DOCKET NO ORDER OVERRULING MOTION FOR REHEARING

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1 DocuSign Envelope ID: EE8FF28C-DF19-46F8-945B-C4F88BC94F2C DOCKET NO TEXAS ALCOHOLIC BEVERAGE COMMISSION, Petitioner vs. GO DEVELOPMENT GROUP, LLC DIBIA THE CENTENNIAL, Respondent PERMIT MB841930, LB, PE HIDALGO COUNTY, TEXAS (SOAR DOCKET NO ) BEFORE THE TEXAS ALCOHOLIC BEVERAGE COMMISSION ORDER OVERRULING MOTION FOR REHEARING CAME ON FOR CONSIDERATION this 15th day of March, 2018, the above-styled and numbered cause. An Order in this cause was issued on January 22, 2018 suspending Respondent's permits for 22 days unless a payment in lieu of suspension was made. On February 14, 2018, Respondent timely filed a Motion for Rehearing. Respondent essentially asserts that the credible evidence is insufficient to support the finding that a violation of the Alcoholic Beverage Code occurred. Respondent alleges that alcoholic beverages were not being sold during a period when its permits were suspended, but instead were being given away for free. Having fully considered the arguments set forth in the Motion for Rehearing, Respondent's Motion for Rehearing is OVERRULED. All motions, requests for entry of Proposed Findings of Fact and Conclusions of Law, and any other requests for general or specific relief submitted by any pmiy are denied, unless specifically granted or adopted herein.

2 DocuSign Envelope ID: EE8FF28C-DF19-46F8-945B-C4F88BC94F2C IT IS THEREFORE ORDERED: IF THIS ORDER IS NOT APPEALED WITHIN THE TIME ALLOWED BY ALCOHOLIC BEVERAGE CODE 11.67, the privileges granted by the Commission and the activities authorized under the above permits by the Code will be SUSPENDED beginning at 12:01 a.m. on May 9, 2018 and shall remain suspended for TWENTY TWO (22) CONSECUTIVE DAYS, UNLESS a civil penalty in the amount of $6, is paid in full in lieu of suspension ON OR BEFORE May 1, IF THIS ORDER IS APPEALED AND THE DECISION IS AFFIRMED, the privileges granted by the Commission and the activities authorized under the above permits by the Code will be SUSPENDED beginning at 12:01 a.m. on the fifteenth (15th) day following the date the decision is affirmed, whether by Order or by operation of law, and shall remain suspended for TWENTY TWO (22) CONSECUTIVE DAYS, UNLESS a civil penalty in the amount of $6, is paid in in full in lieu of suspension ON OR BEFORE the seventh (7th) day following the date the decision is affirmed, whether by Order or by operation of law. Pursuant to Government Code (a)(2)(A), this Order is effective on the date it is signed. SIGNED this the 15th day of March, 2018, at Austin, Texas. Matthew Chaplin, Deputy Executive Director Texas Alcoholic Beverage Commission CERTIFICATE OF SERVICE I ce1iify that the persons listed below were served with a copy of this Order in the manner indicated below on this the 15th day of March, Martin Wilson, Assistant General Counsel Texas Alcoholic Beverage Commission 2

3 DocuSign Envelope ID: EE8FF28C-DF19-46F8-945B-C4F88BC94F2C Holly Vandrovec ADMINISTRATIVE LAW JUDGE State Office of Administrative Hearings 300 W. 15th Street, Suite 504 Austin, TX VIA FACSIMILE: (512) Go Development Group, LLC d/b/a The Centennial RESPONDENT 1410 Austin Avenue McAllen, TX VIA FIRST CLASS MAIL, CMRRR # Reynaldo Ortiz ATTORNEY FOR RESPONDENT 1305 E. Nolana Loop, Suite F McAllen, TX VIA FIRST CLASS MAIL, CMRRR# AND VIA FACSIMILE: (956) David Duncan ATTORNEY FOR PETITIONER T ABC Legal Division VIA david.duncan@jabc.texas.gov 3

4 TEXAS ALCOHOLIC BEVERAGE COMMISSION CIVIL PENALTY REMITTANCE DOCKET NUMBER: NAME: GO Development Group, LLC REGISTER NUMBER: TRADENAME: The Centennial ADDRESS: 1410 Austin Avenue, McAllen, TX DUE DATE: May 1, 2018 PERMITS: MB841930, LB & PE AMOUNT OF PENALTY: $6, Amount remitted $ Date remitted You may pay a civil penalty rather than have your permits and licenses suspended ifan amount for civil penalty is included on the attached order. YOU HA VE THE OPTION TO PAY THE CIVIL PENAL TY ONLY IF YOU PAY THE ENTIRE AMOUNT ON OR BEFORE THE DUE DATE. AFTER THAT DATE YOUR LICENSE OR PERMIT WILL BE SUSPENDED FOR THE TIME PERIOD STATED ON THE ORDER. Mail this form with your payment to: TEXAS ALCOHOLIC BEVERAGE COMMISSION P.O. Box Austin, Texas Overnight Delivery Address: 5806 Mesa Dr., Austin, Texas You must pay by postal money order, certified check, or cashier's check. No personal or company check nor partial payment accepted. Your payment will be returned ifanything is incorrect. You must pay the entire amount ofthe penalty assessed. Attach this form and please make certain to include the Docket # on your payment. Signature ofresponsible Party Street Address P.O. Box No. City State Zip Code Area Code/Telephone No.

5 DocuSign Envelope ID: 49DEE9BF D1-840B-74260EE155EF DOCKET NO TEXAS ALCOHOLIC BEVERAGE COMMISSION, Petitioner vs. GO DEVELOPMENT GROUP, LLC D/B/A THE CENTENNIAL, Respondent PERMIT MB841930, LB, PE HIDALGO COUNTY, TEXAS (SOAH DOCKET NO ) ORDER BEFORE THE TEXAS ALCOHOLIC BEVERAGE COMMISSION CAME ON FOR CONSIDERATION. this 22nd day of January, 2018, the above-styled and numbered cause. After proper notice was given, this case was heard by the State Office of Administrative Hearings (SOAH),. with Administrative Law Judge Holly Vandrovec presiding. The hearing convened on June 7, 2017 and the SOAH record closed the same date. The Administrative Law Judge made and filed a Proposal for Decision containing Findings of Fact and Conclusions of Law on August 7, The Proposal for Decision was properly served on all parties, who were given an opportunity to file exceptions and replies as part of the record herein. Respondent filed a Motion to Reconsider on September 1, The Administrative Law Judge filed a letter on September 13, 2017 stating that SOAH no longer has jurisdiction over the case unless it is referred back by the Commission for further action. After review and due consideration of the Proposal for Decision, I adopt the Findings of Fact and Conclusions of Law of the Administrative Law Judge that are contained in the Proposal for Decision and incorporate those Findings of Fact and Conclusions of Law into this Order, as if such were fully set out and separately stated herein. All motions, requests for entry of Proposed Findings of Fact and Conclusions of Law, and any other requests for general or specific relief submitted by any party are denied, unless specifically adopted herein.

6 DocuSign Envelope ID: 49DEE9BF D1-840B-74260EE155EF IT IS THEREFORE ORDERED that the privileges granted by the Commission and the activities authorized under the above permit by the Code will be SUSPENDED beginning at 12:01 a.m. on February 28th, 2018 and shall remain suspended for TWENTY-TWO (22) DAYS, UNLESS a civil penalty in the amount of $ is paid ON OR BEFORE February 20th, This Order will become final and enforceable on the 15th day of February, 2018, unless a Motion for Rehearing is filed by the 14th day of February, SIGNED this the 22nd day of January, 2018, at Austin, Texas. Matthew Chaplin, Deputy Executive Director Texas Alcoholic Beverage Commission

7 DocuSign Envelope ID: 49DEE9BF D1-840B-74260EE155EF CERTIFICATE OF SERVICE I certify that the persons listed below were served with a copy of this Order in the manner indicated below on this the 22nd day of January, Dina Powell, Legal Assistant Texas Alcoholic Beverage Commission Holly Vandrovec ADMINISTRATIVE LAW JUDGE State Office of Administrative Hearings 300 W. 15th Street, Suite 504 Austin, TX VIA FACSIMILE: (512) Go Development Group, LLC d/b/a The Centennial RESPONDENT 1410 Austin Avenue McAllen, TX VIA FIRST CLASS MAIL, CMRRR # Reynaldo Ortiez ATTORNEY FOR RESPONDENT 1305 E. Nolana, Suite F McAllen, TX VIA FIRST CLASS MAIL, CMRRR# David Duncan ATTORNEY FOR PETITIONER TABC Legal Division VIA david.duncan@tabc.texas.gov

8 TEXAS ALCOHOLIC BEVERAGE COMMISSION CIVIL PENALTY REMITTANCE DOCKET NUMBER: REGISTER NUMBER: NAME: GO DEVELOPMENT GROUP, LLC TRADENAME: The Centennial ADDRESS: 1410 Austin Avenue, McAllen, Texas DUE DATE: February 20, 2018 PERMITS OR LICENSES: MB841930, LB, PE AMOUNT OF PENALTY: $6, Amount remitted$ Date remitted you may pay a civil penalty rather than have your permits and licenses suspended if an amount for civil penalty is included on the attached order. YOU HAVE THE OPTION TO PAY THE CIVIL PENALTY ONLY IF YOU PAY THE ENTIRE AMOUNT ON OR BEFORE THE DUE DATE. AFTER THAT DATE YOUR LICENSE OR PERMIT WILL BE SUSPENDED FOR THE TIME PERIOD STATED ON THE ORDER. Mail this form with your payment to: TEXAS ALCOHOLIC BEVERAGE COMMISSION P.O. Box Austin, Texas Overnight Delivery Address: 5806 Mesa Dr., Austin, Texas You must pay by postal money order, certified check, or cashier's check. No personal or company check nor partial payment accepted. Your payment will be returned if anything is incorrect. You must pay the entire amount of the penalty assessed. Attach this form and please make certain to include the Docket# on your payment. Signature of Responsible Party Street Address P.O. Box No. City State Zip Code Area Code/Telephone No. Page 1 of 2

9 SOAR DOCKET NO TEXAS ALCOHOLIC BEVERAGE COMMISSION, Petitioner v. GO DEVELOPMENT GROUP LLC d/b/a THE CENTENNIAL, Respondent PERMIT NO. MB841930, LB & PE HIDALGO COUNTY, TEXAS (TABC CASE NO ) BEFORE THE STATE OFFICE OF ADMINISTRATIVE HEARINGS PROPOSAL FOR DECISION The Texas Alcoholic Beverage Commission (TABC) Staff brought this action against Go Development Group LLC, d/b/a The Centennial (Respondent), alleging that Respondent, on or about March 4, 2017, sold, offered for sale, distributed, or delivered alcoholic beverages while under a 12-day permit suspension. TABC requested that Respondent's original 12-day suspension be reinstated, and that its permit be suspended for an additional 10 days for a total of 22 days, or, in lieu of suspension, that Respondent pay an administrative penalty of $300 per day. The Administrative Law Judge (ALJ) finds that TABC established that Respondent sold alcohol while Respondent's permit was under suspension. The ALJ recommends that Respondent's original 12-day suspension be reinstated, and that its pem1it be suspended for an additional 10 days for a total of 22 days, or, in lieu of permit suspension, that Respondent be ordered to pay a civil penalty in the amount of $6,600. I. JURISDICTION, NOTICE, AND PROCEDURAL HISTORY No contested issues of notice, jurisdiction, or venue were raised in this proceeding. Therefore, these matters are set out in the findings of fact and conclusions of law without further discussion here.

10 SOAR DOCKET NO PROPOSAL FOR DECISION PAGE2 On June 7, 2017, a hearing was held before ALJ Holly Vandrovec at the Lark Branch Library located at 2601 Lark Avenue, McAllen, Texas Staff was represented by its attorney, David T. Duncan, Jr. Respondent appeared and was represented by attorney Reynaldo Ortiz. The record closed that same day. II. LEGAL STANDARDS AND APPLICABLE LAW TABC exercises statewide regulatory authority over the manufacture, sale, distribution, transportation, and possession of alcoholic beverages, including the issuance of licenses and permits to entities subject to its regulation. 1 TABC may suspend or cancel a mixed beverage pennit if it finds that the permittee purchased, sold, offered for sale, distributed, or delivered an alcoholic beverage, or consumed an alcoholic beverage or permitted one to be consumed on the licensed premises while its license was under suspension. 2 TABC rules contain guidelines for sanctions when a violation is found. The guidelines recommend reinstating the original suspension period plus 8-13 days, or imposing an administrative penalty of $300 per day in lieu of the suspension in the case of a licensee's first violation. 3 III. EVIDENCE A. TABC Staff's Evidence and Position TABC Staff offered three exhibits into evidence, all of which were adrnitted. 4 Agent Carlos Navarro and auditor Michael Kennedy testified on behalf of Staff. Staff argued that Respondent was under a 12-day license suspension, and that during that suspension, Respondent sold or served alcoholic beverages in violation oftabc code. 1 Tex. Alco. l;3ev. Code Tex. Alco. Bev. Code l l.6l(b)(2), 11.68, 61.7l(a)(22). 16 Tex. Admin. Code Staff's Exhibit J is the Notice of Hearing; Exhibit 2 is Respondent's Permit and Violation History; and Exhibit 3 is the Focus System Sales Record for March 1-2, 2017.

11 SOAR DOCKET NO PROPOSAL FOR DECISION PAGE3 1. Agent Navarro Agent Navarro testified that he has been a peace officer for the state of Texas for 11 years and an agent for TABC for 5 years. Agent Navarro was aware of Respondent's suspension, which was to occur from March 1-12, Staff Exhibit 2 contains a Settlement Agreement and Waiver, signed by Respondent's owner Isaac Guerra, indicating the suspension period and start date. Agent Navarro visited the Centennial on March 4, 2017, to make sure the restaurant was not serving alcohol during its suspension. Agent Navarro testified that upon entering the premises on March 4 and proceeding to the second floor of the Centennial, he witnessed an adult male drinking from a beer bottle at the bar, and another adult male drinking from what appeared to be a wine glass. A member of Respondent's restaurant staff told Agent Navarro that Mr. Guerra was on his way. Agent Navarro testified that he was present for the following discussion with Mr. Guerra, although Mr. Guerra spoke with another TABC employee, Sergeant Ruiz. Upon arrival, Mr. Guerra stated that he had done everything TABC told him to, and that he had "comped" up to $1,500 worth of alcohol to his customers. Navarro testified that Sergeant Ruiz then informed Mr. Guerra that he was unable to give out alcoholic beverages during his suspension. Mr. Guerra responded he had spoken with Michael Kennedy, who told him he was free to give away alcohol. On cross-examination, Agent Navarro testified that he did not interview nor get the names of the individuals he witnessed drinking from the beer bottle and wine glass. Agent Navarro further testified that he did not give Respondent a violation that day, nor did he witness any alcohol being sold or offered to be sold, and also did not witness the delivery of alcohol outside the premises. 2. Michael Kennedy Michael Kennedy testified that he is an auditor at the TABC McAllen district office. Mr. Kennedy testified that Mr. Guerra gave him Staff Exhibit 3, Respondent's Focus System Sales Record for March 1-2, 2017, which shows Respondent's alcohol sales for those dates.

12 SOAR DOCKET NO PROPOSAL FOR DECISION PAGE4 Mr. Kennedy testified that although there was a "O" in the liquor, wine, and beer columns of the record, the "MB" column, meaning "mixed beverage," added up to the total alcohol sales, demonstrating that alcohol was sold and not "comped" as argued by Respondent. B. Respondent's Evidence and Position Respondent offered three exhibits into evidence, all of which were admitted without o.bjection. 5 Respondent argued that the TABC code was not violated because Agent Navarro did not see Respondent sell or serve alcohol, and the TABC code does not provide a definition of "distributed" or "delivered." Respondent also argued that discrepancies in TABC Exhibit 3 do not provide enough evidence to demonstrate that alcohol was served during the suspension. IV. ANALYSIS The evidence presented by Staff established a violation for selling alcohol on a suspended license in violation of Texas Alcoholic Beverage Code Agent Navarro saw patrons drinking what appeared to be alcohol on March 4, Further, Respondent's own inventory tracking system showed net sales of $832 of mixed beverages on March 1, 2017, and $1,017 on March 2, Finally, Respondent's owner, Mr. Guerra, signed the Settlement Agreement and Waiver on August 13, 2016, which stated that a 12-day suspension would begin on March 1, Therefore, Respondent had notice nearly 7 months before the suspension as to the exact dates it was scheduled to take place. In lieu of the suspension, Respondent could have paid an $1,800 civil penalty, but did not. Therefore, the sales of alcohol on March 1-2, 2017 took place while Respondent's license was suspended. 5 Respondent's Exhibit 1 is the Notice of Hearing; Exhibit 2 consists of screenshots of a text message conversation between Mr. Guerra and Michael Kennedy; and Exhibit 3 is a letter from Respondent's attorney to TABC's attorney. 6 Staff Exhibit 3. 7 Staff Exhibit 2.

13 SOAR DOCKET NO PROPOSAL FOR DECISION PAGES V. RECOMMENDATION Respondent was aware of the suspension period and dates of the suspension at the time alcohol was sold on the premises. The ALJ recommends that Respondent's original suspension of 12 days be reinstated, and that its pennits should be suspended for an additional period of 10 days for a total of 22 days; or in lieu of any permit suspension, Respondent be allowed to pay a civil penalty in the amount of $6, VI. FINDINGS OF FACT 1. Go Development Group LLC, d/b/a The Centennial (Respondent), holds a Mixed Beverage Permit, a Mixed Beverage Late Hours Permit, and a Beverage Cartage Permit (MB841930) for the premises located at 1410 Austin Avenue, McAllen, Hidalgo County, Texas Respondent's permit was suspended from March 1-12, 2017, for violations of the Texas Alcoholic Beverage Commission (T ABC) rules. 3. On March 4, 2017, a TABC.agent saw alcohol being consumed on Respondent's premises during the suspension period. 4. Respondent's inventory tracking system showed net sales of $832 of mixed beverages on March 1, 2017, and $1,017 on March 2, On April 27, 2017, TABC Staff issued a notice of hearing to Respondent concerning the alleged violation. 6. The notice contained a statement of the time, place, and nature of the hearing; a statement ofthe legal authority and jurisdiction under which the hearing was to be held; a reference to the particular sections of the statutes and rules involved; and a short, plain statement of the factual matters asserted. 7. On June 7, 2017 a hearing was held before Administrative Law Judge Holly Vandrovec at the Lark Branch Library located at 2601 Lark Avenue, McAllen, Texas TABC Staff was represented by its attorney, David T. Duncan, Jr. Respondent was represented by its attorney, Reynaldo Ortiz. The record closed that same day. 8 Tex. Alco. Bev. Code ; 16 Tex. Admin. Code 34.3.

14 SOAH DOCKET NO PROPOSAL FOR DECISION PAGE6 VII. CONCLUSIONS OF LAW 1. TABC has jurisdiction over this matter. Tex. Alco. Bev. Code 6.01, The State Office of Administrative Hearings has jurisdiction to conduct the hearing in this matter and to issue a proposal for decision containing findings of fact and conclusions oflaw. Tex. Gov't Code ch Proper and timely notice of the hearing was provided to Respondent. Tex. Gov't Code The hearing was conducted pursuant to the Administrative Procedure Act. Tex. Gov't Code ch TABC Staff had the burden of proof by a preponderance of the evidence. 1 Tex. Adrnin. Code TABC Staff met its burden of proving that Respondent sold alcohol while his license was suspended. Tex. Alco. Bev. Code Respondent's permits should be suspended for a period of 22 days, or, in lieu of any suspension, Respondent should be allowed to pay a civil penalty in the amount of $6,600. Tex. Alco. Bev. Code 1 l.61(b)(2), , 11.68, 61.71(a)(22); 16 Tex. Admin. Code SIGNED August 7, ADMINISTRATIVE LAW JUDGE STATE OFFICE OF ADMINISTRATIVE HEARINGS

15 State Office of Administrative Hearings Lesli G. Ginn Chief Administrative Law Judge August 7, 2017 Robert Saenz Interim Executive Director Texas Alcoholic Beverage Commission 5806 Mesa Dr. Austin, TX VIA INTERAGENCY MAIL RE: SOAH Docket No ; Texas Alcoholic Beverage Commission v. GO Development Group LLC d/b/a The Centennial Dear Mr. Saenz: Please find enclosed a Proposal for Decision m this case. recommendation and underlying rationale. It contains my Sincerely, Holly Vandrovec Administrative Law Judge HV/tt Enclosure xc David T. Duncan, Jr., Staff Attorney, Texas Alcoholic Beverage Commission, 5806 Mesa Dr., Austin, TX VIA INTERAGENCY MAIL Dina Powell, Office of General Counsel, Texas Alcoholic Beverage Commission, 5806 Mesa Dr., Suite 380, Austin, TX VIA INTERAGENCY MAIL Julie Allen, Interim General Counsel, Texas Alcoholic Beverage Commission, 5806 Mesa Dr., Austin, TX VIA INTERAGENCY MAIL Reynaldo Ortiz, Law Office of Reynaldo Ortiz, LP, 1305 E. Nolana, Suite F, McAllen, TX VIA REGULAR MAIL 300 W. 15th Street, Suite 504, Austin, Texas 78701/P.O. Box 13025, Austin, Texas (Main) (Docketing) (Fax)