STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WILLIAM DAVENPORT, )

)

Petitioner, )

)

vs. ) CASE NO. 90-1639

)

DEPARTMENT OF REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

Upon due notice, this cause came on for formal hearing on August 30, 1990 in Daytona Beach, Florida, before Ella Jane P. Davis, a duly assigned Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

FOR PETITIONER: David C. Robinson, Esquire

Suite #6

1326 South Ridgewood Avenue Daytona Beach, Florida 32114

FOR RESPONDENT: Mark T. Aliff

Assistant Attorney General Department of Legal Affairs Tax Section, The Capitol

Tallahassee, Florida 32399-1050 STATEMENT OF THE ISSUE

Whether the Petitioner should be assessed certain sales and use taxes pursuant to Section 212.0505 F.S. for the cultivation of marijuana as more particularly described in the assessment.

PRELIMINARY STATEMENT

The Department of Revenue (DOR) initially assessed Petitioner $16,368.75 upon the total estimated weight of 28 marijuana plants attributed to his cultivation when he was arrested September 16, 1989. At formal hearing, counsel for DOR stipulated that the agency had reassessed Petitioner's tax liability to be only $5,850.00, which substantially reduced figure is memorialized by Respondent's Exhibit 3, admitted in evidence over Petitioner's objection upon other grounds.

Petitioner testified on his own behalf and had three exhibits admitted in evidence. Respondent presented the oral testimony of Vern Wattercutter and Michael L. Thomas and had eight exhibits admitted in evidence, including the deposition of Sherry Gomez.

A transcript was filed October 1, 1990, and all timely-filed proposed findings of fact have been ruled upon in the Appendix to this Recommended Order, pursuant to Section 120.59(2) F.S.

FINDINGS OF FACT

1. Acting on an anonymous tip, Michael L. Thomas, a Wildlife Officer with the Florida Game and Fresh Water Fish Commission, examined property in the Turnbull-Hammock area of Volusia County at a location between Edgewater and Oakhill and immediately adjacent to U.S. Route 1. This is a rural area which is unfenced and entirely open to the public.

   
   

2. The particular property in question is reached by a substantial shell road running at a right angle from U.S. 1 and deadending in a borrow pit. A canal also is at right angles to the unnamed shell road at its borrow-pit end. The borrow pit is owned by Doug Cole. A smaller dirt road or jeep trail branches off from the shell road and passes between some thick trees and underbrush. Beyond the trees and underbrush, the jeep trail curves off slightly to the left where a pole barn or construction shack owned by Tom Foster is located. Instead of curving left, one can proceed on foot several more yards on a cleared pathway until one reaches a growth of vines which crosses the pathway and forms a sort of barricade across it. If one goes through the vines, one sees several narrower, winding, overgrown footpaths meandering back through the overgrowth quite some distance. The area beyond the vines is completely overgrown with tall weeds and brush except for these footpaths.

   
   

3. Officer Thomas followed the route aforedescribed and followed one of the overgrown footpaths where he discovered approximately twenty-eight marijuana plants growing in plastic tubs deep in the underbrush. The plants were 8-10 feet tall and needed water. Officer Thomas' observation of the plants convinced him that the person who had cultivated them would have to water them soon. On the ground eight or ten feet before he reached the growing marijuana, Officer Thomas observed a pink plastic watering can, a metal can, some potting materials, and an empty box of "Miracle Grow" plant food. Officer Thomas and Sergeant Hightower "staked out" the area during the afternoon of September 16, 1989.

   
   

4. More than three hours into their "stake out," the officers observed Petitioner park his truck at the pole barn and meander through the underbrush in the direction of the marijuana. He occasionally stopped and looked around him as he did so. Once Petitioner was beyond the vines, the officers could not "eyeball" him any longer. They did not see him touch any marijuana. They heard the sound of water cans being moved, and when Petitioner reappeared through the underbrush, he was carrying two empty containers he had picked up from those originally observed by Officer Thomas eight to ten feet in front of the marijuana crop.

   
   

5. The officers interpreted Petitioner's looking around to have been checking to be sure he had not been followed or seen and interpreted his selecting the particular containers as evidence that he knew where and how to water the marijuana.

6. The Petitioner then walked toward the canal with the containers and hunkered down on its bank. When he did so, Officers Thomas and Hightower sprang from their hiding place and placed Petitioner under arrest. They never saw him draw or scoop up any water into the containers, and the most credible evidence is that he stayed on the high side of the bank and did not approach the edge of the water in the canal below.

   
   

7. Petitioner is a cement worker by trade. He stores his equipment, including his form boards, in the pole barn. The owner of the pole barn, Tom Foster, does not charge Petitioner any rent for this use. Petitioner was familiar with the area as far inward as the pole barn. On the day in question, the area immediately surrounding the pole barn was strewn with debris evidencing that teenagers had used it as a "partying area." It also was littered with discarded furniture and old boards that Petitioner identified as belonging to Tom Foster.

   
   

8. On September 3, 1989 Petitioner's girlfriend had given him a used shotgun for deer hunting. On the day in question, a weekend, Petitioner had chosen Tom Foster's property to "tryout" that shotgun and see what type of pattern it shot. Petitioner explained that he had walked past all the other debris at the pole barn without selecting any of it as a target because it probably belonged to Tom Foster, the man who let him store his equipment without fee, and Petitioner did not want to lose Tom Foster's goodwill. Petitioner testified that he looked around himself as he walked and selected the containers far away from the pole barn because they did not seem to be Tom Foster's, that he had not even seen the marijuana let along recognized what it was, and that he was carrying the containers back to his truck to fetch his gun when a burrowing animal in the bank of the canal/ditch caught his attention and he hunkered down to watch it.

   
   

9. Based on DOR's photographic exhibits and Officer Thomas' testimony, it is found that the tubs in which the marijuana was growing were obscured by underbrush from the view of anyone standing at the location of the watering and potting materials, although the marijuana tops could be seen from that point if one were looking in that direction. Officer Thomas readily agreed that many untrained people cannot recognize marijuana growing in the field.

   
   

10. The officers did not note whether any burrowing was going on in the canal bank, but their subsequent search of Petitioner's truck turned up the shotgun and some birdshot. Officer Thomas testified that a better "pattern" effect could be obtained by aiming the shotgun at a larger object than the water containers and that some of the birdshot found with the gun might be lost on the smaller objects. He therefore ascribed no credibility to Petitioner's choice of the watercans as targets.

    
    

11. No drug paraphernalia or materials for cultivation were found on Petitioner's person or in his truck.

    
    

12. Petitioner was charged, tried before a jury, and acquitted of the criminal charge "manufacture of cannabis." A final judgment was entered to that effect. In deference to DOR's concerns expressed at formal hearing, it is noted that the judicial outcome of the criminal charge is not res judicata nor "law of the case" in the instant administrative proceeding which embraces different issues and burdens of proof. It does, however, support Petitioner's assertions that he has never used drugs or been convicted in connection with them.

13. The original September 1989 DOR assessment used as a component base an estimated 24.25 weight of the 28 marijuana plants. The "estimate" was made by Mr. Wattercutter, who prepared the original assessment. Mr. Wattercutter telephoned the Volusia County State Attorney's Office, copied the arrest warrant, and interviewed Officer Thomas. He accepted what was told him without DOR calculating a chain of custody, calibration of scales, or finding out what parts of the marijuana had been weighed, or the quality or gender of the marijuana. The original DOR assessment used as a component multiplier a value assigned by the Florida Department of Law Enforcement price list in effect at that time. That list assigned a value of $600 per pound of marijuana. Mr. Wattercutter also applied a fraud penalty in accord with DOR policy. The original assessment amounted to $16,368.75.

    
    

14. On August 20, 1990, Mr. Wattercutter and others who did not testify weighed some marijuana in two boxes in the evidence room of the Sheriff's Office in DeLand, Florida. After subtracting the weight of the empty boxes, Mr. Wattercutter applied the FDLE price list figure of $600 per pound and reassessed Petitioner's tax liability (excluding the inapplicable fraud penalty) at $5,850. The chain of custody of the marijuana was not presented. No evidence of calibration of the scale used was presented.

    
    

15. The predicate for the $600 per pound valuation made by FDLE was presented through the deposition of Sherry Gomez, which is not persuasive that the charted figure is probative of the value of the marijuana in this case.

    
    

    CONCLUSIONS OF LAW

    
    

16. The Division of Administrative Hearings has jurisdiction of the parties and subject matter of this cause. See, Section 120.57(1) F.S.

    
    

17. Procedurally, the initial order of proof in this type of assessment proceeding is for the DOR to establish that the agency was appropriately and procedurally correct in the assessment. At that point, the order and burden of proof shifts to the Petitioner to establish the inaccurateness of the agency's assessment with regard to the liability for and amount of tax, interest, and penalties claimed. See, Section 214.06 F.S.

18. The controlling substantive statutes herein are as follows: 212.0505 Taxation of unlawful sales, use, and other

    transactions involving medicinal drugs, cannabis, or controlled substances.--

    (1)(a) Every person is exercising a taxable privilege who engages in this state in the unlawful sale, use, consumption, distribution, manufacture, derivation, production, transportation, or storage of any medicinal drug, as defined in chapter 465, cannabis, as defined in s. 893.02, or controlled substance enumerated in s. 893.03. For the exercise of such privilege, a tax is levied on each taxable transaction or incident, including each occasional or isolated unlawful sale, use, consumption, distribution, manufacture, derivation, production, transportation, or storage, at the rate of 50 percent of the estimated retail price of the medicinal drug, cannabis, or controlled substance involved in the transaction or incident.

    (b) In addition to any other tax there shall also be a 25 percent surcharge on the estimated price of the transaction or incident taxable under paragraph (a).

    1. The sale, use, consumption, distribution, manufacture, derivation, production, transportation, or storage of any medicinal drug, as defined in chapter 465, cannabis, as defined in s. 893.02, or controlled substance enumerated in s. 893.03 by a federal, state, or local government officer or employee, or his agent, acting in his official capacity is exempt from the tax imposed by this section.

    2. The taxes imposed under this section are subject to the same interest and penalties and the same procedures for collection and enforcement as other taxes imposed under this part, except that a dealer's credit under s. 212.12(1) is not allowed. The department may adopt rules for administering the taxes imposed by this section.

    3. Neither this section nor the assessment or collection of taxes under this section shall be construed as making lawful the transaction or incident which is the subject of the tax.

    4. Any assessment made pursuant to this section shall be deemed prima facie correct in any judicial or administrative proceeding in this state. The suppression of evidence on any ground by a court in a criminal case involving a transaction or incident taxable under this section or the dismissal of criminal charges in such a case shall not affect any assessment made under this section.

    * * *

    
    

19. Section 212.0505(1)(a) F.S. clearly contemplates that the tax is to be levied upon estimated retail price, but here there has been no demonstration of the chain of custody of the marijuana and the predicate for the estimation of value by weight according to the FDLE chart is flawed. Therefore, the presumption established in Section 212.0505(5) F.S. has been rebutted.

Moreover, Petitioner's being in the wrong place at the wrong time (in proximity to growing marijuana plants which had gone dry) with empty water containers does not equate with "cultivation" as charged, nor with any reasonable definition of the proper statutory terms, "unlawful sale, use, consumption, distribution, manufacture, derivation, production, transportation." Had the Game and Fresh Water Fish Officers waited a little while longer to confront Petitioner, it is conceivable that he would have committed some overt act which would permit a finding of fact that he had custody, possession, or control of the marijuana in question, but the evidence of record does not support such a conclusion.

Petitioner did not own the property where the marijuana was growing. The public had access to the unfenced area. The pots in which the marijuana was growing were obscured from Petitioner's view when he picked up what he thought were abandoned water containers he could use as targets. The officers' interpretation that it would be more reasonable for Petitioner to "pattern" his shotgun against his benefactor's discarded furniture, boards, or barn than to seek out a smaller target is insufficient to sustain a conclusion that Petitioner was producing marijuana.

RECOMMENDATION

Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a Final Order dismissing the assessment/amended assessment against Petitioner.

DONE and ENTERED this 29th day of October, 1990, at Tallahassee, Florida.

ELLA JANE P. DAVIS, 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 29th day of October, 1990.

APPENDIX TO RECOMMENDED ORDER

The following constitute specific rulings pursuant to Section 120.59(2) F.S. upon the parties' respective proposed findings of fact (PFOF):

Petitioner's PFOF:

1-10 Except as modified to exclude subordinate material, accepted.

Respondent's PFOF:

1 Rejected as not probative. Undoubtedly, the fact that Ms. Gomez' deposition was taken by telephone contributed to its disjointed nature, but the predicate for the accuracy of the chart/graph was insufficient as set out in FOF 15.

2-4, 9 Accepted except for subordinate and cumulative material. Not adopted because the facts as found more accurately reflect the record as a whole.

5-8 Except for the last sentence, accepted except where subordinate or unnecessary. The last sentence of 8 is rejected as not supported by the more credible record evidence as a whole.

10 Subordinate as stated. Accepted that the plants were marijuana.

Copies furnished to:

Mark T. Aliff

Assistant Attorney General Department of Legal Affairs Tax Section, The Capitol

Tallahassee, Florida 32399-1050

David C. Robinson, Esquire Suite 6

1326 South Ridgewood Avenue Daytona Beach, Florida 32114

J. Thomas Herndon Executive Director Department of Revenue The Capitol

Tallahassee, Florida 32399-0100

William D. Moore General Counsel Department of Revenue

203 Carlton Building Tallahassee, Florida 32399-0100

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS: All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should consult with the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 90-001639

Orders for Case No: 90-001639