STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

NORTH FLORIDA PROPERTY OWNERS )

ASSOCIATION and ERON W. CARVER, )

)

Petitioners, )

)

v. ) CASE NO. 91-0750

) OLCOTT DAIRY and STATE OF FLORIDA ) DEPARTMENT OF ENVIRONMENTAL REGULATION, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on June 24, 1991, in Tallahassee, Florida, before the Division of Administrative Hearings, by its designated Hearing Officer, Diane K. Kiesling.

APPEARANCES

For Petitioners: John K. McPherson

Attorney at Law McPherson & Coffey, P.A.

22 South Main Street Gainesville, Florida 32601

For Respondent, Earl Olcott, Pro Se Olcott Dairy: Olcott Dairy

Route 2, Box 417

Branford, Florida 32008

For Respondent,

DER: William Congdon

Assistant General Counsel Department of Environmental

Regulation

2600 Blair Stone Road Tallahassee, Florida 32399-2400

STATEMENT OF ISSUES

The ultimate issue is whether Olcott Dairy is exempt from permitting requirements regarding treatment and disposal of wastewater from its dairy operation. If it is not exempt, the remaining issue is whether Olcott Dairy must apply for a wastewater treatment and disposal permit from the Department of Environmental Regulation (DER) in order to continue operation.

PRELIMINARY STATEMENT

DER presented the testimony of Phillip M. Coram and had DER Exhibits 1-10 admitted in evidence. Olcott Dairy presented the testimony of Phillip M. Coram, Earl Olcott, and Steve Swann. Olcott's Exhibits 1 and 2 were admitted in evidence. Petitioners presented the testimony of Eron W. Carver and Eugene Hyde and had North Florida Property Owners Association's (NFPOA) Exhibits 1 and 2 admitted in evidence.

The parties waived the filing of a transcript. The Respondents timely filed proposed findings of fact and conclusions of law. Olcott waived the filing of a proposed order. All proposed findings of fact and conclusions of law have been considered. A specific ruling on each proposed finding of fact is made in the Appendix attached hereto and made a part of this Recommended Order.

FINDINGS OF FACT

1. During the early part of 1990, Earl Olcott proposed to construct and operate the Olcott Dairy in Gilchrist County, Florida, near the intersection of State Road 138 and U.S. Highway 129.

   
   

2. In response to Olcott's proposal, DER sent Olcott a letter dated February 26, 1990, which advised that he could "either apply for a construction permit covering the treatment and disposal of dairy wastes using the enclosed industrial waste application or pursue an exemption from permitting."

   
   

3. Based on the options given to him by DER, Olcott submitted a request for an exemption on March 23, 1990. The request included all the necessary engineering information and drawings.

   
   

4. Essentially Olcott proposed a concrete lined waste storage pit sized to prevent the 25-year 24-hour storm event from overflowing and spray irrigation system for distributing the wastes to a hayfield.

   
   

5. By letter dated March 26, 1990, DER exempted the proposed dairy from permitting requirements subject to certain conditions.

   
   

6. Based on the exemption, Olcott purchased and constructed the proposed dairy, including the waste storage pit. Olcott Dairy commenced operations on January 26, 1991, and continues to operate.

   
   

7. On November 8, 1990, the Petitioners wrote to DER about the Olcott Dairy, inquiring about the granting of the exemption to Olcott and seeking a point of entry to challenge the exemption. DER advised that "because these facilities are exempt by rule, the Department does not believe it has taken any action that would be subject to the provisions of Section 120.57 or 403.412(5), F.S." Mr. Olcott was copied on this letter.

   
   

8. The Petitioners filed their Petition for Formal Administrative Proceedings on January 3, 1991. NFPOA is comprised of 45 members who live in the area of Olcott Dairy. On April 11, 1991, NFPOA incorporated as a Florida corporation not-for-profit. The purpose of the group, as stated in the Articles of Incorporation, is to protect "the environmental health of the land, air and water in North Florida."

   
   

9. Petitioner Eron Carver lives directly across the road from Olcott Dairy and relies for drinking water on wells that pump from the groundwater aquifer

   lying beneath his home as well as beneath the Olcott Dairy. He also fishes in the Santa Fe River, an Outstanding Florida Water (OFW).

   
   

10. After the filing of the Petition, DER wrote to Olcott on February 5, 1991, advising that the decision on the exemption was proposed agency action only and that "no action may be taken on the above exemption" until DER issued a Final Order on entitlement to the exemption. Regrettably for Mr. Olcott, action had already been taken based on the exemption and on DER's letter of December 7, 1990, which had indicated that the exemption was already granted and not subject to challenge by the Petitioners. The dairy was already in operation.

    
    

11. The March 26, 1990, letter which found Olcott entitled to an exemption did not advise that the action was proposed and not final. Instead the letter clearly authorized Olcott to proceed with construction and operation of the wastewater management system as proposed and subject to the stated conditions because the proposed project was exempt from DER's permitting requirements. The December 7, 1990, letter clearly reinforced that the exemption was granted and not subject to challenge.

    
    

12. On March 1, 1991, DER inspectors went to Olcott Dairy to review the wastewater management system in use. They found that the storage pit had overflowed and that no spray irrigation system had been built. Instead, the wastes were being applied to the field from a tank truck which was being driven slowly over the same 10-foot wide area with its tank valve open.

    
    

13. On April 29, 1991, DER advised Olcott by letter that it was no longer supporting the exemption because an exemption was not appropriate and a groundwater discharge permit was necessary. The reasons given for this change in position were

    
    

    1. New information which shows that dairy activities pose a threat of groundwater contamination;

       
       

    2. Condition 4 was being violated by Olcott's waste application rates;

       
       

    3. Condition 7 was violated because the system design engineer failed to certify that the system was constructed to meet the design criteria;

       
       

    4. The waste management system being operated differed from the proposed design because the wastes were being applied by a tank truck; and

       
       

    5. The storage pit had apparently overflowed.

    
    

14. The primary reason for DER's change was the new information derived from a study of dairies in North Central Florida. This study of dairies similar to Olcott indicated that existing waste management practices of dairies in the Suwannee River Basin have a potential to contaminate groundwater with elevated levels of nitrates and to cause off-site contamination.

    
    

15. Specifically, the study found that groundwater beneath more than 45% of the dairies studied had nitrate levels exceeding the state standard of 10 mg/l, with nitrate levels as high as 140 mg/l recorded. Nitrate is a pollutant that can cause health problems in humans, particularly children.

    
    

16. The area in which Olcott Dairy is located is highly vulnerable to groundwater contamination because of the underlying Karst geology. Additionally

    the aquifer under the dairy flows, under normal conditions, toward the Santa Fe River, an OFW.

    
    

17. The ground application of wastes by Olcott Dairy allows percolation of wastes, which threatens violation of groundwater standards beyond the boundaries of the dairy. It also threatens to impair the water quality of the Santa Fe River, a contiguous water body. The only way these threats can be evaluated is to require that the waste management system undergo a complete review as part of the permit application process.

    
    

18. By its letter of March 26, 1990, DER led Olcott to believe that the exemption was final and that the dairy could operate indefinitely pursuant to the exemption from permitting. Olcott has taken all of its actions in reliance on DER's representations regarding permitting requirements and DER's authority to determine entitlement to exemptions.

    
    

19. In reliance on the exemption given in the March 26, 1990, letter, Mr. Olcott expended sums in purchasing the property for the dairy and in building the dairy, including the waste management system currently in place. He will be required to expend additional sums for preparation and filing of a permit application and for installation of monitoring wells and other equipment which may be required to qualify for a permit.

    
    

    CONCLUSIONS OF LAW

    
    

20. The Division of Administrative Hearings has jurisdiction of the parties to and subject matter of these proceedings. Section 120.57(1), Florida Statutes.

    
    

21. Petitioners brought this action pursuant to Section 120.57 and Section 403.412(5), Florida Statutes. While the Petition is not verified as required by Section 403.412(5), this deficiency was not raised in any motion in opposition to the petition and is deemed waived. Eron Carver has adequately proven that his substantial interests will be affected by the exemption given to Olcott Dairy because of the threat to his only source of drinking water. NFPOA has likewise proven its standing to bring this action pursuant to Section 403.412(5) in that its purpose is to protect the air, water and other natural resources of the state from pollution, impairment, or destruction. Section 403.412(5). This is particularly so in light of the groups incorporation prior to the hearing. See Cape Cave Corp. v. Department of Environmental Regulation and Environmental Confederation of Southwest Florida, 498 So.2d 1309 (Fla. 1st DCA 1986), rev. denied 509 So.2d 1117 (Fla. 1987).

    
    

22. Until April 1991, DER had consistently taken the position that the granting of exemptions was not subject to administrative proceedings pursuant to Section 120.57 or Section 403.412(5). DER's mistake of law was brought home to it by the First District Court of Appeals in Friends of the Hatchineha, Inc., et al. v. Department of Environmental Regulation, et al., 16 FLW 1357 (Fla. 1st DCA May 14, 1991). That case makes it clear that even exemptions within DER's jurisdiction are proposed agency action until after an appropriate point of entry is made available for all persons whose substantial interests are affected by the proposed action.

    
    

23. In the present case, DER was mistaken as to a matter of law when it granted the exemption by its letter of March 26, 1990, and when it reaffirmed the exemption and denied Petitioners a point of entry by its letter of December 7, 1990. Even though Olcott relied on DER's representations, the doctrine of

    estoppel does not apply. Estoppel requires proof of three elements: (1) a representation as to a material fact that is contrary to a later-asserted position; (2) reliance on that representation; and (3) a change in position detrimental to the party claiming estoppel, caused by the representation and reliance thereon. See T & L Management v. Dept. of Transportation, 497 So.2d 685 (Fla. 1st DCA 1986); Chipley Motel v. Dept. Of Transportation, 498 So.2d 1357 (Fla. 1st DCA 1986), app. dismissed, 503 So.2d 326 (Fla. 1987); Tri-State Systems, Inc. v. Dept. of Transportation, 500 So.2d 212 ( Fla. 1st DCA 1986), rev. denied, 506 So.2d 1041 (Fla. 1987). Estoppel will not be applied when there has been a mistake of law, rather than fact. See, Austin v. Austin, 350 So.2d 102 (Fla. 1st DCA 1977), cert. denied, 357 So.2d 184 (Fla. 1978); Nelson Richard Advertising v. Dept. of Transportation, 513 So.2d 181 (Fla. 1st DCA 1987); and Dolphin Outdoor Advertising v. Dept. of Transportation, 16 FLW 1702 (Fla. 1st DCA June 26, 1991). Here DER made a clear mistake of law, not of fact.

    
    

24. These estoppel principles are equally applicable in DER cases and in exception or exemption cases. See City of Pompano Beach v. Yardarm Restaurant, Inc., 509 So.2d 1295 (Fla. 4th DCA 1987); Reedy Creek Improvement District v. Department of Environmental Regulation, 486 So.2d 642 (Fla. 1st DCA 1986); and The Florida Companies v. Orange County, Florida, 411 So.2d 1008 (Fla. 5th DCA 1982).

    
    

25. Because DER's action was not final agency action as a matter of law, it did not become final. Olcott's entitlement to an exemption is the primary issue in this case. A party seeking an exemption from DER's rules bears the burden of demonstrating entitlement to the exemption. Olcott is seeking an exemption from the permitting requirements of Rule 17-28.700(4)(c), Florida Administrative Code. Olcott bears the burden of persuasion of entitlement through all of the proceedings on the exemption request, of whatever nature, until such time as final action has been taken by the agency. Florida Department of Transportation v. J.W.C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA 1981).

    
    

26. Since the exemption was never final, DER did not abuse its discretion in withdrawing its assent to the exemption even if Olcott had fully complied with all of the conditions placed on the exemption.

    
    

    Rule 17.28.700(4)(c), F.A.C., provides:

    
    

    Unless a permit defining a zone of discharge is otherwise required by Department rule, the following installations shall not be required to obtain a permit establishing a zone of discharge:

    1. Agricultural fields, ditches and canals;

    2. Livestock waste lagoons exempted from permitting under Section 17-6.300, F.A.C.; and

    3. Stormwater facilities.

       These installations shall have a zone of dis- charge of 100 feet from the site or to the installation's property boundary, whichever is less, unless a different zone is specified in any appropriate Department permit. If the discharge from the installation threatens to violate groundwater standards at the boundary

       of the zone of discharge, or otherwise threatens to impair the designated use of contiguous waters, the Department shall require the installation owner to obtain a groundwater permit if he has none, define an appropriate zone of discharge or modify it if a permit exists, and institute appropriate monitoring plans pursuant to (6) below. [Emphasis added]

       
       

27. Based upon the new information received by DER pursuant to the diary study, it is concluded that Olcott Dairy threatens to violate water quality standards beyond the boundaries of the dairy. Accordingly, it is further concluded that Olcott has failed to carry the burden of proving entitlement to an exemption. In order to continue operation, Olcott Dairy must obtain a permit.

    
    

28. Because Olcott has done everything possible to comply with DER's changing requirements and because Olcott detrimentally relied on DER's compounded mistakes of law, it is further concluded that Olcott should be excused from payment of the normal permit application fee. Further, if monitoring wells are necessary, DER is urged to the extent possible to make use existing wells, both on and off site.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Environmental Regulation enter a Final Order and therein:

1. Deny Olcott Dairy's request for an exemption from permitting requirements.

   
   

2. Waive permit application fees from Olcott for its permit application and cooperate with Olcott in processing and conditioning for intended approval the permit for which Olcott must apply.

RECOMMENDED this 26th day of July, 1991, in Tallahassee, Florida.

DIANE K. KIESLING

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 26th

day of July, 1991.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-0750

The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case.

Specific Rulings on Proposed Findings of Fact Submitted Jointly by Petitioners, North Florida Property Owners

Association and Eron W. Carver and by Respondent Department of Environmental Regulation

1. Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1(1); 2(5); 3(6); 5(13); 6- 8(14); 9&10(15); 12(16); 13&14(17); and 15(9).

   
   

2. Proposed finding of fact 4 is subordinate to the facts actually found in this Recommended Order.

   
   

3. Proposed finding of fact 11 is unsupported by the competent, substantial evidence.

COPIES FURNISHED:

John K. McPherson Attorney at Law McPherson & Coffey, P.A.

22 South Main Street Gainesville, FL 32601

Earl Olcott Olcott Dairy Route 2, Box 417

Brandford, FL 32008

William H. Congdon Assistant General Counsel

Department of Environmental Regulation Twin Towers Office Building

2600 Blair Stone Road Tallahassee, FL 32399-2400

Carol Browner, Secretary

Department of Environmental Regulation Twin Towers Office Building

2600 Blair Stone Road Tallahassee, FL 32399-2400

Daniel H. Thompson General Counsel

Department of Environmental Regulation Twin Towers Office Building

2600 Blair Stone Road Tallahassee, FL 32399-2400

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 contact 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.

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

AGENCY FINAL ORDER

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

STATE OF FLORIDA

DEPARTMENT OF ENVIRONMENTAL REGULATION

NORTH FLORIDA PROPERTY OWNERS ASSOCIATION, ERON W. CARVER,

Petitioner,

DOAH CASE NO. 91-0750

vs. OGC CASE NO. 91-0113

OLCOTT DAIRY AND STATE OF FLORIDA DEPARTMENT

OF ENVIRONMENTAL REGULATION,

Respondents.

/

FINAL ORDER

On July 26, 1991, a hearing officer from the Division of Administrative Hearings submitted to me and all parties her Recommended Order, a copy of which is attached as Exhibit A. In accordance with Florida Administrative Code Rule 17-103.200, all parties were allowed 15 days in which to file exceptions to the Recommended Order. None of the parties have submitted exceptions.

The Recommended Order has come before me as head of the Department for final agency action. Having considered the Recommended Order, the pleadings, and the other documents submitted in this case,

IT IS ORDERED:

The Recommended Order is adopted in its entirety and Mr. Olcott's request for an exemption from permitting requirements is hereby denied.

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 32399-2409; 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 22 day of August, 1991, in Tallahassee, Florida STATE OF FLORIDA DEPARTMENT

OF ENVIRONMENTAL REGULATION

CAROL M. BROWNER

Secretary

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

Telephone: (904)488-4805

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true copy hereof has been furnished to: Mr. Earl Olcott John K. McPherson, Esq.

Olcott Dairy McPherson & Coffey, P.A.

Route 2 Box 417 22 S Main St

Branford FL 32008 Gainesville FL 32601

Ann Cole, Clerk

Division of Administrative Hearing The DeSoto Bldg.

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

Diane K. Kiesling

Division of Administrative Hearing The DeSoto Bldg

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

by U.S. Mail on this 26 day of August, 1991

STATE OF FLORIDA DEPARTMENT ENVIRONMENTAL REGULATION

WILLIAM H. CONGDON

Assistant General Counsel 2600 Blair Stone Road Tallahassee, FL 32399-2400

Telephone: (904) 488-9730

Docket for Case No: 91-000750

Orders for Case No: 91-000750