STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF ENVIRONMENTAL ) PROTECTION, )
)
Petitioner, )
)
vs. ) Case No. 07-4175EF
)
L.B. KING, JR., )
)
Respondent. )
)
FINAL ORDER
Pursuant to notice, this matter was heard before the Division of Administrative Hearings by its assigned Administrative Law Judge, Donald R. Alexander, on February 5, 2008, in Tallahassee, Florida.
APPEARANCES
For Petitioner: Jason A. Wiles, Esquire
Department of Environmental Protection 3900 Commonwealth Boulevard
Mail Station 35
Tallahassee, Florida 32399-3000
For Respondent: Robert D. Fingar, Esquire
Gramling & Fingar
1607 Village Square Boulevard, Suite 1
Tallahassee, Florida 32309-2771 STATEMENT OF THE ISSUES
The issues in this case are whether Respondent, L.B. King, Jr., violated certain rules relating to petroleum contamination site cleanup criteria promulgated by Petitioner, Department of Environmental Protection (Department), whether he should be
required to pay an administrative fine and investigative costs and expenses incurred by the Department, and whether he should take corrective action, as described in the Department's Notice of Violation, Orders for Corrective Action, and Administrative Penalty Assessment (Notice of Violation) issued on June 15, 2007.
PRELIMINARY STATEMENT
This enforcement action began on June 15, 2007, through the issuance of a Notice of Violation by the Department alleging that Respondent owned property in Cross City, Florida, on which eight regulated petroleum tanks were stored; that when three tanks were closed or removed, one in 1997 and two in 2004, the Department discovered contamination in the soil; that Respondent failed to file certain assessment reports; and that he had failed to timely assess and remediate the contamination on his property. The Notice of Violation advised Respondent that because this conduct violated certain Department rules and related statutes, it intended to assess a $10,000.00 administrative penalty, recover investigative expenses and costs in the amount of $500.00, and require certain corrective actions.
On September 6, 2007, Respondent filed his Petition for Formal Administrative Hearing (Petition) for the purpose of contesting the Department's proposed action.1 The matter was referred to the Division of Administrative Hearings on September 17, 2007, with a request that an administrative law judge be assigned to conduct a formal hearing.
By Notice of Hearing dated October 17, 2007, the matter was scheduled for final hearing on November 14, 2007, in Tallahassee, Florida. On October 24, 2007, Respondent filed an unopposed Motion for Continuance and requested that the case be temporarily abated on the ground he expected final disposition of a federal court action with his insurance carrier within the next 45 days. On December 19, 2007, the Department requested that the matter be reset for hearing. By Notice of Hearing dated December 21, 2007, the case was rescheduled to February 5, 2008, at the same location.
On January 9, 2008, the Department filed a Motion for Summary Final Order (Motion). On January 14, 2008, Respondent filed his response in opposition to the Motion. On January 25, 2008, the undersigned issued an Order on Motion for Summary Final Order granting the requested relief in part and determining that in the following respects there was no genuine issue as to any material fact and the Department was entitled to summary disposition as a matter of law: (a) that Respondent violated the rules cited in the Notice of Violation and was responsible for cleaning up the contamination on his property; (b) that Respondent should reimburse the Department for investigative expenses and costs in the amount of $500.00; and (c) that Respondent should perform the corrective actions described in the Notice of Violation, including the filing of a completed assessment report for the discharges that occurred in 1997 and
2004 within 180 days of the effective date of this Final Order, as well as the complete cleanup of the contaminated site. The Order further noted that the only remaining issue in dispute was whether the administrative penalty being imposed by the Department should be reduced due to mitigating circumstances. In making those determinations, the Order concluded (with more specificity than here) that Section 376.309(2), Florida Statutes, (2007),2 which allows the Department to institute an enforcement action against the insurance carrier (rather than the responsible party) for cleanup costs, did not prohibit the Department from initiating an enforcement action against Respondent since this choice was a matter within the agency's discretion. The undersigned also ruled that Section 376.3071(7)(c), Florida Statutes, did not serve as a bar to an enforcement action against Respondent. That statute comes into play only after liability has been established and allows a responsible party to provide evidence to the Department that he is financially unable to cleanup the contaminated property. The Department may then agree to undertake all or part of the cleanup of the site with state trust funds. The appropriate findings of fact and conclusions of law relative to the partial summary determinations are set forth in this Final Order.
By Order dated January 30, 2008, the undersigned granted the Department's First Amended Motion in Limine, which excluded evidence concerning or related to Respondent's insurance
claim for petroleum contamination at his property and concurrent litigation related thereto and evidence concerning Section 376.309, Florida Statutes, on the ground it was immaterial to the primary issues (liability and corrective actions) raised in the enforcement action.3 However, the Order
allowed Respondent to use this information as mitigating evidence for the purpose of seeking a reduction in the proposed administrative penalty.
On January 30, 2008, Respondent filed a Motion to Abate this matter pending the outcome of a lawsuit with his insurance carrier in federal court. This filing (together with other papers) indicates the carrier is denying liability for both discharges under the policy. The Motion to Abate also indicated that motions for summary final judgment filed by both Respondent and the carrier have been pending before the United States District Court for the Northern District of Florida since
August 2007, and that Respondent may file a motion in the federal lawsuit seeking to join the Department as an indispensable party. After hearing argument at the final hearing, the Motion to Abate was denied.
At the final hearing, which was limited to the issue of mitigating evidence, the Department did not present any witnesses or offer any exhibits. Although Respondent did not present any witnesses, he offered Respondent's Exhibits 2-15, which were received in evidence. Exhibit 2 is the affidavit of George W.
Hatch, III, Esquire, an attorney representing Respondent in the federal lawsuit, Exhibit 11 is the deposition testimony of Patrick W. Elwood, a corporate representative of Respondent's insurance carrier, and Exhibit 12 is the deposition testimony of Glenn M. Serrano, an assistant vice-president with Pollution Insurance Products. Finally, as requested in the parties' Pre- Hearing Stipulation, the undersigned has taken official recognition of Sections 403.121(3)(g) and 403.121(6), Florida Statutes.
A Transcript of the hearing was filed on February 12, 2008. Proposed Final Orders were filed by Petitioner and Respondent on February 18 and 19, 2008, respectively, and have been considered by the undersigned in the preparation of this Final Order.
FINDINGS OF FACT
Based upon the record presented by the parties, and those allegations in the Notice of Violation which are undisputed, the following findings of fact are determined:
Respondent is the owner and operator of non-residential property (doing business as King Oil and Tire) located at 16776 Southeast U.S. Highway 19 (at Main Street and Ward Street) in Cross City, Florida. He has owned the property since June 30, 1982.
Since July 1978, eight regulated petroleum storage tanks were situated on the property. See Fla. Admin. Code R. 62- 761.200(20), (45), (53), and (65). The Department has assigned
facility identification number 15/8839661 to the site. During the intervening time period since Respondent assumed ownership, six of the tanks and their associated piping have been closed or removed, including tank 4 in August 1997 and tanks 5 and 6 in March 2004. Tank 4 was a 1,000 gallon diesel underground storage tank system (UST) originally installed in July 1982, tank 5 was a kerosene UST installed in July 1978, while tank 6 was a waste oil UST installed in July 1978. Only tanks 7 and 8 still remain in service.
After tank 4 and the associated piping were closed in August 1997, Respondent conducted a closure assessment in the area of tank 4 and performed soil and groundwater analytical sampling in the area of its former piping run. He then filed a Tank Closure Assessment Report (TCAR) with the Department on August 19, 2003. The TCAR revealed groundwater contaminants above the Department's Cleanup Target Levels (CTLs) for Methylnapthalene in two respects and for Naphthalene. See Fla. Admin. Code R. 62-777.170(1)(a), Table I.
Because of the presence of contamination on the site, on September 3, 2003, the Department sent Respondent a letter requesting that he submit a Discharge Report Form (DRF) and initiate a site assessment, as required by Florida Administrative Code Rule 62-770.600, and that he file a completed site assessment report by July 10, 2004.3 Subsection (1) of that rule requires that "[w]ithin 30 days of discovery of contamination,
the responsible party shall initiate a site assessment." On September 29, 2003, the Department received the requested DRF.
During a tank closure inspection of tanks 5 and 6 performed on March 4, 2004, the Levy County Health Department, acting on behalf of the Department, discovered stained soils in the fill area of tank 6.
On May 18, 2004, the Department received a TCAR dated May 7, 2004, for the closure of tanks 5 and 6. The TCAR documented the results of laboratory analytical tests on groundwater samples, which revealed groundwater contaminants above the Department's CTLs for Methylnapthalene in two respects.
On May 24, 2004, the Department received from Respondent a copy of a DRF (dated March 9, 2004, as amended on April 9, 2004) for the contamination related to tanks 5 and 6. The DRF was the last report filed by Respondent concerning tanks 5 and 6. On the same date, the Department sent Respondent a letter requesting that he initiate site assessment activities for the discharge related to tanks 5 and 6, as required by Florida Administrative Code Rule 62-770.600(1).
On July 14, 2004, the Department sent Respondent another letter requesting (a) completion of a site assessment and (b) the submission of a Site Assessment Report (SAR) for the discharge from tank 4 (SAR-97), which complied with the requirements of Florida Administrative Code Rule 62-770.600(8). (The SAR-97 was originally due on July 10, 2004, but had not yet been filed.) In
order to be deemed complete, a SAR must contain all of the information detailed in subsection (8). Also, the letter requested that a SAR for the 2004 discharge (SAR-04) be completed no later than August 1, 2004, as required by Florida Administrative Code Rule 62-770.600(7). That subsection requires in relevant part that "[w]ithin 270 days of discovery of contamination, the responsible party shall submit to the Department or to the FDEP local program for review two copies of a [SAR] "
On July 15, 2004, or the day after the above letter was mailed, the Department received a copy of the SAR-97 from Respondent. The report was then referred to the Department's Petroleum Cleanup Section for its review. By letter dated August 27, 2004, the Department advised Respondent that SAR-97 was under review. The letter also changed the due date for the SAR-04 from August 1, 2004, to November 9, 2004.
On September 15, 2004, the Department received correspondence from Respondent requesting an extension of time in which to submit his SAR-04. On December 10, 2004, the Department approved the request and authorized Respondent to file a SAR-04 no later than March 1, 2005.
On April 12, 2005, Respondent filed with the Department a Site Assessment Report Addendum (SARA) for the 1997 discharge (SARA-97). The report was dated March 1, 2005.
On May 25, 2005, the Department sent Respondent a letter requesting that he file two copies of a supplement to the SARA-97 no later than July 5, 2005, to address certain deficiencies noted in that report, as required by Florida Administrative Code Rule 62-770-600(11). That subsection provides that "[i]f the [SAR] is incomplete in any respect, or is insufficient to satisfy the objectives of subsection 62- 770.600(3), F.A.C., the Department or the FDEP local program shall inform the responsible party pursuant to paragraph 62- 770.600(9)(b), F.A.C., and the responsible party shall submit to the Department or to the FDEP local program for review two copies of a [SARA] that addresses the deficiencies within 60 days after receipt of the notice." The same letter also requested that a disposal manifest be provided for the tank and piping closures.
On July 11, 2005, the Department received a second SARA-97 from Respondent's consultant. On July 14, 2005, it also received the disposal manifest documentation for the closure of tank 4 and its piping. These were the last reports filed by Respondent.
On October 4, 2005, the Department sent Respondent a letter requesting that he provide two copies of a third SARA for the 1997 discharge to address deficiencies noted by the Department in the second SARA. The letter indicated that the third SARA was to be filed no later than November 23, 2005. The Department also requested that he provide a completed financial
affidavit to justify Respondent's claim that he was financially unable to complete the remaining required cleanup corrective actions at his property.
On November 29, 2005, Respondent requested an extension of time to complete the third SARA-97. (The reason for the requested extension was that Respondent's insurance carrier would not give authorization for the work.) On January 12, 2006, the Department advised Respondent by letter that his request had been denied and that he must submit either the third SARA or a financial affidavit, as previously requested, no later than February 15, 2006. In its response, the Department indicated that it did not "consider generic delays by contractors or insurance carriers as good cause for an extension." To date, neither filing has been made.
By failing to file the requested third SARA for the 1997 discharge, Respondent has contravened the requirements of Florida Administrative Code Rules 62-770.600(11) and 62- 770.800(3), which require that within 60 days after notice, a responsible party submit a SARA to address deficiencies noted in a SAR. Respondent's conduct also implicates Florida Administrative Code Rule 62-770.800(5), which makes it a violation of two Florida Statutes for a responsible party to not submit requested information within the time frame specified.
Since March 1, 2005, which was the due date on which a report was to be filed, Respondent has failed to submit an
approved SAR for the 2004 discharge, as required by Florida Administrative Code Rule 62-770.600(7), which in turn contravenes Florida Administrative Code Rule 62-770.800(3) and (5).
To date, Respondent has failed to complete site assessment activities for both the 1997 and 2004 discharges, as required by Florida Administrative Code Rule 62-770.600(10). That provision states that "[s]ite assessment activities shall not be deemed complete until such time as a [SAR] is approved."
To date, Respondent has failed to timely and completely assess and remediate the contamination at his property, as required by Florida Administrative Code Rule Chapter 62-770.
That chapter contains the criteria which apply to the cleanup of a site contaminated with petroleum products.
During the course of its investigation of this matter, the Department has incurred expenses "in the amount of not less than $500.00."
As mitigating evidence, Respondent offered into evidence Respondent's Exhibits 2-15, the majority of which pertain to his insurance policy and the pending litigation with his carrier, Mid-Continent Casualty Company (MCC), or the priority score funding process, which is the process by which contaminated properties are scored or rated for purposes of determining eligibility to receive state cleanup funds when the responsible party is financially unable to do so. Although evidence regarding the insurance policy and pending litigation
was deemed to be immaterial to the issues of establishing Respondent's liability for the violations and responsibility for undertaking the corrective actions necessary to satisfy the violations, the undersigned ruled that it could be used by Respondent as mitigating evidence, if relevant, for the purpose of seeking to reduce the administrative penalty.
Respondent's Exhibits 8, 9, and 11 indicate that after he reported the 2003 discharge to MCC, in 2003 the carrier denied coverage for that discharge (on the ground "any 'confirmed release' must commence after the retroactive date of the policy (4/3/98)"). However, MCC initially accepted coverage for the 2004 discharge and authorized Respondent's environmental consultants to conduct a site assessment. The documents further show that in December 2005, or before the 2004 site assessment had been completed and a SAR prepared, MCC reversed its position and denied coverage for the 2004 discharge on the ground there was no "Confirmed Release," as defined by the policy. Respondent then filed his lawsuit seeking a determination that the carrier was responsible for cleanup costs. Respondent asserts that he has expended more than $50,000.00 in pursuing the lawsuit, which is much more than the administrative penalty being assessed by the Department.
Respondent points out that prior to the time MCC reversed its position as to coverage for the 2004 discharge in December 2005, he had filed a DFR, TCAR, disposal manifest, SAR-
97, and two SARAs for the 1997 discharge, and a TCAR and DFR for the 2004 discharge, all of which indicate a good faith effort on his part to comply with the assessment requirements. As noted above, the final reports prepared by Respondent's consultant were a second SARA-97 and a disposal manifest for the 1997 discharge, which were filed with the Department in July 2005, and a TCAR and DRF for the 2004 discharge filed in May 2004.
Respondent's Exhibit 10A recites language in Coverage B of the insurance policy, which provides in part that MCC "will pay Clean-up Costs by an Insured for environmental damage that an Insured is legally obligated to pay . . . ." Respondent argues that if he acknowledges by affidavit or other proof that he does not have the ability to pay for cleanup costs, he fears that under the above language, MCC would not be "legally obligated to pay." This is because Section 376.3071(7)(c), Florida Statutes, provides that when a responsible party does not have the ability to pay for all of the cleanup costs, the Department "may" enter into an agreement with the responsible party to undertake all or part of the site rehabilitation after "taking into consideration the party's net worth and the economic impact on the party." Respondent contends that if he files an affidavit under this statute, MCC would then be relieved of any responsibility under the policy, and his rights in the lawsuit would be jeopardized.
Respondent further points out that several other provisions in the insurance policy prohibit him from completing
the assessment until the litigation is concluded. For example, one provision (Section II.B) provides that "No Clean-up Costs, charges, and expenses shall be incurred without the Company's consent," while another (Section II.C) provides that "An Insured shall not admit or assume any liabilities or settle any Claim(s) without the Company's consent." Respondent asserts that these provisions prevent his consultant from conducting any further work on the site without MCC's consent, and if he does so, he will lose the right to reimbursement under the policy.
Finally, Exhibits 3 through 6 show that Respondent's property has been assigned a site ranking score of ten points, and that the Department is currently funding sites that are eligible for state restoration funding only if they have scores of 37 points and higher. Thus, Respondent argues that a delay in remediation of the site is not unreasonable.
Except for the two discharges at issue in this case, there is no evidence that Respondent has a history of non- compliance or that he gained any direct economic benefit by virtue of the discharges. Although no reports have been filed since July 2005, through counsel, Respondent has kept the Department abreast of his efforts to establish liability on the part of MCC so that the site assessments can resume.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties hereto
pursuant to Sections 120.569, 120.57(1), and 403.121, Florida Statutes.
Section 376.303(1)(j), Florida Statutes, authorizes the Department "to bring an action on behalf of the state to enforce the liabilities imposed by ss. 376.30-376.319." It also provides that "[t]he provisions of ss. 403.121, 403.131, 403.141, and
403.161 apply to enforcement under ss. 376.30-376.319." Section 403.121(2)(a), Florida Statutes, authorizes the Department to "institute an administrative proceeding to
establish liability and to recover damages for any injury to the air, waters, or property . . . of the state caused by any violation." The same statute allows the Department to "order the prevention, abatement, or control of the conditions creating the violation." § 403.121(2)(b), Fla. Stat. Under this broad statutory authority, the Department has issued its Notice of Violation.
"The department has the burden of proving with the preponderance of the evidence that the respondent is responsible for the violation." § 403.121(2)(d), Fla. Stat.
Throughout this case, the thrust of Respondent's arguments has been two-fold: that it is unfair for the Department to continue to pursue this enforcement action while Respondent is engaged in litigation with his insurance carrier concerning coverage under an insurance policy; and that the Department should be seeking reimbursement from the insurance
carrier, rather than Respondent. The first argument raises the issue of whether pending litigation between a responsible party and its insurance carrier should trump the Department's statutory responsibility to ensure that site assessment and cleanup activities are promptly initiated and completed after an unlawful discharge occurs. In ruling on various preliminary motions raising this same argument, the undersigned found no statute or rule which would warrant delaying an enforcement action for an indefinite period of time while the federal litigation runs its course, and Respondent has not cited any agency precedent for doing so. Significantly, if the Legislature had intended that the Department forego pursuing an enforcement action until this type of litigation was concluded, it could have written the regulatory statutes in this manner.
As to the second argument, in both the Order on Motion for Summary Final Order issued on January 25, 2008, and the Order Granting First Amended Motion in Limine issued on January 30, 2008, the undersigned set forth in detail the reasons why this argument was not accepted. Those reasons are incorporated into this Final Order. Here, it is sufficient to say that the statute reposes in the Department the discretion to file an enforcement action against the responsible party or the insurance carrier, and the undersigned will not second guess the exercise of that discretion by the agency.
Count I of the Notice of Violation alleges that Respondent failed to submit requested information to the Department within 60 days of written notification, complete site assessment activities, and timely and completely assess and remediate the contamination on his property in violation of Florida Administrative Code Rules 62-770.600(7), (10), and (11) and 62-770.800(3) and (5). By violating these rules, Count I alleges that Respondent has also violated Sections 376.302 and 403.161, Florida Statutes, which make it unlawful to violate a Department rule. Count II alleges that the Department has "incurred expenses to date while investigating this matter in the amount of not less than $500.00." Because Respondent has not disputed these allegations, it is concluded that Respondent has failed to (a) timely submit an approved SARA-3 for the 1997 discharge, (b) timely submit an approved SAR for the 2004 discharge, (c) timely complete site assessment activities for both discharges, and (d) timely and completely assess and remediate the contamination discovered at his property, as charged in Count I of the Notice of Violation. Likewise, Respondent has not disputed the fact that the Department has incurred expenses in the amount of $500.00 while investigating this matter. Therefore, the Department has also sustained the charge in Count II.
For violating the rules cited in Count I, the Department has proposed to assess an administrative penalty in
the amount of $10,000.00. In arriving at that amount, the Department has followed the directive in Section 403.121(3)(g), Florida Statutes, which provides in relevant part that "[e]xcept for violations involving hazardous wastes, asbestos, or underground injection, administrative penalties must be calculated according to the following schedule:
(g) For storage tank system and petroleum contamination violations . . . [t]he department shall assess a penalty of $2,000 for . . . failure to timely assess or remediate petroleum contamination . . . .
In addition, Section 403.121(6), Florida Statutes, provides that "[f]or each additional day during which a violation occurs, the administrative penalties in subsection (3) may
be assessed per day violation." (Emphasis added) Exercising its discretion under this statute, the Department has assessed a
$2,000.00 penalty for four additional days in which the violations occurred, or an additional $8,000.00. The total administrative penalty is $10,000.00.
The total administrative penalty does not contravene Section 403.121(2)(b), Florida Statutes, which provides that "the department shall proceed administratively in all cases in which the department seeks administrative penalties that do not exceed
$10,000 per assessment as calculated in accordance with subsections (3), (4), (5), (6), and (7)" and that "[t]he department shall not impose administrative penalties in excess of
$10,000 in a notice of violation." In assessing the maximum
penalty, it is presumed that the Department did so after taking into account the length of time and effort expended in seeking to secure a complete assessment of the site and corrective measures to cleanup the contaminated property.
Section 403.121(10), Florida Statutes, allows a responsible party to offer "mitigating circumstances" that may serve as a basis for reducing the administrative penalty. That statute provides as follows:
(10) The administrative law judge may receive evidence in mitigation. The penalties identified in subsection (3), subsection (4), and subsection (5) may be reduced up to 50 percent by the administrative law judge for mitigating circumstances, including good faith efforts to comply prior to or after discovery of the violations by the department. Upon an affirmative finding that the violation was caused by circumstances beyond the reasonable control of the respondent and could not have been prevented by respondent's due diligence, the administrative law judge may further reduce the penalty.
Under the foregoing statute, an administrative penalty "may be reduced up to 50 percent" for "mitigating circumstances, including good faith efforts to comply prior to or after discovery of the violations by the department." Also, if a respondent can demonstrate that "the violation was caused by circumstances beyond the reasonable control of the respondent and could not have been prevented by respondent's due diligence," the penalty may be further reduced.
There are only a few reported appellate and administrative decisions involving mitigation of administrative penalties, none of which involve circumstances similar to those presented here. The single appellate decision on this subject makes clear that to support a claim of mitigation, there must be "competent, substantial evidence" presented by the respondent. Florida Department of Environmental Protection v. Holmes Dirt Service, Inc. et al., 864 So. 2d 507, 508 (Fla. 1st DCA 2004)(Benton, J., dissenting). Although the majority opinion in Holmes approved an administrative law judge's reduction in a penalty due to the respondent's not "hav[ing] enough money to comply" with Department financial responsibility standards, a subsequent administrative final order noted that a lack of financial resources is not a mitigating factor under the statute. Department of Environmental Protection v. Hethington, DOAH Case No. 06-3496EF, 2007 Fla. ENV LEXIS 49 at *23 (DOAH April 20, 2007). However, it is unnecessary to reach that issue here since Respondent has not offered any evidence regarding his inability to cleanup the contaminated site. Rather, Respondent has simply asserted that he is unable to demonstrate financial hardship under Section 376.3071(7)(c), Florida Statutes, because it may jeopardize the pending lawsuit with his insurance carrier.
An administrative penalty has been reduced, for example, where there was a "long delay" by the Department in notifying the responsible party that it had failed to file a
required report, and some arguable ambiguity existed in the language of the notice of violation. Department of Environmental Protection v. Laniger Enterprises of America, Inc., DOAH Case No. 06-1245EF, 2006 Fla. ENV LEXIS 150 at * 22 (DOAH Sept. 19, 2006).
However, neither one of these circumstances has been raised here. In another administrative decision, cited above, "good faith efforts" by the responsible party "to extinguish [a] fire [on his property] after its discovery" was sufficient evidence to reduce an administrative fine. Hethington at *27. On the other hand, where no factual justification was presented by a respondent for not timely initiating a site assessment, a reduction in the amount of the penalty was not warranted. Department of Environmental Protection v. Elston et al., DOAH Case Nos. 03-0626 and 03-2284, 2003 Fla. ENV LEXIS 255 at *43 (DOAH Nov. 5, 2003).
Similarly, where no relevant mitigating evidence was presented by the responsible party for the proven violations, the Department's proposed administrative penalties were sustained in the final order. Department of Environmental Protection v. Dajoma, Inc., DOAH Case No. 04-0654EF, 2004 Fla. ENV LEXIS 232 (DOAH June 7,
2004); Department of Environmental Protection v. Leasure, DOAH Case No. 04-3688EF, 2005 Fla. ENV LEXIS 41 (DOAH Feb. 18, 2005).
In terms of mitigation, Respondent admits that he is liable for completion of the site assessment and for cleanup, but argues that there are mitigating circumstances for reducing by fifty percent the administrative penalty of $2,000.00 (down to
$1,000.00) in that he proceeded in good faith in site assessment until December 2005 when MCC changed its coverage opinion in mid- assessment and withdrew funding; that multi-day penalties (in the amount of $8,000.00) are not called for here since he is engaged in a good faith effort to recoup cleanup costs from his insurance carrier; and that the remaining $1,000.00 penalty should not be imposed because the failure to complete site assessment activities was due to circumstances (a denial of insurance coverage) beyond his control. In summary, Respondent has agreed to pay investigative costs and expenses of $500.00 but argues that no administrative penalties should be imposed.
On the other hand, the Department takes the position that neither filing an insurance claim for coverage nor litigating with an insurance company constitutes a good faith effort to comply with Section 403.121, Florida Statutes, so that the $10,000.00 penalty ($2,000.00 plus $8,000.00 for four more days in which the violations occurred) may be reduced by up to fifty percent. Likewise, the Department argues that a further reduction in the penalty is not warranted, as there is no evidence that the violation was caused by circumstances beyond his control or that he could not have been prevented by his due diligence.
The last assessment reports (though still incomplete) were filed by Respondent in July 2005 for the 1997 discharge, or two and one-half years ago, and in May 2004 for the 2004
discharge, or almost four years ago. Once the insurance carrier denied liability in December 2005, all assessment activities ceased and no required cleanup activities were ever begun.
Admittedly, since July 2006 Respondent has been engaged in litigation with his insurance carrier seeking recovery of assessment and cleanup costs. At the same time, the undersigned recognizes that Respondent has been placed in the difficult position of defending against a Department enforcement action while at the same time seeking reimbursement from his insurance carrier in a federal lawsuit. However, absent some agreement or understanding with the Department that it may temporarily cease all assessment and cleanup activities for an unlawful discharge pending the outcome of litigation, or a change in the existing statutory scheme, the responsible party must either continue with assessment and cleanup activities or file an affidavit attesting to the fact that it is financially unable to complete the required cleanup of the property. Even so, due to Respondent's good faith efforts to remediate the discharge during the period from 2003 until mid-2005, a fifty percent reduction in the administrative fine (from $10,000.00 to $5,000.00) is warranted. No further reduction is justified.
In his Petition and Proposed Final Order, Respondent has requested attorney's fees under Section 403.121(2)(f), Florida Statutes, which allows the recovery of attorney's fees if there is a determination "that the notice of violation issued by
the department seeking the imposition of administrative penalties was not substantially justified as defined in s. 57.111(3)(e)." Because the facts herein establish that Respondent violated the cited Department rules, and that the issuance of the Notice of Violation was clearly justified, the request is hereby denied.
Finally, Section 403.121(2)(f), Florida Statutes, also provides that "the prevailing party shall recover all costs as provided in ss. 57.041 and 57.071. The costs must be included in the final order." In this case, the Department is the prevailing party. However, it made no request for the "prevailing party" costs, and it presented no evidence on their amount. Therefore, they cannot be included in this Final Order. Elston, supra, at
*48-49.
DISPOSITION
Based on the foregoing Findings of Fact and Conclusions of Law, it is
ORDERED that the charges in the Notice of Violation are sustained, and that Respondent shall correct and redress all violations in the time periods required below and comply with all applicable rules in Florida Administrative Code Rule Chapters 62- 761 and 62-770. Specifically, he shall (1) file a completed site assessment report within 180 days of the effective date of this Final Order for the 1997 and 2004 discharges; (2) timely perform all necessary assessment and cleanup of the contamination on the property, as required by Florida Administrative Code Rule Chapter
62-770 until the Department issues a No Further Action Order or a Site Rehabilitation Completion Order; (3) pay the Department
$5,000.00 for the administrative penalties assessed above within
10 days of the effective date of this Final Order; and (4) pay
$500.00 to the Department for investigative costs and expenses within 10 days of the effective date of this Final Order.
Payment for the administrative penalties and costs shall be made by cashier's check or money order payable to the "State of Florida, Department of Environmental Protection" and shall note "OGC Case No. 06-2199" and "Ecosystem Management and Restoration Trust Fund" thereon. The payment shall be sent to the State of Florida Department of Environmental Protection, Northeast District, 7825 Baymeadows Way, Suite 200-B, Jacksonville, Florida 32256-7590. Finally, Respondent shall remain liable to the Department for any damages resulting from the violations alleged herein and for the correction, control, and abatement of any pollution from his facility.
DONE AND ORDERED this 27th day of February, 2008, in Tallahassee, Leon County, Florida.
S
DONALD R. ALEXANDER
Administrative Law Judge
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-3060
(850) 488-9675 SUNCOM 278-9675
Fax Filing (850) 921-6847 www.doah.state.fl.us
Filed with the Clerk of the Division of Administrative Hearings this 27th day of February, 2008.
ENDNOTES
1/ On January 22, 2008, Respondent filed an Amended Petition for Formal Administrative Hearing, but he withdrew that filing on January 29, 2008.
2/ All references are to the 2007 version of the Florida Statutes.
3/ Although the parties have not addressed the reason why the Department did not request these reports until almost six years after the discharge occurred, and it is not an issue in this case, Respondent's Exhibit 2 (a time table of events prepared by Respondent's federal litigation counsel) suggests that the 1997 discharge was not confirmed until several years later. This probably explains why a claim with the insurance company was not filed until sometime in 2003. Exhibit 2 also indicates that the Department conducted an inspection of the site as early as September 1997 and noted "No leaks reported" on a Pollutant Storage Tank System Inspection Report. An inspection of the site on June 29, 2000, resulted in a Letter of Non-Compliance being issued, which was followed over the next few years by several non- compliance and warning letters, and a proposed Notice of Violation in 2003. Presumably, these warnings related not only to tank 4, but also to other violations on the property.
COPIES FURNISHED:
Lea Crandall, Agency Clerk
Department of Environmental Protection 3900 Commonwealth Boulevard
Mail Station 35
Tallahassee, Florida 32399-3000
Jason A. Wiles, Esquire
Department of Environmental Protection 3900 Commonwealth Boulevard
Mail Station 35
Tallahassee, Florida 32399-3000
Robert D. Fingar, Esquire Gramling & Fingar
1607 Village Square Boulevard, Suite 1
Tallahassee, Florida 32309-2771
NOTICE OF RIGHT TO JUDICIAL REVIEW
A party who is adversely affected by this Final Order is entitled to judicial review pursuant to Section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing the original notice of appeal with the Clerk of the Division of Administrative Hearings and a copy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or with the District Court of Appeal in the Appellate District where the party resides. The notice of appeal must be filed within 30 days of rendition of the order to be reviewed.
| Issue Date | Document | Summary |
|---|---|---|
| Mar. 24, 2009 | Opinion | |
| Mar. 24, 2009 | Mandate | |
| Feb. 27, 2008 | DOAH Final Order | Respondent was found guilty of unlawful petroleum discharge on his property. The mitigating evidence was sufficient to reduce the penalties by 50 percent. Litigation with insurance carrier was not a good cause to delay the administrative case. |
