STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HUGHES SUPPLY, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 91-8334

) DEPARTMENT OF ENVIRONMENTAL ) REGULATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Upon due notice, this cause came on for hearing on June 10, 1992, in Orlando, Florida, before William R. Cave, a duly assigned Hearing Officer of the Division of Adminis trative Hearings.

APPEARANCES

For Petitioner: Scott E. Wilt, Esquire

Maguire, Voorhis and Wells

2 South Orange Plaza Orlando, Florida 32801

For Respondent: Brigette A. Ffolkes, Esquire

Department of Environmental Regulation

2600 Blair Stone Road Tallahassee, Florida 32399-2400

STATEMENT OF THE ISSUE

Whether Petitioner's site, Hughes Supply, Inc. located at 2920 Ford Street, Fort Myers, Lee County, Florida is eligible for restoration under Section 376.3072, Florida Statutes.

PRELIMINARY STATEMENT

On November 19, 1991, the Respondent, State of Florida Department of Environmental Regulation (Department) issued an order denying Petitioner, Hughes Supply, Inc. (Hughes) eligibility in the Florida Petroleum Liability Insurance and Restoration Program (FPLIRP) established in accordance with Section 376.3072, Florida Statutes. For a site owned by Hughes and located in Ft.

Myers, Florida. The order was issued in response to a Discharge Notification Form showing August 30, 1991, as the date of discovery of a petroleum discharge. Hughes timely filed a petition for administrative hearing challenging the Department's order and this proceeding ensued.

At the hearing, Hughes presented the testimony of Larry Carman, Phillip Ross, Greg Roberts and Fred E. Kendall. Hughes' exhibits 1 through 11 were received as evidence. The Department presented the testimony of Larry Carman, William Trueman and Steve Hooper. Department's exhibits 1 through 3 were received as evidence. Chapters 17-661 and 17-769, Florida Administrative Code, were officially recognized in accordance with Rule 22I-6.020, Florida Administrative Code.

A transcript of this proceeding was filed with the Division of Administrative Hearings on June 29, 1992. The parties jointly requested an extension of time for filing their Proposed Recommended Order which was granted by order dated July 10, 1992 with the understanding that the time frame for entry of a Recommended Order set out under Rule 28-5.402, Florida Administrative Code, was waived in accordance with Rule 22I-6.031(2), Florida Administrative Code. The parties timely filed their Proposed Recommended Order under the extended time frame. A ruling on each proposed finding of fact has been made as reflected in an Appendix to the Recommended Order.

FINDINGS OF FACT

Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made:

1. Hughes is a Florida Corporation in good standing and authorized to do business in the State of Florida.

   
   

2. The Department's facility no. 36-8519331 (the Facility), owned and operated by Hughes and the subject matter of this proceeding, is located at 2920 Ford Street, Ft. Myers, Lee County, Florida, and is a "Facility" as defined in Section 376.301(5), Florida Statutes.

   
   

3. The Facility consisted of (a) two underground storage tanks (USTs), one 4000 gallons UST (gasoline tank) and one 8000 gallons UST (diesel tank), and (b) four monitoring well, and is a "petroleum storage system" as defined in Section 376.301(15), Florida Statutes.

   
   

4. At all times material to this proceeding, Hughes held, and was the name insured of, an effective third party pollution liability insurance policy (No. FPL 7622685 - Renewal No. FPL 7621566) applicable to the Facility that was issued in accordance with, and qualified under, Section 376.3072, Florida Statutes. Hughes paid annual premiums exceeding $20,000.00 for the above insurance.

   
   

5. In accordance with Sections 376.3072, Florida Statutes, and Chapter 17- 769, Florida Administrative Code; the Department issued to Hughes a Notice of Eligibility pertaining to the Facility and the third party pollution liability insurance referred to in Finding of Fact 4 above.

   
   

6. Lee County, Florida has a local program approved by the Department pursuant to Section 376.3073, Florida Statutes, to provide for the administration of the Department's responsibilities under certain sections of Chapter 376, Florida Statutes.

   
   

7. Diesel fuel was placed into the diesel tank at the Facility on August 12, 1991, and no diesel fuel has been placed in the diesel tank at the Facility since that date.

8. On Thursday, August 29, 1991, a contractor bidding on the removal of the tanks detected free product in one of the monitoring wells at the Facility and told Larry Carman, the Warehouse Manager for Hughes. Mr. Carman told Phillip Ross, the Branch Manager for Hughes, who in turn informed Gene Kendall, the Operations Coordinator for Hughes. All of this occurred on August 29, 1991.

   
   

9. On Friday, August 30, 1991, an employee of IT Corporation, acting upon the request of Gene Kendall, sampled the four monitoring wells at the Facility and found six inches of free product in the northwest monitoring well.

   
   

10. On Tuesday, September 3, 1991, Fred Kendall discussed the discharge with Bill W. Johnson, Supervisor, Lee County Storage Tank Local Program. During this discussion, Johnson learned that the diesel tank had not been emptied. Johnson advised Kendall that the diesel tank had to be emptied of its product and placed out of service.

    
    

11. On Tuesday, September 3, 1991 Mr. Kendall completed the Discharge Reporting Form (DRF) pertaining to the discharge and mailed the DRF to Johnson on September 4, 1991. The DRF indicated August 30, 1992, the day that IT Corporation confirmed the discharge, as the day of discovery of the discharge. The discharge was diesel fuel as indicated by the DRF and a "petroleum product" as defined in Section 376.3-1(14), Florida Statutes.

    
    

12. The discharge reported in the DRF constitutes a "discharge" as defined in Section 376.301(4), Florida Statutes, which constitutes an "incident" as defined in Section 376.3072(2)(c), Florida Statutes, and as described in Rule 17-769.600, Florida Administrative Code.

    
    

13. On Wednesday, September 4, 1991, Mr. Kendall also mailed a letter to Johnson stating Hughes' intent to seek restoration coverage for the Facility, pursuant to Policy No. FPL 762285, Renewal No. FPL 7621566.

    
    

14. On September 13, 1991 when Hooper, Inspector for the Lee County Storage Tank Local Program, inspected the Facility the diesel tank contained a total of 39 5/8 inches of diesel and water, of which 4 3/4 inches was water.

    
    

15. On September 16, 1991 when Hooper again inspected the Facility, the diesel tank contained a total of 36 1/2 inches of diesel and water, of which 4 1/2 inches was water. On this date, Hooper advised Hughes that the diesel tank had to be emptied of its product. The inspection report issued on September 16, 1991 by Hooper advised Hughes that the Facility was not in compliance with Chapter 17-761, Florida Administrative Code.

    
    

16. On September 17, 1991, Hughes had the diesel tank emptied of all its product.

    
    

17. Although Hughes was in the process of emptying the diesel tank by giving diesel away, at no time between August 30, 1991 and September 16, 1991 was the diesel tank completely empty of its product.

    
    

18. Between August 30, 1991 and September 16, 1991 Hughes did not test the diesel tank to determine if the diesel tank was leaking and, if so, to pinpoint the source of the leak.

    
    

19. There was no evidence that either the Department or Lee County Storage Tank Local Program personnel ever informed Hughes before September 16, 1991 that there was a time frame within which the diesel tank had to be emptied of all of

    its product, and placed out of service in order for Hughes to be in compliance and eligible for reimbursement for restoration under the FPLIRP. Likewise, Hughes did not request any information from the Department or the Lee County Local Program personnel concerning any time frames within which the diesel tank had to be tested for leaks or emptied of its contents to prevent any further discharge in order to be eligible for reimbursement for restoration under the FPLIRP.

    
    

20. Between August 29, 1991 and September 17, 1991 Hughes bailed the monitoring wells at the Facility on a daily basis, removed the free product from the monitoring wells, and placed the free product in a sealed 55-gallon drum.

    
    

21. When the discharge was discovered, Hughes made the decision to close the Facility by tank removal, and at this point did not intend to repair or replace the Facility.

    
    

22. As a result of an inspection of the Facility by the Lee County Local Program personnel in May, 1991, Hughes was made aware that the Facility was not in compliance with Chapter 17-761, Florida Administrative Code, since the gasoline tank had not been used in over three years, and there had been no closure of the gasoline tank. This noncompliance with Chapter 17-761, Florida Administrative Code, concerning the gasoline tank was also a portion of the noncompliance report filed by Hooper on September 16, 1991. The gasoline tank comes within the definition of "unmaintained" as defined by Rule 17-761.200(2), Florida Administrative Code.

    
    

23. Both the diesel tank and the gasoline tank were removed on October 28, 1991 by a Florida licensed storage tank system removal contractor, and the Facility permanently closed by IT Corporation on October 29, 1991.

    
    

24. In December, 1991, Hughes filed a tank closure assessment report pertaining to the removal of the diesel and gasoline tanks from, and closure of, the Facility. The tank closure assessment report was prepared by IT Corporation upon a request made by Hughes to IT Corporation on September 3, 1991 for a tank closure assessment proposal which was submitted by IT Corporation to Hughes on September 4, 1991.

    
    

25. In April or May, 1992, Hughes filed with Lee County a contamination assessment report prepared by IT Corporation pertaining to the removal of the USTs from and closure of the Facility.

    
    

26. Subsequent to discovery of the discharge. Hughes has expended approximately $60,000.00 as of June 10, 1992, on the Facility in connection with the USTs.

    
    

27. Site rehabilitation costs for the Facility have been estimated in a range of $220,000.00 to $245,000.00 as of June 10, 1992.

    
    

28. In the early part of 1991 water was present in the diesel tank, and approximately six months before discovering the discharge in August, 1991, Hughes had the water pumped out of the diesel tank. Hughes gave no explanation for the presence of water in the diesel tank. Neither the Department nor the Lee County Local Program personnel were notified of this unexplained presence of water in the diesel tank.

    CONCLUSIONS OF LAW

    
    

29. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this cause pursuant to Section 120.57 (1), Florida Statutes.

    
    

30. The Department is the agency charged with the duty to administer and enforce Chapter 376, Florida Statutes.

    
    

31. Section 376.3072(1), Florida Statutes, created the FPLIRP and in pertinent part provides as follows:

    
    

    The program must provide third-party liability insurance to qualified participants for incidents of inland contamination related to the storage of petroleum products regulated by department rules pertaining to storage tanks adopted pursuant to s. 376.303, and must provide restoration for eligible sites in the liability insurance program or for sites which are eligible for self- insurance under the provisions of this section. (Emphasis supplied)

    
    

32. Therefore, while an owner or operator may be eligible to participate in the FPLIRP, each site for which an owner or operator seeks restoration under the FPLIRP must be shown to be eligible for restoration under the liability insurance program.

    
    

33. Section 376.3072(2), Florida Statutes, provides that in order for a particular site at which an incident has occurred to be eligible for restoration, the owner or operator of that particular site must be a participant in the third-party insurance program or meet the self-insurance requirements of eligibility of Section 376.3072, Florida Statutes. However, where the owner or operator of a particular site is subject to Chapter 376, Florida Statutes, and applicable rules relating to petroleum storage systems or petroleum contamination site cleanup adopted pursuant to Section 376.303, Florida Statutes, as an additional requirement of eligibility for restoration under the FPLIRP with respect to a particular site, Section 376.3072(3)(a), Florida Statutes, requires that the particular site be in substantial compliance with Chapter 376, Florida Statutes, and applicable rules relating to petroleum storage systems or petroleum contamination site cleanup adopted pursuant to Section 376.303, Florida Statutes. Additionally, Section 376.3072(3)(a), Florida Statutes, requires that in order for the owner or operator of that particular site to be eligible to participate in the FPLIRP, the owner or operator must file an affidavit stating that the owner or operator has read and is familiar with Chapter 376, Florida Statutes, and the rules relating to petroleum storage systems or petroleum contamination site cleanup adopted pursuant to Section 376.303, Florida Statutes.

    
    

34. Where the owner or operator of a petroleum storage system is eligible to participate in the FPLIRP, Section 376.3072(2), Florida Statutes, requires that the owner or operator must, upon discovery of evidence of a discharge of petroleum product at the facility, drain, and remove from service the suspected petroleum storage system, if necessary, and complete initial remedial action as defined by Department rules in order to participate in the restoration program.

35. Based on the evidence presented at the hearing, it was necessary for Hughes to drain and remove from service the diesel tank in question to prevent any further discharge. Particularly, in view of the fact that Hughes made no test to determine if the diesel tank was leaking and, if so, where the leak was located so that enough diesel could be removed to get below the leak in the diesel tank and prevent any further discharge.

    
    

36. From a thorough reading of Section 376.30, Florida Statutes, wherein the legislature expresses its intent relating to Sections 376.30 - 376.319, Florida Statutes, it is clear that the legislature intended for the Department to move expeditiously in order to contain spills, discharges and escapes of pollutants that occur as a result of procedures taken by private and governmental entities involving the storage, transportation, and disposal of such pollutants. The authority expressed in Section 376.30(3), Florida Statutes, for the Department to require prompt containment and removal of such pollutants is a specific expression of that intent. The requirement set out in Section 376.305(1), Florida Statutes, that any person discharging pollutants as prohibited by Section 376.30 - 376.319, Florida Statutes, shall immediately undertake to contain, remove and abate the discharge to the satisfaction of the Department, is a further expression of that legislative intent. In furtherance of that legislative intent and pursuant to the authority granted under Sections

    376.303 and 376.3072(10)(a), Florida Statutes, the Department adopted Chapters 17-761 and 17-769 Florida Administrative Code. Chapter 17-761, Florida Administrative Code, was adopted to provide standards for construction, installation, maintenance, registration, removal and disposal of underground storage tank systems and is designed to bring about compliance with the requirements of Chapter 376, Florida Statutes, while Chapter 17-769, Florida Administrative Code, was adopted to establish separate eligibility requirements for the insurance program and the restoration program , and to establish procedures and documentation required to participate in the FPLIRP.

    
    

37. Rule 17-769.400, Florida Administrative Code, pertains to the eligibility requirements for participation in the Florida Petroleum Liability Insurance Program, while Rule 17-769.600, Florida Administrative Code, pertains to the eligibility requirements for participation in the restoration program. In that regard, Rule 17-769.600(14)(15) and (16), Florida Administrative Code, provides as follows:

    
    

    1. The participating owner or operator shall maintain compliance with the rules of the Department for stationary tanks established pursuant to Section 376.303, F.S., including Chapters 17-61, 17-761 and 17-762, F.A.C. In order for any individual incident to be covered under the restoration program, the participating owner or operator shall file a Discharge Reporting Form with the Department within 24 hours of discharge.

       Restoration coverage will be determined on an incident by incident basis.

       
       

    2. In order to eligible for the restoration program, the participating owner or operator shall, within 3 days of discovery of a discharge, test or empty the petroleum storage system or leaking component of product. If the system is found to be

       leaking, the owner or operator shall within 3 days remove the petroleum storage system from service until it has been tested, and if found to be leaking, either repaired or replaced.

       
       

    3. In order to be eligible for the restoration program, the participating owner or operator shall, within 3 days of discovery of a discharge, take steps to obtain cleanup services, and within 30 days of discovery of a discharge, initiate recovery of free product at the site. Recovery of all free product shall be completed in accordance with the cleanup criteria rule established pursuant to Section 376.3071, F.S., Chapter 17-770, F.A.C.

       
       

38. Since it was Hughes' decision to remove the diesel tank rather than test the diesel tank and either repair and replace the diesel tank, it was incumbent upon Hughes to empty the diesel tank of all its product within 3 days of discovery of the discharge. While 3 days may be a short period of time to accomplish this task, the rule follows the legislative intent of Chapter 376, Florida Statutes, requiring prompt and immediate action to contain, remove, and abate the discharge. Furthermore, Hughes should have been aware of the time frame set out in this rule since the affidavit required by Section 376.3072(3)(a), Florida Statutes, for eligibility in the insurance and restoration program required familiarity with Chapter 376, Florida Statutes, and applicable rules relating to petroleum storage systems and petroleum contamination site cleanup.

    
    

39. Since Rule 17-769.600(14), Florida Administrative Code, requires compliance with Chapter 17-761, Florida Administrative Code, in order to be covered under the restoration program, it is necessary to determine if the Facility was in compliance. Section 376.305(1), Florida Statutes, as well as Rule 17-761.800(2), Florida Administrative Code, require the owner or operator of a facility discharging a regulated substance to immediately undertake to contain, remove, and abate the discharge. While the word "immediately" is not defined by the statute or the rule, the common meaning can be found in the dictionary. Webster's Encyclopedic Dictionary of the English Language, 1990 Edition, defines "immediately" in its temporal application to mean "at once, with no intervening lapse of time". The evidence clearly shows that Hughes did not immediately undertake to contain, remove, and abate the discharge.

    
    

40. Rule 17-761.800(3), Florida Administrative Code, requires the owner or operator of a petroleum storage system to report certain suspected releases within one working day of discovery. One such reportable suspected release is any unexplained presence of water in the tank. Rule 17-761.800(3)(b), Florida Administrative Code. Approximately six months prior to the August 30, 1991 discharge, Hughes observed the presence of unexplained water of such quantity in the diesel tank that it required the removal of the water from the diesel tank and the placing of a devise on the pump to filter out water. This unexplained presence of water in the diesel tank was not reported in accordance with Rule

    17-761.460, Florida Administrative Code, nor was there any evidence that the presence of the water was the result of the equipment being defective but not leaking which was immediately repaired or replaced. While the unexplained presence of water in the diesel tank was evidence of a discharge, Hughes failed

    to remove the regulated substance and repair the tank to prevent further release or to close the tank, all in accordance with Rule 17-761.820(1), Florida Administrative Code. Instead, Hughes placed more diesel in the diesel tank on August 12, 1991. Again, there is evidence of Hughes' failure to comply with Chapter 17-761, Florida Administrative Code.

    
    

41. Rule 17-761.800(2)(a), Florida Administrative Code, requires that owner of unmaintained storage tank system permanently close the system within 90 days of the effective date of this rule or of discovery of the existence of the unmaintained storage tank system. Rule 17-761.800(2)(d), Florida Administrative Code, requires the closure of a storage tank system after the removal of all liquid and accumulated sludges either by having the tank removed from the ground by a certified contractor or by filling it with a solid inert material of sufficient density to prevent a structural collapse of the closed system. Since Hughes was made aware of the unmaintained gasoline storage tank in May, 1991, closure should have been accomplished by August, 1991. This gasoline tank was not closed until October 28, 1991 along with the diesel tank. Again, there is further evidence of noncompliance with Chapter 17-761, Florida Administrative Code.

    
    

42. Hughes, as the party asserting the affirmative of an issue before an administrative tribunal, has the burden to prove by a preponderance of the evidence that Hughes is entitled to participate in the restoration program under the FPLIRP and to be reimbursed for the restoration of the Facility. Florida Department of Transportation v. J. W. C. Co., Inc., 396 So.2d 778 (1 DCA Fla. 1981). Hughes has failed to sustain its burden in this regard.

RECOMMENDATION

Based upon the foregoing findings of fact and conclusions of law, it is recommended that the Department enter a Final Order denying Hughes application for restoration coverage under the Florida Petroleum Liability Insurance and Restoration Program.

DONE and RECOMMENDED this 24th day of September, 1992, at Tallahassee, Florida.

WILLIAM R. CAVE, 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 24th day of September, 1992.

APPENDIX TO RECOMMENDED ORDER IN CASE NO. 91-8334

The following constitutes my specific rulings, pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties in this case.

Rulings on Proposed Findings of Fact Submitted by the Petitioner

1. The following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parenthesis is the Finding(s) of Fact which so adopts the Proposed Finding(s) of Fact:(1); 2-3(2); 4-5(3); 6- 8(4); 9(5); 10(6); 11(8,9); 12(10,11); 14(15,22); 15(10); 16(19); 18(10); 19(13); 20-21(7); 22-23(24); 24(21); 25(17); 26-29(20); 30(15); 31(16); 32(22); 33(23); 35(23); 36(7); 37(23); 38(24); 39(25); 40(26); 41(27); 42-43(27); and 44(15,22).

   
   

2. Proposed Findings of Fact 13, 17 and 34 are neither material nor relevant to the conclusion reached in the Recommended Order.

Rulings on Proposed Findings of Fact Submitted by the Respondent

1. The following Proposed Findings of Fact are adopted in substance as modified in the Recommended Order. The number in parenthesis is the Finding(s) of Fact which so adopts the Proposed Finding(s) of Fact:1-2(2); 3(3); 4-6(5); 7(6); 8(22); 9(7); 10(8); 11(9); 12(10); 13-16(11); 17(12); 18(13): 19(18); 20(17); 21-22(14); 23-24(15); 25-26(28); 27(16); and 28(23).

COPIES FURNISHED:

Scott E. Wilt, Esquire Maguire, Voorhis and Wells

2 South Orange Plaza Orlando, Florida 32801

Brigette A. Ffolkes, Esquire Department of Environmental

Regulation

2600 Blair Stone Road Tallahassee, Florida 32399-2400

Carol Browner, Secretary Department of Environmental

Regulation

2600 Blair Stone Road Tallahassee, Florida 32399-2400

Daniel H. Thompson, Esquire General Counsel

Department of Environmental Regulation

2600 Blair Stone Road Tallahassee, Florida 32399-2400

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.

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DEPARTMENT OF ENVIRONMENTAL REGULATION

HUGHES SUPPLY, INC.,

DER Facility No. 368519331,

Petitioner, OGC CASE NO. 91-2376 DOAH CASE NO. 91-8334

vs.

STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION,

Respondent.

/

FINAL ORDER

On September 24, 1992, a Hearing Officer from the Division of Administrative Hearings submitted his Recommended Order to the Department of Environmental Regulation ("Department") and to Petitioner, Hughes Supply, Inc. ("Hughes"). A copy of the Recommended Order is attached as Exhibit A. The Hearing Officer recommended that the Department deny Hughes' application for restoration coverage under the Florida Petroleum Liability Insurance and Restoration Program ("PLIR") established by Section 376.3072, Florida Statutes. On October 9, 1992, Hughes submitted timely exceptions to the Recommended Order, and on October 19, the Department submitted its response to Hughes' exceptions. The matter is now before me as Secretary of the Department for final agency action.

BACKGROUND

Hughes is owner and operator of a facility located in Fort Myers, Florida, which at all times material to this proceeding consisted of an 8000-gallon underground storage tank ("diesel tank"), a 4000-gallon underground storage tank ("gasoline tank"), and four monitoring wells. Following detection of free product on or about August 30, 1991, in one of the monitoring wells, Hughes submitted a Discharge Reporting Form to the Lee County storage tank local

program. In response to the filing of this form and other communications between Hughes and Lee County, an inspector for Lee County conducted an inspection of the facility on September 13 and 16, 1991 (Lee County conducted compliance inspections and performed administrative services in connection with underground tanks regulation pursuant to contractual arrangements with the Department). As a result of the findings made during this inspection and an earlier inspection conducted in May of 1991, the Department determined the site to be ineligible for participation in the PLIR restoration program, notifying Hughes of this determination by letter dated November 19, 1991. (Petitioner's Exhibit No. 11)

A timely request for administrative hearing was filed by Hughes, and the matter was referred to the Division of Administrative Hearings. A hearing was held on June 10, 1992, and on September 24, 1992, the Hearing Officer entered his Recommended Order recommending that the facility be found ineligible for restoration coverage. That recommendation was based on findings and conclusions by the Hearing Officer that Hughes had failed to comply with applicable statutes and rules of the Department in at least three significant respects and therefore as a matter of law was not entitled to coverage. Specifically, the Hearing Officer found that Hughes was required to drain the diesel tank and remove it from service within three days of discovery of the discharge, but that instead Hughes had continued to dispense fuel from the tank and had failed to test or drain the tank until after the September 16, 1992 inspection found it to be in noncompliance; that approximately six months prior to the reported discharge, Hughes had become aware of the unexplained presence of significant quantities of water in the diesel tank, but had failed to report this finding as a suspected release and had failed to take any necessary corrective action with respect thereto; and finally, that the unmaintained gasoline tank had not been properly closed within the time provided by law, despite the fact that Hughes had been notified by Lee County of the requirements for such closure. These findings and conclusions by the Hearing Officer form the basis for the exceptions filed by Hughes.

RULINGS ON EXCEPTIONS

Hughes has filed 27 numbered exceptions relating to various aspects of the Hearing Officer's recommendation that it be found ineligible for restoration coverage. In order to facilitate logical analysis of and rulings on these exceptions, they will be grouped, where possible, according to the issues they present. In ruling on these exceptions, I should note at the outset that I may not reject findings of fact made by the Hearing Officer unless they are unsupported by any competent substantial evidence in the record. Section 120.57(1)(b)10., Florida Statutes.

1. Exceptions to Findings and Conclusions Regarding Hughes' Failure to take Action in Response to the Unexplained Presence of Water in the Diesel Tank (Hughes' Exceptions No. 1 2, 3, 4, 5, 6, and 7)

   
   

   In Finding of Fact No. 28 (Recommended Order at 8) and Conclusion of Law No. 40 (Recommended Order at 13-14), the Hearing Officer found that approximately six months prior to the August 30, 1991 discharge, Hughes had observed the presence of unexplained water in the diesel tank of such quantity that it required the removal of the water from the tank and the placing of a filtration device on the pump. He further found that this unexplained presence of water was not reported in accordance with Rule 17-761.40, Florida Administrative Code; that Hughes failed to remove the regulated substance and

   repair the tank or close the tank as required by Rule 17-761.820(1), Florida Administrative Code; and that Hughes had instead placed more diesel fuel in the tank on August 12, 1991. These findings were not part of the Department's November 19, 1991 letter of ineligibility (Petitioner's Exhibit No. 11), but were based on the testimony at hearing of Larry Carman Hughes' warehouse manager, and Steve Hooper, inspector for the Lee County tanks program. (T. 29, 93-94, 139-45) However, Hughes takes issue with these findings from an evidentiary standpoint for several reasons.

   
   

   In its first three exceptions, Hughes relies on a request for admission served by it on April 20, 1992, which was admitted by the Department:

   
   

   22. Other than as reported in the DRF [Discharge Reporting Form, Petitioner's Exhibit No. 1], Respondent has no evidence that any other or any further discharge or suspected release of a pollutant occurred on, at or from the Facility.

   
   

   The essence of Hughes' argument is that this admission by the Department precluded the Hearing Officer from considering evidence or entering a finding with regard to the earlier presence of water in the diesel tank. According to this logic, any such evidence would have been offered to show a different discharge or suspected release than the one evidenced on August 30, 1991, and the receipt of such evidence was therefore precluded by the admission.

   
   

   I do not find these arguments to be persuasive. First of all, the request clearly shows on its face that it refers to evidence in the possession of the Department as of the date the admission was made, which was May 15, 1992. The administrative hearing held June 10, 1992 under Section 120.57, Florida Statutes, was a de novo proceeding that had as its purpose the formulation of agency action, not the review of agency action previously taken. Florida Department of Transportation v. J.W.C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA 1981). As such, evidence considered by the Department in making its preliminary determination that the necessary conditions for coverage were not met could be supplemented by additional evidence offered by either party that related to the presence or absence of other violations or instances of noncompliance at the facility. Obviously, an exception might apply on grounds of fundamental fairness or unfair surprise if a party wrongfully failed to disclose evidence in its possession in response to a discovery request, but no such issue has been raised in the instant case. The Hearing Officer could lawfully base findings of fact and conclusions of law on such additional evidence, provided it was competent, substantial and credible.

   
   

   It should also be noted that on June 5, 1992, the parties entered into a Joint Prehearing Statement that, in Paragraph 11, quoted Hughes' requested admission verbatim and listed it under the category of "disputed facts." It would thus appear that the matter was again placed into issue by the express consent of the parties, see Southern Railway Co. v. Wood, 171 So.2d 614 (Fla. 1st DCA 1965), a conclusion bolstered by the fact that Mr. Hooper's testimony was not objected to on the basis of the purported admission at the time it was given. See Swan v. Florida Farm Bureau Ins. Co., 404 So.2d 802 (Fla. 5th DCA 1981); DeLuca v. State, 384 So.2d 212 (Fla. 4th DCA 1980), rev. den., 389 So.2d

   1108 (Fla. 1980).

   
   

   Based on the foregoing, I find that the Hearing Officer properly considered Hughes' failure to take any required action in response to a reportable incident

   as part of his determination that the facility was not in compliance with applicable statutes and Department rules and therefore not entitled to restoration coverage. However, even if I were to find that the Hearing Officer erred in considering this evidence and making these findings and conclusions, such error would be harmless because the remaining violations and instances of noncompliance found to exist by the Hearing Officer would be sufficient to disqualify Hughes from restoration coverage for the site, as is discussed further in the remainder of this Final Order.

   
   

   Hughes also argues error on the part of the Hearing Officer in basing his findings regarding the prior presence of water in the diesel tank on a set of inspectors' field notes that were never admitted into evidence. The record discloses that the notes in question were marked as Respondent's Exhibit No. 3 for identification and were used for the purpose of refreshing the recollection of Mr. Hooper regarding past communications he had had with Hughes' representatives about the large amounts of water they had been removing from the tank, and whether the amount of water they had been pouring off the filter might be equal to the amount of water getting into the tank. (T. 139-45) While the Hearing Officer did err in reciting that Respondent's Exhibit No. 3 had been admitted into evidence, that error is harmless because his findings in this regard are based on the direct testimony of Mr. Hooper rather than the contents of the notes.

   
   

   Finally, Hughes argues in Exception No. 6 that the testimony of Larry Carman established that the waters in the tank was caused by condensation, and therefore its presence was not unexplained. However, review of the transcript makes clear that Hughes' counsel successfully objected to Mr. Carman offering an opinion in that regard because he had not been qualified as an expert. (T. 93-

   94) The Hearing Officer did permit him to answer, if he could, on the basis of personal knowledge:

   
   

   HEARING OFFICER: If you know where it came from, say it.

   
   

   MR. CARMAN: I don't. I have no idea, absolutely no idea. (T. 94)

   
   

   Based on the foregoing, Hughes' Exceptions No. 4 and 5 are granted to the limited extent of correcting the Recommended Order to reflect that the field notes marked for identification as Respondent's Exhibit No. 3 were not received in evidence. In all other respects, Hughes' Exceptions No. 1-7 are rejected.

   
   

2. Whether Hughes Demonstrated Substantial Compliance with Applicable Statutes and Rules of the Department (Hughes' Exceptions No. 8, 9, 10, 11, 14, 18, 20, 21, and 27.

   
   

   In these exceptions, Hughes emphasizes the various actions that it did take in accordance with various provisions of Chapter 376, Florida Statutes, and Chapters 17-761 and 17-769, Florida Administrative Code, asserting that the instances of noncompliance found by the Hearing Officer were insubstantial.

   Specifically, it argues that waiting until September 17, 1991, to empty the diesel tank constituted substantial compliance as a matter of law with Rule 17- 769.600(15), Florida Administrative Code (requiring testing or emptying the petroleum storage system within three days of discovery of a discharge). Hughes also argues that it substantially complied with Rule 17-769.600(15) by giving away free diesel fuel from September 3, 1991, through September 16, 1991, and then emptying the tank on September 17, 1991, after it had been advised as a

   result of the compliance inspection conducted by Lee County that it was not in compliance with Rule 17-769.600(15). Regarding the abandoned gasoline tank, Hughes argues that removing that tank on October 28, 1991, instead of by August 8, 1991, as directed by Lee County in May of 1991 constitutes substantial compliance (the August 8 date represented an extension granted by the County after Hughes failed to comply with the original requirement of removal by March 9, 1991, set forth in Rule 17-761.800(2)(a), Florida Administrative Code (T.

   145-46, 156)). Finally, Hughes notes that the three-day requirement for removing the diesel tank is found in a Department rule rather than a statutory enactment by the legislature, and suggests that adoption of such a rule is beyond the statutory authority of the Department.

   
   

   Reviewing these exceptions in light of the findings and conclusions made by the Hearing Officer, as well as the applicable law set forth in Chapter 376, Florida Statutes, I find no error on the part of the Hearing Officer. His findings of fact in regard to the time periods and events that transpired before Hughes undertook required action are supported by competent substantial evidence in the record. Likewise, I find no fault with the Hearing Officer's analysis and conclusions, set forth in Paragraphs 36 through 39 of his conclusions of law, that the legislative intent of Chapter 376, Florida Statutes, is to require prompt and immediate action to contain, remove and abate discharges of pollutants. Furthermore, the Florida Legislature has also made clear that eligibility to participate in the PLIR program is dependent not only upon substantial compliance with Chapter 376, but also the applicable rules of the Department adopted pursuant thereto. Section 376.3072(3)(a), Florida Statutes. Finally, the Department's representative, William Truman, testified that the Department adopted the three-day requirement in Rule 17-769.600(15), Florida Administrative Code, for the purpose of initiating "as close as we can to immediate action" while still providing somewhat of a time allowance that would take into consideration weekends and other delays. (T. 104-05) Mr. Truman also noted that the instances of noncompliance involved in this case were not minor and had the potential of further contamination to the environment. (T. 103-04)

   
   

   For these reasons, I decline to find, either as a matter of law (as requested by Hughes) or based on the specific facts of this case (as alternatively requested by Hughes), that the delays on Hughes' part in taking actions required by the law constituted substantial compliance with those requirements. I also note that Hughes' remedy for challenging the three-day requirement set forth in Rule 17-761.600(15), Florida Administrative Code, is a rule challenge filed under Section 120.56, Florida Statutes, and neither the Hearing Officer nor I have jurisdiction to entertain such a challenge in a proceeding brought under Section 120.57(1), Florida Statutes. Accordingly, Hughes' Exceptions No. 8-11, 14, 18, 20, 21, and 27 are rejected.

   
   

3. Whether the Department Should Exercise Its Discretion under Section 376.3072(3)(b), Florida Statutes, to Waive Violations in this Case (Hughes' Exceptions No. 12, 13, 18 and 19)

   
   

   As in the preceding group of exceptions, Hughes emphasizes in Exceptions No. 12, 13, 18 and 19, the number of requirements it did comply with in this case, arguing that such efforts constitute a good faith effort to achieve and maintain compliance as well as the taking of prompt action to correct any violations. Hughes thus asserts that the Department should exercise its discretion as set forth in Section 376.3072(3)(b), Florida Statutes, to waive the violations that the Hearing Officer found to exist in this case. The relevant statutory provision is as follows:

   (b) The failure of any owner or operator of a storage system containing petroleum products to maintain compliance with this chapter and rules relating to stationary tanks adopted pursuant to s. 376.303 at any location will result in the cancellation of liability insurance provided through the program and eligibility for the restoration program for that location... For purposes of this paragraph, the department may, in its discretion, waive minor violations of this chapter or of rules adopted pursuant to

   s. 376.303, including, without limitation, violations of provisions relating to the

   form of inventory or reconciliation records or violations of registration requirements, or other violations if the owner or operator can demonstrate that he is making a good faith effort to achieve and maintain compliance and has taken prompt action to correct any violation, as required by the department.

   
   

   Section 376.3072(3)(b), Florida Statutes.

   
   

   The Department's interpretation of this statute and the manner in which it exercises its discretion to waive violations were testified to by Mr. Truman. (T. 103-05) The essence of his testimony was that the Department only exercises its discretion to waive minor violations, and that the violations involved in the instant case are considered moderate violations, meaning they have the potential to result in further contamination to the environment. He did testify, with respect to the gasoline tank, that if all the reasons for denial were corrected and were no longer violations, the violation related to the gasoline tank would probably be waived. (T. 119)

   
   

   It does appear that, subsequent to being advised as a result of the September 13 and 16 inspection of the existence of ongoing violations, Hughes undertook action to correct, to the extent feasible, those violations. However, the fact remains that all of the violations found to exist by the Hearing Officer had the potential to exacerbate damage to the environment beyond that which would have occurred had applicable requirements been complied with in a timely fashion. I do not believe that it would be appropriate for me to exercise statutorily conferred discretion in a manner that would, from a policy standpoint, have the effect of encouraging the failure of participants in the PLIR program to file timely reports of incidents or facts that are required by law to be reported and which have the potential for evincing a discharge of pollutants into the environment. Likewise, I should not exercise such discretion in a manner that would have the effect of encouraging delay in taking appropriate remedial measures to contain, remove and abate discharges of pollutants in contravention of the intent of the legislature in enacting Chapter 376, Florida Statutes. For these reasons, Hughes' Exceptions No. 12, 13, 18, and 19, are rejected.

   
   

4. Should Chapter 92-30, Laws of Florida, Be Applied Retroactively? (Hughes' Exceptions No. 15, 16 and 17)

   In Exceptions No. 15-17, Hughes raises for the first time in this proceeding its assertion that certain amendments to Section 376.3072, Florida Statutes, adopted by the 1992 Legislature in Chapter 92-30, Laws of Florida, should be given retroactive application to this case. Specifically, the amended portions of Section 376.3072(2)(b)3., Florida Statutes, alter the previous eligibility requirements by allowing the insured to demonstrate, for a facility found not to be in compliance with Department rules at the most recent inspection conducted by the Department, that any necessary corrective actions identified at such inspection have been corrected as ordered by the Department. Section 376.3072(2)(b)3., Florida Statutes (as amended, July 1, 1992). Hughes argues that this amendment is remedial in nature and is to be liberally construed, and therefore that it should be given retroactive application. In Exceptions No. 16 and 17, Hughes argues that it has corrected the noncompliance by removing the gasoline tank on October 28, 1991, and by emptying the diesel tank on September 17, 1991.

   
   

   It is well settled that, unless the express language of a statute explicitly prescribes retroactive operation, statutes will not be construed to apply retroactively. See, e.g., Young v. Altenhaus, 472 So.2d 1152 (Fla. 1985); Trustees of Tufts College v. Triple R. Ranch, Inc., 275 So.2d 521 (Fla. 19"3); Middlebrooks v. Department of State, 565 So.2d 727 (Fla. 1st DCA 1990). An exception to this rule is made for statutes which are remedial or procedural, but a remedial statute is one which operates in furtherance of an existing remedy or confirmation of rights rather than one which creates new rights or takes away vested rights. See, e.g., State v. Kelley, 588 So.2d 595 (Fla. 1st DCA 1991); Hapney v. Central Garage, Inc., 579 So.2d 127 (Fla. 2nd DCA 1991).

   
   

   The portions of Chapter 92-30, Laws of Florida, relied on by Hughes create new rights in that they provide insured owners and operators of facilities a specific opportunity to take necessary corrective actions identified at the most recent inspection as a means of avoiding a determination that the facility is ineligible for coverage. This is not simply a procedural amendment or the furtherance of an existing remedy, but is instead a new opportunity to exercise newly created rights that did not exist under former law. As such, the amendment should not be construed to have retroactive effect, and for these reasons Hughes' Exceptions No. 15-17 are rejected.

   
   

5. Was Hughes Properly Charged with Constructive Knowledge of the Requirements of Applicable Department Rules? (Hughes' Exceptions No. 22, 23, 24, and 25)

   
   

   The essential basis of Hughes' Exceptions No. 23-25 is that its representatives had no actual knowledge of the time deadlines set forth in Chapter 17-769, Florida Administrative Code, and that if they had had such knowledge they would have complied with the applicable deadlines. Hughes also argues that the representatives of the Lee County tanks program had a duty to advise Hughes of applicable time deadlines before those deadlines passed. As part of its position regarding this issue, Hughes asserts that the Hearing Officer erred by relying in part upon the affidavit required to be filed by Section 376.3072(3)(a), Florida Statutes, to qualify for participation inn the PLIR insurance and restoration program, because the affidavit was not received in evidence.

   
   

   While unquestionably it is desirable for Department representatives and representatives of local programs to communicate applicable time deadlines to the regulated public to the greatest extent possible, in the absence of actions that would actively mislead the public or otherwise serve as a basis for a

   finding of estoppel against the regulating agency, their failure to point out the existence of a regulatory requirement or deadline does not excuse the failure to comply with that requirement or deadline. Furthermore, while it is true that the affidavit submitted by Hughes is not in evidence in this case, it is clear that the Hearing Officer, in Conclusion of Law No. 38, was referring to "the affidavit required by Section 376.3072(3)(a), Florida Statutes." That statutory provision expressly requires a familiarity with Chapter 376 ?and the rules relating to petroleum storage systems or petroleum contamination site cleanup adopted pursuant to s. 376.303 ..." (emphasis supplied). Nevertheless, because the affidavit is not in evidence, I accept Hughes' exceptions to the extent that the last sentence of Paragraph 38 of the Hearing Officer's Conclusions of Law (Recommended Order at 13) should be deleted. However, the error is harmless because the obligations in question exist independent of such affidavit and appear plainly from the face of the statute.

   
   

   Finally, Hughes argues that the Hearing Officer's Finding No. 19, that Hughes did not request any information concerning time frames, is unsupported by evidence in the record. A fair reading of that finding by the Hearing Officer, however, is that the Hearing Officer was referring to the lack of evidence to this effect in the record before him. Having found that there was no evidence that either the Department or Lee County personnel informed Hughes before September 16, 1991, of the existence of a time deadline, the Hearing Officer's use of the word "likewise" properly refers to a similar lack of evidence in the record to indicate that Hughes requested any such information from the Department or from Lee County. To this limited extent, Hughes' Exception No. 25 is granted and Paragraph 19 of the Recommended Order is modified accordingly.

   In all other respects, for the reasons set forth above, Hughes' Exceptions No. 22-25 are rejected.

   
   

6. Miscellaneous Issues (Hughes' Exceptions No. 26 and 27)

The essence of Hughes' arguments in its Exceptions No. 26 and 27 is that the Hearing Officer improperly rejected (as irrelevant and immaterial) its proposed finding that September 2, 1991, was Labor Day, a state and federal holiday. Hughes argues that the next business day, for purposes of reporting the discharge, would have been Tuesday, September 3, 1991. Hughes then refers to a conversation its representative had with a representative of Lee County, Bill Johnson, on September 3 and maintains that Johnson on that day advised Hughes to file for restoration coverage even though he knew that the diesel tank was not empty. Hughes then asserts that it "proceeded on that basis."

First of all, I find no error on the part of the Hearing Officer in rejecting Hughes' proposed finding No. 13 as irrelevant. If Hughes had undertaken to test or remove the diesel tank within three days of September 3, 1991, this might be an issue; however, it is uncontroverted that Hughes did not empty the diesel tank until September 17, 1991, after being advised twice to do so by Lee County representatives and only after an inspection by Lee County had found Hughes to be in noncompliance with Rule 17-769.600(15), Florida Administrative Code, among other things. As for the remainder of Hughes' Exception No. 27, it is unclear why Hughes mentions the conversation with Mr.

Johnson or exactly what Hughes requests me to do in the context of ruling on findings, conclusions, and recommendations made by the Hearing Officer. Mr. Johnson did not testify in this case, and the only evidence in the record with regard to the conversation in question is the testimony of Mr. Kendall:

Q. [By Mr. Wilt) Did you talk about other things?

(T. 61)

A. Well, of course, he informed me that we would have to fill out a Discharge Reporting Form, which I told him I already had that, because I wanted to have that before I called him so I would have it in case I wanted any information off of the form.

At that time, he also inquired of me if we had, if we were going to apply for any restitution or reimbursement, that I had to send him a letter to that effect.

Q. Did you send such a letter?

1. Yes, I did, the following day.

   
   

   From the foregoing, it is clear that Mr. Johnson did not "advise Kendall to file for restoration coverage" as asserted by Hughes. He simply advised him of the requirement of submitting a letter if he intended to do so. Even if he had advised Mr. Kendall to file for restoration coverage, in the absence of any showing that he affirmatively misled Mr. Kendall with regard to the time requirements for emptying the diesel tank, there is simply no basis for overturning the Hearing Officer's Conclusion No. 38. For these reasons, Hughes' Exceptions No. 26 and 27 are rejected.

   
   

   Having ruled on all the exceptions, IT IS ORDERED:

   1. The findings of fact and conclusions of law contained in Exhibit A are adopted and incorporated by reference, except as modified herein.

      
      

   2. The application filed by Hughes Supply, Inc., for restoration coverage under the Florida Petroleum Liability Insurance and Restoration Program for Facility No. 368519331 is denied.

Any party to this Order has the right to seek judicial review of the Order pursuant to Section 120.68, Florida Statutes, by the filing of a Notice of Appeal pursuant to Rule 9.110, Florida' Rules of Appellate Procedure, with the clerk of the Department in the Office of General Counsel, 2600 Blair Stone Road, Tallahassee, Florida 32399-2400; and by filing a copy of the Notice of Appeal accompanied by the applicable filing fees with the appropriate District Court of Appeal. The Notice of Appeal must be filed within 30 days from the date this Order is filed with the clerk of the Department.

DONE AND ORDERED this 5th day of November, 1992, in Tallahassee, Florida.

STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION

CAROL M. BROWNER

Secretary

Twin Towers Office Bldg 2600 Blair Stone Rd Tallahassee FL 32399-2400 Telephone: 904/488-4805

FILING AND ACKNOWLEDGEMENT

FILED, on this date, pursuant to S. 120.522 Florida Statutes, with the designated Department Clerk, receipt of which is hereby acknowledged.

11/06/92 Clerk Date

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing FINAL ORDER has been sent by U.S. Mail to:

Scott E. Wilt, Esquire

Maguire, Voorhis and Wells, P.A.

2 S Orange Plaza P O Box 633 Orlando FL 32802

and by hand delivery to:

Brigette Ffolkes, Esquire Assistant General Counsel

Department of Environmental Regulation Twin Towers Office Bldg

2600 Blair Stone Rd Tallahassee FL 32399-2400

William R. Cave Ann Cole, Clerk

Hearing Officer Division of Administrative

Division of Administrative Hearings

Hearings The DeSoto Bldg

The DeSoto Bldg 1230 Apalachee Pkwy

1230 Apalachee Pkwy Tallahassee FL 32399-1550

Tallahassee FL 32399-1550

this 9th day of November, 1992.

STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION

for DANIEL THOMPSON

General Counsel

Twin Towers Office Bldg 2600 Blair Stone Rd Tallahassee FL 32399-2400 Telephone: 904/488-9730

Docket for Case No: 91-008334

Orders for Case No: 91-008334