STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, DEPARTMENT OF ) INSURANCE, DIVISION OF LP GAS, )

)

Petitioner, )

)

vs. ) Case No. 86-1184

) VETERANS GAS AND APPLIANCE CO. ) INC., t/a VETERANS GAS COMPANY, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Fort Walton Beach, Florida, before Robert T. Benton, II, Hearing Officer of the Division of Administrative Bearings, on September 16, 1986. The Division of Administrative Hearings received the transcript of the final hearing on November 18, 1986. The parties filed proposed recommended orders, including proposed findings of fact which are addressed by number in the attached appendix. Along with its proposed recommended order, respondent filed a separate memorandum in support of its position.

The parties appeared through counsel:

For Petitioner: Lisa S. Santucci and

Susan Koch Stafford

413 B Larson Building Tallahassee, Florida 32301

For Respondent: Robert P. Gaines

Beggs and Lane

Post Office Box 12950 Pensacola, Florida 32576

By administrative complaint dated April 3, 1986, petitioner alleged that respondent Veterans Gas Company "at all times material ... licensed as a Dealer in Liquefied Petroleum Gas, in Appliances and in Equipment for Use of Such Gas and Installation

... on or about December 8, 1983, ... [by its employee] Ken Wallace ... filled an underground container with liquefied petroleum gas for customer William Wright, owner of Ships Chandler Tackle and Marine Supply Company"; that the "container was connected by a line to an adjacent building containing Way Associates, Inc."; that "when ... Ken Wallace pumped approximately

100 gallons of liquefied petroleum into the container, the liquefied petroleum gas passed through the line leading to Way Associates, Inc. and seeped into the space between the existing cement block wall and new drywall installed when that building was converted to office space"; that "when Way Associates' Employee, Fay Shaw, switched on the PMT camera she was working with, an explosion and flash fire occurred, which caused serious injury to Ms. Shaw and injury to fellow employee Wanda G. Gibbs"; that Ken Wallace "failed to check the entire gas system to determine that all fittings, ends and valves were closed and that no gas was escaping prior to pumping the liquefied petroleum into an existing system and failed to check for leakage, in violation of Section 1.2.13, NFPA No. 54, duly adopted by Section 48-1.01, Rules of the Department of Insurance"; that "Respondent's negligent actions as [just] described ... were the cause of the explosion and fire at Way Associates, Inc."; and that petitioner seeks revocation on that account "under the provisions of Section 527.06, 527.08, Florida Statutes, or to impose such remedies as may be proper under the provisions of Section 527.09, 527.12, 527.13, 527.14, Florida Statutes."

ISSUE

Whether petitioner should take disciplinary action against respondent for the reasons alleged in the administrative complaint?

FINDINGS OF FACT

1. The parties stipulated that respondent Veterans Gas and Appliance Co., Inc., trading as Veterans Gas Company, now holds and has at all pertinent times has held a license issued by petitioner. Petitioner has licensed respondent as a "[d]ealer in liquefied petroleum [LP] gas, in appliances and in equipment for use of such gas and installation." Petitioner's Exhibit No. 1. Respondent has been in business for 25 years or so, at least. (T.48)

   
   

2. On December 8, 1983, Clyde K. "Ken" Wallace, a gas serviceman in respondent's employ, was at the office of the Veterans Gas Company in Fort Walton, when a Mr. Wright telephoned,

   requesting that LP gas be delivered to the Ships Chandler in Destin, Mr. Wright's place of business. Mr. Wallace set out by himself for Destin in a bulk-fill truck to make the delivery.

   
   

3. When he arrived, he found he could not enter the driveway, so he parked on the south side of U.S. Highway 98 about

   15 feet from the Ships Chandler tank. He knew where the tank was because he had filled it the previous winter, the last time he had been there. Standing with two young ladies in the doorway of the Ships Chandler, Mr. Wright greeted him, saying something like, "I'm glad to see you. We're freezing."

   
   

4. Mr. Wallace set right to work. Initially unable to remove the dome which blocked access to the underground tank, he asked Mr. Wright for a claw hammer. With the hammer he succeeded in removing the dome, and then announced he was going to turn off the service valve, which is the valve that allows gas to enter the building from the tank. Mr. Wright asked him not to turn the valve off, saying he was going to ignite the pilot light in his furnace, and disappeared into the store.

   
   

5. Mr. Wallace took the dust cap off and, hooking up the hose to the fill valve, pumped one hundred gallons of LP gas at the rate of 25 to 30 gallons a minute, according to the meter on the truck. Before introducing LP gas into the tank, Mr. Wallace never turned off the service valve or any other valve through which LP gas flowed before passing through the regulator and into the system of pipes. In fact, he never touched the service valve, and did not know for sure whether it was on or off.

   
   

6. Furnace apparently lit, Mr. Wright reemerged from his store after a few minutes, a check in hand to pay for the gas. Earlier on, at some point during their conversation, Mr. Wright asked Mr. Wallace whether he knew if nearby shop owners heated with gas or otherwise used gas, or something to that effect. Mr. Wallace said he did not know. The question arose because the complex had been a motel with central gas heat before it had been remodeled into shops and offices; and the conversion had taken place since the preceding winter. Mr. Wright wondered aloud whether or not his neighbors owed him money for gas.

   
   

7. Mr. Wallace saw Mr. Wright enter one shop door, leave, enter another, leave, and so forth, presumably inquiring of the people inside whether they used gas. By the time he disengaged the hose and closed the fill valve, Mr. Wright was nowhere to be found. Mr. Wallace indicated on the invoice that it had been

   paid, dropped it on a desk or counter in the Ships Chandler, and left.

   
   

8. After Mr. Wallace had driven off, an explosion occurred causing a fire and injuries to two persons. Explosion, fire and injuries occurred not in the Ships Chandler, but on the premises occupied by Way and Associates, Inc. Whoever did the remodeling cut the gas line and neglected to cap it, so that LP gas pumped into the Ships Chandler tank, ended up in a space between the dry wall and the outside wall in the building Way and Associates, Inc. occupied. Ignition of the LP gas accumulated there caused the explosion. Respondent had nothing to do either with the remodeling or with the initial installation of the gas pipes.

   
   

9. If Mr. Wallace had followed standard industry practice, he would have turned off the service valve before pumping LP gas into the fill valve of an empty system. After pumping LP gas into the tank, he would have turned off the pump; he would have asked Mr. Wright to turn off all appliances, and, once the appliances were off, he would have turned the service valve back on to charge the system. Then he would have turned the service valve off again, in order to listen carefully. If he had done that, he would have heard LP gas moving through the regulator, even after the service valve was closed, and he would have realized that gas was leaking.

   
   

10. Mr. Wallace, who started working for respondent in July of 1982, is qualified as a gas service man but not as a gas appliance service man. Like other new drivers respondent hires, Mr. Wallace went out with an older driver or the manager to learn the route and safety procedures for at least two weeks before going out on his own, but he was never told to check for leaks when introducing LP gas into an empty system.

    
    

    CONCLUSIONS OF LAW

    
    

11. Petitioner is authorized to issue cease and desist orders, Section 527.12, Florida Statutes (1985), levy administrative fines, Section 527.12 and 527.13, Florida Statutes (1985) and suspend or revoke the licenses, Section 527.14, Florida Statutes (1985) of licensees who violate the provisions of Chapter 527, Florida Statutes (1985) or rules promulgated thereunder, including Rule 4B-1.01, Florida Administrative Code, which, by reference at the time of the explosion, incorporated NFPA No. 54, American National Standard Fuel Gas Code, 1974 edition.

    
    

    Burden of Proof

    
    

12. License revocation proceedings have been said to be "`penal' in nature." State ex rel. Vining v. Florida Real Estate Commission, 281 So.2d 487, 491 (Fla. 1973); Kozerowitz v. Florida Real Estate Commission, 289 So.2d 391 (Fla. 1974); Bach v. Florida State Board of Dentistry, 378 So.2d 34 (Fla. 1st DCA 1979)(reh. den. 1980). Strict procedural protections apply, and the prosecuting agency's burden is generally believed to be to prove its case clearly and convincingly. See generally Addington v. Texas, 441 U.S. 426 (1979); Ferris v. Austin, 487 So.2d 1163, (Fla 5th DCA 1986); Anheuser-Busch, Inc. v. Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, 393 So.2d 1177 (Fla 1st DCA 1981); Walker v. State Board of Optometry, 322 So.2d 612 (Fla. 3rd DCA 1975); Reid v. Florida Real Estate Commission, 188 So.2d 846, 851 (Fla 2nd DCA 1966). A licensee's breach of duty justifies revocation only if the duty has a "substantial basis," Bowling v. Department of Insurance, 394 So.2d 165, 173 (Fla. 1st DCA), in the evidence, unless applicable statutes and rules create the duty clearly. Id.

    
    

13. Whether a regulatory agency is proceeding under statute, rule, or "non-rule policy," McDonald v. Department of Banking and Finance, 346 So.2d 569, 583 (Fla 1st DCA 1977); see Cohn v. Department of Professional Regulation, 477 So.2d 1039 (Fla. 3rd DCA 1985), Bowling v. Department of Insurance, supra and Anheuser- Busch, Inc., v. Department of Business, Regulation, Division of Alcoholic Beverages and Tobacco, 393 So.2d 1177 (Fla. 1st DCA 1985), the agency must afford the licensee fair notice of the grounds on which it proposes to take disciplinary action. Due process forbids disciplinary action on grounds not pleaded in the administrative complaint. Wray v. Department of Professional Regulation, Board of Medical Examiners, 435 So.2d 312 (Fla. 1st DCA 1983). The administrative complaint in the present case pleads only a violation of the statutes requiring obedience to petitioner's rules. Sections 527.06 and 527.08, Florida Statutes (1985). The specific rule alleged to have been violated, Rule 48- 1.01, Florida Administrative Code, incorporates by reference NFPA No. 54, the document which contains the substantive requirements respondent allegedly failed to meet, having to do with turning off the service valve while filling the tank and listening for leaks afterward. Petitioner has not charged respondent with failing to follow industry standards, apart from allegedly violating Rule 48- 1.01, Florida Administrative Code. See Colloquy at T. 25,26.

    
    

14. By Rule 48-1.01, Florida Administrative Code, petitioner had, at the time of the events in question, adopted the "standards of the National Fire Protection Association for the storage and

    handling of liquefied petroleum gases as published in NFPA, No. 58, Storage and Handling of Liquefied Petroleum Gases ... and for gas appliances and gas piping as published in NFPA, No. 54, American National Standard National Fuel Gas Code." Petitioner's Exhibit No. 3. Petitioner relies in this proceeding on provisions of Part 1 of the National Fuel Gas Code, which reads in part:

    
    

    NATIONAL FUEL GAS CODE PART I

    INSTALLATION OF GAS PIPING AND GAS EQUIPMENT ON NONINDUSTRIAL

    PREMISES

    
    

    1. GENERAL

       1. Scope

          
          

          1. Applicability: Part

             1 of this Code is a safety code for nonindustrial gas piping systems on consumers premises and the installation of nonindustrial type gas utilization equipment and accessories for use with fuel gases such as natural gas, manufactured gas, liquefied petroleum gas in the vapor phase, liquefied petroleum gas-air mixtures, or mixtures of these gases, including:

             1. The design, fabrication, installation, testing, operation and maintenance of gas piping systems from the point of delivery to the connections with each gas utilization device. Piping systems

                covered by Part 1 of this Code are limited to a maximum operating pressure of 1/2 psig (14 inches water column). For purposes of this Code, the point of delivery is defined as the outlet of the meter set assembly, or the outlet of the service regulator or service

                shutoff valve where no meter is provided.

             2. The installation of

             gas utilization equipment and related accessories supplied at gas pressure of 1/2 psig or less, and their ventilation and venting systems.

             
             

    2. GAS PIPING INSTALLATION

       * * *

       1. Leakage Check After Gas Turn On

          
          

          1. Close All Gas Outlets: Before turning gas under pressure into any piping, all openings from which gas escape shall be closed.

             
             

          2. Check For Leakage: Immediately after turning on the gas, the piping system shall be checked by one of the following methods to ascertain that no gas is escaping:

       
       

       1. Checking For Leakage Using The Gas Meter. Immediately prior to the test it should be determined that the meter is in operating condition and has not been by passed.

          Checking for leakage can

          be done by carefully watching the test dial of the meter to determine whether gas is passing through the meter. To assist in observing any movement of the test hand, wet a small piece of paper and paste its edge directly over the center line of the hand as Soon as the gas is turned on. Allow 5 minutes for a 1/2-foot

          dial and proportionately longer for a larger dial in checking for gas flow. This observation should be made with the test hand on the upstroke.

          In case careful

          observation of the test hand for a sufficient length of time reveals no movement, the piping shall be purged and a small gas burner turned on and lighted and the hand of the test dial again observed. If the dial hand moves (as it should), it will show that the meter is operating properly.

          If the test hand does not move or register flow of gas through the meter to the small burner, the meter is defective and the gas should be shut off and the serving gas supplier notified.

       2. Checking For Leakage

          Not Using a Meter. This can be done by attaching to an appliance orifice, a

          mamometer or equivalent device calibrated so that it can be read in increments of 0.1 inch water column, and momentarily turning on the gas supply and observing the gaging device for pressure drop with the gas supply shutoff. No discernible drop in pressure shall occur during a period of

          3 minutes.

          
          

       3. When Leakage Is Indicated. If the meter test

       hand moves, or a pressure drop on the gage is noted, all appliances or outlets supplied through the system shall be examined to see if they are

       shut off and do not leak. If they are found tight there is a leak in the piping system. The gas supply shall be shut off until the necessary repairs have been made, after which the test specified in 1.2.13.2(a) or (b) shall be repeated. Petitioner's Exhibit No. 2. (1974 edition)

       
       

       At hearing respondent Contended that NFPA No. 54 pertained only to installation of new pipes or equipment and did not address procedures to be followed in introducing LP gas into a system in which there was neither new piping nor new equipment. Respondent called an expert witness and offered hearsay corroboration of the expert's testimony that Sections 1.2.13.1 and 1.2.13.2 apply whether or not the system has been newly installed, but the expert testimony is not dispositive on this crucial legal question. See Krispy Kreme Doughnut Co. v. Cornett, 312 So.2d 771 (Fla. 1st DCA 1975) cert. den. 330 So.2d 16 (Fla. 1976) and Noa v. United Gas Pipeline Co., 305 So.2d 182 (Fla. 1974). Nor was evidence as to industry practice determinative in interpreting NFPA No. 54.

       
       

15. Although entitled "Installation of Gas Piping and Gas Equipment Part I of NFPA No. 54 purports to apply not only to installation but also to "design, fabrication . testing, operation and maintenance of gas piping systems from the point of delivery to the connections with each gas utilization device." Section 1.1.1.1(a). None of the exclusions set out in Section

    1. pertain in the present case.

    
    

16. Similarly subpart 1.2, while entitled "Gas Piping Installation" starts before installation and ends after installation. It recommends that a piping plan be drawn "before proceeding with the installation" Section 1.2.1, specifies which piping materials are acceptable for installation, Section 1.2.6, requires that the gas to the system be turned off before work is begun, Section 1.1.3.1, and, after setting out installation requirements in detail (locations, connections, procedures, e.g., "Each outlet . . . shall be securely closed gastight . . . immediately after installation," Section 1.2.10.11), sets out procedures for "Leakage Check After Gas Turn On."

    
    

17. Here, of Course, there had been a drastic change to the system, when somebody severed a gas line, then failed to cap it. But, under NFPA No. 54, the onus was on the "installer," the party

    who altered the system, to test for leaks. Much of NFPA No. 54 is written in the passive voice, but when the code does identify -the party responsible for compliance, it specifies "[t]he installing agency," e.g., Section 1.2.14.1, not a deliveryman never told of any modification to the piping.

    
    

18. After an installation, Section 1.2.13 requires a leakage check, before the system is put into operation. Only if the system is brand new will there necessarily be a delivery of gas to the premises, in order to test the installation. When piping is replaced or added to an existing system or when a new appliance is being connected, gas is likely to be available in a storage tank. In such cases, the leakage check will be performed independently of any delivery of gas. Section 1.2.13 prescribes testing and operation procedures after work has been done on a system, and does not address deliveries of LP gas to an empty system as such.

It is, accordingly, RECOMMENDED:

That petitioner dismiss the administrative complaint filed against respondent.

DONE AND ENTERED this 26th day of November, 1986, in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

Division of Administrative Hearings Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301 904/488-9675

FILED with the Clerk of the Division of Administrative Hearings this 26th day of November, 1986.

APPENDIX TO RECOMMENDED ORDER IN CASE NO.86-1184

Petitioner's proposed findings of fact Nos. 1,2,3,4, and 7 have been adopted in substance, insofar as material.

Petitioner's proposed finding of fact No. 5 is supported only by hearsay as regards the identity of the person who ignited the gas, but has otherwise been adopted, in substance, insofar as material.

Petitioner's proposed finding of fact No. 6 has been adopted, in substance, except that these omissions have not been found to violate NFPA No. 54.

Respondent's proposed findings of fact Nos. 1,2,3,4,5, and 6 have been adopted in substance, insofar as material.

Respondent's proposed finding of fact No. 7 contains detail supported only by hearsay but has been adopted, in substance.

COPIES FURNISHED:

Lisa S. Santucci

and Susan Koch Stafford

413 B Larson Building Tallahassee, Florida 32301

Robert P. Gaines Beggs and Lane

Post Office Box 12950 Pensacola, Florida 32576

Docket for Case No: 86-001184

Orders for Case No: 86-001184