STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

EAU GALLIE YACHT CLUB, INC., ) DER FACILITY NO. 058500985, )

)

Petitioner, )

vs. ) CASE NO. 92-2121

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

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing in the above-styled matter was held on September 17, 1992, in Rockledge, Florida, before Joyous D. Parrish, a designated Hearing Officer of the Division of Administrative Hearings. The parties were represented at the hearing as follows:

APPEARANCES

For Petitioner: Scott E. Wilt

Maguire, Voorhis & Wells, P.A. Post Office Box 633

Orlando, Florida 32802

For Respondent: Brigette A. Ffolkes

Department of Environmental Regulation 2600 Blair Stone Road

Tallahassee, Florida 32399-2400 STATEMENT OF THE ISSUES

The central issue in this case is whether Petitioner is eligible for restoration benefits pursuant to Section 376.3072, Florida Statutes, for its site located in Melbourne, Florida.

PRELIMINARY STATEMENT

This case began on March 6, 1992, when the Department of Environmental Regulation (Department) issued an order denying Petitioner, Eau Gallie Yacht Club, Inc., its request for eligibility in the Florida Petroleum Liability Insurance and Restoration Program as set forth in Section 376.3072, Florida Statutes. Thereafter, the Petitioner timely filed a request for an administrative hearing to review the denial, and the matter was forwarded to the Division of Administrative Hearings for formal proceedings on April 6, 1992.

The parties' prehearing statement was filed on September 11, 1992.

At the hearing, the Petitioner presented the testimony of the following witnesses: Michael Kelly, harbor master for the Eau Gallie Yacht Club, Inc. (Petitioner or Club); David Meredith, maintenance supervisor for the Club; and

John Pullin, former harbor master. Exhibits numbered 1 through 32 have been admitted into evidence.

Rita DiStasio, formerly an associate environmental specialist employed by Brevard County, and William Truman, an environmental manager in cleanup employed by the Department, testified on behalf of the Respondent. Further, at the Department's request, official recognition has been taken of Chapters 17-61 and 17-761, Florida Administrative Code.

After the hearing, the transcript of the proceedings was filed on September 28, 1992; and, the parties filed proposed recommended orders which have been considered in the preparation of this order. Specific rulings on the proposed findings of fact are included in the attached appendix.

FINDINGS OF FACT

Based upon the prehearing statement, the testimony of the witnesses, and the documentary evidence received at the hearing, the following findings of fact are made:

1. The Petitioner is a Florida corporation in good standing, authorized to do business in this state.

   
   

2. The Petitioner owns and controls the site which is the subject matter of these proceedings. Such site is located in Brevard County, Florida.

   
   

3. The Department has identified the subject site as DER facility no. 05- 8500985 (the facility).

   
   

4. At all times material to this case, the facility consisted of: three underground storage tanks (UST), one 3000 gallon UST used for storing diesel fuel, one 1000 gallon UST used for storing diesel fuel, and one 1000 gallon UST used for storing gasoline; five monitoring wells; and pipes and pumps related to the foregoing system.

   
   

5. The facility constituted a storage tank system as defined in Section 376.301, Florida Statutes, and Rule 17-761.200(38), Florida Administrative Code.

   
   

6. The Petitioner holds, and is named insured for, third party pollution liability insurance applicable to the facility. Such insurance was issued pursuant to Section 376.3072, Florida Statutes.

   
   

7. The policy for the foregoing insurance, policy no. FPL7622040, was in force from March 22, 1991 through March 22, 1992.

   
   

8. The Department issued a notice of eligibility for restoration insurance to Petitioner for the above-described facility.

   
   

9. Based upon the foregoing, the Petitioner is a participating owner or operator as defined in Chapter 17-769, Florida Administrative Code.

   
   

10. Pursuant to Section 376.3073, Florida Statutes, Brevard County operates a local program that has been approved by the Department. Such local program is managed by the Brevard County Office of Natural Resources Management (County).

11. In July, 1990, a discharge of diesel fuel occurred at the Petitioner's facility. Petitioner's employees estimated that approximately twenty gallons of diesel fuel filled the pump box overflowed from the pump box across the seawall into the adjacent waters. Upon discovering the discharge, Petitioner shut down diesel fuel dispensing until repairs could be made to the apparent cause of the leak. Additionally, the diesel fuel remaining in the pump box and on top of the tank area was removed. Contaminated soil in the pump box was also removed.

    
    

12. The apparent cause of the discharge described above was attributed to cracked pipe fittings which were repaired by Glover Oil Co. within a few days of the discharge. No detailed inspection was made to the system to determine if additional sources of discharge existed.

    
    

13. Petitioner did not complete a discharge reporting form (DRF) for the above-described incident until April 18, 1991. The April DRF was completed after Petitioner was directed to do so by Ms. DiStasio, an inspector employed by the County.

    
    

14. From August, 1990 until May, 1991, at least one monitoring well at the Petitioner's facility showed free product accumulating in the well pipe. The exact amounts of the free product found are unknown, but reports estimated the level at 100 centimeters.

    
    

15. From August, 1990 until September, 1991, the Petitioner did not undertake any measure to explore the origin of the free product found in the monitoring well. Further, the Petitioner did not report the monitoring well testing results as a suspected or confirmed discharge.

    
    

16. In April, 1991, an inspection of the Petitioner's facility was performed by Ms. DiStasio. That inspection resulted in a letter to the Petitioner that outlined several violations at the facility. Among those violations listed was the Petitioner's failure to report a suspected or confirmed discharge.

    
    

17. At the time of the April, 1991 inspection, Petitioner had reported neither the July, 1990 discharge (a known discharge) nor the monitoring well test results (at the minimum a suspected discharge).

    
    

18. In connection with the July, 1990 discharge, following the repairs made by Glover Oil, Petitioner did not have the system pressure tested. Only the area visible from the pump box was checked for leakage.

    
    

19. In July, 1991, when Ms. DiStasio performed a re-inspection of the facility, she found Petitioner had not (in the interim period, April through July, 1991) taken any steps to test the system or to remove the fuels from the suspect tanks. Since the free product continued to appear in the monitoring well, a pressure test of the system would have definitively answered the discharge question. Alternatively, the removal of the fuels would have prevented further seepage until the system could be pressure tested.

    
    

20. On August 6, 1991, the Petitioner issued a letter that advised the County that it had stopped dispensing fuel at the facility. The tanks were not drained, however, until on or about September 11, 1991. Further, the August, 1991, letter acknowledged that the Petitioner "had proposals for initial remedial cleanup related to diesel contamination in the tank field area." Obviously, the Petitioner must have contemplated a need for such cleanup.

21. On September 11, 1991, at the Petitioner's request, Petroleum Equipment Contractors, Inc. attempted to pressure test the 3000 gallon diesel tank. The purpose of the pressure test was to determine if the diesel system had a leak. The company could not even run the test on the tank because of the defective system. A similar test on the Petitioner's gasoline tank passed without incident.

    
    

22. Once the Petitioner learned the results of the test, it initiated Initial Remedial Action (IRA) as described on the IRA report filed by Universal Engineering Sciences. The IRA consisted of the removal of the excessively contaminated soil, approximately 74 cubic yards, and the removal of the USTs. The foregoing work was completed on or about September 15, 1991.

    
    

23. On October 4, 1991, the Petitioner filed a discharge reporting form dated October 2, 1991, that identified September 11, 1991, as the date of discovery for the discharge. This discharge discovery was allegedly made incidental to the diesel tank pressure testing failure. No reference was made to the months of monitoring well reports showing a free product.

    
    

24. On October 8, 1991, Ms. DiStasio prepared a Florida Petroleum Liability Insurance and Restoration Program Compliance Checklist that reported the Petitioner was not in compliance with applicable statutes and rules.

    
    

25. When Petitioner applied for restoration coverage under the statute on January 31, 1992, such request was denied by the Department on March 6, 1992. The basis for the denial was as follows:

    
    

    Failure to notify the Department of a positive response to sampling within three working days of testing, pursuant to the rule in effect at the time of the initial response (17-61.050(1), Florida Administrative Code). An inspection by Brevard County on April 17, 1991, revealed that free product had been detected in one monitoring well since July 1990. The discharge reporting form was not submitted until October 2, 1991.

    
    

    CONCLUSIONS OF LAW

    
    

26. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

    
    

27. The Department is the state agency charged with the responsibility of administering and enforcing Chapter 376, Florida Statutes.

    
    

28. The Petitioner bears the burden of proof to establish its entitlement to restoration coverage.

29. Section 376.3072(1), Florida Statutes, provides, in pertinent part: There is hereby created the Florida Petroleum

    Liability Insurance and Restoration Program to

    be administered by the Department of Environmental Regulation. . . . 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. . . .

30. Section 376.3072(3), Florida Statutes, provides, in pertinent part: (3)(a) ELIGIBILITY FOR PARTICIPATION.-- Any

    owner or operator of a petroleum storage system, as defined in s. 376.301, who is subject to and in substantial compliance with this chapter and applicable rules relating to petroleum storage systems or petroleum contamination site cleanup adopted pursuant to s. 376.303 with respect to a particular location is eligible to participate in the Florida Petroleum Liability Insurance and Restoration Program for that location.

    
    

    (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.

    
    

31. Rule 17-761.460, Florida Administrative Code, provides, in pertinent part:

    
    

    The owner or operator shall report the following items to the Department and, if the storage tank system is in a county with a locally administered program under contract with the Department, to that locally administered program on Form

    17-761.900(1):

    * * *

    1. Any spill, overfill or other discharge of regulated substances from a storage tank system that equals or exceeds its reportable quantities under the federal Comprehensive Environmental Response, compensation and Liability Act of 1980,

       40 CFR Section 302, within one working day of discovery of the discharge, or any spill, overfill or other discharge of petroleum or petroleum

       product that results in a release to the environment that exceeds 25 gallons or that causes a sheen on surface water;

    2. Suspected releases within one working day of discovery. Suspected releases shall include:

       1. The discovery by owners and operators or others of released regulated substances from an underground storage tank system at the facility or in the surrounding area (such as the presence of free product or vapors in soils, basements,

          sewer and utility lines, and nearby surface water) in excess of the quantities set forth in subsection (2);

          * * *

          (c) Monitoring results from a release detection method required under Rule 17-761.600 through 17-761.640, F.A.C., or from a closure assessment required under Rule 17-761.800(3),

          F.A.C., that indicate a release may have occurred, including but not limited to the positive response of a leak detection device, a significant increase in contamination levels above background, a sheen, layer or odor of regulated substances in a ground water sample, a sheen or layer of regulated substances on surface water,. . .

          
          

32. Chapter 17-761, Florida Administrative Code, took effect on December 10, 1990. From that date on, Petitioner was required to report positive monitoring well results such as those known in this case to the Department or to its agent, Brevard County. Since the Petitioner never disclosed the suspected discharge reflected by the monitoring well reports, it failed to comply with Rule 17-761.460, Florida Administrative Code.

    
    

33. Rule 17-761.820(1), Florida Administrative Code, provides, in pertinent part:

    
    

    1. When evidence of a discharge from a storage tank system is discovered and reported in accordance with Rule 17-761.460, F.A.C., the owner or operator shall remove as much of the regulated substance from the system as is necessary to prevent further release to the

       environment.. . . The storage tank system shall be repaired, if possible, in accordance with Rule 17-761.700, F.A.C. If the storage tank system cannot be repaired, it shall be closed in accordance with Rule 17-761.800(2), F.A.C.

    2. Any owner or operator of a facility discharging a regulated substance shall immediately undertake to contain, remove, and abate the discharge in accordance with Chapter 376 and 403, F.S. . . .

    
    

34. In this case, the Petitioner took no action from July, 1990 until September, 1991 to correct a suspected problem. Despite reports of product in the monitoring well, Petitioner did not pressure test the system or drain the tanks of the fuels.

    
    

35. Section 376.3072(2), Florida Statutes, provides, in part:

    
    

    In order for an eligible owner or operator

    to participate in the restoration program, the owner or operator must, upon discovery of evidence of a discharge of petroleum product at a facility,

    drain and remove from service the suspected petroleum storage system, if necessary, and complete initial remedial action as defined by department rules.

    The cost of restoration will be paid through the Inland Protection Trust Fund.

    
    

36. In this case, the presence of product in the monitoring well clearly suggested a discharge of petroleum fuel. The Petitioner, by law, was to initiate and complete remedial action to both investigate the source of the discharge and to take appropriate action to correct the problem. In this case, from December, 1990 (the effective date of the applicable rule) until September, 1991, the Petitioner did nothing. Therefore, the Petitioner failed to comply with Section 376.3072(2), Florida Statutes.

    
    

37. Based upon the foregoing, the Petition failed to comply with the applicable rules and was, therefore, not in compliance with statutes and rules at the time of its request for restoration coverage.

RECOMMENDATION

Based on the foregoing, it is RECOMMENDED:

That the Department of Environmental Regulation enter a final order denying Petitioner's claim for restoration coverage under the Florida Petroleum Liability Insurance and Restoration Program.

DONE and ENTERED this 31st day of December, 1992, in Tallahassee, Leon County, Florida.

JOYOUS D. PARRISH

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 December, 1992.

APPENDIX TO CASE NO. 92-2121

RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE PETITIONER:

1. Paragraphs 1, 2, 8, 12, 15, 16, 17, and 18 are accepted.

2. Except as found above, paragraph 3 is rejected as not supported by the record cited. It is accepted that Brevard County acted as the local agent in this case.

3. Paragraph 4 is rejected as not supported by the record.

4. With regard to paragraph 5, substituting "A" for "The" and "confirmed" for "discovered" the paragraph can be accepted; otherwise rejected as contrary to the record.

5. Similarly, with the substitution of the word "confirmation" for "discovery" in Paragraph 6, the paragraph can be accepted; otherwise rejected as contrary to

   the record. No suitable explanation was offered by the Petitioner for why, if a discharge were not reasonably suspected, it retained the company to immediately remove the USTs upon the failed pressure testing. Clearly, the Club had a notion the tanks were a discharge problem.

6. Paragraph 7 is rejected as contrary to the weight of the evidence. While there was some confusion as to the exact volume of free product in the monitoring well, there was clear evidence that such was reported for many months prior to the confirmation in September, 1991. Further, the main confusion regarding the product found in the well was not as to its existence, but as to the individual's knowledge of the metric measurement of it. One hundred centimeters of product in a two or three inch pipe would not be a minute amount.

7. Except as addressed in the foregoing findings, paragraph 9 is rejected as contrary to the weight of the evidence. Petitioner did not undertake all repairs necessary to abate a discharge problem.

8. Paragraph 10 is rejected as not supported by the weight of credible evidence or irrelevant. Clearly, as early as August, 1990, Petitioner knew or should have known of a discharge problem based upon the monitoring well report; that all of the discharge did not necessarily flow from the fittings that had been repaired is irrelevant. Further, Petitioner did no testing to verify that the replaced fittings had solved the discharge problem (especially in light of the well reports).

9. Paragraph 11 is rejected as an inaccurate restatement of the exhibit.

10. Paragraph 13 is rejected as contrary to the weight of the evidence. Incidentally, the hearing in this case was in the year 1992.

11. Paragraph 14 is rejected as contrary to the weight of credible evidence.

RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT:

1. Paragraphs 1 through 11 are accepted.

2. Paragraph 12 is rejected as a misstatement of the exhibit cited.

3. Paragraphs 13 through 27 are accepted.

COPIES FURNISHED:

Brigette A. Ffolkes Assistant General Counsel Department of Environmental

Regulation

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

Scott E. Wilt

MAGUIRE, VOORHIS & WELLS, P.A.

2 South Orange Plaza

P.O. Box 633

Orlando, Florida 32802

Carol Browner, Secretary Department of Environmental

Regulation

Twin Towers Office Building 2600 Blair Stone Road

Tallahassee, Florida 32399-2400

Daniel H. Thompson, General Counsel Department of Environmental

Regulation

Twin Towers Office Building 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.

Docket for Case No: 92-002121

Orders for Case No: 92-002121