STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

OFFSHORE SHIPBUILDING, INC., )

)

Petitioner, )

)

v. ) CASE NO. 92-3946

)

DEPARTMENT OF NATURAL RESOURCES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on September 24 and 25, 1992, in Jacksonville, Florida, before the Division of Administrative Hearings, by its designated Hearing Officer, Diane K. Kiesling.

APPEARANCES

For Petitioner: Robyn A. Deen

Attorney at Law

Brant, Moore, Sapp, MacDonald & Wells Post Office Box 4548

Jacksonville, FL 32202

For Respondent: L. Kathryn Funchess

Assistant General Counsel Department of Natural Resources 3900 Commonwealth Blvd., MS-35 Tallahassee, FL 32399-3000

STATEMENT OF ISSUES

The issues are whether Offshore Shipbuilding, Inc., (Offshore) is entitled to reimbursement from the Florida Coastal Protection Trust Fund, pursuant to Sections 376.011-.21, Florida Statutes, for costs and expenses incurred by Offshore in a spill cleanup at Offshore's Green Cove Springs facility or whether the Department of Natural Resources (DNR) correctly denied Offshore's application for reimbursement.

PRELIMINARY STATEMENT

At hearing, both Offshore's and DNR's Motions in Limine were DENIED and those rulings are incorporated herein.

Offshore presented the testimony of Anthony Bucknole, Pam Barrett, James Douglas Hirsch, Fredrick Willshier, Jr., Johnnie C. Bertram, Clifton Earl Barnett, Jr., and William Zegel. Offshore's Exhibits 1-3, 5-8, 9A, 9B, 11A, 11B, 12, 13, 15, 18A, 18C, 19-24, and 26 were admitted in evidence.

DNR presented the testimony of Jane Mears, John Alfred McGough, and Sgt.

Jesse Baker, but offered no exhibits.

The transcript of the proceedings was filed on October 17, 1992. Both parties timely filed proposed findings of fact and conclusions of law. All proposed findings of fact and conclusions of law have been considered. A specific ruling on each proposed finding of fact is made in the Appendix attached hereto and made a part of this Recommended Order.

FINDINGS OF FACT

1. Offshore engages in the business of dry docking and repairing boats, barges and other types of marine vessels. Its primary facility and business offices are in Palatka, but it also leases a facility at the Clay County Port in Green Cove Springs, Florida.

   
   

2. The scallop vessel, Theresa R. II (Theresa), was repaired by Offshore at the Green Cove Springs facility from August 2 to August 7, 1991. The vessel was hauled out of the St. Johns River and placed on a dolly located on a marine railway which extends south from the river about 500 feet.

   
   

3. Prior to coming to Offshore's facility, Theresa had undergone major reconditioning at another facility. In the course of that work, the vessel's bilges had been pumped out by Envirotech Southeast on May 3, 1991. Envirotech pumped 2,200 gallons of water from the bilge.

   
   

4. When the Theresa arrived at Offshore, it did have some water in the bilge. There was oil floating on top of the water and most likely a sludge of waste matter from the painting and scraping had settled to the bottom of the bilge. John Rita, the owner of the Theresa, indicated that he wanted to pump out the bilge onto the ground, but was advised by Offshore that he would need to have it pumped out by a qualified pumper.

   
   

5. The repairs to be performed by Offshore included repairs to the sea valve in the engine room where the bilge was also located. Hawkins, an employee of Offshore, could not make that repair until the bilge water level was lowered. Hawkins performed some other tasks and then found that the bilge was empty enough to perform those repairs. He did not know how the bilge water level was lowered and did not see that the bilge had been pumped on the ground and did not see or smell diesel fuel or oil on the ground.

   
   

6. On Saturday, August 3, 1991, Rita acknowledges that he pumped water from the bilge over the starboard side of the vessel. Rita says the source of the water was rain and water from the St. Johns River.

   
   

7. He did not pump the bilge dry, but pumped enough water to lower the level and permit the repairs. He pumped only water, leaving the solids in the sludge on the bottom and the oils floating on top suspended above the water. Solid materials tend to cling to surfaces and are not easily removed by water. In order to remove solid materials, it is necessary to physically remove them by some sort of tool, like a hoe or shovel.

   
   

8. The Theresa was launched on August 7, 1991, around 3:30 p.m. Cleanup around the yard where the Theresa had been began the morning of August 8, 1991. Later that afternoon, an unidentified employee of Offshore reported discovering a spill to Fred Willshier, Offshore's yard superintendent at Green Cove Springs.

   Willshier called the Palatka office and told Tony Bucknole, Offshore's Vice President and General Manager, about the spill.

   
   

9. Bucknole told Pam Barrett, an employee whose duties included environmental matters, personnel and payroll. Willshier reported the spill to Barrett around 3:00 p.m. Bucknole told Barrett to go to the Green Cove Springs yard the next morning on her way to work.

   
   

10. Barrett and Willshier examined the spill the morning of Friday, August 9, 1991. The spill contained some oil and smelled of diesel fuel. The area of the spill was approximately 4 or 5 feet from the marine railway next to where the Theresa had been. Various witnesses described the spill as being 30 feet, 50-75 feet and 30 yards from the St. Johns River. No contamination was threatening the river and no spill material had reached the beach area adjacent to the shoreline.

    
    

11. Barrett ordered the necessary materials such as barrels and shovels for the removal of the contaminated soil. She told Willshier to remove all the contamination that could be seen, to put the soil in drums, to seal the drums and to label the drums.

    
    

12. Soil was removed from the site on August 9 and 10, 1991. The soil was placed into drums without lids, because no lids were available on such short notice. Some of the soil in drums was taken to Palatka and put into a large steel bin. The drums were then taken back to Green Cove Springs for reuse with this spill. The drums were sealed with visqueen and duct tape. No one labeled the drums as to date, source, or number, although some drums were apparently labeled so as to show that they contained soil and diesel fuel or oil.

    
    

13. Willshier was supposed to supervise the cleanup, but he does not know who wrote on the drums, how many drums were filled or what happened to those drums.

    
    

14. The steel bin at Palatka had no cover. No one knows if it was empty when the drums were emptied into it or if other materials were added after the contents of those drums was put into it. Barrett, who was responsible for the inventory of such materials, didn't know that any of the soil was put in the steel bin. She also could not account for the number of drums or their location immediately after the cleanup was completed.

    
    

15. On August 29, 1991, Sgt. Jesse Baker of the Florida Game and Fresh Water Fish Commission and Jane Mears of the Department of Environmental Regulation participated in the execution of a search warrant related to Offshore's handling of hazardous waste at the Palatka facility.

    
    

16. That search revealed numerous 55-gallon drums at the Palatka site, many of which were not labeled. Of those drums with labels, some had partially disappeared or were unreadable, some were labeled during the execution of the search warrant and some had more than one label. Additionally, four drums were located next to a derelict tugboat, the Victoria, and the crane operator was in the process of lifting drums of contaminated soil and liquid waste and dumping those contents into the bilge of the Victoria.

    
    

17. Sgt. Baker saw several metal bins containing soil, rust, and other waste materials, including one large steel container which was full of soil. These containers of soil were not labeled.

18. Sgt. Baker was informed by Offshore employees that for three days they had been combining the contents of the various drums and there was no way to determine with certainty "what soil came from where." He was also advised that the combined contaminated soils and liquid waste had been placed in the tugboat for ultimate "disposal." Sgt. Baker observed a large quantity of waste material in the Victoria's hold and several crushed metal drums in a dumpster.

    
    

19. The next day, August 30, 1991, Ms. Mears and Sgt. Baker inspected the Offshore facility at Green Cove Springs. They found additional drums of contaminated soil and waste material at Green Cove Springs. The condition of the drums was similar, with some having visqueen and duct tape sealing them. The labeling was similarly haphazard or nonexistent.

    
    

20. As a result of these inspections, all waste material at both sites was appropriately sealed, labelled, and inventoried. The resulting inventories were offered by Offshore as the only proof that 43 drums of contaminated soil were removed from the spill site.

    
    

21. Numerous witnesses, including Ms. Mears and Sgt. Baker, examined the site from which this contaminated soil was allegedly removed. There was no observable hole or depression which would account for removal of soil down to one foot below grade just three weeks earlier.

    
    

22. Offshore did not notify the Department of Natural Resources of the alleged spill until January 28, 1992. Offshore did not notify the Florida Marine Patrol or the U.S. Coast Guard of the alleged spill until on or about that same date.

    
    

23. Offshore never sought or received authorization or approval of its cleanup activities from the Department of Natural Resources prior to its activities to remove the alleged spill.

    
    

24. Offshore first filed an application for reimbursement from the Florida Coastal Protection Trust Fund on February 26, 1992. That application, filed by counsel for Offshore, sought reimbursement of $3,603.93 for expenses allegedly incurred by Offshore in containing and cleaning up a spill of diesel fuel from the Theresa R. II. The application claimed $3,218.75 for labor costs and

    $385.18 for materials.

    
    

25. That application was incorrect about several material facts. First, the date of the alleged spill was August 8-9, 1991, even though the vessel alleged to be responsible for the spill had been launched on August 7, 1991, and even though at hearing, Offshore took the position that the spill occurred on August 3, 1991, when Rita pumped water from the bilge.

    
    

26. The second error in the application is the assertion that the spill occurred when the vessel's owner pumped the contents of the fuel tank over the side of the vessel and onto the ground. In fact, only the contents of the vessel's bilge were involved.

    
    

27. The application also seeks reimbursement for labor costs for the alleged cleanup of $25.00 per hour and $37.50 per hour for overtime. In fact, the employees who cleaned up the alleged spill were paid only their regular hourly wage. None of the employees were paid even $25.00 per hour. Offshore was claiming its regular hourly charge for repairs performed in its yards rather than the amount actually paid to the employees. That regular hourly charge is based on Offshore's annual average hourly cost for all its services which

    includes salaries, insurance, overhead, fuel, and other expenses necessary to run the yards, presumably including some profit.

    
    

28. Fourth, the application asserts that the contaminated soil had been drummed and transported to the Palatka facility. In fact not all the contaminated soil was drummed or taken to Palatka. It cannot be determined precisely how much soil was removed or where it is now located.

    
    

29. Offshore billed Mr. Rita, the vessel's owner, for the cleanup by sending him a bill for $5,887.53 on August 23, 1991.

    
    

30. Offshore presented evidence regarding sampling and testing of the contents of certain drums which it alleges contained soil from the alleged spill. Because there is insufficient evidence to establish the true origin of the contents of the various drums and because Offshore was so haphazard in maintaining records of the contents of the drums, the testimony and evidence regarding the sampling and testing is simply not material or probative of any issues significant to the resolution of this reimbursement claim.

    CONCLUSIONS OF LAW

    
    

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

    
    

32. DNR administers the Coastal Protection Trust Fund, which is to be used as a non-lapsing revolving fund for carrying out the purposes of Sections 376.011-376.21, Florida Statutes. As relevant to this case, Section 376.09(7) states:

    
    

    (7) Any person who renders assistance in containing or removing any pollutant may be eligible for reimbursement of the cost of containment or removal, provided prior approval

    for such reimbursement is granted by the department. The department may, upon petition and good cause shown, waive the prior-approval prerequisite. [Emphasis supplied.]

    
    

33. Because Offshore failed to notify DNR or the Marine Patrol of the alleged spill until more than 180 days from the occurrence and because Offshore performed the cleanup without prior approval from DNR, Offshore has the initial burden of proving good cause for DNR to waive the prior-approval prerequisite. Only after proving that DNR abused its discretion in denying that waiver can Offshore attempt to carry its burden of proving the amount of reimbursement to which it is entitled. See Department of Transportation v. J.W.C., Inc., 396 So. 2d 778 (Fla. 1st DCA 1981). These burdens of proof are by a preponderance of the credible, competent and substantial evidence.

    
    

34. Rule 16N-16.020, Florida Administrative Code, sets forth the procedure for claimants requesting reimbursement from the Coastal Protection Trust Fund for damages sustained as the direct result of a pollutant spill. Claimants must submit a completed Reimbursement for Damage Claim form, together with three estimates for repair of damage to property and three photographs of the damage claimed, within 180 days of the date of the spill. "Damages" is defined to mean "the documented extent of any destruction to or loss of any real or personal property, or the documented extent of any destruction of the environment and

natural resources, . . . as the direct result of the discharge of a pollutant" pursuant to Section 376.031(1), Florida Statutes.

1. According to Section 376.11, the purpose of the Coastal Protection Trust Fund is:

   
   

   to provide a mechanism to have financial resources immediately available for prevention of, and cleanup and rehabilitation after, a pollutant discharge, to prevent further damage by the pollutant, and to pay damages. It is the

   legislative intent that this section be liberally construed to effect the purposes set forth, such interpretation being especially imperative in light of the danger to the environment and resources.

   
   

2. The only "good cause" offered by Offshore for its immediate cleanup of the alleged spill was that it looked like it might rain and they wanted to keep the contamination from entering the St. Johns River. However, this reason is given no weight because it is contrary to the credible evidence. The credited testimony showed that the spill site was at some distance from the river and that there was no immediate threat to the river. The true fact is that Offshore did not know that it could seek reimbursement until months after the cleanup and that it is now seeking reimbursement because it has other significant problems with its waste disposal in general. Offshore has failed to prove any good cause for its failure to timely report the alleged spill and gain pre-approval for its cleanup activities.

   
   

3. Even if Offshore was entitled to a waiver of the requirements of Section 376.09(7), it would not be entitled to reimbursement. First, the labor costs sought by Offshore are grossly inflated and bear no resemblance to the actual costs incurred. Claimants for reimbursement are only entitled to recompense for actual costs of containment and removal.

   
   

4. Additionally, there is simply insufficient credible evidence to establish how much contaminated soil was removed, where it is now, what the nature of the contamination was, and how it should be remediated or handled. The record keeping was so shoddy that it is impossible to determine the actual source of the alleged spill and the true costs of the cleanup.

   
   

5. Even in light of the mandate that the Act be liberally construed, Offshore has failed dismally to prove its entitlement to reimbursement. The claim should be denied for all the reasons stated above.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Natural Resources enter a Final Order

and therein DENY the reimbursement claim filed by Offshore Shipbuilding, Inc.,

and DISMISS the petition filed herein.

DONE and ENTERED this 18th day of December, 1992, in Tallahassee, Florida.

DIANE K. KIESLING

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 18th day of December, 1992.

APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 92-3946

The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case.

Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Offshore Shipbuilding, Inc.

1. Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1 & 2(1); 3(8); 4(9); 5(2); 13(2); 17 & 18(4); 19-22(5); 24(5); 29(3); 32(3); 35(3); 38(6); 42 & 43(8); 45(8); 48(10); 59(9); 60(10); 86(9); and 103(11).

2. Proposed findings of fact 6, 10-12, 14, 16, 25-27, 30, 31, 33, 39, 40, 46,

47, 49, 50, 56, 61-64, 71-74, 76-79, 83, 87-93, 95, 107, 108, 111, 121, 122,

136, 187-192, 198, 216-219, 221, and 222 are subordinate to the facts actually found in this Recommended Order.

3. Proposed findings of fact 7, 8, 15, 23, 28, 34, 36, 37, 41, 52, 53, 58, 65-

67, 69, 70, 75, 80, 84, 85, 94, 97-100, 102, 117, 124-132, 141-184, 186, 193-

197, 199-215, 220, 223-236, and 238-240 are irrelevant.

4. Proposed findings of fact 9, 44, 51, 55, 57, 68, 96, 101, 104-106, 109, 110,

112-116, 118-120, 123, 133-135, 137-140, 185, and 237 are unsupported by the credible, competent and substantial evidence.

5. Numerous proposed findings of fact, including but not limited to, 151-153, 155-157, 159, 160, 167, 218, and 219 are mere summaries of testimony and are not appropriate as findings of fact.

Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Department of Natural Resources

1. Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 2(1); 3-7(24-28); 9(29); 10 & 11(27); 12(22); 13(23); 15 & 16(2); 19(3); 20(3); 21(6); 22 & 23(7), 24(8); 25

& 26(9); 28(9); 29 & 30(10); 32 & 33(12); 34(14); 35(12); 36(14); 43(15); 44 &

45(16); 46(17); 47 & 48(18); 49 & 50(16); 51(19); 54(21); and 65(30).

2. Proposed findings of fact 1, 8, 14, 17, 27, 31, 37, 38, 41, 42, 55, 56, 60, and 61 are subordinate to the facts actually found in this Recommended Order.

3. Proposed findings of fact 18, 39, 40, 52, 53, 57-59, and 62-64 are irrelevant, primarily for the reasons stated in Finding of Fact 30.

COPIES FURNISHED:

Virginia B. Wetherell Executive Director

Department of Natural Resources 3900 Commonwealth Boulevard, MS-10 Tallahassee, FL 32399-3000

Kenneth Plante, General Counsel Department of Natural Resources 3900 Commonwealth Boulevard, MS-10 Tallahassee, FL 32399-3000

L. Kathryn Funchess Assistant General Counsel

Department of Natural Resources 3900 Commonwealth Boulevard, MS-35 Tallahassee, FL 32399-3000

Robyn A. Deen Sidney F. Ansbacher Attorneys at Law

Brant, Moore, Sapp, MacDonald & Wells Post Office Box 4548

Jacksonville, FL 32202

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: 92-003946

Orders for Case No: 92-003946