. There is no evidence in the record indicating that the local authority

sent any subsequent order or any other communication to Mr. Maravilla

concerning the $500 civil penalty. (Exhibit 3; Testimony of Police Chief Michael

Tupper)

At hearing, Mr. Maravilla could not recall receiving the Hearing Complaint and

Notice of Hearing from the local authority. Mr. Maravilla testified that he did

not know about the $500 civil penalty prior to the hearing and that he would pay

it if necessary. (Testimony of Enrique Maravilla)

2nd Alleged Sale/Service of an Alcoholic Beverage to an Underage Person

Juan Tejada has been employed by the Marshalltown Police Department as a

police officer for four years. Officer Tejada is bilingual in English and Spanish.

On November 16, 2013, Officer Tejada was on routine patrol when police

dispatch contacted him to relay a complaint of an underage person drinking

inside Tacos y Mariscos Maravilla. Officer Tejada entered Tacos y Mariscos

Maravilla shortly after 3:00 p.m. (Testimony of Juan Tejada; Exhibit 6)

Tacos y Mariscos is a small restaurant with only a few tables. Officer Tejada

observed five males sitting at a table that had a lot of beer bottles on it, both full

and empty. Three of the five males at the table appeared to be under the legal

age. Officer Tejada spoke to everyone at the table, including the male that he

later positively identified through police department records as 19 year old

Eduardo Garcia. Mr. Garcia was not carrying identification but provided Officer

Tejada with his name and date of birth, which was March 11, 1994. Mr. Garcia

denied that he had been drinking, and he consented to a preliminary breath test

(PBT), which registered .203 and indicated that he had been drinking an alcoholic

beverage. Officer Tejada issued a citation to Eduardo Garcia for possession of

alcohol under legal age. On November 22, 2013, Mr. Garcia paid the $330

criminal penalty that was assessed for the possession of alcohol citation.

(Testimony of Juan Tejada; Exhibits 4, 6)

Officer Tejada also identified another underage person at the table, Luis Ordas-

Ochoa. Mr. Ordas-Ochoa denied drinking alcoholic beverages and refused a

PBT. Officer Tejada did not issue Mr. Ordas-Ochoa a citation. (Testimony of

Juan Tejada; Exhibit 6)

DIA No. 13ABD040

Owner Enrique Maravilla, a waitress, and two cooks were present in the

restaurant during Officer Tejada’s investigation. Officer Tejada asked Mr.

Maravilla (in Spanish) who served “the alcohol at that table?” and Maravilla

responded “I did.” Officer Tejada asked Mr. Maravilla if he saw Eduardo’s ID

and Maravilla answered “No, but I asked him if he was twenty-one and he said

yes.” Officer Tejada told Mr. Maravilla that Eduardo was only nineteen years

old. Officer Tejada issued a criminal citation to Enrique Maravilla for serving

alcohol to a person under the legal age, in violation of Iowa Code section

123.49(2)(h). This citation is still pending; Mr. Maravilla has not been convicted.

(Testimony of Juan Tejada; Michael Tupper; Exhibits 5, 6)

At hearing, Enrique Maravilla denied that he served beer to Eduardo Garcia and

denied that he was even present in the restaurant when Officer Tejada arrived.

Mr. Maravilla testified that he lied to Officer Tejada when he admitted serving

Eduardo Garcia and when he told Officer Tejada that he asked Garcia if he was

twenty-one. Mr. Maravilla testified that he had been out making a delivery, and

when he returned to the restaurant he saw the patrol car parked out front. Mr.

Maravilla testified that when he entered the restaurant through the back door,

the waitress told him that Garcia arrived at the restaurant drunk and served

himself the beer after she refused to serve him. Mr. Maravilla further testified

that the cook told Garcia not to grab the beer, and Garcia responded aggressively

to the cook. Mr. Maravilla also testified that he had known Garcia for a long

time, that Garcia was a friend, and that he knew that Garcia had been drinking

all night at another house “because they called me.” Mr. Maravilla further

testified that Garcia told him (Maravilla) to tell the officer that he served him so

that the officer would not take him to jail. (Testimony of Enrique Maravilla)

On rebuttal, Officer Tejada testified that he did not see Enrique Maravilla enter

the restaurant after he arrived, and he believed that Mr. Maravilla was on the

premises before he arrived. Officer Tejada further testified that he did not allow

Eduardo Garcia to speak with Enrique Maravilla and did not hear Garcia ask

Maravilla to say that he had served him. Officer Tejada testified that Enrique

Maravilla was very cooperative and he had no reason to doubt Maravilla’s

statement to him that he had served Garcia. (Testimony of Juan Tejada)

Enrique Maravilla’s claim that he lied to Officer Tejada about serving Garcia and

his further claim that he made this admission at the request of Garcia was not

credible. Mr. Maravilla’s testimony did not ring true, was inconsistent with his

DIA No. 13ABD040

prior admissions, and was inconsistent with the more credible observations

made by Officer Tejada.

Police Chief’s Recommendation-Local Authority Denial of Beer Permit Renewal

Michael Wade Tupper has been in law enforcement for 21 years and has been the

Marshalltown Chief of Police for 2½ years. When Beer Permit No. BB-34223

came up for renewal in December 2013, Chief Tupper recommended that the

local authority deny the renewal application. His recommendation was based on

the two citations that had been issued for violations of Iowa Code section

123.49(2)(h) in the past year. One of the citations had resulted in a conviction of

the permittee’s employee, and the most recent citation issued to Enrique

Maravilla was still pending. Chief Tupper considered the most recent violation,

which occurred when the beer permit was up for renewal, to be flagrant. Chief

Tupper admits that he did not recommend denial of the renewal application for

Casey’s General Stores, which also had a violation of Iowa Code section

123.49(2)(h) during the April 5, 2013 compliance check. Chief Tupper was

uncertain if Casey’s had paid the $500 civil penalty for that violation or if it has

had a subsequent violation of Iowa Code section 123.49(2)(h). (Testimony of

Michael Tupper)

CONCLUSIONS OF LAW

I. Scope of Issues-Burden of Proof

When a permittee appeals the local authority’s denial of its permit to the

Alcoholic Beverages Division (Division), the hearing held before the Division is

the permittee’s opportunity to establish its compliance with all of the

requirements for holding the permit.1 The evidence at hearing, however, must

generally be confined to those issues for which notice was provided to the

permittee prior to hearing.2 If the Division Administrator determines, following

a hearing, that the permittee complies with all of the requirements for holding a

beer permit, then the Administrator shall order the issuance of the permit. If the

Administrator determines that the permittee does not comply with the

1 Iowa Code section 123.32(7)(2013). 2 185 IAC 10.21(3).

DIA No. 13ABD040

requirements for holding the beer permit, the Administrator shall disapprove the

issuance of the permit.3

II. Statutes and Rules Defining Good Moral Character Required for Liquor

Licensees and Beer Permittees

A liquor control license or beer permit may only be issued to a person who is of

“good moral character” as defined by Iowa Code chapter 123.4 Some of the

“good moral character requirements are objective measures. In order to be a

“person of good moral character,” a person must not have had a revoked liquor

license in the previous two years, must not have had a felony conviction in the

previous five years, and must be a citizen of the United States and an Iowa

resident or must be licensed to do business as a corporation in this state.5

However, the statutory definition of “good moral character” also includes the

following more subjective standard:

a. The person has such financial standing and good reputation

as will satisfy the administrator that the person will comply with

Iowa Code chapter 123 and all laws, ordinances, and regulations

applicable to the person's operations.” 6

This case implicates the “good reputation” portion of that definition. The

Division’s administrative rules implement Iowa Code chapter 123 and provide

further detail and guidance for evaluating a licensee or permittee’s “good

reputation.”7 Pursuant to the Division’s rules, the factors that a local authority may

consider when evaluating an applicant's “good reputation” specifically include:

…pattern and practice by the licensee or permittee or the licensee's

or permittee’s agents or employees, of violating alcoholic beverages

laws and regulations for which corrective action has been taken

since the previous license or permit was issued…8

3 Id. 4 Iowa Code sections 123.30(1)(a), 123.127(1)(b), 123.128(2)(2013). 5 Iowa Code section 123.3(34)(b),(c), and (d). 6 Iowa Code section 123.3(34)(a)(2013). 7 185 IAC 4.2(4). 8 185 IAC 4.2(4)”b.” (emphasis added).

DIA No. 13ABD040

Although “corrective action” is not defined by the rule, it clearly would include

any administrative or criminal sanctions that have been imposed against the

licensee or permittee by the courts, the Division, or the local authority.

“Corrective action” should not be read so narrowly, however, so as to eliminate a

local authority’s ability to consider recent violations by the licensee or permittee

or the licensee’s or permittee’s employees when there has not been sufficient

time to obtain sanctions prior to reviewing the renewal application. In those

cases, it is reasonable to construe “corrective action” to include the local

authority’s formal investigation and/or the issuance of citations, filing of criminal

charges, or filing of an administrative hearing complaint against the licensee or

permittee and to allow the local authority the opportunity to prove the violation

at the administrative hearing.

III. Prohibited Sales/Service to Underage Persons- Violations and Mandatory

Sanctions

Iowa Code section 123.49(2)(h)(2013) provides, in relevant part:

2. A person or club holding a liquor control license or retail

wine or beer permit under this chapter, and the person's or club's

agents or employees, shall not do any of the following:

...

h. Sell, give, or otherwise supply any alcoholic beverage, wine

or beer to any person, knowing or failing to exercise reasonable

care to ascertain whether the person is under legal age, or permit

any person, knowing or failing to exercise reasonable care to

ascertain whether the person is under legal age, to consume any

alcoholic beverage, wine, or beer.

(emphasis supplied). The Iowa Code defines "legal age" as twenty-one years of

age or more. 9

A violation of Iowa Code chapter 123 by any employee, agent, or servant of a

licensee or permittee is deemed to be the act of the licensee or permittee and

9 Iowa Code section 123.3(24)(2013).

DIA No. 13ABD040

subjects the license to suspension or revocation.10 A criminal conviction is not a

prerequisite to suspension, revocation, or imposition of a civil penalty.11

The Iowa Supreme Court has recognized that, at a very minimum, the exercise of

reasonable care to ascertain the age of a person, as required by Iowa Code section

123.49(2)(h), requires a licensee or permittee’s employees to request identification

from patrons prior to serving them unless their age is known or reasonably

beyond question.12 Merely asking a patron who appears to be under legal age if

they are twenty-one years of age does not constitute reasonable care to ascertain

whether the person is under legal age.

For most liquor law violations, the legislature has vested the Division and local

authorities with discretion to determine appropriate administrative sanctions.13

In the case of prohibited sales/service to underage persons, however, the

legislature has elected to mandate uniform progressive administrative sanctions.

The legislatively mandated sanction for a first offense conviction or

administrative violation of Iowa Code section 123.49(2)(h) is a $500 civil penalty

for a first offense and then an automatic fourteen day suspension if the civil

penalty is not paid as ordered.14 The sanction for a second violation within two

years is a $1500 civil penalty and a 30 day license suspension.15 A third violation

within three years is sanctioned by another $1500 civil penalty and a 60 day

license suspension.16 A fourth violation within three years results in revocation

of the license or permit.17

In cases where the person who sold or served the alcoholic beverage was

criminally convicted, the Division or the local authority typically issues an Order

imposing the appropriate administrative sanction for a first, second, third, or

fourth violation under Iowa Code section 123.50(3), but the licensee or permittee

is given the opportunity to appeal the sanction in an administrative hearing. In

those cases where there was an acquittal on the criminal charge or if no criminal

charge was filed, the licensee or permittee may still be sanctioned

10 185 IAC 4.8. 11 Iowa Code section 123.39(1)(c)(2013). 12 Jim O. Inc. v. City of Cedar Rapids, 587 N.W.2d 476, 478 (Iowa 1998). 13 See Iowa Code section 123.39(1)(2013). 14 Iowa Code section 123.50(3)(a)(2013). 15 Iowa Code section 123.50(3)(b)(2013) 16 Iowa Code section 123.50(3)(c)(2013). 17 Iowa Code section 123.50(3)(d)(2013).

DIA No. 13ABD040

administratively under Iowa Code section 123.50(3) for a violation of Iowa Code

section 123.49(2)(h) if the local authority or the Department of Public Safety files

an administrative hearing complaint and give the licensee or permittee an

opportunity for an administrative hearing.

IV. Analysis

Pursuant to the Notice of Hearing, the only issue to be resolved through this

appeal proceeding is whether the local authority properly denied the beer permit

renewal application filed by Enrique Maravilla, d/b/a Tacos y Mariscos

Maravilla, based on sales/service to underage persons on April 5, 2013 and

November 16, 2013. The legislature has prescribed mandatory and progressive

administrative sanctions to be imposed for sales/service to persons under the

legal age by a licensee/ permittee or the licensee/ permittee’s employees. These

sanctions are imposed in addition to any criminal sanctions. It is inconsistent

with this statutory framework for a local authority to simply deny a license or

permit renewal for two sales to underage persons rather than pursue the

mandatory administrative sanctions clearly provided for by the legislature.

At hearing, the local authority asked the Division to suspend Beer Permit No.

BB-34223 for 14 days (based on the permittee’s failure to pay the $500 civil

penalty) if the beer permit is ultimately renewed. It is premature for the

Division to order a 14 day suspension, however. Pursuant to the statute, a 14

day suspension may only be imposed for failure to pay the $500 civil penalty “as

ordered.”18 It does not appear that the local authority has issued an Order to the

permittee requiring payment of the $500 civil penalty. The permittee was sent

the Hearing Complaint, Notice of Hearing, and an Acknowledgement/Settlement

Agreement, which was not returned, but no order was ever issued by the local

authority. If the permittee is ordered to pay the $500 civil penalty and fails to

appeal the order or to pay the civil penalty as ordered, then the 14 day

suspension should be imposed.

In addition, in the event that the permit denial is reversed, the local authority

reserved the right to seek administrative sanctions against the permittee for a

second violation of Iowa Code section 123.49(2)(h) on November 16, 2013.

Pursuant to Iowa Code sections 123.50 and 123.39(1)(c), the local authority is still

authorized to file a hearing complaint seeking the administrative sanctions for a

18 Iowa Code section 123.50(3)(a)(2013).

DIA No. 13ABD040

second violation (a $1500 civil penalty and a 30 day license suspension)

regardless of whether Enrique Maravilla’s citation results in a conviction.

DECISION AND ORDER

IT IS THEREFORE ORDERED that the decision of the Marshalltown City

Council to deny the renewal application filed by Enrique Maravilla, d/b/a Tacos

y Mariscos Maravilla, for Beer Permit BB-34223, is hereby REVERSED. If this

Proposed Decision becomes a final decision, Beer Permit BB-34223 shall be

renewed. The local authority may pursue administrative sanctions under Iowa

Code section 123.50 for any permittee violations of Iowa Code section

123.49(2)(h).

185 IAC 10.27(1) and (2) provide that any adversely affected party may appeal a

proposed decision to the Administrator of the Alcoholic Beverages Division

within thirty (30) days after issuance of the proposed decision. In addition, the

Administrator may initiate review of a proposed decision on the Administrator's

own motion at any time within thirty (30) days following the issuance of a

proposed decision.

Requests for review shall be sent to the Administrator of the Alcoholic Beverages

Division, 1918 S.E. Hulsizer, Ankeny, IA 50021. Unless otherwise ordered, each

appealing party may file exceptions and briefs within thirty (30) days of the

notice of appeal or order for review. Within thirty (30) days thereafter, any

party may file a responsive brief. The Administrator may shorten or extend the

briefing period as appropriate. The Administrator may resolve the appeal on the

briefs or provide an opportunity for oral argument. 185 IAC 10.27(6). The

administrator may affirm, reverse or modify the proposed decision.

A party who is adversely affected by the proposed decision shall not be deemed

to have exhausted administrative remedies unless the adversely affected party

files a request for review of the proposed decision within the time provided and

the Administrator has reviewed the proposed decision and has affirmed,

reversed, or modified the proposed decision.

DIA No. 13ABD040

Dated this 24th day of February, 2014.

Margaret LaMarche

Administrative Law Judge

Department of Inspections and Appeals

Administrative Hearings Division

3rd Floor, Wallace State Office Building

Des Moines, IA 50319

CC: See attached mailing list

DIA No. 13ABD040

Copies to:

Margaret LaMarche

Administrative Law Judge

Department of Inspections & Appeals

Administrative Hearings Division

Wallace State Office Bldg-3rd Fl.,

502 E 9th

Des Moines, Iowa 50319

John Lundquist

Assistant Attorney General

Department of Justice

Hoover State Office Building


Lt. Kunert

ISP, District #1

260 N.W. 48th Place

Des Moines, Iowa 50313-2299

City of Marshalltown

City Clerk

24 N Center St

Marshalltown, Iowa 50158

Chief Michael Tupper

Marshalltown Police Department

Curt Ward

City Attorney

11 East Church Street


Steve Bogle

Iowa Lottery

2323 Grand Avenue


Steven Mandernach

Social Gaming Unit

Lucas State Office Bldg.


Karen Freund

Licensing/Regulatory Bureau Chief

Iowa Alcoholic Beverages Division

1918 SE Hulsizer

Ankeny, Iowa 50021

Barry Kaplan

Attorney at Law

111 East Church Street


22 N Center St


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