At the formal hearing, Petitioner presented the testimony of Aurelio Rodriguez and of Tomas Pequeno, Jr. Mr. Rodriguez, a part owner of International Petroleum, operates the facility on a daily basis. Mr. Pequeno, Jr., is the son of the owner of X.O. #1 Corporation and assists his father in the management of the affairs of that business. Petitioner presented no exhibits. Respondent presented the testimony of Patricia Dugan, the Administrator of Respondent's Petroleum Cleanup Reimbursement Section.
Respondent offered 5 exhibits, each of which was accepted into evidence. A sixth exhibit was marked, but it was not offered into evidence.
During the course of the hearing, Mr. Pequeno, Jr., testified that he did not believe that the site was contaminated, and that he filed the application to participate in the EDI Program as a precaution. Following that testimony, Respondent moved to dismiss the proceedings on the grounds that the Petitioner's failure to prove contamination is an absolute basis for denial of participation in the program. That motion was denied, but the denial was without prejudice to the right of the parties to argue that issue in the post-hearing submittals.
A transcript of the proceedings has been filed. At the request of the parties, the time for filing post-hearing submissions was set for more than ten days following the filing of the transcript. Consequently, the parties waived the requirement that a recommended order be rendered within thirty days after the transcript is filed. Rule 22I-6.031, Florida Administrative Code. Rulings on the parties' proposed findings of fact may be found in the Appendix to this Recommended Order.
Petitioner is the owner of a gasoline service station located at 2188
N.W. 20th Street, Miami, Florida 33142. Tomas Pequeno, Sr., is the President and owner of X.O. # 1 Corporation. International Petroleum currently operates the facility located at 2188 N.W. 20th Street, Miami, Florida 33142 pursuant to a lease agreement with X.O. #1 Corporation. The mailing address of the subject facility and of X.O. #1 Corporation is 12190 S.W. 99th Street, Miami, Florida 33186.
Aurelio Rodriguez is part owner of International Petroleum and has been the manager and operator of the facility in question since 1988.
Since 1988 Tomas Pequeno, Sr., has delegated authority to his son, Tomas Pequeno, Jr., to act on his behalf with regard to the business of X.O. #1 Corporation and the facility located at 2188 N.W. 20th Street, Miami, Florida 33142.
At the subject facility there are six underground storage tanks which receive and dispense petroleum products. These underground storage tanks are owned by X.O. #1 Corporation and constitute part of the property leased to International Petroleum. At all times pertinent to this proceeding, there were functioning monitoring wells on the premises for the purpose of detecting leaks in the underground storage system.
At the formal hearing, Tomas Pequeno, Jr., testified that on September 21, 1987, an odor of petroleum in one of the monitoring wells on the subject site was detected during a routine inspection of the premises. Mr. Pequeno, Jr., was advised by the inspector that there might be a leak in the system. On November 17, 1987, Mr. Pequeno, Jr., caused the tanks on the premises to be relined. No leaks were detected by the tests that were conducted following the relining of the tanks.
Paragraph 9 of the Pretrial Stipulation filed by the parties on July 24, 1991, is as follows:
9. That the date of discovery of petroleum contamination at this facility was September 21, 1987, as indicated by Tomas Pequeno.
On December 9, 1988, Petitioner submitted to Respondent an "Early Detection Incentive Program Notification Application" which was signed by Tomas Pequeno, Sr., as president of X.O. #1 Corporation. This form had been completed by Tomas Pequeno, Jr., and given to his father for his execution. This form represented that contamination at the site was detected September 21, 1987, by a manual test of the monitoring wells, that the number of gallons lost was unknown, that the petroleum contamination was due to leaking storage tanks, and that the system had been repaired. The cause of the leak in the piping and the cause of the leak in the tanks were stated as being unknown.
Mr. Pequeno, Jr., testified at the formal hearing that: "There was never a discharge from that site and there is not a discharge right now at this moment." Mr. Pequeno, Jr., also answered in the affirmative to the following question: "Mr. Pequeno, are you testifying there is no contamination at this facility?" 1/ Mr. Pequeno, Jr., testified further that he submitted the Early Detection Incentive Program Notification Application as a precaution in the event contamination was discovered. The testimony of Mr. Pequeno, Jr., at the formal hearing contradicted the representations made on the Early Detection Incentive Program Notification Application.
At all times pertinent to this proceeding both Mr. Pequeno, Jr., and Mr. Rodriguez were aware that the primary purpose of a monitoring well is to detect leaks from a petroleum storage system. At all times pertinent to this proceeding both Mr. Pequeno, Jr., and Mr. Rodriguez were aware of the existence of the monitoring wells on the subject site. The Dade County Department of Environmental Management (DERM) had asked the operator of the facility to submit
monitoring reports. 2/ Mr. Rodriguez was unable to recall when DERM first requested the monitoring reports, but it is clear from his testimony that the request was made several months before the hearing. The operator knew that monitoring system checks were required and had been requested by DERM to provide reports of those monitoring system checks.
The failure to conduct regular, periodic monitoring system checks creates the risk that a leak in a petroleum storage system will continue undetected.
Neither the operator nor the owner monitored the underground petroleum storage system on a regular basis until July of 1991, when the operator began to monitor the system on a regular basis and began to keep a log of the results.
Since September 21, 1987, Petitioner was aware that a sample of water from one of the monitoring wells (monitoring well #9) at the subject facility consistently contained the odor of petroleum. At the time of the formal hearing, monitoring well #9 still contained the odor of petroleum.
On January 26, 1989, Mr. Rodriguez, as the operator of the facility, received a copy of the Pollutant Storage Tank System Inspection Report form completed by a DERM inspector. This report placed the operator of the facility on notice that evidence of a discharge of pollutants had been discovered at the facility.
On March 3, 1989, DERM sent to Petitioner by certified mail a letter which provided, in pertinent part, as follows:
The Department of Environmental Resources Management acknowledges that you have applied for a state administered cleanup under the "Early Detection Incentive Program" ... .
However, a review of the Department's records reveals that the source of contamination has not been determined. Therefore, the discharge of hazardous materials from the underground storage system to the adjacent soils or waters may be continuing.
* * *
... [Y]ou are required to:
Immediately upon receipt of this letter, CEASE and DESIST from any further unauthorized discharges to the ground and/or groundwater of Dade County.
Immediately upon receipt of this letter, hydrostatically test, and repair any leaks to all underground tanks and transmission lines at the subject site.
Within thirty (30) days of receipt of this letter, submit to this Department certifica- tion that all underground tanks and transmis- sion lines at the subject site are tight and are not discharging contaminants to the environment. ...
The letter dated March 3, 1989, was received by Petitioner on March 7, 1989. By that letter, Petitioner was placed on notice that there was a risk
that a discharge of hazardous materials from the underground storage system to the adjacent soils and waters was continuing. By that letter, Petitioner was also placed on notice that DERM required that it hydrostatically test all underground tanks and transmission lines at the subject site in order to determine if leaks existed in the tanks and lines. By that letter, Petitioner was also placed on notice that DERM required that Petitioner certify that all underground tanks and transmission lines at the subject site are tight and are not discharging contaminants to the environment.
Mr. Pequeno, Jr., believed that by having the tanks relined and repaired in November 1987, Petitioner had complied with the requests made in DERM's letter of March 3, 1989. On March 13, 1989, Mr. Pequeno, Jr., called DERM to determine whether the tests that were conducted following the relining and the repair of the tanks in November 1987, satisfied the requirements contained in DERM's letter of March 3, 1989. When Mr. Pequeno, Jr., did not get a response to his inquiry, he assumed that Petitioner was in compliance. Petitioner took no steps until two years later to hydrostatically test its underground tanks and transmission lines.
On March 21, 1991, Petitioner had a tank tightness test conducted at the facility. The tank system tightness test conducted on March 21, 1991, indicated that five tanks did not test tight. There was no evidence that Petitioner has filed a certification with DERM that all underground tanks and transmission lines at the subject site are tight and are not discharging contaminants to the environment.
No fuel transmission line tightness test has been conducted pursuant to DERM's March 3, 1989, request. As of the date of the formal hearing, Petitioner had not performed a complete investigation to determine the source of contamination as DERM had requested.
The underground storage system at the subject site were continuously used for the storage and dispensing of petroleum products from September 21, 1987, to the date of the formal hearing. At all times pertinent to this proceeding deliveries of petroleum products were made to the tanks which had been identified by Petitioner as leaking.
Petitioner's failure to conduct a complete investigation to determine the source of contamination, its failure to repair the tanks which failed the tank tightness, and its continued use of these tanks, create the risk that a discharge of hazardous materials may be continuing at the present time.
By letter dated February 13, 1991, Respondent denied Petitioner's eligibility to participate in the Early Detection Incentive Notification Program. This letter provided, in pertinent part, as follows:
The Department of Environmental Regulation has completed its eligibility review of your Early Detection Incentive Notification Application. Based upon information given in
this application and a compliance verification evaluation, the Department has determined that this site is not eligible for state-administered cleanup pursuant to Section 376.3071(9), Florida Statutes (1986) for the following reasons:
Failure to have storage tanks tightness tested. Request was made by the Department of Environ- mental Resources Management (DERM) on March 3, 1989. This shall be construed to be gross negligence in the maintenance of a storage system.
According to Section 376.3071(9)(b)3, Florida Statutes, sites shall not be eligible for state- administered cleanup where the owner or operator has been grossly negligent in the maintenance of a petroleum storage system.
By Pre-Trial Stipulation filed July 24, 1991, the parties entered into certain factual stipulations and framed the following two issues of law to be resolved:
Whether X.O. #1 Corporation was grossly negligent as defined under Section 376.3071(9)(b)3, Florida Statutes, for failing to immediately investigate and abate the source of a petroleum contamination by conducting a tank and line tightness test pursuant to a request by DERM (Dade County Department of Environmental Resources Management).
Whether X.O. #1 Corporation was grossly negligent as defined under Section 376.3071(9)(b)3, Florida Statues, for failing to make monthly monitoring system checks where such systems are in place.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over this matter. Section 120.57(1), Florida Statutes.
The provisions of Section 376.3071, Florida Statutes, creates the Early Detection Incentive Program and impose upon Respondent the responsibility and authority to implement and administer that program. The Early Detection Incentive Program provides for state-sponsored cleanup of sites contaminated as a result of a discharge of petroleum products from a petroleum storage system. The underground storage and dispensing system owned by Petitioner at the subject site is a "petroleum storage system" as defined by Section 376.301(3), Florida Statutes.
The testimony of Mr. Pequeno, Jr., and the testimony of Mr. Rodriguez establish their position that the subject site has not been contaminated. That position was not taken by Petitioner prior to hearing and the issue was not raised by the denial letter or by the pleadings. The position is in conflict with the application filed by Petitioner to participate in the Early Detection Program and is in conflict with the pretrial stipulation executed by Petitioner. The conflict is resolved by concluding, based on the persistent presence of the odor of petroleum in the monitoring well and the provisions of Rule 17- 61.050(5)(c), Florida Administrative Code, that there exists sufficient evidence
of contamination to adjudicate Petitioner's eligibility on the merits. Respondent's motion to dismiss was appropriately denied.
The presence of the odor of petroleum in a monitoring well is indicative of a "discharge" as that term is defined by Section 376.301(3), Florida Statutes. Pursuant to Section 376.301(3), Florida Statutes:
(3) "Discharge" includes, but is not limited to, any spilling, leaking, seeping, pouring, misapplying, emitting, emptying, or dumping of any pollutant which occurs and which
affects lands and the surface and ground water of the state ... .
Rule 17-61.050(5)(c), Florida Administrative Code, provides that the presence of odor shall be treated as a discharge unless the owner or operator affirmatively demonstrates that no discharge has occurred. The record establishes that there has consistently been an odor of gasoline in one monitoring well, even up to the time of the formal hearing. The testimony of Mr. Pequeno, Jr., and Mr. Rodriguez failed to affirmatively demonstrate that no discharge has occurred.
Rule 17-61.050(4)(b), Florida Administrative Code, requires that any person discharging pollutants from a facility to "immediately undertake to contain, remove, and abate the discharge."
The owner or operator is required to test a storage system whenever the Department has ordered that testing is necessary to protect the lands, groundwaters, or surface waters of the state. The Department is authorized to order testing when a discharge detection device or monitoring well indicates that pollutant has been or is being discharged. Rule 17-61.050(6)(c), Florida Administrative Code. When there is evidence of discharge, monitoring wells are to be tested monthly. Rule 17-61.050(4)(c)1.c., Florida Administrative Code.
Mr. Pequeno, Jr., assumed that the work he had done on the tanks in November 1987 was all that was required of him and, consequently, he did not have the system tested following DERM's notification on March 3, 1989, that tank and line tightness tests were required until March 21, 1991. This failure to respond created a risk that contamination was continuing. The tank and line tightness tests on March 21, 1991, reflected that five tanks did not test tight.
Neither the owner nor the operator of the facility performed monitoring tests even though Mr. Pequeno, Jr., and Mr. Rodriguez knew the purpose of the monitoring wells, and knew that there was evidence of petroleum discharge in the form of the odor of petroleum from one of the monitoring wells.
Section 376.3071(9)(b)3.a., Florida Statutes, provides that a site shall be declared ineligible for the program when:
... the owner or operator of a petroleum storage system has been grossly negligent in the maintenance of such storage system
... . For the purposes of this paragraph, willful failure to maintain inventory and reconciliation records, willful failure to make monthly monitoring system checks where such systems are in place, and failure to
meet monitoring and retrofitting requirements within the schedules established under
Chapter 17-61, Florida Administrative Code ... shall be construed to be gross negligence in the maintenance of a petroleum storage system.
The failure of the owner and the operator to have the system tested for tightness after being told to do so by DERM and after they were both aware that one of the monitoring wells had a persistent odor of petroleum constitutes gross negligence in the maintenance of the subject storage system within the meaning of Section 376.3071(9)(b)3.a., Florida Statutes. Nana's Petroleum, Inc.
v. State of Florida, Department of Environmental Regulation, DOAH Case No. 89- 5912, Final Order issued March 29, 1990; and Weeks Oil Company, Inc. v. State of Florida, Department of Environmental Regulation, DOAH Case No. 89-5523, Final Order issued June 15, 1990. Likewise, the failure of the operator to monitor the system after being told to do so by DERM and after becoming aware that one of the monitoring wells had a persistent odor of petroleum constitutes gross negligence in the maintenance of the subject storage system within the meaning of Section 376.3071(9)(b)3.a., Florida Statutes.
Paragraphs 10 and 11 of the Conclusions of Law portion of the Recommended Order in Weeks Oil Company, Inc., supra, contained the following discussion of "gross negligence" which is pertinent to this case. That analysis was adopted by the Final Order entered by the Department of Environmental Regulation.
Gross negligence is the "omission or commission of an act with a conscious indifference to consequences so far as other persons are concerned." Faircloth v. Hill, 85 So.2d 870, 872 (Fla. 1956).
In Glaab v. Caudill, 236 So.2d 180, 184 (Fla. 2nd DCA 1970), the Court defined "conscious disregard of consequences" as:
We equate "conscious disregard of consequences" with a voluntary act or omission in the face of conditions towards which reasonable prudence requires a particularly keen alertness or caution when such act or omission is dangerous and well-calculated to result in grave injury. (Emphasis in the original.)
In this case, Petitioner believed that the action it took in relining its tanks was the appropriate response to the evidence of contamination. Petitioner contends that it acted in good faith and that it was not grossly negligent. Petitioner's contentions are rejected. The record establishes that both failed to comply with DERM's clear instructions to monitor the system and to have tank and line tightness tests performed. These instructions were issued after the tanks had been relined in 1987. Petitioner's misunderstanding of its responsibilities in maintaining an underground petroleum storage and dispensing system does not excuse its failure to have tank and line tightness tests performed nor does it excuse its failure to have the monitoring wells checked on a regular basis.
It is concluded that Petitioner was "grossly negligent" in the maintenance of its underground petroleum storage and dispensing system within the meaning of Section 376.3071(9)(b)3.a., Florida Statutes, by failing to have tank and line tightness tests performed. It is concluded that such gross negligence renders the site ineligible for participation in the Early Detection Incentive Program.
It is further concluded that Petitioner was "grossly negligent" in the maintenance of its underground petroleum storage and dispensing system within the meaning of Section 376.3071(9)(b)3.a., Florida Statutes, by failing to have the monitoring wells checked on a regular basis. It is concluded that such gross negligence renders the site ineligible for participation in the Early Detection Incentive Program.
If there is no contamination, as Mr. Pequeno, Jr., maintained at the hearing, the application should nonetheless be denied because contamination is a prerequisite to eligibility for participation in the Early Detection Incentive Program.
Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered by the Florida Department of Environmental Regulation which denies the application of Petitioner to participate in the Early Detection Incentive Program for its facilities located at 2188 N.W. 20th Street, Miami, Florida 33142.
RECOMMENDED in Tallahassee, Leon County, Florida, this 25th day of September, 1991.
CLAUDE B. ARRINGTON
Filed with the Clerk of the Division of Administrative Hearings this 25th day of September, 1991.
1/ In their pretrial stipulation, the parties stipulated that the only issue of fact to be determined by the Hearing Officer is whether X.O. # 1 Corporation was "grossly negligent" in its operation of the subject petroleum storage tank system. The denial letter issued by Respondent and the stipulated statement of the issues do not raise the issue as to whether the site was contaminated. That issue was raised for the first time by the testimony presented by Petitioner at the formal hearing. Following Mr. Pequeno, Jr.'s, testimony that the site was not contaminated, Respondent moved to dismiss the proceedings on the grounds that the Petitioner's failure to prove contamination is an absolute basis for denial of participation in the program. That motion was denied, but the denial
was without prejudice to the right of the parties to argue that issue in the post-hearing submittals. Disposition of the arguments that underlie the motion is made in the Conclusions of Law section of this Recommended Order.
2/ Petitioner does not challenge the authority of DERM to require monitoring tests, nor has Petitioner challenged the authority of DERM to require the tank and line tightness tests that are discussed in upcoming paragraphs.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-2630
The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioner.
The following rulings are made on the proposed findings of fact submitted on behalf of the Respondent.
Alfredo G. Duran, Esquire Museum Tower, Suite 2200
Elizabeth G. Lowery, Esquire Janet E. Bowman, Esquire Department of Environmental
Daniel H. Thompson General Counsel
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.
