STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HARBOR CONSULTANTS AND PLANNERS, ) INC., )

)

Petitioner, )

)

vs. ) CASE NO. 88-3076

)

DEPARTMENT OF ENVIRONMENTAL )

REGULATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, on October 18, 1988, in Tallahassee, Florida. The issue for determination in this proceeding is whether a permit issued by the Department of Environmental Regulation to Harbor Consultants and Planners, Inc. in 1985 expired on June 1, 1987.

APPEARANCES

For Petitioner: Kenneth G. Oertel

Oertel, Hoffman, Fernandez & Cole, P.A. Post Office Box 6507

Tallahassee, Florida 32314-6507

For Respondent: Richard Grosso

Asst. General Counsel 2600 Blair Stone Road

Tallahassee, Florida 32399-2400 INTRODUCTION

In support of its position that its Department of Environmental Regulation (DER) permit to construct a boat docking facility in Lee County did not expire on June 1, 1987, petitioner presented the testimony of Richard Stevens, and its Exhibits 1 through 10 were received into evidence. The respondent, DER, presented the testimony of Michael Dentzau, and its Exhibit 1 was received into evidence.

Subsequent to the hearing, both parties submitted proposed recommended orders. To the extent that the parties' proposed findings of fact are not incorporated or included in this Recommended Order, they are rejected for the reasons set forth in the Appendix hereto.

FINDINGS OF FACT

Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found:

1. On or about March 6, 1984, petitioner applied for a DER permit to construct a marina on state owned submerged land located in Punta Rassa, Lee County, Florida. The original design requested approval to build slips for 54 boats. This design was later modified to conform to suggested modifications made by DER staff. The modification reduced the size of the marina to 30 boat slips.

   
   

2. By an Intent to Issue dated April 24, 1985, petitioner was advised that the DER intended to issue the permit with 17 special conditions. Special Condition Number 1 advised petitioner of the Florida law which states that construction on state sovereignty lands may not be commenced prior to receiving from the Board of Trustees of the Internal Improvement Trust Fund the required lease, license, easement, or other form of consent authorizing the proposed use. In none of the 17 special conditions, nor in any other portion of the Intent to Issue, was it stated when the permit time would begin to run, or when it would expire. The expiration date of the proposed permit simply was not mentioned. The Intent to Issue did contain a standard "point of entry" notice, advising that a petition for a hearing could be filed and stating that the hearing process was designed to formulate agency action. Having no objection to the DER's Intent to Issue and the conditions thereof, the petitioner determined not to request an administrative hearing with regard to said Intent.

   
   

3. On May 17, 1985, the DER issued to petitioner Permit Number 360836415. This permit included 15 general conditions and the same 17 special conditions that were contained in the Intent to Issue. In addition, the permit stated that it would expire on June 1, 1987. The permit was accompanied by a letter. Neither the letter, nor the permit, bore the stamp of the agency clerk or contained language advising petitioner of its right to petition for an administrative hearing or other "point of entry" language. DER never notified petitioner by any document that contained "point of entry" language that the permit time would begin running immediately and would expire on June 1, 1987.

   
   

4. In order to obtain a sovereignty land lease from the Trustees of the Internal Improvement Trust Fund, petitioner was required to modify its proposed marina design by reducing the number of boat slips to 14. The Trustees approved the lease on or about July 29, 1986, although the Certification of Board Action attesting the Board's approval of the lease, as well as the sovereignty submerged land lease itself, was not forwarded to the petitioner until March 12, 1987.

   
   

5. Due to the modifications required by the Trustees, the petitioner requested DER to modify its permit to reflect the reduction of the project scope. The request represented a minor modification to the permit and was granted by DER by letter dated September 30, 1986. The letter of modification does not suggest that the original expiration date of the permit had been changed.

   
   

6. As of June 1, 1987, construction work on the proposed marina had not yet begun. The petitioner's agent relied upon a promulgated rule of the DER and assumed that the permit time would not begin to run on this project until petitioner had obtained consent to use state owned submerged land.

7. DER's Dredge and Fill Application is encompassed in a form which is adopted by reference in Rule 17-1.203(1), Florida Administrative Code. This rule was adopted in 1982 and is still in effect today. A portion of that form, Appendix E, paragraph 3(g), on page 30, states that

   
   

   Where the proposed activity involves the use of state-owned submerged lands, DER shall not issue a permit before approval or consent of use is obtained from DNR, although DER will continue to process the application to the extent possible. (Emphasis supplied.)

   
   

   Except for this rule, DER has no other published instructions to applicants as to when permit times begin to run.

   
   

8. Since the effective date of the Warren S. Henderson Wetlands Protection Act (Sections 403.91 - .929, Florida Statutes) in October of 1984, DER has not followed its policy outlined in Form 17-1.203(1), as adopted by rule. This contrary practice is based on DER's interpretation of the Henderson Act's failure to include language which was previously included in Section 253.124, Florida Statutes, to the effect that DER permits do not become effective until all other local, state and federal permits are issued. DER's internal practice that calculates the running of the permit time prior to receiving approval to use state owned submerged land is not the subject of any public notice, memorandum or instructions generally available to the public or permit applicants.

   
   

9. DER does not require permittees to provide proof of submerged land consent subsequent to the issuance of the DER permit. Also, DER has no internal mechanism for regularly apprising itself of permits which are soon to expire.

   
   

10. DER does process and grant time extensions of permits. Requests for time extensions are made through a simple written request, and DER will generally grant such requests if the subject permit is still valid. If the DER permit has already expired at the time that the request for an extension is made, DER requires a new permit application. In this case, petitioner did not request an extension at any time before June 1, 1987. As noted above, it was the belief of petitioner's agent that the two-year permit term would not begin to run until the required Trustee's consent was secured. It was not until June

    23 or 24, 1987, that he learned that DER considered the permit to have expired on June 1, 1987.

    
    

11. In July of 1987, petitioner did re-apply for a new permit, but DER had environmental objections to the issuance of a new permit. The petition initiating these proceedings was subsequently filed.

    
    

    CONCLUSIONS OF LAW

    
    

12. The petitioner relies upon three separate reasons to support its position that Permit Number 360836415 did not expire on June 1, 1987. First, it is urged that petitioner was never appropriately notified that it could object to the expiration date on the permit by petitioning for a proceeding under Chapter 120, Florida Statutes. While the Intent to Issue dated April 24, 1985, did contain appropriate "point of entry" language, said Intent did not contain information as to the term of the proposed permit. When the permit itself was issued, petitioner learned for the first time that the expiration was June 1, 1987. However, neither the permit nor the cover letter accompanying the permit,

    contained advice that the applicant could request a hearing regarding the permit. It is urged that since DER never provided "point of entry" notice as to the expiration date of the permit, the permit never became "final agency action," and therefore cannot be considered to have expired. In support of this position, the petitioner relies upon the cases of Capeletti Brothers Inc. v.

    Florida Department of Transportation, 362 So.2d 346 (Fla. 1st DCA, 1978) and Henry v. Department of Administration, 431 So.2d 677 (Fla. 1st DCA, 1983).

    
    

13. As a related second ground for concluding that the permit time can not have expired, petitioner asserts that the permit never became final agency action because it was never filed with the agency clerk as required by Section 120.52(11), Florida Statutes. There having been no "rendition" of any final order by the agency, the permit time, according to Petitioner, cannot have expired. The Petitioner relies upon the case of Roach v. Department of Administration, 416 So.2d 1194 (Fla. 1st DCA, 1982), in support of this position.

    
    

14. Technically and legally, petitioner is correct that it received no proper notification of its right to challenge the expiration date contained on the permit, and that the permit did not bear the stamp of the agency clerk, as required by Section 120.52(11), Florida Statutes. However, to hold that the permit in question never became effective solely due to the lack of such notice or the lack of a clerk stamp would be to elevate form over substance. Under the facts of this proceeding, both errors are harmless procedural errors that did not impair either the fairness of the proceedings or the correctness of the action. First, the failure to provide a "point of entry" with regard to the permit's expiration date was of no real consequence because petitioner did not need to initiate an administrative proceeding in order to modify the expiration date of the permit. It could have done so at any time during the two-year term of the permit simply by requesting an extension in writing. And, as is occurring in this very proceeding, even if the expiration date issue is raised after the date stated in the permit, one substantially affected by agency action regarding that issue may petition for a hearing pursuant to Section 120.57(1), Florida Statutes. The Henry and Capeletti Brothers cases, supra, relied upon by petitioner are distinguishable. In those cases, the private litigants had been completely foreclosed from obtaining relief by the agency's failure to provide notice of their rights to administrative proceedings. Similarly, petitioner was not prejudiced by the DER's failure to file the permit with the agency clerk.

    As recognized in the Roach cases cited by the petitioner, the purpose of requiring that agency orders bear the stamp of the agency clerk and the filing date is to eliminate factual disputes regarding the required filing date for administrative or judicial appeal. The issue in this proceeding is not the date upon which agency action was taken. The issue is the expiration date of that agency action. It is obvious that the petitioner was aware that it had obtained a permit from the DER, and had, indeed, obtained a later modification of that permit. Thus, the procedural errors of failing to provide "point of entry" language regarding the termination date of the permit and the failure to clerk- in the permit are harmless and nonprejudicial under the circumstances present in this case, and are not determinative of the issue regarding the appropriate expiration date of the instant permit.

    
    

15. The third and more compelling reason asserted by the petitioner in support of its position regarding the appropriate expiration date of its permit is that the DER's issuance of the instant permit is contrary to the policy expressed in Form 17-1.203(1), which was adopted as a rule in 1982. That rule clearly provides that where proposed activities involve the use of state owned submerged lands, DER "shall not issue" a permit before approval or consent of

    use is obtained from the Department of Natural Resources. The Permit itself contains, as its first special condition, a reminder of the Florida law which prohibits any activity involving the use of Sovereignty lands until consent authorizing the proposed use is obtained from the Trustees.

    
    

16. DER admits that the issuance of the instant permit is contrary to its rule on the subject. It is urged, however, that an agency may deviate from its own rules if such deviation is adequately explained. DER attempts to explain the deviation by asserting that the Henderson Act repealed by implication the statutory provision which stated that permits issued by the DER will not commence until all other necessary permits are issued. From this "repeal by implication," DER then relies upon the axiom that where statutory law conflicts with a rule, the statute will prevail. DER's witness could point to no statutory authority which provides that DER permits are effective prior to obtaining the necessary consent for the use of state-owned submerge lands. The undersigned could find nothing in the Henderson Act which requires DER to begin the permit time running as soon as a decision is made as to whether a permit application will be granted.

    
    

17. It is well-settled that an agency must follow its own rules. This has been recognized many times by the appellate courts and also by the Legislature, As stated in the case of Best Western Tivoli Inn v. Department of Transportation, 435 So.2d 321 (Fla. 1st DCA, 1983), if an agency wishes to excuse itself from coping with its rule as plainly written, it must either amend its rule, meanwhile granting effect to its terms, or it must cite special circumstances, peculiar to the facts of a particular case, that justify its departure from the rule. No such special circumstances were presented by DER in this proceeding. DER points out that it has no internal mechanism for informing itself of the date upon which consent to use state owned submerged land is obtained subsequent to the issuance of a permit and does not regularly apprise itself of permits which are soon to expire. As noted in the case of Boca Raton Artificial Kidney Center v. Department of Health and Rehabilitative Services,

    493 So.2d 1055 (Fla. 1st DCA, 1986), if a rule

    
    

    has proved impractical in operation, it can be amended pursuant to established rulemaking

    procedures. Absent such amendment, expedience cannot be permitted to dictate its terms.

    
    

    Also, Section 120.68(12)(b), Florida Statutes, clearly recognizes that an agency may not act in a manner which is inconsistent with its rules.

    
    

18. DER Rule 17-1.203, Florida Administrative Code, clearly provides that a permit shall not issue until consent to use state owned lands has been obtained. Based upon that mandate, and the fact that the Department originally considered that the permit would be extant for approximately two years, it is concluded that the subject permit should not be considered to expire on June 1, 1987; and that the two-year term of the permit should be considered to commence on March 12, 1987, the date of the Certification of Board Action attesting the Trustees approval of the lease.

    
    

19. The undersigned is aware that DER Rule 17-12.072, Florida Administrative Code, provides that DER dredging or filling permits issued under Rules 17-12.010 through 17-12.110 shall be effective on the date of execution by the department. However, that is a general rule and the more specific rule pertaining to permitting activities involving the use of state owned submerged land is applicable and prevails in this case. Indeed, Rule 17-12.060 requires

that applications for permits be made on forms listed in Chapter 17-1. It is the Form specifically adopted by Rule 17-1.203(1), Florida Administrative Code, which prohibits the DER from issuing a permit prior to approval from the Trustees for activities on state owned lands.

RECOMMENDATION

Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the Department of Environmental Regulation enter a Final Order holding that Permit Number 360836415 does not expire until two years from March 12, 1987, and that appropriate recognition be given to the time which has elapsed due to the pendency of the instant proceeding.

Respectfully Submitted and entered this 13th day of January, 1989, in Tallahassee, Florida.

DIANE D. TREMOR

Hearing Officer

Division of Administrative Hearings The Oakland Building

2900 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 13th day of January, 1989.

APPENDIX

The Proposed findings of fact Submitted by the parties have been carefully considered and are accepted, incorporated and/or Summarized in this Recommended Order, with the following exceptions:

Petitioner

7. Rejected as an improper factual finding.

Respondent

19. Last three Sentences rejected as contrary to the evidence.

21. Partially rejected due to the existence of Rule 17-1.203(1), Florida Administrative Code.

COPIES FURNISHED:

Kenneth G. Oertel, Esquire Oertel, Hoffman, Fernandez

& Cole, P.A.

Post Office Box 6507 Tallahassee, Florida 32314-6507

Richard Grosso, Esquire Assistant General Counsel Department of Environmental

Regulation

2600 Blair Stone Road Tallahassee, Florida 32399-2400

Dale H. Twachtmann, Secretary Department of Environmental

Regulation

2600 Blair Stone Road Tallahassee, Florida 32399-2400

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

AGENCY FINAL ORDER

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

STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION

HARBOR CONSULTANTS AND PLANNERS, INC.,

Petitioner,

vs. OGC File No. 87-1456

DOAH Case No. 88-3076

DEPARTMENT OF ENVIRONMENTAL REGULATION,

Respondent.

/

FINAL ORDER

On January 13, 1989, a hearing officer from the Division of Administrative Hearings (DOAH') submitted to me and all parties her Recommended Order, a copy of which is attached as Exhibit A.

On January 30, Respondent Department of Environmental Regulation ("Department") timely filed exceptions to the Recommended Order, attached as Exhibit B. On February 6 Petitioner Harbor Consultants and Planners, Inc., ("Harbor") filed its response to the exceptions, attached as Exhibit C. The matter thereafter came before me as Secretary of the Department for Final Agency Action.

BACKGROUND

This matter arose with a petition for formal administrative proceedings filed by Harbor on October 16, 1987, challenging the Department's determination that a permit issued by the Department on May 17, 1985, had expired on June 1,

1987. The permit authorized construction of a marina in Punta Rassa, Lee County. To construct the project Harbor also needed a lease from the Board of Trustees of the Internal Improvement Trust Fund (Trustees"). Harbor received approval for the lease from the Trustees on July 29, 1986, and certification of that approval on March 12, 1987. In the interim, on September 30, 1986, the Department modified Harbor's permit at Harbor's request to reflect changes imposed by the Trustees.

In Harbor's petition and in the parties' prehearing stipulation, Harbor alleged that the June 1, 1987, permit expiration date was inoperative and has not yet begun to run. The basis for this argument is that the final order granting the original permit was neither clerked nor had proper point of entry language. The Hearing Officer found that neither of these arguments justified the relief sought by Harbor. At hearing Harbor developed a third argument, that Harbor's consultant relied on language contained on page 30 of the "State of Florida Joint Application for Permit Dredge Fill Structures" ("Joint Application Manual") to believe that the permit time did not begin to run until receipt of approval from the Trustees. The Hearing Officer accepted this argument, which resulted in her recommending that the Department enter a Final Order holding that the permit "does not expire until two years from March 12, 1987, and that appropriate recognition be given to the time which has elapsed due to the pending of the initial proceeding."

RULING ON EXCEPTIONS

The Department's exceptions to the Recommended Order can be summarized as follows: The Hearing Officer erred in holding that the two year permit period did not become effective until March 12, 1987, because language on page 30 of the Joint Application Manual suggesting such a result was superseded by enactment of the Henderson Wetlands Act in 1984, as well as Florida Administrative Code Rule 17-12.072.

The page 30 language provides as follows:

When the proposed activity involves the use of state-owned submerged lands, [the Department] shall not issue a permit before approval or consent of use is obtained from [the Department of Natural Resources], although [the Department] will continue to process the application to the extent possible.

This language was derived from Section 253.77(1), Florida Statutes, as it existed prior to enactment of the Henderson Act at Chapter 84-79, Laws of Florida. The language was repealed in Section 12 of the Act, and replaced with the requirement that construction cannot commence until appropriate Trustees consent is obtained. This concept is reiterared in Section 1 of the Act, codified at Section 403.922, Florida Statutes, which provides that the Department shall issue its permit conditioned upon the securing of necessary consent or approvals' from the Trustees, and that the activity cannot commence until such approval is obtained. The Department subsequently adopted Florida Administrative Code Rule 17-12.072, effective October 16, 1984, which provides in relevant part that all Department dredge and fill permits "shall be effective on the date of execution by the department."

The Hearing Officer specifically found that the above-cited page 30 language was a rule of the Department, that Rule 17-12.072 was a general rule

not repealing the previously adopted more explicit language, and that the Department had not adequately set forth special circumstances to justify its deviation from the rule. See Best Western Tivoli Inn v. Department of Transportation, 435 So.2d 321 (Fla. 1st DCA 1983). it is reasonable to infer from the record that the Department did not anticipate the potential for such a finding, because Harbor did not raise the argument or provide supporting evidence for it until commencement of the hearing portion of the formal proceeding. This inference is indicated by Harbor's failure to raise this issue either in its original petition or in the parties' pretrial stipulation.

Notwithstanding any resulting surprise, the Department did not object to the raising of this new theory, and did not present evidence to counter it.

I find that the Hearing Officer's analysis of the law and of the Department's policy is incorrect. First of all, it was incorrect to find that the entire Joint Application Manual is a Department rule. The only dredge and fill rule contained in the manual is Department Form 17-1.203(1), the application form itself, which appears prior to page one of the Manual. That form is indicated by the citation on the bottom left corner of each of its five pages. The rest of the manual is simply an advisory document developed to assist applicants in preparing permit applications, and was never intended to be a Department rule.

Secondly, notwithstanding the legal status of the Joint Application Manual, the page 30 language was implicitly repealed by the Henderson Act and by Florida Administrative Code Rule 17-12.072. This repeal is based upon two commonly accepted rules of construction: First, that in the event of a conflict between two laws, the latter prevails; and secondly, that when there is a conflict between a statute and rule, the statute prevails. See Kiesel v. Graham, 388 So.2d 594 (Fla. 1st DCA -1980); and Canreal Insurance Co. v. Continental Casualty Co., 489 So.2d 136, 138 (Fla. 2d DCA 1986). The Hearing Officer, therefore, should not have relied upon the page 30 language in reaching her decision.

Finally, the recommended interpretation of the Hearing Officer is contradicted by the explicit language in the permit, which provided a date certain for permit expiration - June 1, 1987. It strains credulity to accept the suggestion that the applicant would rely on ambiguous language in an instruction manual as opposed to explicit time certain language in the permit.

While I reject the Hearing Officer's legal conclusion, I cannot fault her for reaching it. As mentioned earlier, Harbor raised the issue of the importance of the page 30 language for the first time at the hearing. Because the Department was unprepared to address this issue, it put on no evidence distinguishing Department Form 17-1.203(1) from the Permit Application Manual, and did not object to consideration of the page 30 language as a Department rule. The Department also presented no evidence that adequately explained policy and practice in this area. While the Hearing Officer's analysis is essentially a legal one, it is sufficiently infused with findings of fact, based upon an inadequately developed record, that reversal of the conclusion might violate the Section 120.57(1)(b)10., Florida Statutes, restriction against reversal of hearing officer findings that are based on competent substantial evidence. Since the Department raised no objection to this line of testimony, I cannot now remand the matter to the Hearing Officer so that she can have the benefit of a complete record. Berry v. Department of Environmental Reoulation,

530 So.2d 1019 (Fla. 4th DCA 1988). Therefore, while I cannot accept the Hearing Officer's analysis, I find that I am legally constrained, given the

posture of this case, from rejecting inferred findings in her recommendation that the June 1, 1987, expiration date on Harbor's permit is not valid.

At the same time, I find it necessary to explain the Department's proper position on this matter to ensure that this case is not considered as precedent for the interpretation of other Department permits for which subsequent Trustees' approval is required. To reiterate: the Permit Application Manual is just that, and not a rule of the Department; the page 30 language has been effectively repealed by the Henderson Act, Florida Administrative Code Rule 17- 12.072, and subsequent Department policy and practice implementing the Act and Rule, all of which mandate that a permit begins to run at the time of issuance; and the specific expiration date in a Department permit issued subsequent to the Henderson Act takes precedence over any suggested extension of the permit resulting from delays in obtaining other governmental approvals for the subject project.

While I concur with the Hearing Officer's conclusion that the permit be extended, I do not accept her specific recommendation for resolving this matter. The Hearing Officer recommended that the permit should not expire until two years after March 12, 1987, and that "appropriate recognition" be given to the time that has elapsed during the pending proceeding. A better approach is as follows. The record in this case indicates that Harbor sought an extension of its permit on June 24, 1987. The Hearing Officers findings require me to hold that the extension was timely filed. The record does not disclose how much time was requested in the extension. However, since it took almost two years for the applicant to receive certification of approval from the Trustees, and since there is no evidence to indicate that Harbor was dilatory in seeking that approval, I find appropriate, given the facts of this case, an extention to the five year maximum available as an expiration date on this permit. Since the original date of issuance of the permit was May 17, 1985, this would extend the expiration date of the permit until May 17, 1990.

Therefore, it is ORDERED:

1. The Hearing Officers findings of fact and conclusions of law are adopted except to the extent modified by this Final Order.

   
   

2. The expiration date on permit Number 36-0836415 of Harbor Consultants and Planners, Inc., is extended until May 17, 1990.

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

DONE AND ORDERED this 27th day of February 1989, in Tallahassee, Florida.

STATE OF FLORIDA DEPARTMENT OF ENVTRONMENTAL REGULATION

DALE TWACHTMANN

Secretary

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

Telephone: (904)488-4805

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing Final Order has been hand delivered to Diane D. Tremor, Hearing Officer, Division of Administrative Hearings, Desoto Building,Tallahassee, Florida 32399, and Richard Grosso, Assistant General Counsel, 2600 Blair Stone Road, Tallahassee, Florida; and a copy has been furnished by U.S. Mail to Kenneth G. Oertel, Esquire, Oertel, Hoffman, Fernandez, & Cole, P.A. Post Office Box 65076, Tallahassee, Florida 32314-6507 on this 27th day of February, 1989.

DANIEL H. THOMPSON

General Counsel

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

Telephone: (904)468-9730

Docket for Case No: 88-003076

Orders for Case No: 88-003076