STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PUCKETT OIL COMPANY, )

)

Petitioner, )

)

vs. ) CASE NO. 89-6458F

) STATE OF FLORIDA, DEPARTMENT OF ) ENVIRONMENTAL REGULATION, )

)

Respondent. )

)

SUMMARY FINAL ORDER

THIS CAUSE comes before the undersigned Hearing Officer upon Petitioner, Puckett Oil Company's ("Puckett") Motion for Summary Final Order, pursuant to Section 5-7.111, Florida Statutes, and Rules 22I-6.030 and 22I-6.035, Florida Administrative Code. Puckett seeks entry of a Summary Final Order awarding it

$15,000.00 in attorney's fees and costs as requested in its Petition for Costs and Fees filed in this proceeding.

The allegations in the Motion far Summary Final Order, which are not timely controverted, reveal that on November 28, 1989, Puckett filed a Petition seeking an award of $15,000.00, pursuant to Section 57.111, Florida Statutes. Its Petition was incorporated by reference in its Motion. In its Petition for Costs and Fees, Puckett alleged that it was a "prevailing party" in the action styled Puckett Oil Company vs. State of Florida, Department of Environmental Regulation, 10 FALR 5525 (Final Order, September 1, 1988), reversed, 14 FLW

1795, substitute opinion, 14 FLW 2213 (Fla. 1st DCA, September 21, 1989). It also alleged that the agency's actions were not "substantially justified", that the agency was not a nominal party only, and that Puckett was unaware of circumstances which would make the award of fees and costs unjust for purposes of Section 57.111, Florida Statutes. An Affidavit accompanied that Petition attesting to the fact that Puckett was a "small business party" at the time the agency initiated its action by affording Puckett a clear point of entry to contest its denial of eligibility for the Early Detection Incentive Program related to petroleum and petroleum products, as those terms are defined in Section 376.301, Florida Statutes. Also attached to the Petition was an itemized Affidavit of costs and fees, attested to by Puckett's counsel.

Pursuant to Rule 22I-6.035(5), Florida Administrative Code, the agency is required to respond to the Petition within twenty (20) days of the Petition's filing. The subject rule employs the word "shall", which is universally accepted, in terms of statutory and rule construction, to mean that the action to which it relates is mandatory. Here, the Department did not timely file the responsive pleading required by the Rule, contesting the Petition herein, nor did it indicate which, if any, of the statutory issues, arising under Section 57.111, Florida Statutes, it chose to contest. In point of fact, it filed its responsive pleading several days late, in which it indicated that it contested the issue of entitlement, as it relates to "substantial justification", but not the remaining allegations of the Petition.

Failure by a state agency to timely file a responsive pleading contesting a petition for costs and fees sought under Section 57.111, Florida Statutes, constitutes a waiver of the agency's opportunity to dispute the petitioner's allegations. Heisler v. Department of Professional Regulation, Construction Industry Licensing Board, 11 FALR 3309 (Final Order, May 19, 1989); Department of Professional Regulation, Board of Landscape Architecture v. Webster, 11 FALR 3016 (Final Order, August 28, 1988); David's Pharmacy v. Department of Health and Rehabilitative Services, 11 FALR 72 (Final Order, December 8, 1988).

Accordingly, under the mandate of the above-cited Rule, as well as the above- cited decisional authority, the failure by the agency to timely respond to the subject Petition renders that Petition uncontroverted. The Division of Administrative Hearings has final order authority in these proceedings, pursuant to Section 57.111(4)(d), Florida Statutes. Since the Petition is uncontroverted, there are no genuine issues of material fact raised in this proceeding as to the allegations in the Petition and the incorporated supporting Affidavits. Consequently, entry of a Summary Final Order is appropriate.

Accordingly, in consideration of the foregoing, it is, therefore

ORDERED that the sum of $15,000.00 in costs and attorney's fees, as requested in the Petition and incorporated supporting Affidavits filed in this proceeding, be awarded to Puckett, which sum shall be paid to that Petitioner by Respondent, State of Florida, Department of Environmental Regulation.

DONE AND ORDERED this 16th day of April, 1990, at Tallahassee, Leon County, Florida.

P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 16th day of April, 1990.

COPIES FURNISHED:

E. Gary Early, Esq. Department of Environmental

Regulation

2600 Blair Stone Road Tallahassee, FL 32399-2400

Robert D. Fingar, Esq. HUEY, GUILDAY, KUERSTEINER

& TUCKER, P.A.

215 South Monroe Street First Florida Bank Building Suite 500

Tallahassee, FL 32302

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PUCKETT OIL COMPANY, )

)

Petitioner, )

)

vs. ) CASE NO. 89-6458F

) STATE OF FLORIDA, DEPARTMENT OF ) ENVIRONMENTAL REGULATION, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, this cause came on for hearing before P. Michael Ruff, duly-designated Hearing Officer of the Division of Administrative Hearings, on July 30, 1991, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Robert D. Fingar, Esquire

HUEY, GUILDAY, ET AL.

Post Office Box 1794 Tallahassee, Florida 32302

For Respondent: E. Gary Early, Esquire

Department of Environmental Regulation 2600 Blair Stone Road

Tallahassee, Florida 32399-2400 STATEMENT OF THE ISSUE

The issue in this cause concerns whether the Respondent, Department of Environmental Regulation ("DER"), is liable to the Petitioner, Puckett Oil Company, Inc. ("Puckett"), for attorney's fees and costs incurred in the earlier related administrative proceeding, in accordance with Section 57.111, Florida Statutes.

PRELIMINARY STATEMENT

This cause arose upon advice by DER to Puckett by Order of April 16, 1987 that Puckett's contaminated site was not eligible for reimbursement of cleanup costs, pursuant to the State Underground Petroleum Environmental Response Act ("Super Act") Reimbursement Program. Section 376.3071(12), Florida Statutes, (Supp. 1986). That Order states that the source of the contamination in question was used oil, which DER maintained did not meet the statutory definitions of "petroleum" or "petroleum product" for purposes of Section 376.301(9)(10), Florida Statutes, (Supp. 1986).

Upon notice of this action by DER, Puckett timely requested a formal proceeding before the Division of Administrative Hearings; and a hearing was held to determine Puckett's entitlement to the reimbursement eligibility in question. Following that hearing, a Recommended Order was entered by the undersigned Hearing Officer concluding that the automotive crankcase oil or used oil in question was "petroleum" and "petroleum product" and that, therefore, Puckett was entitled to reimbursement of the cleanup costs for the site in question. See Puckett Oil Company v. State of Florida, Department of Environmental Regulation, 10 FALR 5505, 5540 (Recommended Order filed June 7, 1988). Thereafter, a Final Order was entered by DER denying reimbursement to Puckett because there was no "petroleum storage system" in place, and operative, to accommodate the used oil at the site. Puckett, 10 FALR, at 5540 (Final Order entered September 2, 1988). The cause was appealed to the Court of Appeals for the First District and was reversed. The Court held that DER had denied eligibility for reimbursement on a ground (the issue of the presence of the petroleum storage system) which had not been raised and litigated at the hearing before the Hearing Officer and which, indeed, had been foreclosed to DER due to positions taken by DER during the discovery phase of the proceeding. See Puckett Oil Company v. State of Florida, Department of Environmental Regulation,

549 So.2d 720 (Fla. 1st DCA 1989). Thereafter, on October 24, 1989, that Court issued a mandate to DER requiring it to determine the site in question eligible for reimbursement of cleanup costs, pursuant to the Super Act.

On November 28, 1989, Puckett filed a petition for costs and attorney's fees, pursuant to Section 57.111, Florida Statutes. DER did not timely file a response, although it later filed an untimely response asserting that its actions were substantially justified for purposes of Section 57.111. The Hearing Officer, however, entered a Summary Recommended Order awarding Puckett costs and attorney's fees due to DER's failure to timely respond to the petition for costs and fees. See Rule 22I-6.015(5)(a), Florida Administrative Code. An appeal was taken, pursuant to Section 120.68, Florida Statutes, of the Hearing Officer's Order; and the First District Court of Appeal reversed the Hearing Officer, holding that DER was entitled to a hearing on its objection to Puckett's petition for costs and fees. See State of Florida, Department of Environmental Regulation v. Puckett Oil Company, Inc., 16 FLWD 926 (Fla. 1st DCA April 3, 1991).

Because of this turn of events, a hearing was duly held on July 30, 1991 in Tallahassee, Florida, at which the parties argued their respective positions and stipulated that the record involved in this proceeding for fees and costs would consist of the record on appeal of the earlier decision on the merits of Puckett's original claim. The issues were also limited by stipulation to that concerning whether DER's actions in the underlying proceedings on the merits of the reimbursement claim were "substantially justified". There is no dispute concerning the reasonableness of the claimed fees and costs nor any of the other criteria of Section 57.111, Florida Statutes, save the issue of substantial justification. The parties submitted proposed findings of fact and conclusions of law in the form of Proposed Final Orders, and those proposed findings are treated in this Final Order, as well as in the Appendix attached hereto and incorporated by reference herein.

FINDINGS OF FACT

1. Puckett reported a discharge of used oil at its site when it filed an early detective incentive program notification application with DER. Puckett, thus, advised DER that it would clean up its site and apply for reimbursement of the costs of that cleanup in accordance with Section 376.3071(12), Florida

   Statutes (Supp. 1986). When it received Puckett's application, DER conducted an investigation of the site and determined that a discharge of used automotive crankcase oil had occurred there. DER was advised by Puckett that the discharge had occurred when used automotive crankcase oil was drained into a service bay floor drain. Puckett and the site operator placed the used oil in the drain in the belief that a storage tank was connected to the floor drain to receive and safely store the used oil. Unknown to Puckett, however, the storage tanks previously connected to that floor drain had been removed by a former site owner or operator. The Recommended Order entered by the Hearing Officer contains findings to the effect that Puckett was unaware that storage tanks did not any longer connect with the floor drain in question, in part, at least, because it is the custom and practice in the service station business that used oil collecting persons or entities collect from such storage tanks after the service station hours of operation. Therefore, it was customary for the operator of a service station not to be aware of when used oil was removed from storage tanks. Upon learning that used oil had been spilled at the site due to the lack of a storage tank, where formerly one had been in place, the subject application was filed.

   
   

2. DER conducted its site investigation and after it was concluded, on April 16, 1987, issued an order denying reimbursement eligibility to Puckett. DER took this position because it opined that used oil is not "petroleum" or a "petroleum product", as those terms and substances are defined in Subsections 376.301(9)(10), Florida Statutes (Supp. 1986).

   
   

3. Puckett then filed a timely petition for administrative hearing as a result of that denial of eligibility. The cause was duly transmitted to the undersigned Hearing Officer for conduct of a Section 120.57, Florida Statutes, formal proceeding. In the discovery phase of that proceeding, requests for admissions were served by Puckett upon DER, in response to which DER admitted that the sole basis for denial of reimbursement eligibility was the fact that the substance discharged was used oil, which, DER contended was not "petroleum" or a "petroleum product". DER, thus, took the position that the used oil in question was beyond the scope of reimbursement eligibility allowed by the "Super Act," the statutory provisions cited above.

   
   

4. The cause was duly scheduled for hearing for September 9-10, 1987. Shortly prior to the hearing, on August 31, 1987, DER filed a motion for continuance seeking an opportunity thereby to have time to explore the question of whether Puckett was "grossly negligent" in the maintenance of its facility, which is a ground for disqualification from Super Act reimbursement eligibility. This was an issue which had not theretofore been raised in the proceeding. See Section 376.3071(9)(b)3., Florida Statutes (Supp. 1986). That motion for continuance was denied, as found and discussed in the Recommended Order in the underlying proceeding.

   
   

5. The cause then came on for hearing as scheduled on September 9-10, 1987. A motion in limine filed by Puckett was granted at the hearing so as to preclude DER from raising any issue concerning "gross negligence" at hearing. The basis for the ruling was that DER had known of the circumstances surrounding the discharge for nearly one year, but that during the discovery process, DER assured Puckett that its position was that gross negligence would not be an issue in the proceedings and that the sole basis for its denial of the reimbursement application was that the substance discharged, being used oil, was not, in its view, "petroleum" or a "petroleum product".

6. Following the hearing, the Hearing Officer issued the Recommended Order in question finding that used crankcase oil was, indeed, "petroleum", as well as being a "petroleum product", for the purposes of the definitions in the above- cited statutory provisions. It was thus recommended that Puckett be determined to be eligible to apply to DER for reimbursement of the cleanup costs involved. Puckett, 10 FALR at 5540.

   
   

7. Certain findings and conclusions made in the Recommended Order are germane to the question of whether DER's actions with respect to the initial and final denial of Super Act eligibility had a reasonable basis in law and fact at the time the agency action was initiated and finally taken in the Final Order. Those findings include the findings in the Recommended Order that used crankcase oil consists of "petroleum", as that term is defined by Section 376.301(9), Florida Statutes (Supp. 1986), with particular emphasis on those findings and conclusions in the Recommended Order, incorporated by reference herein, concerning crankcase oil coming within the definition of "other hydrocarbons" for the reasons delineated in the Recommended Order. Further, DER's own expert witness admitted, and it was found by the Hearing Officer, that the predominant use of used oil is as a fuel, just as is gasoline, diesel, kerosene and certain other grades of fuel oil, which are specifically included in the statutory definition of "petroleum product". See page 20 of the Recommended Order and the transcript of the proceeding below, pages 362-363. It was also established without question that used oil is a "liquid," a "commodity" and a liquid fuel commodity for the reasons delineated in the Recommended Order. It was established further by the record in the proceeding on the merits, and found in the Recommended Order that used oil has no meaningful similarity to the substances specifically, statutorily excluded from the definition of "petroleum product", and that DER has had a policy encouraging the collection and recycling of used oil as a fuel. This was well-known and accepted by DER's own experts before the "policy makers" at DER, who engendered the subject initial agency action, took the position that used oil did not constitute petroleum or a petroleum product. Used oil has not been otherwise regulated as a hazardous waste.

   
   

8. DER's interpretation of the statutory definition of "petroleum product" to the effect that the product, as it was initially produced, must be sold or used as a fuel in order to meet that definition, in fact, imposes an additional inconsistent criteria for determining what types of substances are included within the meaning of the term, which criteria is not enunciated in the statute, either expressly or implicitly. DER's restrictive interpretation of the statute further disregards the language of the Super Act. Sections 376.3071(12)(a) and 376.315, Florida Statutes (Supp. 1986), which requires it to give "such liberal construction to the statute as will accomplish the purposes set forth in this subsection", in other words, to promote the cleanup of as many contamination sites as possible.

   
   

9. Further, it was established by the record in the proceeding on the merits and concluded in the Recommended Order that the restrictive interpretation of the statute adopted by DER was inconsistent with existing agency policy which encourages used oil collection and recycling and that the interpretation "is clearly not one expressed or reasonably implied on the face of the statute" and "would frustrate the clear, legislative impetus of the Super Act" and is "illogical". More significantly, DER's policy makers responsible for the initial agency action and decision that used oil is not "petroleum" or a "petroleum product" did not take counsel with certain key expert personnel in DER's own used oil section concerning whether used oil is "petroleum" or a "petroleum product" prior to the initial denial of eligibility and the

   proceeding and hearing before the Hearing Officer. In fact, the policy makers were apparently unaware of facts critical to the subject determination and to the fact that DER's proposed (and, indeed, final) action was inconsistent with agency policy concerning treatment and definition of used oil, which DER's "in- house" experts had been aware of all along.

   
   

10. These findings and conclusions in the Recommended Order demonstrate clearly and in detail why DER's initial agency action and position through the conclusion of the hearing, concerning rejection of Puckett's reimbursement eligibility, did not have a reasonable basis in law and fact. Those findings and conclusions appearing at pages 18-36 of the Recommended Order, which has been stipulated into the record of the instant proceeding, are incorporated by reference and adopted in the findings of fact and conclusions of law in this Final Order.

    
    

11. Despite the findings and conclusions in the Recommended Order, DER, in its Final Order, ultimately denied reimbursement eligibility. Puckett at page 5505. DER found in its Final Order that Super Act coverage is limited to "incidents related to storage", as opposed to incidents where a contaminant is discarded. DER also found that because Puckett did not have a "petroleum storage system" at the site, the discharge was not "related to storage", despite the facility operator's proven and found intention and belief, when he dumped the product in the floor drain, that he was "storing" the used oil in question.

    
    

12. DER acknowledged the Hearing Officer's granting of Puckett's motion in limine, which precluded denial of reimbursement eligibility on "gross negligence" grounds, but stated that it was not denying eligibility on this ground at page 18 of its Final Order. Although DER acknowledged in its Final Order that its denial of eligibility did not depend on a finding of gross negligence, this acknowledgment, which appears to re- state its position, taken in the discovery phase, that gross negligence would not be raised as an issue by DER, and is an apparent acknowledgment of the ruling on the motion in limine, is somewhat belied by the following language from the Final Order:

    
    

    Although my decision to deny eligibility for reimbursement to Puckett does not depend on a finding of gross negligence on the part of Puckett, any site owner who fails to ascertain whether an oil drain fitting on site is actually connected to an operational used oil system now has clear notice that it allows used oil discharges to that drain fitting only at its own peril. It is not appropriate that state funds be expended to remediate contamination caused by reckless disregard for elementary waste disposal regulations. In the future, the department will continue to deny eligibility to any site where contamination has resulted from used oil discharges to land in the complete absence of a used oil storage system. (emphasis supplied)

    
    

    See pages 18 and 19 of the Final Order.

13. Puckett then appealed that denial of reimbursement eligibility. The District Court of Appeals reversed DER, finding as follows:

    
    

    DER's assertion that Puckett's eligibility for cleanup reimbursement of the used oil discharge was dependent on whether storage was involved and whether the used oil would be reused or recycled was never made until the final agency order was entered. These issues were not raised by the pleadings, were not litigated at the hearing, were not considered by the Hearing Officer, and were not considered by the Hearing Officer's Recommended Order. In addition, the pleadings reflect that DER was asked in a written request for admission to admit the following: 'The Department's only basis for denial of Super Act eligibility for Puckett is that the reported discharge was used oil.' DER admitted that statement. This was the only issue created by the pleadings, and it was the only issue tried and determined by the Hearing Officer. DER cannot raise and decide for the first time in the final agency order issues not previously raised or considered.

    
    

    See Puckett, 549 So.2d at 722 (emphasis in original). The Court then remanded the proceeding to DER for entry of an order determining Puckett to be eligible to apply for reimbursement.

    
    

14. Puckett also petitioned the appellate court for appellate attorney's fees pursuant to Section 120.57(1)(b)5., Florida Statutes, arguing that the Final Order was a "gross abuse" of agency discretion, a standard for granting of appellate attorney's fees under that statutory provision. The Court denied that motion on the basis that gross abuse of agency discretion had not been demonstrated. Although reliance on issues improperly raised for the first time in the Final Order may not have been a "gross abuse" of agency discretion supportive of an award of appellate costs and fees pursuant to the above- referenced statutory provision, it is found that DER has not justified as reasonable its rejection of eligibility on additional non-litigated or properly raised grounds in the Final Order. Therefore, DER's reliance on the new issues in the Final Order to deny reimbursement eligibility was not "substantially justified".

    
    

15. After issuance of the Court's mandate, Puckett filed a petition for costs and fees pursuant to Section 57.111, Florida Statutes, initiating the instant proceeding. DER filed an untimely response conceding that Puckett was a "prevailing small business party" and the other criteria for award of fees and costs provided for in Section 57.111, Florida Statutes, with the exception that it did not concede that its denial of reimbursement eligibility in the related proceeding was not "substantially justified". DER did not dispute that the reasonable amount of costs and fees incurred by Puckett exceeded $15,000.00 nor did it assert that any special circumstances exist which would make an award of costs and fees unjust nor that it was a nominal party only. Since Puckett's petition was not timely responded to and since its Motion for Summary Final Order thereon was not answered by DER, the Hearing Officer issued a Summary

    Final Order awarding $15,000.00 in costs and fees to Puckett. DER appealed and the First District Court of Appeals reversed the award and remanded the proceedings to the Hearing Officer to consider DER's position on the issue of award of fees and costs, based generally upon the Court's view that DER's non- timely response to the petition for fees and costs should be excused, as more particularly delineated in the Court's opinion in Department of Environmental Regulation v. Puckett Oil Company, Inc., 16 FLW D.926 (Fla. 1st DCA April 3, 1991).

    
    

16. The cause involving fees and costs, thus, became at issue before the Hearing Officer once again. In the prehearing filings, the parties limited the issues to that concerning whether DER's action on the reimbursement eligibility question was "substantially justified". On July 30, 1991, a hearing was held on this matter, during which the parties presented their arguments and stipulated that the record in this proceeding would be the record on appeal, including the Hearing Officer's Recommended Order in the reimbursement eligibility case.

    
    

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction of the subject matter of and the parties to this proceeding. Section 120.57(1), Florida Statutes, and Section 57.111(4), Florida Statutes.

    
    

18. Section 57.111(4)(a), Florida Statutes, provides as follows:

    
    

    An award of attorney's fees and costs (including appellate costs) shall be made to a prevailing small business party in any adjudicatory proceeding or administrative proceeding pursuant to Chapter 120 initiated by a state agency, unless the actions of the agency were substantially justified or special circumstances exist which would make the award unjust.

    
    

19. Section 57.111(3)(c), Florida Statutes, provides as follows:

    
    

    A party is a prevailing small business party when a final judgment or order has been entered in favor of the small business party and such judgment or order has not been reversed on appeal or the time for seeking judicial review of the judgment or order has expired.

    
    

20. Section 57.111(3)(b)3., Florida Statutes, provides as follows:

    
    

    A proceeding is initiated by a state agency if the agency: was required by law or rule to advise a small business party of a clear point of entry after some recognizable event in the investigatory or other free form proceeding of the agency.

21. DER has conceded that Puckett is a "small business party", as provided for in Section 57.111(3)(d), Florida Statutes. It also concedes that it was not a nominal party in these proceedings. Section 57.111(4)(d) 1., Florida Statutes.

    
    

22. Puckett has filed itemized statements of costs and fees incurred in the underlying proceedings, together with appropriate supporting affidavits; and those fees and costs exceed the upper limit of $15,000.00 provided for in Section 57.111(4)(d)2., Florida Statutes. DER does not dispute the reasonableness of the costs and fees should Puckett be determined to be entitled to them. Puckett thus satisfies all prerequisites for recovery of fees and costs; and the sole issue for determination herein concerns whether DER's action in the eligibility case was "substantially justified". The determination of this issue requires an assessment of whether the initial rejection of reimbursement eligibility was reasonable and whether the rejection of eligibility in the Final Order, which precipitated the appeal and which involved the employment of new issues by DER in order to deny eligibility which were not raised and litigated before the undersigned Hearing Officer, was reasonable.

    DER bears the burden of proof to show that its rejection of eligibility, both initially and in the Final Order, was reasonable. Miller v. Department of Professional Regulation, Division of Real Estate, 12 FALR 2312 (Final Order on attorney's fees entered May 16, 1990).

    
    

23. DER's decision to impose additional criteria on the statutory definitions of "petroleum" and "petroleum product" was unreasonable, particularly in light of the Legislature's directive to broadly construe eligibility requirements. See Sections 376.3071(12) and 376.315, Florida Statutes (Supp. 1986), and in consideration of the findings and conclusions appearing at pages 18-36 of the Recommended Order in the proceedings conducted on the merits of the eligibility claim of Puckett, which have been adopted and incorporated by reference herein. Perhaps if DER had simply consulted its own expert employees concerning whether used oil is petroleum or a "liquid fuel commodity" made of petroleum (petroleum product), it would not have taken the ad hoc decision to impose additional criteria on the statutory definition of "petroleum" or "petroleum product". However, DER never consulted its own in- house used oil experts to determine whether used oil meets the statutory criteria for reimbursement or whether DER's statutory construction was consistent with already existing agency policy, which it was not. Had DER done so, it might reasonably have construed the eligibility requirements in the first place. See Cosyns v. Florida Department of Professional Regulation, Division of Real Estate, 11 FALR 3948 (Final Order on attorney's fees entered July 3, 1989), a decision turning on the fact that had the agency fully investigated facts known to its own in-house agency investigator, it could have avoided the trouble and expense of the proceeding for all concerned. See also Gentele v. Department of Professional Regulation, Board of Optometry, 9 FALR 310 (Final Order on attorney's fees entered June 20, 1986), which provides that the process used in the agency's decision making must be considered in determining whether the agency acted reasonably.

    
    

24. Knowledge of circumstances and information which could have led DER to make a reasonable construction of the relevant statutory provisions and, therefore, reasonable initial agency action on Puckett's request was readily available to DER; and it did not employ it in its decision making herein. It is, therefore, concluded that DER's initial rejection of reimbursement eligibility had no reasonable basis in law and fact and that its action was not substantially justified.

25. DER has independent concurrent permitting authority, as provided for in Section 373.413, Florida Statutes.

    
    

26. DER's denial of eligibility in its Final Order had no reasonable basis in law or fact. As the Court's opinion indicates, DER had, by its discovery admission, agreed to limit the proceedings to the issue of whether the substance at the site, the used oil, was "petroleum" or a "petroleum product". DER, by its own action, thereby foreclosed consideration of whether the manner of handling the used oil at the site, including the question of the existence of a "petroleum storage system," could serve as grounds for disqualifying the site from reimbursement eligibility. The belated assertion of this issue concerning the lack of a "petroleum storage system" and the legal effect of it, at the Final Order stage, when that issue had never been raised in the record before the Hearing Officer nor litigated before the Hearing Officer and when DER, by its own action, had led Puckett to believe that that issue would not be raised in the proceeding, was unreasonable. Consequently, the action taken in DER's Final Order was not substantially justified either.

    
    

27. The District Court of Appeals' denial of Puckett's request for attorney's fees, pursuant to Section 120.57(1)(b)10., Florida Statutes, which would have necessitated proof that DER's action in necessitating the appeal was a "gross abuse" of discretion does not preclude an award of attorney's fees and costs based upon DER's action in its Final Order being an agency action which was not substantially justified. Pursuant to Section 57.111, Florida Statutes, and the Gentele decision, supra., DER has the burden to show that its actions had a reasonable basis in law and fact. Under Section 57.111, Florida Statutes, Puckett does not have a burden to show a "gross abuse of discretion". Further, the appellate Court, in its order reversing DER's Final Order, wherein it denied the motion for attorney's fees by Puckett, was not considering the reasonableness of DER's initial agency action of denying Puckett reimbursement eligibility nor the question of reasonableness or substantial justification for the position which DER took in the Final Order, wherein DER compounded the unreasonableness of its earlier initial agency action by unreasonably denying eligibility on new unlitigated grounds in that Final Order. DER bears the burden of proving that its actions were substantially justified and it has not met that burden. Accordingly, it must be concluded that the request for fees and costs is justified and it is, therefore,

ORDERED that, having considered the foregoing Findings of Fact and Conclusions of Law, Puckett's petition for attorney's fees and costs in the total amount of $15,000.00 be and the same is hereby granted.

DONE AND ORDERED this 31st day of October, 1991, in Tallahassee, Leon County, Florida.

P. MICHAEL RUFF Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 31st day of October, 1991.

APPENDIX TO FINAL ORDER IN CASE NO. 89-6458F

Petitioner's Proposed Findings of Fact 1-17. Accepted.

Respondent's Proposed Findings of Fact

1-5. Accepted.

1. Rejected as subordinate to the Hearing Officer's findings of fact on this subject matter and as not material to resolution of the relevant issues in this proceeding.

2. Rejected as immaterial.

3. Rejected as immaterial.

4. Rejected as immaterial.

5. Rejected as contrary to the preponderant evidence of record in this proceeding, including the record stipulated in this proceeding from the earlier proceeding at issue.

6. Accepted.

7. Rejected as not entirely in accord with the preponderant evidence of record and the Hearing Officer's findings of fact in the Recommended Order below, admitted into the record in this proceeding, and as immaterial.

8. Rejected as subordinate to the Hearing Officer's findings of fact on this subject matter and as not in accord with the preponderant evidence of record.

9. Rejected as not material based upon the record in this proceeding and the now final findings of fact made in the Recommended Order in the reimbursement entitlement case at issue.

15-16. Accepted but not materially dispositive of the issues presented.

1. Rejected as contrary to the preponderant weight of the evidence and subordinate to the Hearing Officer's findings of fact on this subject matter.

2. Rejected as contrary to the preponderant weight of the evidence and subordinate to the Hearing Officer's findings of fact on this subject matter.

3. Accepted but immaterial at this point in the proceeding given the findings of fact made in the underlying case at issue and the law of the case at this point.

4. Accepted but immaterial at this point in the proceeding given the findings of fact made in the underlying case at issue and the law of the case at this point.

5. Rejected as contrary to the preponderant weight of the evidence and subordinate to the Hearing Officer's findings of fact.

6. Rejected as immaterial, contrary to the preponderant weight of the evidence, and subordinate to the Hearing Officer's findings of fact.

23-26. Rejected as subordinate to the Hearing Officer's findings of fact and not in themselves materially dispositive on the issue of "reasonableness".

1. Rejected as subordinate to the Hearing Officer's findings of fact and as not entirely in accord with the preponderant weight of the evidence and as constituting essentially a conclusion of law.

2. Rejected as irrelevant.

3. Rejected as irrelevant and immaterial.

COPIES FURNISHED:

Carol Browner, Secretary

Department of Environmental Regulation Twin Towers Office Building

2600 Blair Stone Road Tallahassee, FL 32399-2400

Daniel H. Thompson, Esq. General Counsel

Department of Environmental Regulation Twin Towers Office Building

2600 Blair Stone Road Tallahassee, FL 32399-2400

Robert D. Fingar, Esq. HUEY, GUILDAY, ET AL.

P.O. Box 1794 Tallahassee, FL 32302

E. Gary Early, Esq. Department of Environmental

Regulation

Twin Towers Office Building 2600 Blair Stone Road Tallahassee, FL 32399-2400

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

Docket for Case No: 89-006458F

Orders for Case No: 89-006458F