STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PHILLIPS PETROLEUM COMPANY, )

)

Petitioner, )

vs. ) CASE No. 89-4648

)

DEPARTMENT OF AGRICULTURE )

AND CONSUMER SERVICES, )

)

Respondent. )

) PHILLIPS PETROLEUM COMPANY, )

)

Petitioner, )

vs. ) CASE No. 90-3265

)

DEPARTMENT OF AGRICULTURE )

AND CONSUMER SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a public hearing in these consolidated cases on July 26, 1990, in Tampa, Florida.

APPEARANCES

For Petitioner: R. H. Switz

Phillips Petroleum Company 3021 Landing Way

Palm Harbor, Florida :34684

For Respondent: Clinton H. Coulter, Jr., Esquire

Senior Attorney

Department of Agriculture and Consumer Services

Mayo Building

Tallahassee, Florida 32399-0800 STATEMENT OF THE ISSUES

Whether or not Petitioner is entitled to a refund of its cash bonds posted in lieu of confiscation of contaminated fuels.

PRELIMINARY STATEMENT AND BACKGROUND

In these consolidated cases, Petitioner, Phillips Petroleum Company, seeks a refund of two (2) $1,000.00 cash bonds that it posted to Respondent in lieu of confiscation of petroleum fuels which were determined to be contaminated by

Petitioner as a result of inspections at two of Petitioner's retail outlets by Respondent's agents on July 6, 1989 and on March 12, 1990. Respondent is in opposition to a refund and urges that the bonds be forfeited on the grounds that its actions were appropriate, reasonable and in keeping with the authority vested in it and should therefore be placed in the general inspection trust fund to defray expenses incurred in the enforcement of inspections and analysis of gasoline and oil products.

At the hearing, Petitioner presented the testimony of its representative,

1. Switz, and Respondent presented the testimony of its bureau chief for petroleum inspection, John H. Whitton.

   
   

   FINDINGS OF FACT

   
   

   1. Petitioner, Phillips Petroleum Company, is the owner and operator of two retail gasoline stations situated at 2675 Volusia Avenue, Daytona Beach, Florida and 13987 Walsingham Road, Largo, Florida.

      
      

   2. On July 6, 1989, Respondent's inspector, Ralph Myrick, made a routine inspection of the "super clean unleaded" gasoline at Petitioner's company-owned station at 2675 Volusia Avenue, Daytona Beach, Florida. A sample of the super clean unleaded fuel was taken by inspector Myrick and was analyzed by Respondent. The analysis revealed that the super clean unleaded gasoline was contaminated with diesel fuel.

      
      

   3. On June 20, 1989, Petitioner converted its 4,000 gallon diesel tank to a super clean unleaded gasoline tank. During the conversion, Petitioner used a transport carrier to drain the diesel from the tank to a transport carrier. Petitioner thereafter utilized a maintenance contractor to pump all residue from the bottom of the tank until it was dry. Petitioner thereafter flushed the lines with 100 gallons of new gasoline product before refilling the tank with 3,700 gallons of super clean unleaded gasoline. The diesel which was pumped out and the 100 gallons used for flushing was returned to Petitioner's Jacksonville terminal by a transport carrier. On July 3, 1989, Petitioner received another 1,300 gallons of super clean unleaded gasoline and stored it in the converted tank which had previously been used to store diesel fuel. At the time of Respondent's inspection of the Daytona Beach station on July 6, 1989, Petitioner had sold to the public, at retail, approximately 2,337 gallons of the contaminated fuel. At the time of inspector Myrick's inspection on July 6, 1989, Petitioner was advised of the contamination problem and a "stop order" was issued to correct the problem. In lieu of confiscation, Petitioner posted a refundable bond in the amount of $1,000 and retained the fuel. Petitioner had its transport carrier to again completely drain the converted tank and Petitioner returned 2,663 gallons to its Jacksonville terminal. Petitioner ordered 2,600 gallons of new product which was returned to the subject station for sale.

      
      

   4. On March 12, 1990, inspector Myrick made a routine inspection of Petitioner's retail station at 13987 Walsingham Road, Largo, Florida. A sample of the detroleum product was taken and analyzed. Respondent's analysis of the sample taken from Petitioner's Largo station revealed that the fuel was below standard.

      
      

   5. Petitioner's agent Switz admitted that more than 1,000 gallons of fuel had been sold to retail customers at a price at approximately $1.00 or more per gallon.

   6. Petitioner placed a $1,000 cash bond in lieu of confiscation to continue operating and to retain the fuel which was analyzed and found to be below standard at its Largo station.

      
      

      CONCLUSIONS OF LAW

      
      

   7. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this action pursuant to Subsection 120.57(1), Florida Statutes.

      
      

   8. The parties were noticed pursuant to Chapter 120, Florida Statutes.

      
      

   9. The authority of the Respondent is derived from Chapter 525, Florida Statutes.

      
      

   10. Section 525.02 mandates that the Department collect from time to time by its duly authorized agents, samples of any gasoline, illuminating or heating oils sold, offered or exposed for sale and cause such samples to be tested or analyzed by its chemist, who shall report his findings to Respondent.

       
       

   11. Gasoline or oils which fall below standards are subject to confiscation by Respondent. In lieu of confiscation, the retailer of such substandard or contaminated fuels are allowed to post a refundable bond in cash or certified check in the amount of the value of the project which is the subject of confiscation (limited to $1,000.00) which may be accepted by the Department pending legal disposition. If any of the product has been sold to retail customers, the Department is authorized to make an assessment equal to the retail value of the product sold--not to exceed $1,000.00.

       
       

   12. Competent and substantial evidence was offered herein to establish that Petitioner sold, at retail, to customers in Florida, contaminated fuel having a value in excess of $1,000.00 at each of the subject gasoline stations in Daytona Beach and Largo, Florida. The amount of the bond which Petitioner posted falls within the range of the administrative assessments which Respondent is authorized to impose pursuant to section 525.06, Florida Statutes. It is therefore concluded that Respondent is authorized to retain the $1,000 bonds posted by Petitioner in the subject cases, which shall be held in a fund known and designated as the General Inspection Trust Fund to defray expenses incurred in the enforcement of Chapter 525 as provided in Section 525.10, Florida Statutes.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED:

Petitioner enter a Final Order denying Petitioner's request for a refund of the bonds posted in the subject cases.

DONE and ENTERED this 28th day of August, 1990, in Tallahassee, Leon County, Florida.

JAMES E. BRADWELL

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 28th day of August, 1990.

COPIES FURNISHED:

R. H. Switz

Phillips Petroleum Company 3021 Landing Way

Palm Harbor, Florida 34684

Clinton H. Coulter, Jr., Esquire Senior Attorney

Department of Agriculture and Consumer Services

May Building

Tallahassee, Florida 32399-0800

John C. Whitton, Chief

Bureau of Petroleum Inspection 3125 Conner Boulevard

Tallahassee, Florida 32399-1650

Honorable Doyle Conner Commissioner of Agriculture The Capitol

Tallahassee, Florida 32399-0810

Mallory Horne, Esquire General Counsel Department of Agriculture

and Consumer Services

515 Mayo Building

Tallahassee, Florida 32399-0800

Docket for Case No: 89-004648

Orders for Case No: 89-004648