Title: In re Kacey's, Inc.

State: vermont

Issuer: Vermont Supreme Court

Document:

In re Kacey's, Inc. (2004-159); 178 Vt. 567; 879 A.2d 450

2005 VT 51

[Filed 03-May-2005]

                                 ENTRY ORDER

                                 2005 VT 51

                      SUPREME COURT DOCKET NO. 2004-159

                             FEBRUARY TERM, 2005

  In re Kacey's, Inc. d/b/a Kacey's	}	APPEALED FROM:
                                        }
                                        }
                                        }	Liquor Control Board
                                        }	
  	                                }
                                        }	DOCKET NO. 10348-00001

             In the above-entitled cause, the Clerk will enter:

       ¶  1.  Licensee appeals from a Liquor Control Board decision
  revoking its first- and third-class licenses to sell alcoholic beverages
  for on-premises consumption.  Licensee contends the Board abused its
  discretion by basing the revocations on: (1) illegal drug activity that was
  not reasonably discoverable; (2) unsupported findings concerning the
  licensee's reputation; and (3) uncharged conduct and hearsay evidence.  We
  affirm.  

       ¶  2.  Licensee operates a pub, known as Kacey's, in St. Albans,
  Vermont.  Reports of drug activity at the establishment led to an
  investigation by the Vermont Drug Task Force.  The investigation involved
  the use of undercover police officers, one of whom testified at the hearing
  before the Board that he bought cocaine from the pub's manager, Perry
  Paradee, on four separate evenings between July 2002 and January 2003.  The
  officer testified that on each occasion he would enter the pub, locate
  Paradee, and indicate that he wished to purchase cocaine.  The officer
  would then meet Paradee in the bathroom, and Paradee would hold his foot
  against the door to prevent others from entering.  The officer would then
  make the purchase, and both would exit.  On each occasion, the powder
  field-tested positive for cocaine, a determination later confirmed by
  laboratory testing.  On one occasion when they entered the bathroom, the
  officer observed an individual snorting lines of cocaine from the toilet
  lid.  

       ¶  3.  In addition to the four separate cocaine purchases from
  Paradee, the officer also recalled that on one occasion he arranged to
  purchase cocaine from a woman he met at Kacey's, and later completed the
  purchase in the parking lot of the pub.  The officer also recounted an
  incident in which he asked Paradee for some "weed," and Paradee then
  approached another patron, who subsequently handed the officer a film
  canister containing a leafy substance which the officer determined to be
  marijuana.  The officer testified, and the Board found, that these drug
  transactions, combined with Paradee's freedom of movement in and out of the
  bar area and kitchen, making of change, and frequent use of the telephone
  demonstrated that Paradee had essentially "set up shop" to sell drugs at
  Kacey's.  The officer observed other transactions at Kacey's not involving
  Paradee in which the telephone would ring, an individual would answer and
  later enter the bathroom with another patron, and the two would then exit
  in tandem some ten to fifteen seconds later.  This behavior suggested to
  the officer that other drug transactions were regularly occurring on the
  premises.     

       ¶  4.  Kacey's owner, Kirk Boucher, testified that he typically worked
  at the pub preparing food or doing paper work from early morning to
  mid-afternoon.  Boucher stated, and the Board found, that he was not on the
  premises when any of the drug sales occurred.  Boucher claimed that he had
  no knowledge or suspicion of drug trafficking at Kacey's during the events
  in question.  Nevertheless, the Board found that the drug activity
  described by the undercover officer could have been observed by Boucher or
  any other "ordinary alert and interested person;" that Boucher could have
  observed the activity by visiting the premises during the evening hours,
  and could have taken steps to curtail it; and that by failing to do so
  Boucher breached his affirmative duty to become aware of, and prevent,
  prohibited conduct on the premises, in violation of General Regulation No.
  41 of the Liquor Control Department, which provides, in part, that "[n]o
  disturbances, brawls, fighting, unlawful conduct shall be permitted or
  suffered upon any licensed premises." (FN1)  The Board concluded that the
  appropriate penalty for the violation was revocation of licensee's first-
  and third-class licenses.  This appeal followed.
                                             
       ¶  5.  Licensee first contends the Board abused its discretion in
  determining that it "permitted or suffered" drug trafficking to occur on
  its premises.  Licensee notes Boucher's undisputed testimony that he had no
  knowledge of the transactions, and argues that he could not, through
  reasonable diligence, have discovered them because they were by nature
  "subtle and covert" and "undetectable to an untrained observer."  In
  reviewing the Board's ruling "we presume the reasonableness and validity"
  of decisions within its expertise, "and require a clear and convincing
  showing to overcome the presumption."  In re Capital Investment, Inc., 150
  Vt. 478, 480,