STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AGI SERVICE CORPORATION, )

)

Petitioner, )

)

vs. ) CASE NO. 91-2003

) DEPARTMENT OF AGRICULTURE ) AND CONSUMER SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in this case on July 24, 1991, in Miami, Florida, before J. Stephen Menton, a duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Louis Pascali and

Donato Pascali

Qualified Representatives AGI Service Corporation 1599 West Flagler Street Miami, Florida 33147

For Respondent: James R. Kelly, Esquire

Department of Agriculture and Consumer Services

Room 514, Mayo Building Tallahassee, Florida 32399-0800

STATEMENT OF THE ISSUE

The issue in this case is whether or not Petitioner is entitled to a refund of the bond it posted in lieu of confiscation of allegedly mislabelled gasoline products.

PRELIMINARY STATEMENT

On February 18, 1991, Petitioner issued a Stop Sale Notice to the Respondent after an inspection by the Petitioner allegedly revealed misrepresentations of the nature of the gasoline products being sold by Petitioner. Respondent provided a bond in the amount of $1,000 in lieu of confiscation of the allegedly below standard product in accordance with Section 525.06, Florida Statutes. By letter dated February 27, 1991, Respondent advised Petitioner that it had calculated the amount of product sold at retail to be in excess of $1,000 and informed Petitioner that, pursuant to Section 525.06, Florida Statutes, it intended to levy an assessment for the full amount of the bond posted. Petitioner sought a refund of the bond on the grounds that the

station had recently been purchased and the mislabelling unintentionally took place during the ownership conversion. Petitioner timely requested a hearing on the matter and the case was referred to the Division of Administrative Hearings which noticed and conducted the hearing.

Prior to the commencement of the hearing, the parties were able to stipulate to many of the facts in this case. At the hearing, Petitioner presented the testimony of Louis Pascali and Donato Pascali. Petitioner did not offer any exhibits into evidence.

Respondent presented the testimony of Gene Young, a chemist and administrator of the Respondent's testing laboratory, and James Carpinelli, a field inspector for Respondent. Respondent offered three exhibits into evidence, all of which were accepted.

At the conclusion of the hearing, the parties were advised of their right to file proposed findings of fact and conclusions of law. The parties were granted ten days to determine whether they intended to order a transcript of the proceeding and were advised that proposed findings of fact and conclusions of law were due within ten days of the filing of the transcript or twenty days from the conclusion of the hearing if no transcript was ordered. Counsel for Respondent subsequently notified the undersigned that it did not intend to order a transcript. No posthearing submittals have been received from either party.

FINDINGS OF FACT

1. Petitioner, AGI Service Corporation, owns and operates a Citgo service station located at 1599 West Flagler Street in Miami, Florida. The service station sells regular unleaded, unleaded plus and unleaded premium gasoline to the public.

   
   

2. On February 18, 1991, James Carpinelli, the Respondent's inspector, visited the station to conduct an inspection and obtain samples of the gasoline Petitioner was offering for sale to the consuming public from its tanks and related gasoline pumps.

   
   

3. Mr. Carpinelli took samples of all three types of gasoline offered for sale by Petitioner. The samples were forwarded to the Respondent's laboratory and were tested to determine whether they met Departmental standards for each type of gasoline.

   
   

4. The Petitioner's "premium unleaded" pump indicated the octane or Anti Knock Index of the gasoline was 93. The "regular unleaded" pump indicated that the octane level was 87. The laboratory analysis of the samples revealed that the octane level of the gasoline taken from the "premium unleaded" pump was

   87.4. The octane level of the gasoline taken from the "regular unleaded" pump was 93.0. Upon discovering the discrepancy in the octane levels, the Respondent seized the gasoline and immediately allowed the Petitioner to post a bond in the amount of $1,000. Upon the posting of the bond, the product was released back to the possession of the Petitioner and was allowed to be sold after the pumps were relabelled.

   
   

5. Petitioner acquired ownership of the service station four days prior to the time of the inspection.

   
   

6. At the time they opened the station, the new owners labelled the pumps based upon the information provided to them by the prior owners. The new owners

   had limited experience in the petroleum business and followed the guidance of the prior owners regarding labelling the pumps. It is clear that the pumps were inadvertently mislabelled based upon the information provided by the prior owners.

   
   

7. The new owners sold "premium unleaded" at the price of "regular unleaded" and visa versa. Because more "premium unleaded" was sold at the price for regular, Petitioner lost money as a result of the mislabelling.

   
   

8. The Department seeks to assess the full amount of the bond against the Petitioner in this proceeding.

   
   

9. Respondent calculated the number of gallons of mislabelled gasoline that was sold based upon a delivery date of February 13, 1991. Those calculations indicate that 2,498 gallons were sold at a price of $1.259 per gallon. However, Respondent's calculations appear to begin at a time prior to Petitioner's ownership of the station. No evidence was presented as to how many gallons were sold while Petitioner owned the station. In addition, it is not clear when the mislabeling was done. Thus, no clear evidence was presented as to how many mislabeled gallons were sold by Petitioner.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction of the parties to and the subject matter of these proceedings. Section 120.57(1), Florida Statutes (1989).

    
    

11. Section 525.02 authorizes the Respondent to collect samples of any gasoline or similar products offered or exposed for sale in this State. Those samples are to be tested and analyzed by a chemist who prepares a report to Respondent.

    
    

12. Section 525.06, Florida Statutes, provides:

    
    

    All oils . . . that shall fall below the standard fixed by the Department of Agriculture and Consumer Services, are declared illegal and shall be subject to confiscation and sale by order of the Department. Instead of confiscation, a refundable bond in cash or by certified check in the amount of the value of the product subject to confiscation may be accepted by the Department, pending legal disposition.

    The amount of this bond shall be limited to

    $1,000. If any of the product has been sold to retail customers, the Department is authorized to make an assessment equal to the retail value of the product sold, not to exceed $1,000.

    
    

13. Rule 5F-2.001(1)(i) prohibits the sale of gasoline that is more than

    1.0 less than the Anti Knock Index displayed on the dispenser. Rule 5F- 2.002(1)(c), Florida Administrative Code provides that if there is a deviation of more than 2.0 in the Anti Knock Index, an owner is subject to the penalties set forth in Section 525.06, Florida Statutes.

14. The evidence in this case established that the pumps at Petitioner's service station were inadvertently mislabelled and "regular" gasoline was sold as "premium" and visa versa. The mislabelling in this case was unintentional and Petitioner actually lost money as a result of the mislabelling.

    
    

15. It is clear that Petitioner has violated Section 525.06, Florida Statutes, by selling mislabelled gasoline. While the statute authorizes the Respondent to either confiscate the subject product or demand a bond in lieu of confiscation and to make an assessment equal to the retail value of the products sold, the statute does not make an assessment mandatory. See, Department of Agriculture and Consumer Services v. Lewis Oil Company, Inc. (Suwanee), DOAH Case No. 90-6467, Final Order entered May 31, 1991.

    
    

16. The evidence in this case did not establish how many mislabeled gallons of gasoline were sold while Petitioner owned the station. In the absence of any evidence on this issue, and in light of the circumstances surrounding the mislabelling, it is recommended that the Respondent not impose an assessment in this case. See, D & H Oil and Gas Company, Inc. d/b/a Oasis Food Store v. Department of Agriculture & Consumer Services, DOAH Case No. 90- 6468, Final Order entered June 19, 1991.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Department of Agriculture and Consumer Services enter a

Final Order granting the request of the Respondent for a refund of the bond posted and that the Department rescind its assessment in this case.

DONE and ENTERED this 4th day of October, 1991, at Tallahassee, Florida.

J. STEPHEN MENTON 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 4th day of October, 1991.

COPIES FURNISHED:

LOUIS PASCALI AND DONATO PASCALI

QUALIFIED REPRESENTATIVES AGI SERVICE CORPORATION 1599 WEST FLAGLER STREET MIAMI, FL 33147

JAMES R. KELLY, ESQUIRE DEPARTMENT OF AGRICULTURE

AND CONSUMER SERVICES ROOM 514, MAYO BUILDING TALLAHASSEE, FL 32399-0800

HONORABLE BOB CRAWFORD COMMISSIONER OF AGRICULTURE DEPARTMENT OF AGRICULTURE AND

CONSUMER SERVICES THE CAPITOL, PL-10

TALLAHASSEE, FL 32399-0810

RICHARD TRITSCHLER, GENERAL COUNSEL DEPARTMENT OF AGRICULTURE AND

CONSUMER SERVICES

515 MAYO BUILDING TALLAHASSEE, FL 32399-0800

BRENDA HYATT, CHIEF

BUREAU OF LICENSING & BOND DEPARTMENT OF AGRICULTURE AND

CONSUMER SERVICES

508 MAYO BUILDING TALLAHASSEE, FL 32399-0800

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 91-002003

Orders for Case No: 91-002003