STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CSX REALTY, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 91-1408

) BOARD OF TRUSTEES OF THE ) INTERNAL IMPROVEMENT TRUST ) FUND, )

)

Respondent, )

)

and )

) CSX TRANSPORTATION, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause was heard by William R. Cave, the assigned Hearing Officer from the Division of Administrative Hearings, on November 14, 1991 in Venice, Florida and on November 21, 1991 in Tallahassee, Florida.

APPEARANCES

For Petitioner Richard A. Lotspeich and Intervenor: Landers & Parsons

310 West College Avenue

P.O. Box 271

Tallahassee, Florida 32302

For Respondent: Suzanne B. Doub Brantley

Nona Schaffner

Department of Natural Resources Office of General Counsel

Room 922, Douglas Building 3900 Commonwealth Boulevard

Tallahassee, Florida 32399 STATEMENT OF THE ISSUE

The issue presented is whether Petitioner, CSX Realty, Inc. (CSXR) is entitled to a disclaimer to the submerged lands beneath the phosphate loading pier near the southern end of Gasparilla Island, Lee County, Florida, pursuant to Section 253.129, Florida Statutes, and Chapter 8537, Laws of Florida 1921, commonly referred to as the Butler Act.

PRELIMINARY STATEMENT

On November 29, 1990, CSXR applied to the Respondent for a disclaimer to

1.39 acres more or less of submerged lands beneath and immediately adjacent to the phosphate loading pier located in Charlotte Harbor near the southern end of Gasparilla Island, Lee County, Florida. By letter dated December 31, 1991, the Department of Natural Resources (Department), acting as staff to the Board of Trustees of the Internal Improvement Trust Fund (Board) notified CSXR that its application did not qualify for a disclaimer. Petitioner filed a timely Petition for Formal Administrative Proceeding challenging this action by the Board. By letter dated March 1, 1991, the Department transferred this matter to the Division of Administrative Hearings for the assignment of a Hearing Officer and to conduct a formal hearing. After several continuances, this matter was heard on November 14, 1991 in Venice, Florida and concluded on November 21, 1991 in Tallahassee, Florida.

At the hearing, CSXR presented the testimony of Harold E. Bowe, Jack Hackett and Stanley K. Ink. CSXR's exhibits nos. 1-4 and 6-8 were admitted as evidence. Intervenor, CSX Transportation (CSXT) presented no evidence.

The Board presented the testimony of Judy Wysocki, Kenton R. Keiling, Kris

K. Jain and Pete Mallison. The Board's exhibits nos. 1-10 were admitted as evidence.

Respondent's Motion for Official Recognition of: (1) Chapters 120 and 253, Florida Statutes (1989); (2) Chapter 8537, Laws of Florida, 1921; (3) Chapters 18-21, 22I-6 and 28-5, Florida Administrative Code; and (4) Black's Law Dictionary, Fifth Edition, definition of "permanent" was granted. However, only copies of 2 and 4 were attached to the motion. Copies of 1 and 3 were not attached due to their volume and their official publication. Additionally, a copy of Webster's Third New International Dictionary definition of "permanent" was officially recognized.

A transcript of the proceeding was filed on December 2, 1991 for that portion of the hearing held on November 14, 1991 and on December 17, 1991 for that portion of the hearing held on November 21, 1991. The time for filing proposed findings of fact and conclusions of law by the parties was extended until January 2, 1992. The parties timely filed their proposed findings of fact and conclusions of law under the extended time frame. A ruling on each proposed finding of fact has been made as reflected in an Appendix to the Recommended Order.

FINDINGS OF FACT

Upon consideration of the oral argument and documentary evidence adduced at the hearing, the following relevant findings of fact are made:

1. On November 29, 1990, CSXR filed an application with the Respondent for a disclaimer to 1.39 acres more or less of submerged lands beneath and immediately adjacent to a phosphate loading pier ("pier") located in Charlotte Harbor on the eastern side (bay side) near the southern end of Gasparilla Island in Lee County, Florida.

   
   

2. Charlotte Harbor is a natural, navigable harbor off the Gulf of Mexico which receives water flow from the Gulf of Mexico and the Peace River.

3. The Department is an agency of the state of Florida charged with implementation of Chapter 253, Florida Statutes, relating to sovereign submerged lands. The Department serves as staff to the Board pursuant to Section 253.002, Florida Statutes. The Department has the authority to process applications for disclaimers to state lands under the provision of Section 253.129, Florida Statutes.

   
   

4. On December 31, 1990, the Department notified CSXR that its application for disclaimer was denied. The basis for the denial was that the pier was constructed on pilings and was not solid fill as provided for in Rule 18-21.013, Florida Administrative Code. In addition, the legal description of the subject submerged lands included open submerged lands lying adjacent to the pier. CSXR agreed to amend its application to reflect that it is seeking a disclaimer only for those submerged lands immediately beneath the pier.

   
   

5. The Department reconsidered the application, and it is now the position of the Department that Rule 18-21.014, Florida Administrative Code, no longer applies in this case. However, the Department in reconsidering the application revised its position to deny the application for lack of compliance with the Butler Act in that: (a) it was the Department's opinion that the pier was not a permanent improvement within the intent of the Butler Act; and (b) neither CSXR nor CSXT had shown compliance by its predecessors in title with the Butler Act sufficient to vest title to the submerged lands beneath the pier pursuant to Section 253.129, Florida Statutes, and the Butler Act.

   
   

6. The Department's position is that in order to be "permanent" for purposes of the Butler Act, a structure must be able to exist for an extended period of time without maintenance. Generally, there are no circumstances under which a wooden structure would be considered "permanent" for purposes of the Butler Act by the Department.

   
   

7. The only material available to construct a structure such as the pier when it was constructed was wood, steel or concrete. Each of these materials would have required maintenance in order for the pier to have lasted approximately 80 years. In fact, considering the durability of the materials available at the time of construction, the most durable material would not have lasted more than 15 years without maintenance.

   
   

8. In 1907 or 1908, the Alafia, Manatee and Gulf Coast Railway Company began constructing the pier for the purpose of loading phosphate ore from railroad cars onto ships. The pier and loading system was put into operation in 1911.

   
   

9. The pier was built continuously from the line of mean high water in the direction of the channel in Charlotte Harbor and was built so as not to obstruct the channel.

   
   

10. The pier is a structure along the shore of a navigable waterbody alongside which vessels were brought to be loaded with phosphate.

    
    

11. The main pier is approximately 770 feet long by 25 feet wide with a T- head approximately 325 feet long by 95 feet wide at the north and south ends but only 45 feet wide at the middle two-thirds.

    
    

12. Constructed on the pier was a superstructure consisting of a conveyor system and a loader. The conveyor system moved the phosphate ore from the railroad cars to the loader located on the T-head. The loader could move along

    rails from one end of the T-head to the other. The loader dropped the phosphate ore into the hold of the waiting ship. The loader weighed approximately 250 tons.

    
    

13. The pier was constructed on wood pilings as large as 2 feet in diameter. Wooden caps (beams) 12 inches by 12 inches or 14 inches were placed across the top of the pilings. The caps were fixed together with wood stringers up to 7 inches by 14 inches in cross-section. The caps were fastened to the pilings and the stringers fastened to the caps with metal bolts. The deck of the pier was constructed on top of the stringers.

    
    

14. After the railroad cars were unloaded, they would travel out onto the main pier for a distance of approximately 350 to 400 feet. This part of the pier is known as the trestle and was built to support the weight of the train with railroad cars even when loaded.

    
    

15. When the pier was in operation, from 100 to 240 ships were loaded every year at this facility. This amounted to 500 thousand to 2.5 million tons of phosphate ore per year.

    
    

16. Except for a few years during World War II, the pier was used continuously from 1911 to 1979 for the purpose of loading phosphate ore onto ships.

    
    

17. In 1979, the pier ceased being used to load phosphate. This was because more up-to-date loading facilities had been constructed in Tampa, Florida, and the tracks and trestles between Arcadia and Gasparilla Island were in need of extensive repairs. Therefore, the phosphate that was previously shipped by rail to the pier on Gasparilla Island was shipped to Tampa.

    
    

18. Hurricanes struck this area in 1944 and 1960. In each instance, while the hurricanes damaged the superstructure of the conveyor system, there was only minor superficial damage to the pier itself.

    
    

19. The pier was maintained regularly from 1911 to 1979. The timber pilings were replaced every four to eight years because of damage caused by marine borers that ate the wood. However, in 1954, concrete was placed around the pilings by a process known as jet-creting. Since that time, no pilings have been replaced. The pile caps were replaced infrequently, and the deck of the pier still has some timbers that were placed there in the early 1940s.

    
    

20. Except for routine maintenance and replacement of damaged pilings and timbers, there have been no changes to the pier structure from 1946 to date. The superstructure was raised approximately 8 feet in 1948 and was dismantled and removed in 1988.

    
    

21. While the pier as it currently exists is in need of repair and maintenance, it is an extremely sturdy pier which has been in existence for 80 years. It was constructed of materials and spacings that greatly exceed what one normally sees for a pier that is used for water-related projects.

    
    

22. Considering the purpose, design and construction of the pier, there is no dispute that the pier was originally constructed as a permanent structure.

    
    

23. There is sufficient competent substantial evidence to establish facts to show that the pier is a permanent structure which "permanently improved" the submerged lands directly beneath the pier as contemplated by the Butler Act.

24. CSXR is the record title holder of certain upland littoral (riparian) property in Boca Grande, Gasparilla Island, Lee County, Florida that is contiguous to the submerged lands upon which the pier is located.

    
    

25. Prior to 1934, the United States of America (United States) owned title to the subject property as a military reservation. In 1906, the United States conveyed a right-of-way to the Alafia, Manatee and Gulf Coast Railway Company (Alafia) for construction of the pier and terminal facilities.

    
    

26. In 1934, the United States conveyed fee simple title to the subject property to Boca Grande Inn, Inc., subject to such rights granted to Alafia for right of way and terminal purposes. Boca Grande Inn, Inc. then conveyed fee simple title to Charlotte Harbor and Northern Railway Company by deed dated January 6, 1937. Prior to this conveyance, Charlotte Harbor and Northern Railway Company had become the successor corporation to Alafia, as a result of a name change, and as a result of this conveyance, title to the right-of-way was merged with fee simple title to the riparian upland tract.

    
    

27. In 1946, the Charlotte Harbor and Northern Railway Company deeded the property to the Seaboard Airline Railroad Company by deed dated December 30, 1946. Through a series of name changes, the Seaboard Airline Railroad Company became CSX Transportation, Inc. on July 1, 1986.

    
    

28. On January 27, 1988, CSXT conveyed the subject riparian property, subject to certain reservations, by a special warranty deed to CSXR.

    
    

29. Title to the pier structure itself is currently held by CSXT by virtue of a reservation contained in the 1988 deed from CSXT to CSXR. That reservation also reserved to CSXT those riparian rights and interests necessary to allow CSXT to use, maintain and operate the pier. A further reservation reserved to CSXT a perpetual nonexclusive easement for ingress to and egress from the pier to the extent necessary for the use, maintenance and operation of the pier. CSXT did not reserve title to the submerged lands.

    
    

30. There has been no severance or alienation of the riparian rights to the submerged lands in the chain of title to the subject upland property.

    
    

31. Notwithstanding, that Alafia was not the riparian upland owner at the time Alafia permanently improved the subject submerged lands by constructing the pier, title to the subject submerged lands vested in the riparian upland owner (United States) by virtue of the Butler Act due to the subject submerged lands being permanently improved by Alafia.

    
    

32. There is sufficient competent substantial evidence to establish facts to show that CSXR is currently the riparian upland owner, and therefore, holds title to the subject submerged lands.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

34. The Board has authority and is directed to issue eligible riparian upland owners disclaimer to submerged land pursuant to Section 253.129, Florida Statutes, and the Butler Act (Chapter 8537, Laws of Florida 1921). This

    proceeding resulted from a decision by the Department, acting as staff to the Board, to deny the disclaimer requested by CSXR.

    
    

35. The burden of proof is on the party asserting the affirmative of an issue before an administrative tribunal. Department of Transportation v. J.W.C. Company, Inc., 396 So.2d 778 (1 DCA Fla. 1981). In the instant case, the burden to prove that it is entitled to a disclaimer to the submerged land in question pursuant to the Butler Act and Section 253.129, Florida Statutes is on CSXR. Brickell v. Trammel, 77 Fla. 544, 82 So.2d 221 (Fla. 1919); Williams v. Guthrie,

    102 Fla. 1047, 137 So. 682 (Fla. 1931). CSXR has sustained its burden in this regard.

    
    

36. The Butler Act, formerly Section 271.01, Florida Statutes, provided as follows:

    
    

    Sec. 1. Whereas, it is for the benefit of the State of Florida that water front property

    be improved and developed; and (emphasis added)

    Whereas, the State being the proprietor of all submerged lands and water privileges within its boundaries, which prevents the riparian owners from improving their water lots, therefore

    The State of Florida, for the consideration above mentioned, subject to any inalienable trust under which the state holds said lands, divests itself of all right, title and interest to all lands covered by water lying in front of any tract of land owned by the United State or by any person . . . lying upon any navigable stream or bay of the sea or harbor, as far as to the edge of the channel, and hereby vests the full title to the same, subject to said trust in and to the riparian proprietors, giving them the full right and privilege to build wharves into streams or waters of the bay or harbor as far as may be necessary to effect the purposes described, and to fill up from the shore, bank or beach as far as may be desired, not obstructing the channel, but leaving full space for the requirements of commerce, and upon lands so filled in to erect warehouses, dwellings or other buildings also,

    confirming to the riparian proprietors all improvements which may have heretofore been made upon submerged lands. (emphasis added)

    Provided, that the grant herein made shall apply to and affect only those submerged lands which have been, or may be hereafter, actually bulkheaded or filled in or permanently improved continuously from high water mark in the direction of the channel, or as near in the direction of the channel as practicable

    to equitably distribute the submerged lands, and shall in no wise affect such submerged

    lands until actually filled in or permanently improved. (emphasis added)

    * * *

    Sec. 3. This Act shall take effect as of the day, to-wit: December 27, 1856, when the act entitled "An Act to Benefit Commerce," was adopted by the Legislature of Florida, and shall be continuously effective thence forward and hereafter; and hereby vests in the riparian proprietors and their grantees and successors, in right, the title, right and interest given under the provisions of this act.

    
    

37. The plain language of the Butler Act provides for acquisition of title to submerged lands by bulkheading or filling in or permanently improving the submerged lands. Jacksonville Shipyards, Inc. v. Department of Natural Resources, 466 So.2d 389 (1 DCA Fla. 1985) and the cases cited therein. Upon the completion of the bulkheading or filling in or permanently improving the submerged lands within the limitations of the Butler Act before May 29, 1951 title to the submerged lands became absolute and equal to that of the upland, and not subject to reversion back to the state by reason of any change of events or circumstances occurring after that date. Holland v. Fort Pierce Financing & Construction Co., 157 Fla. 649, 27 So.2d 76 (Fla. 1946); Duval Engineering and Contracting Company v. Sales, 77 So.2d 431 (Fla. 1955); see also Alexander Brest Trust v. Department of Natural Resources and Commodores Point Terminal Corporation v. Department of Natural Resources, Division of Administrative Hearings Case Nos. 88-0378 and 88-0522 (Recommended Order dated January 9, 1989).

    
    

38. There is sufficient competent substantial evidence in the record to establish facts to show that the improvement in question (pier) was intended to be a permanent structure when constructed sometime around 1908-1910, and that the construction of that structure permanently improved the submerged lands in question as contemplated by the Butler Act. This is so notwithstanding the Department's position that because a wooden structure requires regular maintenance in order to survive the elements for any extended period of time it cannot be permanent, and therefore, could not permanently improve the submerged lands as contemplated by the Butler Act.

    
    

39. "Permanently improved" is not defined by the Butler Act, or Chapter 253, Florida Statutes, or by Department or Board rule. And while an agency's interpretation of a statute is entitled to great deference and will not be overturned unless clearly erroneous or is not supported by competent substantial evidence, unreasonable or ridiculous interpretations distort fundamental principles of statutory construction and mandate the use of reasonable interpretations. Drost v. Department of Environmental Regulation, 559 So.2d 1154 (3 DCA Fla. 1990) and the cases cited therein.

    
    

40. It is clear that the Butler Act had no other purpose than to stimulate and encourage the improvement of submerged lands and to improve the foreshore in the interest of commerce and navigation, Duval Engineering, 77 So.2d 431, 433 (Fla. 1955), and with that purpose in mind it does not appear that it was the intent of the legislature to place such a narrow interpretation of the term "permanently improved" as the Department has in this case. Additionally, the Department's interpretation is unreasonable when you consider the definition of "permanent" as defined in Black Law Dictionary, Sixth Edition (1990) and case

    law cited in CSXR's Proposed Recommended Order relating to the term "permanent" and "permanently improved".

    
    

41. It is concluded that the pier constructed by Alafia under the rights granted to it by the United States, the then upland riparian owner, around 1908- 1910 was constructed as a permanent structure, and its construction permanently improved the submerged lands in question as contemplated by the Butler Act. It is further concluded that all the conditions and limitations imposed under the Butler Act having been complied with prior to May 29, 1951 title to the submerged lands in question vested in the United States, and eventually vested in CSXR through the conveyance set out in the above Findings of Fact.

RECOMMENDATION

Having considered the foregoing Findings of Fact and Conclusions of Law, it is, therefore,

RECOMMENDED that a Final Order be entered by the Board granting the disclaimer sought by CSXR.

DONE and ENTERED this 27th day of January, 1992, in Tallahassee, Florida.

WILLIAM R. CAVE

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 27th day of January, 1992.

APPENDIX TO RECOMMENDED ORDER

The following constitutes my specific rulings pursuant to Section 120- 59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties in the case.

Rulings on Proposed Finding of Fact Submitted by the Petitioner

1. Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding(s) of Fact which adopts the proposed finding(s) of fact: 1(1); 2(2); 3(8); 4(9); 5(10); 6(1, 11); 7(12); 8(13); 9(14); 10(15); 11(16); 12(17); 13(18); 14(19); 15(20); 16(21); 17(22); 18(4); 19(5); 20(6); 21-22(7); 23(23); 24(24); 25(25); 26(26); 27(27); 28(28); 29(29); 30(30); and 31(31).

Rulings on Proposed Findings of Fact Submitted by the Respondent

1. Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding(s) of Fact which adopts the proposed finding(s) of fact: 1(24); 2(3); 3(29); 5(1); 6-7(4); 8-9(5); 12(13); 13-14, 16(8); 17-21(25); 22(26); 23(25); 25(19, 20); 26-30(19); 31(21); 32-33(17, 20, 21);

2. Proposed finding of fact 4 is covered in the preliminary statement.

3. Proposed findings of fact 10 and 36 are neither material or relevant to this proceeding.

4. Proposed findings of fact 11, 15, 24, 34 and 35 are rejected as not being supported by competent substantial evidence in the record.

5. Proposed finding of fact 37 is covered in the Conclusions of Law.

Rulings on Proposed Finding of Fact Submitted by the Intervenor

The Intervenor did not submit any proposed findings of fact.

COPIES FURNISHED:

Richard A. Lotspeich Landers & Parsons

310 West College Avenue

P.O. Box 271 Tallahassee, FL 32302

Suzanne B. Doub Brantley Nona Schaffner

Department of Natural Resources Office of General Counsel

Room 922, Douglas Building 3900 Commonwealth Boulevard

Tallahassee, FL 32399

Ken Plante, General Counsel Department of Natural Resources 3900 Commonwealth Boulevard

Mail Station #10

Tallahassee, FL 32399-3000

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.

Docket for Case No: 91-001408

Orders for Case No: 91-001408