STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
TYU, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 92-0678
) DEPARTMENT OF ENVIRONMENTAL ) REGULATION, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to Notice, this cause was heard by Linda M. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on June 18, 1992, in Miami, Florida.
APPEARANCES
For Petitioner: A. C. Vittorino
Special Projects Manager TYU, Inc.
1601 McCloskey Boulevard
Tampa, Florida 33605-6710
For Respondent: Brigette A. Ffolkes, Esquire
Department of Environmental Regulation 2600 Blair Stone Road
Tallahassee, Florida 32399-2400 STATEMENT OF THE ISSUE
The issue presented is whether Petitioner's application for redetermination of eligibility for the Early Detection Incentive Program should be granted.
PRELIMINARY STATEMENT
Petitioner filed an application for redetermination of eligibility for the Early Detection Incentive Program. The Department denied Petitioner's request to have its eligibility redetermined and advised Petitioner of its right to a formal hearing regarding that denial. Petitioner timely filed its request for a formal proceeding, and this cause was subsequently transferred to the Division of Administrative Hearings.
Petitioner presented the testimony of Harry J. Barkett. Respondent presented the testimony of Shawn L. Abbott, Xiomora Lopez, Jose C. Diaz, and Curt L. Williams. Additionally, Petitioner's Exhibits numbered 1-5 and Respondent's Exhibits numbered 1, 2, 4, and 5 were admitted in evidence.
Both parties submitted post-hearing proposed findings of fact. A specific ruling on each proposed finding of fact can be found in the Appendix to this Recommended Order.
FINDINGS OF FACT
Petitioner is the owner of the site known as Union 76 #702 or as Taylor's 76, Inc., located at 9700 East Indigo Street, Perrine, Dade County, Florida. The prior owner of that site was Lawrence Oil Company. There appears to be a commonality of principals between Petitioner TYU, Inc., and its predecessor in title, Lawrence Oil Company.
In 1986 the Legislature created the Early Detection Incentive Program (hereinafter "EDI") to encourage early detection, reporting, and cleanup of contamination from leaking petroleum storage systems. Essentially, the Legislature created a 30-month grace period ending on December 31, 1988, for owners of sites with contamination from petroleum storage systems to apply for reimbursement for cleanup expenses due to the contamination, without retribution from the State. The statute also provided several bases for which an applicant would be deemed ineligible.
Prior to the December 31, 1988, deadline Petitioner checked the various sites owned by it, including the site which is the subject of this proceeding, to determine whether contamination was present.
The subject site had been a service station, selling gasoline for 30 to
35 years. From 1986 forward, however, gasoline was no longer being dispensed at the site although the underground gasoline tanks were still present. It is unknown whether the tanks were emptied at the time that they were taken out of service.
Automobile repairs were still performed at the site. By 1989, the site was also occupied by a lawn maintenance company and a pool company.
In 1988 and 1989 a 55-gallon drum of used oil was located on the site. The lawn company employees used that oil to lubricate their chain saws. The remainder of the used oil and the solvents from the small parts washer were picked up from that site for recycling.
In November or December of 1988, Harry Barkett, president of Lawrence Oil Company, personally visited the site. He sampled the monitoring wells. Because he smelled gasoline in the monitoring wells, he retained Seyfried & Associates, Inc., an environmental consultant, to prepare a report to be submitted to the Department. That report is dated December 15, 1988.
Petitioner's application for participation in the EDI program, together with the report of Seyfried & Associates, Inc., was submitted to the Department prior to the December 31, 1988, deadline.
At the time, Metropolitan Dade County's Department of Environmental Resources Management (hereinafter "DERM") was performing EDI inspections for the Department pursuant to a contract. On March 22, 1989, a DERM employee who performed only industrial waste inspections went to the subject site. He specifically was not there to inspect the petroleum storage systems, and he did not do so.
That employee went into the service bays where the routine auto repair and maintenance services were performed. He noticed the floor drains going from the service bays to the oil/water separator. He then inspected the oil/water separator. He noted that a hole had been cut at the top of the effluent pipe, which breached the system and which might allow oil to flow into either a drain field or a septic tank system. He did not check further to ascertain which.
He took three samples from inside the oil/water separator, one for oil and grease, one for phenols, and one for metals, specifically cadmium, chromium, and lead. Not surprisingly, the laboratory analysis of those samples indicated the presence of phenols, oil, and grease.
The only sampling done by that employee was of the contents of the oil/water separator. No investigation was made of, and no samples were taken from, the soil or groundwater anywhere on the site. Such sampling was not part of that employee's authority or responsibility.
On October 11, 1989, Dade County DERM sent a different employee to perform the EDI inspection at the subject site. To determine the presence of contamination from petroleum or petroleum products, that employee dipped an acrylic bailer into each of the monitoring wells and then "sniffed the bailer" to ascertain if the odor of gasoline could be detected. He did not dip the bailer lower than the top foot of water since he did not wish to bring the bailer up through a column of water before sniffing.
Dade County DERM employees no longer "sniff the bailer" due to the health risk involved in such a procedure. In 1989, however, it was the common practice for DERM employees to "sniff the bailer," albeit cautiously.
That employee failed to detect the odor of gasoline and did not see any petroleum contamination in the monitoring wells. He issued a report to that effect. He took no samples from the soil or groundwater to determine if there were contamination from petroleum or petroleum products at the site.
Based upon the second report indicating the absence of gasoline odor and based upon the first report indicating the presence of oil, grease, and phenols inside the oil/water separator, Dade County DERM recommended to the Department that Petitioner's application for participation in the EDI program be denied.
Based upon that recommendation, the Department sent Petitioner a letter dated May 23, 1990, denying Petitioner's application for participation in the EDI program. That letter stated as the two reasons for denial the following:
Contamination is not the result of a discharge from a petroleum storage facility as defined in Section 376.301(11), Florida Statutes. Waste oil contamination found on the ground and groundwater was the result of poor maintenance practices by site owner/ operator. Participation in the Early Detection Incentive Program is restricted to contamination from such storage facilities pursuant to 376.3071(9), Florida Statutes.
Contamination is a mixture of waste oil, grease and phenolic compounds.
Participation in the Early Detection Incentive Program is limited to petroleum or petroleum products as defined in Section
37.301 [sic] (9) and (10), Florida Statutes.
That letter further advised Petitioner of its right to request a hearing regarding that determination and advised Petitioner that its failure to timely request an administrative hearing would render that correspondence to be a final Order of Determination of Ineligibility.
When Petitioner received that correspondence, one of its employees interpreted the letter to mean that the Department had determined that the site did not have contamination from petroleum or a petroleum product. Viewing that as good news, that employee merely put the letter in a file. No request for an administrative hearing was made by Petitioner, and the correspondence became a final Order of Determination of Ineligibility by its own terms.
In 1990 the Legislature determined that all sites which had been declared ineligible by the Department would be re-determined for eligibility. The Legislature established March 31, 1991, as the new deadline by which owners or operators could request the Department to reevaluate eligibility for sites for which a timely EDI application had been filed but which had been deemed ineligible by the Department. The new legislation set forth several circumstances under which the Department would not redetermine the eligibility of a previously denied site. One of those exceptions related to the reason for which a site had initially been denied.
Petitioner had remained convinced that the subject site was contaminated by petroleum or petroleum products prior to the original deadline for filing EDI applications. Petitioner was aware of the new legislation and new deadline by which sites determined ineligible could have their eligibility redetermined. Petitioner therefore retained Kiefer-Block Environmental Services, Inc., to do a site analysis to verify Petitioner's belief that the site had a petroleum contamination. That company issued a report indicating that was the case. Petitioner timely filed its application for redetermination before the March 31, 1991, deadline and submitted to the Department the information obtained from Kiefer-Block, the second environmental consultant to verify the presence of petroleum contamination.
In reviewing applications for redetermination, the Department established a procedure whereby it simply looked at its original letter denying eligibility to ascertain the reason for denial. If that reason matched one of the exclusions under the new legislation, the Department advised the applicant that it was not eligible to have its site redetermined. The Department did not review the Department's files relating to a site and did no additional inspection.
In 1991 the Legislature again amended the statute, this time carving out an exception to those sites excluded from redetermination of eligibility by directing that sites excluded due to an absence of contamination be redetermined for eligibility if contamination had in fact existed. That amendment went into effect July 1, 1991. Accordingly, that amendment was part of the law in effect when the Department made its decision as to whether it would redetermine Petitioner's eligibility.
By letter dated September 3, 1991, the Department advised Petitioner that it was not eligible to participate in the redetermination process. That letter specifically provided as follows:
This Order is to inform you that this site is not eligible to participate in the eligibility redetermination process pursuant to Section 376.3071(9)(b), F.S., because the original reasons for ineligibility were:
Contamination is not the result of a discharge from a petroleum storage facility as defined in Section 376.301(11), Florida Statutes [definition in Section 376.301(15), F.S., current revision]. Waste oil contamination found on the ground and groundwater was the result of poor maintenance practices by site owner/ operator. Participation in the Early Detection Incentive Program is restricted to contamination from such storage facilities pursuant to 376.3071(9), F.S.
Contamination is a mixture of waste oil, grease and phenolic compounds.
Participation in the Early Detection Incentive Program is limited to petroleum or petroleum products as defined in Section 376.301(9) and (10), Florida Statutes [definitions in Section 376.301(13) and (14), F.S., current revision].
Section 376.3071(9)(b)3.c., F.S., states that redetermination of eligibility is not available to facilities that were denied eligibility due to contamination from substances that were not petroleum or a petroleum product, or contamination that was not from a petroleum storage system.
Petitioner timely filed its request for an administrative hearing regarding that letter, contesting the Department's refusal to redetermine Petitioner's eligibility to participate in the EDI program.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties hereto and the subject matter hereof. Section 120.57(1), Florida Statutes.
In 1986 the Legislature established the Early Detection Incentive Program described in Section 376.3071(9), Florida Statutes, as part of the State Underground Petroleum Environmental Response Act of 1986, also known as the Super Act. The definitions of petroleum, petroleum product, and petroleum storage system, as utilized in the EDI program, are contained in Section 376.301, Florida Statutes, and provide as follows:
'Petroleum' includes:
Oil, including crude petroleum oil and other hydrocarbons, regardless of gravity, which are produced at the well in liquid form by ordinary methods and which are not the result of condensation of gas after it leaves the reservoir; and
All natural gas, including casinghead gas, and all other hydrocarbons not defined as oil in paragraph (a).
'Petroleum product' means any liquid fuel commodity made from petroleum, including, but not limited to, all forms of fuel known or sold as diesel fuel, kerosene, all forms of fuel known or sold as gasoline, and fuels containing a mixture of gasoline and other products, excluding liquefied petroleum gas and American Society for Testing and Materials (ASTM) grades no. 5 and 6 residual oils, bunker C residual oils, intermediate fuel oils (IFO) used for marine bunkering with a viscosity of 30 and higher, asphalt oils, and petrochemical feedstocks.
'Petroleum storage system' means a stationary tank not covered under the provisions of chapter 377, together with any onsite integral piping or dispensing system associated therewith, which is used, or intended to be used, for the storage or supply of any petroleum product as defined herein, and which:
* * *
(d) is a system with respect to which notification has been submitted to the Department of Environmental Regulation under s. 376.303;
* * *
Petroleum storage systems may also include oil/water separators, and other pollution control devices installed to meet the rules promulgated pursuant to this chapter.
The intent of the Legislature in passing the Super Act is clear and has been acknowledged by the Secretary of the Department as follows:
[I]t is important to bear in mind the legislative history and purpose behind creation of the Super Act. The Act was adopted by the 1986 Legislature in Chapter 86-159, Laws of Florida, in order to address environmental problems caused by leaks and spills associated with the storage of petroleum and petroleum products. As part
of the Super Act the Legislature created the Inland Protection Trust Fund to provide state assistance for a limited period of time both to initiate state-funded site cleanups (called the 'Early Detection Incentive' or 'EDI' program) and to provide reimbursement for those parties who have undertaken their own site cleanups (the 'reimbursement' program). The heart of the program is found in Section 376.3071, Florida Statutes, which sets forth legislative findings, the intent and purpose of the program, the creation of the Fund, and the eligibility requirements for both the EDI and reimbursement programs.
* * *
[T]he Legislature intended a liberal construction to maximize those potentially eligible for the benefits of Super Act coverage.
Puckett Oil Company v. Florida Department of Environmental Regulation, 10 FALR 5525, 5527-29 (Final Order 9/1/88).
Despite the liberal interpretation intended by the Legislature, initially the Department refused to recognize used oil to be a petroleum product. In Puckett Oil Company, supra, the Secretary of the Department corrected the Department's policy to conform with the clear legislative intent as follows:
My conclusion is summarized as follows: 'Petroleum' as defined in the Super Act is limited to oil from the well, and does not include hydrocarbons that have been refined or otherwise made out of petroleum. The term does not include used oil. 'Petroleum product,' however, can include used oil, but only if it is being utilized, to a significant degree, either by the owner or the ultimate user, as a liquid fuel commodity. Eligibility for reimbursement under the Super Act can cover spills from used oil, but only if used oil meets the functional definition of petroleum product and only if the contamination results from spills related to its storage in petroleum storage systems. At 5529-5530.
After emphasizing the importance placed by the Department on the collection and storage of used oil for recycling, the Secretary concluded his detailed analysis of the goal of the EDI program and the Department's policies related thereto, as follows:
This analysis leads me to the conclusion that used oil may be included as a 'petroleum product,' but not necessarily
under all circumstances. Just as used oil should be included when it is being reused, public policy dictates that it should not be included when it simply is being discarded.
Puckett Oil Company, supra, at 5535-5536.
In dealing with subsequent cases involving contamination from used oil, the Department developed a policy that where contamination was caused by substances both eligible and ineligible for Super Act cleanup reimbursement, the entire site is ineligible for reimbursement if the majority of the contamination came from ineligible sources, and, conversely, the entire site is eligible for reimbursement if the majority of the contamination came from eligible sources. Red Top Sedan, Inc. v. Florida Department of Environmental Regulation, 12 FALR
214 (Final Order 9/14/89); Petroleum Products Corporation v. Florida Department of Environmental Regulation, 12 FALR 3604 (Final Order 8/22/90).
The Department's original denial letter to Petitioner stated that the contamination at the site was a mixture of waste oil, grease, and phenolic compounds, apparently a reference to the laboratory analysis of the contents of the oil/water separator. The letter also stated that the contamination was not a discharge from a petroleum storage facility and that the waste oil contamination found on the ground and in the groundwater was the result of poor maintenance practices. Petitioner never challenged the conclusions contained in that original denial letter, and that letter became a final Order of Determination of Ineligibility as a matter of law. Accordingly, Petitioner can no longer challenge the contents of that original denial letter.
In 1990 the Legislature amended Section 376.3071(9)(b)3. by adding the following language:
The department shall redetermine the eligibility of petroleum storage systems for which a timely EDI application was filed, but which were deemed ineligible by the department, under the following conditions:
The owner or operator, on or before March 31, 1991, shall submit, in writing, notification that the storage system is now in compliance with department rules adopted pursuant to s.376.303, and which requests the department to reevaluate the storage system eligibility; and
The department verifies the storage system compliance based on a compliance inspection.
* * *
Redetermination of eligibility pursuant to sub-subparagraph b. shall not be available to:
* * *
(IV) Facilities that were denied eligibility due to:
Absence of contamination.
Contamination from substances that were not petroleum or a petroleum product.
Contamination that was not from a petroleum storage system.
Pursuant to that amendment, Petitioner applied for a redetermination of eligibility. Petitioner included an affidavit that the site was now in compliance with Department rules and correspondence from the second environmental consultant retained by Petitioner to evaluate the site. That correspondence and affidavit explained the recycling of the used oil, the plugging of the drain system from the automobile service bays, the steps taken to de-activate the underground tanks, and included a statement that the results of sampling would be forthcoming. A laboratory analysis was subsequently submitted to the Department.
It is undisputed that Petitioner timely filed an application for redetermination. Before the Department reviewed Petitioner's application for redetermination, the Legislature again amended Section 376.3071 by narrowing the categories of persons who could be denied redetermination. As of July 1991, Section 376.3071(9)(b)3.c. provides as follows:
c. Redetermination of eligibility pursuant to sub-subparagraph b. shall not be available to:
* * *
(IV) Facilities that were denied eligibility due to
Absence of contamination, unless any such facility subsequently establishes that contamination did exist at that facility on or before December 31, 1988.
Contamination from substances that were not petroleum or a petroleum product.
Contamination that was not from a petroleum storage system. [Emphasis added.]
That most recent amendment clearly indicates the Legislature's intent that at least some facilities would be permitted to establish an eligible contamination even though original letters denying eligibility as to them had become final orders no longer subject to challenge.
The redetermination procedure established by the Department pursuant to the legislative directive to redetermine facilities formerly denied eligibility was to simply look at the original order denying eligibility to see what reasons were stated in that letter. The Department did not review any other documentation related to that site. Had the Department reviewed its file regarding Petitioner's site, it might have discovered that the alleged contamination involving a mixture of used oil, grease, and phenolic compounds related only to the contents of the oil/water separator, a possible petroleum storage system by definition; that no one had determined whether there was contamination from waste oil or from used oil; that no one had alleged that there was a waste oil contamination in the groundwater; that no one had
considered the Department's policy of distinguishing between used oil and waste oil as explicated by the Secretary of the Department in Puckett Oil Company, supra, decided prior to the original denial letter in this case; that no one had considered the "mixed plume" policy elucidated by the Secretary of the Department in Red Top Sedan, supra, decided prior to the original letter of denial; and that Petitioner had been maintaining since prior to December 31, 1988, that there was petroleum contamination at the site. By reviewing only the original denial letter itself, the Department took advantage of the legal concept that the letter was a final order containing established facts, a concept which could not be solely relied on after the Legislature specifically directed the Department to re-visit the basis for ineligibility of those sites for which such a final order had been entered.
Regarding the EDI program, it is the legislative intent that eligible sites be identified and be rehabilitated. The fact that the Legislature amended the EDI statute to specifically require the Department to redetermine the eligibility of certain sites that had been the subject of final agency action reveals the legislative intent that the original "final orders" would not preclude later entry into the EDI Program. In this case, although it is clear that the Department's original decision may have been erroneous in law and in fact, the Department maintains that it is obligated to read the amendments to the EDI legislation in a literal manner so as to restrict redetermination eligibility rather than in a "liberal" manner so as to comply with the Legislature's intent as stated by the Secretary of the Department.
A literal reading of the amendments reveals that the 1990 amendment set forth that redetermination would not be available to facilities that were denied eligibility for three reasons, two of which were, according to the original letter of ineligibility, the specific reasons for which Petitioner's site had been denied. The third reason--absence of contamination--does not apply to Petitioner because the original letter of ineligibility determined that there was a contamination at Petitioner's site. The 1991 amendment, which applies to facilities which were denied eligibility due to the absence of contamination unless such facility subsequently establishes that contamination did exist, does not apply to Petitioner since the Department determined in its original letter that a contamination did exist at Petitioner's site but that it was the wrong kind of contamination to receive the benefits of the EDI program.
A "liberal" reading of the amendments, as suggested by the Legislature and embraced by the Secretary of the Department, however, requires a contrary result. The record in this cause reveals that Petitioner never received a fair and correct determination of eligibility on the first review conducted in 1989 as a result of Petitioner's original application. The Department has the authority and the discretion to review not only the original denial letter, but also the Department's file as supplemented by the facts revealed in the final hearing in this cause and as interpreted by a correct application of the law in effect at the time of the Department's original decision. Doing so requires a conclusion that Petitioner's application for redetermination should be granted.
At the commencement of the final hearing in this cause extensive argument was heard regarding the scope of the final hearing. The Department argued that the proper scope was simply to determine if Petitioner was entitled to a redetermination. Petitioner argued that it was entitled to a redetermination and that it was in fact eligible for inclusion in the EDI program. Since both parties represented that they were in a position to offer evidence regarding both issues, the final hearing was conducted regarding the issues of whether Petitioner should receive a redetermination and whether
Petitioner is eligible for the EDI program. It was concluded by the undersigned that both parties would be better served by inclusion of both issues; otherwise, the possibility existed that a recommended order and then a final order could find Petitioner eligible for a redetermination, the Department could subsequently determine that Petitioner was not eligible for inclusion in the EDI program, and Petitioner would then have a right to a second administrative hearing regarding its March 1991 request for redetermination.
Having followed that approach, the record in this cause indicates the following. Dade County sampled only the contents of the oil/water separator, dipped a bailer into the top of the monitoring wells, and determined there was no petroleum contamination. No samples of the soil or the groundwater were taken. Dade County's inspector testified that the used oil and solvents were being picked up from Petitioner's site for recycling. It does not appear that Dade County knew that the Department had determined that some used oil contamination would be eligible for the EDI program and some would not. If the oil in the oil/water separator, a possible petroleum storage system by statutory definition, was being recycled, Petitioner's site might be eligible if there had been a contamination resulting from the oil/water separator. Although there had been a hole cut into the top of the oil/water separator, no evidence was offered that there was ever a discharge from that system. A 55-gallon drum of used oil was on site, which was used partially for lubricating chain saws and partially for other recycling purposes. One Dade County inspector thought that housekeeping was poor and waste oil had been dumped onto the grass, and the other Dade County inspector thought that the area behind the facility (the same location) was clean. Petitioner has submitted to the Department reports from 1988 forward indicating eligible contamination, and no one on behalf of the Department has ever sampled the soil and groundwater at that site to determine if, in fact, there is an eligible contamination or if, in fact, the site contains both eligible and ineligible contamination, the proportion of which would then need to be determined in order to know whether the eligible contamination is greater than the ineligible contamination so as to entitle Petitioner to state-assisted cleanup. Accordingly, the record in this cause fails to establish whether the site was in fact contaminated and, if so, whether it was an eligible or ineligible contamination.
Both parties offered in evidence hearsay laboratory analyses uncorroborated by competent evidence regarding their contents. Therefore, the only findings of fact which can be based on those reports are findings that the reports were obtained or submitted or believed by the person receiving them. The only competent evidence remaining as to the nature of the contamination, if any, at Petitioner's site on or before December 31, 1988, is olfactory: one person smelled gasoline in the monitoring wells and one person did not. That level of proof is less than the preponderance of evidence required for Petitioner to show its eligibility for the EDI program.
Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered: (1) granting Petitioner's
application for redetermination of eligibility and (2) finding Petitioner ineligible to participate in the Early Detection Incentive Program.
DONE and ENTERED this 26th day of August, 1992, at Tallahassee, Florida.
LINDA M. RIGOT
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 26th day of August, 1992.
APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 92-0678
Petitioner's three unnumbered paragraphs contained in its post-hearing submittal have been rejected as not constituting findings of fact but rather as constituting conclusions of law or argument.
Respondent's proposed findings of fact numbered 1-3, 5-18, and 20 have been adopted either verbatim or in substance in this Recommended Order.
Respondent's proposed finding of fact numbered 4 has been rejected as being unnecessary to the issues involved herein.
Respondent's proposed finding of fact numbered 19 has been rejected as not being supported by the weight of the competent evidence in this cause.
COPIES FURNISHED:
C. Vittorino
Special Projects Manager TYU, Inc.
1601 McCloskey Boulevard
Tampa, Florida 33605-6710
Brigette A. Ffolkes, Esquire Department of Environmental
Regulation
2600 Blair Stone Road Tallahassee, Florida 32399-2400
Carol Browner, Secretary Department of Environmental
Regulation
2600 Blair Stone Road Tallahassee, Florida 32399-2400
Daniel H. Thompson, General Counsel Department of Environmental
Regulation
2600 Blair Stone Road Tallahassee, Florida 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.
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AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION
TYU, INC.,
DER Facility No. 138503963, Petitioner,
vs. OGC CASE NO. 91-1836
DOAH CASE NO. 92-0678
STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION,
Respondent.
/
FINAL ORDER
On August 26, 1992, a Hearing Officer from the Division of Administrative Hearings submitted her Recommended Order to the Department of Environmental Regulation ("Department") and to Petitioner, TYU, Inc. ("TYU"). A copy of the Recommended Order is attached as Exhibit A. The Hearing Officer recommended that the Department grant TYU's application for redetermination of eligibility under the Early Detection Incentive ("EDI") Program described in Section 376.3071(9), Florida Statutes, but that it find TYU ineligible to participate in the EDI Program because the existence of eligible contamination at the site was not established by competent substantial evidence.
On September 10, 1992, TYU requested an extension of the deadline for filing exceptions to the Recommended Order and agreed to waive the deadline for issuance of the Final Order for an additional 10 days. On September 14, 1992, I
entered an order granting TYU's request, and thereby extended until October 20 the due date for this Final Order. On September 14, TYU submitted its exceptions to the Recommended Order.
On September 15, 1992, the Department filed a motion for clarification or correction of the September 14 order, reciting its counsel's understanding, when she agreed to TYU's requested extension, that a similar extension would be granted to the Department. The Department tendered its proposed exceptions with its motion. No response or objection to the granting of the Department's motion was filed by TYU, and no other pleadings have been filed by either party.
Accordingly, the Department's motion is granted, and both parties' exceptions are deemed to be timely filed. The matter is now before me as Secretary of the Department for final agency action.
BACKGROUND
This case has a somewhat complex procedural history which, for the most part, has been set forth in the Recommended Order. However, it may be useful to summarize the operative events relevant to my subsequent rulings on the parties' exceptions, as disclosed by the record of the proceedings in this case.
In December 1988, TYU's predecessor in title filed an Early Detection Incentive Notification Application ("EDI Application") with the Department for its facility known as Taylor's 76, Inc., located in Dade County. (Petitioner's Exhibit 2) The EDI Application indicated that a manual test of monitoring wells at the site had disclosed gasoline odor, but the application indicated "unknown" in response to all questions about the volume of the discharge, the source of the discharge, the cause of the leak, the type of tank involved, and the type of product discharge. Following an investigation conducted by Metropolitan Dade County's Department of Environmental Resources Management ("DERM") pursuant to a contract with the Department, the site was denied eligibility for state- administered cleanup on May 23, 1990. (Respondent's Exhibit 2) The reasons stated for the denial were:
Contamination is not the result of a discharge from a petroleum storage facility as defined in Section 376.301(11), Florida Statutes. Waste
oil contamination found on the ground and groundwater was the result of poor maintenance practices by site owner/operator.
Participation in the Early Detection Incentive Program is restricted to contamination from such storage facilities pursuant to 376.3071(9), Florida Statutes.
Contamination is a mixture of waste oil, grease and phenolic compounds. Participation in the
Early Detection Incentive Program is limited to petroleum or petroleum products as defined in Section 376.301(9) and (10), Florida Statutes.
Those reasons were apparently based on two inspections conducted by representatives of DERM, one on March 22, 1989, (Respondent's Exhibit 4) and the other on October 11, 1989. (Respondent's Exhibit 5). Only the latter inspection was specifically designated as an EDI inspection. The earlier inspection was an industrial waste inspection of an automotive repair operation located on the site. The October 11, 1989, EDI inspection disclosed no
hydrocarbon or petroleum odors and no visual evidence of hydrocarbon contamination in the monitoring wells, but the inspection report did note that housekeeping was poor in the auto repair area, and waste oil had been dumped on the grass. (T. 131-138; Respondent's Exhibit 5) The earlier industrial waste inspection had reported that an oil and water separator associated with the auto repair operation had been sampled and found to contain oil, grease and phenols. (T. 113-118; Respondent's Exhibit 4) This sampling was conducted because the inspector had noted a hole in the effluent pipe leading from the oil-water separator, resulting in a breach of the integrity of the system. (T. 112-114)
TYU's predecessor took no action to contest the Department's notification of non-eligibility for the site. Therefore, by its own terms that notification became a final order of the Department. (Recommended Order at 6; Respondent's Exhibit 2)
On March 29, 1991, in response to new legislation providing for redetermination of the eligibility of certain sites under certain conditions, TYU's representative requested a re-evaluation of EDI eligibility for the site. (Petitioner's Exhibit 4) By letter dated September 3, 1991, the Department denied the request for redetermination based on its determination that Section 376.3071(9)(b)3.c., Florida Statutes, precludes redetermination of eligibility where the basis for denial of the original request for eligibility was that contamination was not the result of a discharge from a petroleum storage facility as defined in the statute, or that the contamination did not constitute petroleum or petroleum products as defined in the statute. (Petitioner's Exhibit 5) TYU filed a timely request for administrative hearing, and the matter was transferred to the Division of Administrative Hearings.
A one-day hearing was held on June 18, 1992. The parties stipulated, among other things, that amendments to the redetermination statute effective in July of 1991 would apply to the case (T. 39-40), and that the hearing would encompass not only whether TYU should be entitled to apply for redetermination, but also whether it would be entitled to participate in the EDI program if it were determined that the statute does not preclude it from applying for such redetermination. (T. 40-47)
In essence, the Recommend Order concludes that the applicable provisions of the redetermination statute do not preclude TYU from having its eligibility determination reconsidered by the Department, but that TYU failed to meet its burden of proving the existence of contamination at the site that would allow it to participate in the EDI Program. These findings and recommendations by the Hearing Officer form the basis for the exceptions filed by the parties.
RULINGS ON EXCEPTIONS
Exceptions of the Department
The Department has filed three exceptions to the Recommended Order, all dealing with various aspects of the Hearing Officer's recommendation that TYU's application for redetermination should be granted.
In its first two exceptions, the Department takes issue with the Hearing Officer's conclusion that the Department should exercise its discretion to review the entire file associated with its original determination of ineligibility, supplemented by facts revealed in the final hearing, to determine if the statutory requirements for redetermination were met. The Department's representative testified at the hearing that it was the Department's practice,
when reviewing applications for redetermination, to look only at the original order denying eligibility to determine if an applicant is entitled to redetermination. (T. 82-85) The Department notes that the July 1991 version of the redetermination statute lists three categories of facilities that would not be entitled to redetermination of eligibility, as follows:
c. Redetermination of eligibility pursuant to sub-subparagraph b. shall not be available to:
* * *
(IV) Facilities that were denied eligibility due to:
Absence of contamination, unless any such facility subsequently establishes that contamination did exist at that facility
on or before December 31, 1988.
Contamination from substances that were not petroleum or a petroleum product.
Contamination that was not from a petroleum storage system.
Section 376.3071(9)(b)3.c., Florida Statutes (1991).
The essence of the Department's first two exceptions is that the Department's original order denying eligibility falls into categories (B) and
above, and category (A) has no relevance to this case because the original order denying eligibility made no specific mention of absence of contamination as a basis for denial. Following this logic, there is no need to go beyond the face of the original order denying eligibility. The only way that a redetermination could be allowed, according to the Department, is if the original order of denial were based on absence of contamination at the site. Since the original order of denial appears to show on its face that absence of contamination was not a basis for denial, the plain language of the redetermination statute controls and there is no need to look further.
The Department's practice in this regard is established by competent substantial evidence in the record (T. 80-86), and I see no reason to overturn that practice insofar as it relates to free-form agency action leading up to a preliminary agency determination. However, I am not willing to adopt a rigid view of the redetermination statute that would preclude further inquiry into the basis of the original denial in a de novo hearing conducted under Section 120.57(1), Florida Statutes, when such hearing specifically involves the issue of whether absence of contamination was a factor in the original decision. In the instant case, while the original EDI Application provides little information that would have alerted the Department or its contractor, DERM, to the presence of leaking underground storage tanks on the property, it does note that the basis of the request is gasoline odor coming from monitoring well samplings, and in fact the DERM inspector, while disagreeing that such contamination was present, did specifically inspect the facility for this purpose and reached a determination that no such contamination existed. (T. 135; Respondent's Exhibit 5) The fact that the original order denying eligibility refers to other, unrelated contamination on the site but makes no mention of the presence or absence of gasoline in the monitoring wells should not, under the circumstances of this case, be allowed to defeat an applicant's later request for redetermination if the applicant can demonstrate that the contamination originally found to be absent did in fact exist at the facility on or before December 31, 1988. The record in the instant case, viewed as a whole, abundantly demonstrates that the existence of gasoline contamination in the
monitoring wells was an issue in the original request for eligibility, having been made so by the EDI application, and the inspector's opinion that such contamination was absent was part of the reason the site was denied eligibility. To hold otherwise would be to elevate form over substance in a way that defeats the remedial purpose of the redetermination legislation. See Puckett Oil Co. v. Florida Dept. of Environmental Regulation, 10 F.A.L.R. 5525, 5529 (DER 1988)
On the other hand, I agree with the Department that the redetermination statute does not allow redetermination of the findings of the original denial as they relate to contamination from the oil-water separator. Even if that portion of the original determination was incorrectly made, that determination became final as a matter of law when the time expired for seeking review, and the redetermination statute, by its clear terms, does not allow it to be revisited. Accordingly, to the extent that the Department's first and second exceptions ask me to overrule the Hearing Officer's recommendation that TYU be allowed to request redetermination of the Department's implied finding that there was no contamination on its sit from leaking storage tanks, those exceptions are rejected; however, to the exten+ that the Recommended Order concludes that TYU is entitled to a redetermination with regard to contamination from its oil-water separator, those exceptions are accepted.
In its third exception, the Department takes issue with the Hearing Officer's recommended conclusions of law that the oil-water separator on the site was a possible petroleum storage system by statutory definition and that if used oil contamination was attributable to the separator, it may have been eligible at the time of Dade County's recommendation of denial. The Department correctly notes that the statutory provision in question was an amendment to the definition of petroleum storage systems that became effective on July 1, 1990, subsequent to the recommendation by Dade County or the issuance of the original denial. Accordingly, the Department's third exception is accepted. However, in view of my previous rulings on the Department's first and second exceptions, the issue is moot and any error is harmless.
Exceptions of TYU
TYU takes exception to the Hearing Officer's conclusion, at page 18-19 of the Recommended Order, that the laboratory analyses submitted by TYU to demonstrate contamination at the site constituted uncorroborated hearsay evidence with regard to their contents and therefore the record in this cause fails to establish whether the site was in fact contaminated. TYU asserts that it has been the practice and an accepted way of doing business with the Department that "if a licensed and approved laboratory facility submitted their reports in writing, without being present in person to testify on each incident, then the Florida DER has accepted this documentation as proof of contamination in order to place a property into their program."
While I do not disagree with TYU's assertion regarding the Department's practices in making initial determinations of eligibility, the quantum of evidence required during such free-form proceedings prior to agency action is not necessarily the same degree of proof required to support findings of fact made in a contested proceeding under Section 120.57, Florida Statutes. The reports of TYU's consultants and its testing laboratories were offered into evidence without any corroborating witnesses who could testify or be cross- examined in regard to their contents. On such basis, there were clearly hearsay and therefore were subject to the provisions of Section 120.58(1)(a), Florida Statutes:
Hearsay evidence may be used for the purpose of supplementing or explaining other evidence, but it shall not be sufficient in itself to support a finding unless it would be admissible over objection in civil actions.
The Hearing Officer correctly noted that the only other evidence of contamination at the site was olfactory (regarding whether or not an odor was detectable in the monitoring wells), and the testimony of the only two witnesses who testified in this regard was in direct conflict.
Once TYU's petition challenging the preliminary determination made by the Department was forwarded to the Division of Administrative Hearings, a de novo proceeding was instituted pursuant to Section 120.57(1), Florida Statutes. The Department lost jurisdiction to proceed further during the pendency of such hearing, except as a party litigant. Section 120.57(1)(b)3., Florida Statutes; Florida Dept. of Transportation v. J.W.C. Co., Inc., 396 So.2d 778 (Fla 1st DCA 1981). The proceedings before the Hearing Officer were subject to the provisions of Section 120.58, Florida Statutes. The fact that the Department may, in appropriate cases, accept hearsay reports of environmental consultants and testing laboratories as part of making preliminary determinations leading up to the formulation of agency action does not alter the fact that evidence offered in a formal administrative hearing must meet the requirements of Section 120.58(1)(a), Florida Statutes. See Harris v. Game and Fresh Water Fish Commission, 495 So.2d 806 (Fla. 1st DCA 1986). While application of the hearsay rule may seem harsh under these circumstances, I am unable to say that the Hearing Officer erred in her application of the law to these evidentiary rulings. Accordingly, I am without authority to disturb them. See Burke v.
Harbor Estates Associates, Inc., 591 So.2d 1034, 1037-38 (Fla. 1st DCA Dec. 26, 1991). For these reasons, TYU's exception is rejected.
Having ruled on all the exceptions, IT IS ORDERED THAT:
The Recommended Order of the Hearing Officer is adopted, subject to modifications as set forth in my rulings on exceptions.
Petitioner, TYU, Inc., is ineligible to participate in the Early Detection Incentive Program.
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, Tallahassee, Florida 32399-2400; 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 19th day of October, 1992, in Tallahassee, Florida.
STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION
CAROL M. BROWNER
Secretary
Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400
Telephone: (904) 488-4805
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by U.S. Mail to the following listed persons:
A.C. Vittorino TYU, Inc.
1601 McCloskey Blvd
Tampa Florida 33605-6710
Brigette A. FFolkes, Esquire Assistant General Counsel & Florida Department of Environmental Regulation 2600 Blair Stone Rd
Tallahassee Florida 32399-2400
Linda M. Rigot, Hearing Officer Division of Administrative Hearings The DeSoto Bldg
1230 Apalachee Pkwy
Tallahassee Florida 32399-1550
Ann Cole, Clerk
Division of Administrative Hearings The DeSoto Bldg
1230 Apalachee Pkwy
Tallahassee Florida 32399-1550
on this 20th day of October, 1992.
STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION
DANIEL H. THOMPSON
General Counsel
Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400
Telephone: (904) 488-9730
| Issue Date | Proceedings |
|---|---|
| Oct. 21, 1992 | Final Order filed. |
| Aug. 26, 1992 | Recommended Order sent out. CASE CLOSED. Hearing held 6/18/92 |
| Jul. 30, 1992 | Respondent`s Proposed Recommended Order filed. |
| Jul. 27, 1992 | Letter to LMR from A. C. Vittorino (re: request for re-evaluation) filed. |
| Jul. 20, 1992 | Transcript filed. |
| Jun. 18, 1992 | CASE STATUS: Hearing Held. |
| Jun. 16, 1992 | Respondent`s Motion for Summary Final Order of Dismissal w/Exhibit-1 filed. |
| Jun. 16, 1992 | Respondent`s Prehearing Statement filed. |
| Mar. 03, 1992 | Notice of Hearing sent out. (hearing set for 6-19-92; 9:00; Miami) |
| Mar. 02, 1992 | Order Severing Cases sent out. (for Case No/s: 92-0677 & 92-0678). |
| Feb. 19, 1992 | Department of Environmental Regulating`s Response to Initial Order filed. |
| Feb. 14, 1992 | Order of Consolidation sent out. (case Nos. 92-677 & 92-678 consolidated) |
| Feb. 13, 1992 | Ltr. to SLS from A. C. Vittorino re: Reply to Initial Order filed. |
| Feb. 05, 1992 | Initial Order issued. |
| Jan. 31, 1992 | Request for Assignment of Hearing Officer and Notice of Preservation of Record; Agency Action Letter; Petition for Administrative Determination Early Detection Incentive Program filed. |
| Issue Date | Document | Summary |
|---|---|---|
| Oct. 19, 1992 | Agency Final Order | |
| Aug. 26, 1992 | Recommended Order | Petitioner granted redetermination but then denied eligibility to participate in early detection incentive program for failure to prove eligibility. |
