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FIFTH DIVISION
DECEMBER 30, 2004

Plaintiff, Amigo's Inn, Inc., d/b/a Amigo's Inn, appeals from an order of the circuit court ofCook County affirming an administrative decision of defendant, Mayor Richard M. Daley, by andthrough the License Appeal Commission of the City of Chicago (Commission), revoking plaintiff'sliquor license. On appeal, plaintiff contends that: (1) the finding of the Commission that asecurity guard was an agent of Amigo's Inn was against the manifest weight of the evidence andan error of law; and (2) the sanction of revocation was an abuse of discretion. For the followingreasons, we reverse the judgment of the trial court.

BACKGROUND

The record reveals the following relevant facts. Plaintiff, Amigo's Inn, Inc., and doingbusiness as Amigo's Inn, held a tavern license for the premises located at 1615 W. 43rd Street,Chicago. Hector Gonzalez is the president of the Amigo's Inn, Inc. On July 31, 2001,defendants, the Local Liquor Control Commissioner, acting through the Local Liquor ControlCommission (LLCC), published an amended notice of hearing charging Amigo's Inn with fiveviolations of the Liquor Control Act (235 ILCS 5/1.1 et seq. (West 2000)), alleging that Amigo'sInn, by and through its agent, Francisco Sanchez, possessed the controlled substances of cocaineor cannabis on the premises, with intent to deliver on March 17, 2001.

The following facts were adduced at an evidentiary hearing conducted by the LLCC:

Initially, prior orders of disposition of the LLCC involving the sale of alcohol to minorsand gambling on the premises of Amigo's Inn were admitted into evidence without objection. Inaddition, the toxicology report on the drugs confiscated at the premises was admitted withoutobjection.

Chicago police officer John Valtierra testified that on March 17, 2001, he and his 9thDistrict Tactical team were investigating drug and gang problems and in that capacity enteredAmigo's Inn at about 10 p.m. Upon entering the premises, Officer Valtierra observed FranciscoSanchez, a security guard about two or three feet away from the door standing near a jukebox. Sanchez was dressed in what appeared to be a police officer uniform lacking police badges orinsignia. Sanchez wore a badge around his neck displaying an insignia of a flag and a hatdisplaying the word "Security."

Officer Valtierra observed Sanchez make a "furtive" or "concealing movement" with hisleft hand and drop three plastic bags to the ground. The officer recovered the bags and opinedthat two of the bags contained cannabis while a third contained a white powder which he thoughtto be cocaine. Officer Valtierra placed Sanchez under arrest and handed the bags to his partnerwhile he searched Sanchez. Officer Valtierra recovered six additional plastic bags from Sanchez'person all containing what appeared to be cocaine. Concurrently, the other members of the teamconducted a license investigation of the premises. Later, at the police station, another officerrecovered an additional three bags of controlled substances in Sanchez' pocket, $340 UnitedStates currency and a cellular telephone.

Officer Valtierra testified as to statements made by Sanchez after his arrest and removalfrom the premises. Officer Valtierra stated that Sanchez told him that he was a security guard forAmigo's Inn and that he sold drugs to make extra money for himself. Plaintiff objected toadmission of Sanchez' statements. The Commission admitted Sanchez' statements as "admissionsagainst interest, and not for the purpose of establishing that Sanchez acted within the scope of hisauthority or that he was an 'agent' of Amigo's Inn."

On cross-examination, Valtierra acknowledged that when he arrived at Amigo's Inn,Sanchez was not standing outside the premises or at the door and did not ask Officer Valtierra foridentification or payment of a cover charge. Officer Valtierra did not see Sanchez talking toanyone inside the premises nor did he see Sanchez make any attempted sale or transfer of acontrolled substance in Amigo's Inn. Officer Valtierra spoke to the bartender, who had noknowledge of the existence of narcotics on the premises that evening.

On redirect examination, Officer Valtierra testified that no more than 10 seconds elapsedbetween his entry into the premises and his observations about Sanchez. The officer testified,over plaintiff's objection, that he spoke with one of the four bartenders on duty and she told himthat Sanchez was a security guard employed by the "owner" and that she did not know theowner's name.

Police officers Ignacio Hernandez and Thomas Buehler testified to the same essential factsas those testified to by Officer Valtierra, including the fact that Sanchez was not observed doinganything except standing by the juke box, and dropping three bags on the floor as the officersentered the premises. Officer Hernandez stated that the team went to Amigo's Inn in response toChicago Alternative Policing Strategy (CAPS) complaints of narcotics being sold and "gangbangers loitering in that establishment."

Hector Gonzalez testified that he has been president of Amigo's Inn since 1990. Gonzalezwas not present at Amigo's Inn on the night of March 17, 2001. Gonzalez stated that March 17,2001, was the first and only day Sanchez worked at Amigo's Inn. Gonzalez never met Sanchez.Sanchez worked at Amigo's Inn for only a couple of hours. A security company, Aguila SecurityConsultants, provide personnel to check identification at the door of the tavern. Gonzalezcontacted an individual named "Raoul," later identified as Raoul Aguila, who supplied and sentsecurity guards to the premises "as needed." Gonzalez paid Aguila Security for services. Gonzalez neither hired nor compensated Sanchez directly.

On cross-examination, Gonzalez testified that he had been using Aguila Security for aboutone year and that Aguila supplied guards two days per week, Fridays and Saturdays. Gonzalezdid not know whether Aguila Security is a licensed facilitator of security guards. The securityguards are given their assignments by Aguila Security. Once on the assigned premises, guardschecked identification, searched people and kept an eye on the premises. When the guards reportfor duty, they take direction from the tavern manager.

Lisa Gilbert, a forensic chemist, testified that the substances recovered from Sancheztested positive for cannabis and cocaine.

Lucarecra Membreno testified through an interpreter that she has been working forAmigo's Inn for approximately three years. Membreno bartends and pays invoices, includingthose for the security company. Membreno stated that the night of March 17, 2001, was the firstnight Sanchez worked as security at Amigo's Inn and she had never seen him prior to that night. Sanchez' duties were to stand at the entrance door and check identification. Sanchez never wentbehind the bar or served alcohol.

Membreno stated that Amigo's Inn has a contract with Aguila Security and that Aguilaprovided Sanchez as a guard on the night in question. Aguila Security is owned by "Raoul" andpayments are made to Aguila Security, not to the individual guard. Membreno stated thatAmigo's Inn had no choice as to who would be sent over as a guard. Upon his arrival, Sanchezwas not given any training or instructions by any representative of Amigo's Inn. Amigo's Inn doesnot provide a uniform to the guards supplied by Aguila.

Membreno described Sanchez' arrest as follows: "He was at the door, and they came inand started to search. They put his hands up and then he was searched. He was searched andsearched. And the last thing I saw was when he was handcuffed and taken out." Membreno didnot see any small bags drop to the floor.

Rebecca Flores is an employee at Amigo's Inn who works from 9 a.m. to 5 p.m., six daysa week. Flores worked at Amigo's Inn on March 17, 2001. Flores also pays invoices for Amigo'sInn and is familiar with the relationship between Amigo's Inn and Aguila Security. On the eveningof March 17, 2001, Sanchez was responsible for checking identification at the door. Sanchez didnot go behind the bar and did not handle money. Sanchez did not work at Amigo's Inn on anyprior occasion. Flores stated that there is a different security guard on duty every night and thatthe security company is responsible for training each guard.

Plaintiff's attorney requested a continuance, explaining that he was unable to reach Aguilato testify at the hearing and was attempting to locate his address in order to serve a subpoena. Aguila had refused to testify or to provide his address. Plaintiff's attorney further explained thatAguila went directly to Amigo's Inn to retrieve checks for security services and that plaintiff didnot have Aguila's address. Aguila did not appear at the hearing to testify.

On June 14, 2002, the LLCC published its findings and order (the revocation order)determining that charges 1, 2 and 3 (possession, through an agent, of a controlled substance onthe licensed premises) had been sustained and determining that charges 4 and 5 (possession withintent to deliver) had not been sustained. The revocation order revoked Amigo's Inn liquorlicense and all other city licenses held by Amigo's Inn.

Plaintiff filed an appeal with the Licence Appeal Commission (Commission). TheCommission affirmed the revocation order and denied plaintiff's motion for reconsideration.

Plaintiff subsequently filed a complaint for administrative review in the circuit court ofCook County seeking reversal of the revocation order as affirmed by the Commission. Each partyfiled memoranda in support and opposition to the complaint. On April 4, 2003, the trial courtentered a memorandum opinion and order affirming the revocation order. In its opinion, the trialcourt concluded that the evidence supported the Commission's findings that Amigo's Inncontrolled the manner in which the security guards performed their work. Because the trial courtcould not say that the relationship between Sanchez and Amigo's was "so clear as to beindisputable," it concluded that the nature of the relationship was a question of fact to be decidedby the administrative agency. The trial court found that the record contained sufficient evidenceto support the Commission's determination that Amigo's had the right to control the manner inwhich the work of Sanchez was to be performed. The trial court further noted that Amigo's Innincurred three prior sanctions from the LLCC and that evidence of previous misconduct could beproperly considered.

Plaintiff filed a motion for reconsideration and a supporting memorandum, and theCommission filed a response. On June 18, 2003, the trial court entered its order denyingplaintiff's motion for reconsideration. This timely appeal followed.

OPINION

Initially, plaintiff contends that the finding of the Commission that Sanchez was an agentof Amigo's Inn was against the manifest weight of the evidence and an error of law.

Upon review of a final decision under the Administrative Review Law (735 ILCS 5/3-101,et seq. (West 2002)), we hold an agency's findings of fact to be prima facie true and correctunless against the manifest weight of the evidence. Launius v. Board of Fire & Police Commissioners of the City of Des Plaines, 151 Ill. 2d 419 (1992). We review an agency's conclusions oflaw and construction of a statute de novo. Envirite Corp. v. Illinois Environmental ProtectionAgency, 158 Ill. 2d 210 (1994).

Plaintiff argues that Amigo's Inn has no liability or responsibility for the acts of Sanchezbecause Sanchez was an independent contractor employed as a security guard by Aguila, not byAmigo's Inn. In support, plaintiff cites to section 10-3 of the Liquor Control Act (the Act) whichprovides in pertinent part as follows:

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