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01/26/96 JACQUELYN'S LOUNGE v. LICENSE APPEAL

January 26, 1996

JACQUELYN'S LOUNGE, INC., D/B/A CITY LIMITS, AND NICK GEORGELOS, PLAINTIFFS-APPELLANTS,
v.
LICENSE APPEAL COMMISSION OF THE CITY OF CHICAGO, WILLIAM D. O'DONAGHUE, ALBERT D. MCCOY, IRVING J. KOPPEL, AND RICHARD M. DALEY, MAYOR AND LIQUOR CONTROL COMMISSIONER OF THE CITY OF CHICAGO, DEFENDANTS-APPELLEES.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE EDWARD C. HOFERT, JUDGE PRESIDING.

The Honorable Justice McNAMARA delivered the opinion of the court: Zwick, P.j., and Rakowski, J., concur.

The opinion of the court was delivered by: Mcnamara

The Honorable Justice McNAMARA delivered the opinion of the court:

This matter involves an administrative review action wherein the trial court affirmed the decision of defendant License Appeal Commission of the City of Chicago (LAC) to revoke all City of Chicago (City) licenses, including one for liquor, which had been issued to plaintiff Jacquelyn's Lounge, Inc. (licensee). The lounge, which had been doing business as City Limits, was located at 4086 North Broadway in Chicago and was owned by plaintiff Nick Georgelos. Defendants William D. O'Donaghue, Albert D. McCoy and Irving J. Koppel are duly appointed members of the LAC. The licenses were revoked based on the testimony of a Chicago police officer regarding the sale of narcotics by a bartender/waitress in the lounge between April 6 and April 13, 1993. It is undisputed that the licensee did not know about, profit from or facilitate this illegal activity. The pertinent facts are as follows.

On April 23, 1993, defendant Richard M. Daley, mayor and liquor control commissioner of the City of Chicago, through the director of the Local Liquor Control Commission (LLCC), issued a license order or a summary order pursuant to section 7-5 of the Liquor Control Act of 1934 (235 ILCS 5/7-5 (West 1992)), summarily closing the licensed premises from April 23, 1993, to April 30, 1993, because of evidence showing that its employee, Michelle McClinton, a bartender/waitress, was selling cocaine in the lounge.

The LLCC director believed that the continued operation of the lounge constituted an immediate threat to the community. The order also set a date for a revocation hearing on April 29, 1993, on five charges which grew out of the purchase of 0.50 grams of cocaine on the licensed premises on April 9, 1993.

The summary order alleged that the licensee through its agent, McClinton, "knowingly permitted or made available the premises building for use in the manufacture or delivery of *** cocaine in violation of *** the Illinois Revised Statues," "encouraged or permitted on the licensed premises, the sale of *** cocaine, in violation of [the] Illinois Revised Statutes, *** contrary to *** the Municipal Code of Chicago, (as amended)," and "suffered or permitted the delivery of *** cocaine on the licensed premises in violation of *** [the] Illinois Revised Statutes contrary to *** the Rules and Regulations of the Illinois Liquor Control Commission." The summary closing further advised that "for the limited purpose of assessing the severity of the penalty that could be imposed, when applicable, the City may present evidence of previous acts of misconduct which have resulted in disciplinary action against the licensee, along with any other *** complaints."

On April 29, 1993, an evidentiary hearing was held on the substantive charges before the LLCC's deputy commissioner, who performed the role of a hearing officer. During the hearing, witnesses for the City and the lounge testified about the events leading up to the closing of the lounge and the revocation of its liquor license. During the City's rebuttal argument before the LLCC, the assistant corporation counsel stated, "we are not alleging that the owner did anything personally. What we're alleging is the agent, Michelle McClinton, who's named in the notice of hearing, knowingly allowed unlawful activity to occur on the licensed premises ***." The testimony elicited at the hearing revealed the following.

Officer Joseph Airhart, a Chicago police officer, who was assigned to the narcotics division, testified for the City that on April 6, 1993, he visited the lounge in an undercover status. On that date, he approached the bar and spoke to McClinton, the bartender, whom he had previously seen at the lounge. When McClinton asked him where he had been, Airhart responded that he had been incarcerated for several months for the possession of narcotics. McClinton told Airhart that if he returned to the lounge the following night, she would be able to give him some cocaine.

Still undercover, Airhart returned to the lounge the following evening, April 7, and saw McClinton sitting at the bar. Airhart took a seat at the bar. After he had been in the lounge for about an hour, Airhart had a conversation with McClinton. Other patrons of the bar were nearby. During that conversation, which McClinton initiated, she informed him "that the coke was in the bar." She then asked him if he wanted any. Airhart indicated that he always wanted coke, but that he was short of money. McClinton informed Airhart that they needed to talk business and indicated that he should sit at a table which was about 6 to 10 feet from the bar. The table was not obstructed in any way from the bar area, and the area was well illuminated. There were about three other employees working that night and a minimum of 10 patrons. No one else was sitting at the tables. When they were seated at the table, McClinton informed Airhart that she could get him coke. She also told him that she was trustworthy. She works in the bar, and people have access to her. Airhart described part of that conversation with McClinton as follows:

"She then informs me that she's the connection. She's tapped into the source of narcotics, cocaine, and that she can get me cocaine, rock cocaine, or weed, which is slang for marijuana, and that the purity is excellent, that the packages would be fat at prices I could afford."

Airhart then informed McClinton that he wanted to buy two quarter grams of cocaine for $20 apiece. They arranged for the sale to take place the following day, April 8, in the lounge.

Airhart returned to the lounge the following evening at about 9 or 10 p.m., again undercover. He noticed that McClinton was not there. Airhart was informed that McClinton would be returning. He waited two hours, but she did not show up.

Airhart returned to the lounge on Friday, April 9, at 9 or 10 p.m., again undercover. He met McClinton outside, just as he was entering the lounge. She told him that she had been informed that Airhart had been there and waited for her for two hours. McClinton said that she had just missed him. She also said that she was working as a cocktail waitress that night. Once they were in the lounge, she asked if Airhart still wanted coke, and he said that he did. She then told him to go to the bar, order a drink and sit at the side table, which Airhart proceeded to do. The table was about 6 to 10 feet from the bar. There was a minimum of eight people sitting at the surrounding tables, with the closest person being about less than six feet away. The area was well illuminated. Airhart saw three or possibly four other employees there that night. Airhart observed McClinton talking to a man, who was standing at the bar. He saw the man, who was later identified as Irving Mayfield, hand her two white packets. Airhart was 10 to 12 feet away from them. McClinton returned to the table and asked him for $40 in exchange ...


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