State Office of Administrative Hearings

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1 State Office of Administrative Hearings Lesli G. Ginn Chief Administrative Law Judge May 22, 2018 A. Bentley Nettles VIA REGULAR MAIL Executive Director Texas Alcoholic Beverage Commission 5806 Mesa Drive Austin, Texas RE: SOAH Docket No ; Texas Alcoholic Beverage Commission vs. K&M 786 Business LLC d/b/a Chavo Sports Bar Dear Mr. Nettles: Please find enclosed a Proposal for Decision m this case. recommendation and underlying rationale. It contains my Exceptions and replies may be filed by any paiiy in accordance with 1 TEX. ADMIN. CODE (c), a SOAH rule which may be found at Sincerely, Timothy Horan Administrative Law Judge TH/mr Enclosure xc Sandra Patton, Texas Alcoholic Beverage Commission, 427 W. 20'h Street, Suite 600, Houston, TX VIA REGULAR MAIL Clark E. Smith, General Counsel, Texas Alcoholic Beverage Commission, 5806 Mesa Drive, Austin, TX VIA REGULAR MAIL Dina Powell, General Counsel's Office, 5806 Mesa Drive, Suite 380, Austin, TX (with Certified Evidentiary Record and _ Hearing CD/s)- VIA REGULAR MAIL Clyde Burleson, Attorney at Law, 1533 W. Alabama, Suite 100, Houston, TX VIA REGULAR MAIL 2020 North Loop West, Suite 111, Houston, Texas (Main) (Fax)

2 SOAH DOCKET NO TEXAS ALCOHOLIC BEVERAGE COMMISSION, Petitioner v. K & M 786 BUSINESS L.L.C. D/B/A EL CHAVO SPORTS BAR PERMIT NO. MB , LB Respondent HARRIS COUNTY, TEXAS (TABC CASE NO ) BEFORE THE STATE OFFICE OF ADMINISTRATIVE HEARINGS PROPOSAL FOR DECISION Staff of the Texas Alcoholic Beverage Commission (TABC) brings this enforcement action against K & M 786 Business L.L.C. d/b/a El Chavo Sports Bar (Respondent or Bar), alleging that on or about December 10, 2016, Respondent or Respondent's agent, servant, or employee sold, served, or delivered an alcoholic beverage to an intoxicated person in violation of the Texas Alcoholic Beverage Code (Code). For reasons discussed in this proposal, the Administrative Law Judge (ALJ) finds Petitioner proved its case, and agrees with Staffs recommendation that Respondent's permit should be suspended for a period 10 days or, in lieu of a suspension, Respondent pay a penalty in the amount of $3,000. I. PROCEDURAL HISTORY The hearing in this matter convened on March 9, 2018, before State Office of Administrative Hearings (SOAH) ALJ Timothy Horan. Sandra K. Patton, Staff Attorney, represented Staff at the hearing. Clyde W. Burleson, attorney, represented Respondent. The hearing concluded on the same day but the record was left open to receive post-hearing briefs. The record was closed on March 30, 2018.

3 SOAH DOCKET NO PROPOSAL FOR DECISION PAGE2 There are no contested issues of notice or jurisdiction in this case. Therefore, notice and jurisdiction are addressed in the findings of fact and conclusions of law without further discussion. II. APPLICABLE LAW The Commission or administrator may suspend for not more than 60 days or cancel an original or renewal permit if it is found that the permittee sold or delivered an alcoholic beverage to an intoxicated person. 1 III. DISCUSSION Staff offered eight exhibits and presented the testimony of three agents: Araceli Lopez, Michael Patton, and Ronny LaRue. Respondent presented the testimony of its owner, Danish Manasiya. On April 5, 2016, TABC issued Mixed Beverage Permit MB , which included a Mixed Beverage Late Hours Permit, for Respondent's premises located at 9855 Fuqua Street, Suite E, Houston, Harris County, Texas. TABC conducted an undercover investigation on December 9, 2016, at Respondent's establishment. Araceli Lopez, an enforcement agent for T ABC, testified that she and Agent Landin were working undercover, entered the premises at approximately 11 :30 p.m., and sat down at a table across from the bar. She observed a male sitting on a bar stool, later identified as Samuel Gonzalez, drinking a beer with two other males. He exhibited poor balance and had difficulty staying on the bar stool. She also observed the male to have red glossy droopy eyes and very slow deliberate movements. Agent Lopez observed the male to walk to the restroom and observed him swaying from side to side. Agent Lopez observed Mr. Gonzalez for about 45 minutes and also saw the bar waitress, later identified as Flor Maria Alarcon, attend and I Tex. Alco. Bev. Code (Code) l l.61(b)(2) and (14).

4 SOAH DOCKET NO PROPOSAL FOR DECISION PAGE3 talk to the men on several occasions. At approximately 12:15 a.m., she observed Mr. Gonzalez order a beer from Ms. Alarcon. Based upon her 45-minute observation of Mr. Gonzalez, Agent Lopez testified that in her opinion it would have been obvious to the other patrons and the bar waitress, Ms. Alarcon, that Mr. Gonzalez was intoxicated. Agent Lopez exited the bar and gave the description of the male and of the bar waitress to the open team, who then entered the premises to give Respondent the administrative citation. Agent Michael Patton was working on the open team that evening and testified that he received the description of the intoxicated male and the bar waitress from Agents Lopez and Landin. He gave the administrative citation to the bar waitress, Flor Maria Alarcon. He did not make any observations of the intoxicated male. Agent Ronny LaRue, also working on the open team, received the description of the intoxicated male from the undercover agents. He entered the bar and asked the male to step outside and was able to identify him as Samuel Gonzalez. Agent LaRue testified that Mr. Gonzalez reeked of alcohol, displayed slow deliberate movements, and appeared disoriented. Mr. Gonzalez did not speak English and Agent LaRue had one of the males who was sitting with Mr. Gonzalez interpret for him. Agent LaRue testified that Mr. Gonzalez was so disoriented that he could not understand his friend, was unable to follow any instructions, and fumbled through his wallet on three separate occasions looking for identification. Agent LaRue testified, based upon his numerous years as a peace officer, that Mr. Gonzalez was intoxicated and would have been a danger to himself or others if left alone. Agent LaRue did not administer any on-scene field sobriety tests because, based upon his observations, it was obvious that Mr. Gonzalez was intoxicated. Danish Manasiya, owner of the bar, testified that he was not present the night of the incident but has seen Mr. Gonzalez on numerous occasions. Mr. Manasiya owns a supermarket next to the bar and has cashed checks for Mr. Gonzalez in the past. He said that Mr. Gonzalez has always had droopy eyes and could appear intoxicated when he is not.

5 SOAH DOCKET NO PROPOSAL FOR DECISION PAGE4 IV. ANALYSIS AND RECOMMENDATION After considering the evidence presented by the paiiies, the ALJ finds that Respondent served an alcoholic beverage to an intoxicated person on December 10, Working undercover, Agent Lopez observed Mr. Gonzalez for 45 minutes and noticed classic signs of intoxication, including red glossy eyes, slow and deliberate movements, poor balance, and sideto-side swaying when walking. Agent LaRue also observed that Mr. Gonzalez reeked of alcohol, had difficulty getting identification out of his wallet, was not able to follow instructions, and appeared to be disoriented. Each of these factors is consistent with intoxication. Both agents testified that, based upon their experience as peace officers, it was obvious to them and others that Mr. Gonzalez was intoxicated. Agent Lopez stated that she saw the bar waitress, Ms. Alarcon, talk to Mr. Gonzalez several times and that she was in a position to observe his actions. Agent Lopez also observed Ms. Alarcon serve Mr. Gonzalez a beer after it was obvious that he was already intoxicated. A licensee owes a duty to the general public not to serve alcohol to a patron when the licensee knows or should have known the patron is intoxicated. A specific intent to violate the statute is not required. A reasonable, prudent person would have observed the same signs observed by the agents and, in this case, Ms. Alarcon was in a position to observe the behavior of Mr. Gonzalez for at least 45 minutes prior to serving him a beer. The evidence on the record is sufficient to establish that Respondent served an alcoholic beverage to an intoxicated person in violation of l l.61(b)(l4) of the Code. Therefore, the ALJ recommends that Respondent's permit be suspended for a period of 10 days, or in lieu of any suspension, the Respondent pay a penalty of$3,000. V. FINDINGS OF FACT I. K & M 786 Business L.L.C. d/b/a El Chavo Sports Bar (Respondent) holds a Mixed Beverage Permit, MB , which includes the Mixed Beverage Late Hour Permit, issued by the Texas Alcoholic Beverage Commission (TABC) for the premises located at 9855 Fuqua Street, Suite E, Houston, Harris County, Texas.

6 SOAH DOCKET NO PROPOSAL FOR DECISION PAGES 2. The permit was issued on April 5, On December 9, 2016, TABC Agents Araceli Lopez and Ronny LaRue went to Respondent's establishment. Agent Lopez was in an undercover capacity and Agent LaRue was on the open team. 4. On the morning of December 10, 2016, at approximately 12:15 a.m., Agent Lopez observed Flor Maria Alarcon, Respondent's waitress, serve a beer to Samuel Gonzalez, a patron in Respondent's establishment. 5. At that time, Mr. Gonzalez exhibited signs of intoxication. Specifically, Agent Lopez observed Mr. Gonzalez to have red, glossy, and droopy eyes, poor balance, swaying while walking, and very slow deliberate movements. Agent LaRue also observed that Mr. Gonzalez reeked of alcohol, fumbled with his wallet while looking for identification, and was disoriented. 6. On July 31, 2017, Staff issued a notice of hearing informing all parties of the hearing in this matter. Staffs notice to the parties contained the time, place, and nature of the hearing; stated the legal authority and jurisdiction under which the hearing was to be held; referenced the particular sections of the statutes and rules involved; and included a short, plain statement of the factual matters asserted. 7. The hearing in this matter convened on March 9, 2018, before State Office of Administrative Hearings (SOAH) Administrative Law Judge (ALJ) Timothy Horan. Staff was represented by attorney Sandra K. Patton. Clyde Burleson, attorney, represented Respondent. The hearing concluded on the same day but the record was left open to receive post-hearing briefs. 8. The record was closed on March 30, VI. CONCLUSIONS OF LAW 1. TABC has jurisdiction over this matter under Texas Alcoholic Beverage Code (Code) Chapter 5 and l l.6i(b)(2) and (14). 2. SOAH has jurisdiction over all matters relating to conducting a hearing in this proceeding, including the preparation of a proposal for decision with findings of fact and conclusions oflaw, pursuant to Texas Government Code Chapter Respondent received notice of the proceedings and hearing, pursuant to Texas Government Code Respondent violated Texas Alcoholic Beverage Code l l.6i(b)(2) and (14).

7 SOAH DOCKET NO PROPOSAL FOR DECISION PAGE6 5. Based on foregoing findings of fact and conclusions of law, Respondent's permit should be suspended for a period of 10 days or, in lieu of suspension, Respondent should be allowed to pay a penalty of$3,000. SIGNED MAY 22, ~ Tl)tOTIIY HORA ' ADMINISTRATI\.IDGR STATE OFFICE OF ADM[NISTRATIVE HEARINGS

8 DocuSign Envelope ID: FCE728D7-219B-44BD A12158AOB91 SOAH DOCKET NO TEXAS ALCOHOLIC BEVERAGE COMMISSION Petitioner vs. K & M 786 BUSINESS L.L.C. D/B/ A EL CHA VO SPORTS BAR PERMIT/LICENSE NO(s). MB939916, LB Respondent HARRIS COUNTY, TEXAS (TABC CASE NO ) BEFORE THE STATE OFFICE OF ADMINISTRATIVE HEARINGS ORDER CAME ON FOR CONSIDERATION this, the 20th day of June 2018, the above-styled and numbered cause. After proper notice was given, this case was heard by the State Office of Administrative Hearings ("SOAR"), with Administrative Law Judge Timothy Horan presiding. The hearing convened on March 9, 2018, but the SOAR record was kept open until March 30, 2018, to allow parties to file post-hearing briefs. The Administrative Law Judge made and filed a Proposal for Decision containing Findings offact and Conclusions of Law on May 22, 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. However, as of the deadline, no exceptions were filed. 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 ofproposed Findings of Facts and Conclusions of Law, and any other requests for general or specific relief submitted by any party are denied, unless specifically adopted herein. IT IS THEREFORE ORDERED 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 August 8, 2018 and shall remain suspended for 10 (TEN) CONSECUTIVE DAYS, UNLESS a civil penalty in the amount of $3, (Three Thousand Dollars) is paid in lieu of suspension ON OR BEFORE July 31, of 3

9 DocuSign Envelope JD: FCE728D7-219B-44BD A12158AOB91 This Order will become final and enforceable on the 16th day ofjuly 2018, unless a Motion for Rehearing is filed by the 15th day ofjuly SIGNED this, the 20th day ofjune 2018, in Austin, Texas. Matthew R. Chaplin, LL.M. Deputy Executive Director Texas Alcoholic Beverage Commission CERTIFICATE OF SERVICE I ce11ify that the persons listed below were served with a copy of this Order in the manner indicated below on this, the 20th day ofjune Dina Powell, Legal Assistant Texas Alcoholic Beverage Commission Timothy Horan ADMINISTRATIVE LAW JUDGE State Office of Administrative Hearings 2020 North Loop West, Suite 111 Houston, TX VIA FACSIMILE: (512) Clyde Burleson ATTORNEY FOR RESPONDENT 1533 W. Alabama, Suite 100 Houston, TX VIA FIRST CLASS MAIL, CMRRR # K & M 786 Business LLC d/b/a El Chavo Sports Bar RESPONDENT 1214 Riverchase Dr. Richmond, TX VIA FIRST CLASS MAIL, CMRRR # of 3

10 DocuSign Envelope ID: FCE728D7-219B-44BD A12158AOB91 Sandra Patton ATTORNEY FOR PETITIONER T ABC Legal Division VIA sa11dra.patto11@tabc.texas.gov 3 of3

11 TEXAS ALCOHOLIC BEVERAGE COMMISSION CIVIL PENALTY REMITTANCE DOCKET NUMBER: REGISTER NUMBER: NAME: K & M 786 BUSINESS LLC TRADENAME: EL CHAVO SPORTS BAR ADDRESS: 1214 Riverchase Drive, Richmond, Texas DUE DATE: July 31, 2018 PERMITS OR LICENSES: MB939916, LB AMOUNT OF PENALTY: $3, Amount remitted$ Date remitted You may pay a civil penalty rather than have your pennits 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 pavment accepted. Your payment will be returned if anything 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.