STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RANDOLPH'S ALTERATIONS & DRY )

CLEANING, )

)

Petitioner, )

)

vs. ) Case No. 99-4787F

)

DEPARTMENT OF ENVIRONMENTAL )

PROTECTION, )

)

Respondent. )

)

FINAL ORDER

This cause arose upon a Petition for Attorney Fee's and Costs filed November 16, 1999, by the above-named Petitioner.

The cause was set for hearing a number of times and continued by agreement of the parties. Ultimately, the parties agreed that an evidentiary hearing was unnecessary to entry of a final order.

They have agreed to entry of a final order based upon the pleading record in the case and accompanying affidavits.

This cause arose on June 10, 1997, when the Petitioner submitted an application to the Respondent to participate in the Dry-Cleaning Solvent Program administered by the Respondent. In the application the Petitioner erroneously answered "Yes" to the question "has a spill of one quart or more of dry-cleaning solvents outside a containment structure occurred at the dry- cleaning facility or wholesale facility after July 1, 1995?"

Based upon that answer by the Petitioner the Respondent denied the Petitioner eligibility to participate in the Dry- Cleaning Solvent Program by order of ineligibility entered September 11, 1998.

The Petitioner shortly thereafter contacted the Respondent to discuss this denial and to inform the Respondent that the answer referenced above, acknowledging that the subject spill had occurred, was an erroneous answer. Thereafter on November 24, 1998, the Petitioner submitted a sworn affidavit to the Respondent correcting the answer referenced above. The Respondent declined to accept the sworn affidavit as justification by itself to include the Respondent as eligible for the Dry-Cleaning Solvent Program. Therefore the Petitioner filed an administrative petition to contest that initial agency action on approximately February 19, 1999.

Since the Petitioner on the original application had signed a certification indicating that its answers on that application including the answer in question, was true and correct and since the only information negating that answer was the self-serving, sworn affidavit by the same Petitioner, the Respondent, after the administrative petition was filed, elected to depose the Petitioner. The deposition was taken on May 6, 1999.

After the deposition was taken the Respondent considered it and agreed to allow the Petitioner to become eligible for the

Dry-Cleaning Solvent Program. This resulted in a settlement of the underlying, formal proceeding initiated by the above- referenced petition of February 19, 1999.

The Petitioner thus contends that the Respondent unnecessarily prolonged the proceedings, forcing the Petitioner to file a Petition for Administrative Hearing in order to preserve his rights and ultimately force a favorable resolution of the matter with the Respondent Agency. The Petitioner maintains that the Respondent had all the facts and information in its possession with which to favorably resolve the matter for the Petitioner on November 24, 1998, with the filing of the affidavit purportedly correcting the original erroneous application answer but failed to do so. The Petitioner thus contends that the Respondent, after November 24, 1998, was not substantially justified in taking the position it did and therefore became liable for attorneys' fees and costs.

The Petitioner states that the Respondent has not met its burden to show that it was substantially justified in its actions after the filing of the November 24, 1998, affidavit, and that the Petitioner is a prevailing small business party. It asserts that the Respondent cited a non-existing statute attempting to justify its decision which it argued would make the decision void as of the date of the original Agency decision of September 11, 1998, denying the application. Therefore, the Petitioner argues

that the agency action was not substantially justified from that date forward.

The Respondent does not dispute the reasonableness of the fees and costs claimed, including the reasonableness of the hourly rate claimed by the Petitioner's counsel. The Respondent also does not contest that the Petitioner is a small business party for purposes of Section 57.111, Florida Statutes. The Respondent questions whether the Petitioner is a prevailing party, however.

If the statute is strictly construed an argument may be made that the Petitioner should be considered a prevailing party since a settlement favorable to the Petitioner was ultimately reached in the underlying case, DOAH Case No. 99-1176. However, because the Department issued its May 21, 1999, eligibility determination in response to the Petitioner's sworn admission that his application to the program contained erroneous information, it is arguable whether the Petitioner actually "prevailed" for purposes of Section 57.111, Florida Statutes, in the proceeding administrative action. Based on the original program application as submitted by the Petitioner, the Department correctly determined the Petitioner was ineligible to participate in the Dry-Cleaning Solvent Program in question. It was only upon the Petitioner's submittal of supplemental and corrected information and a new program application that the Department determined the

Petitioner to be eligible to participate in that program. When an applicant to a program has made an error rendering him ineligible for a benefit conferred by the state and then corrects his error rendering him thereafter eligible for such benefit, it is clear that the initial Agency action adverse to the applicant was caused by his own mistaken action. In the instant situation, as soon as the Respondent verified that the Petitioner had made an error and that indeed the supplemental information supplied, in the form of the affidavit and the Petitioner's testimony under oath at his deposition, rendered him eligible for the benefit, then the Agency rescinded its denial and found the applicant/Petitioner to be eligible for the subject program.

Thus, the original agency action adverse to the Petitioner, which resulted in the Petitioner's filing the petition for formal proceeding and the initiation of DOAH Case No. 99-1176 before the Division of Administrative Hearings was caused by the Petitioner's own mistaken act in erroneously completing the original application and verifying the correctness of his answers on that application. The Respondent, as soon as it took reasonable steps to verify by additional information, including sworn deposition testimony that the original application was incorrect, agreed to rescind its denial and grant the subject

eligibility. Therefore, the Petitioner is not truly a prevailing

small business party for purposes of Section 57.111, Florida Statutes.

However, assuming arguendo that the Petitioner could be a prevailing small business party the Respondent has established with sufficient specificity that its action in the original proceeding, Case No. 99-1176, was substantially justified.

As originally enacted in Chapter 34-355, Laws of Florida, Section 376.3078, Florida Statutes, created a funded program for clean-up of contamination at dry-cleaning facilities. From its inception, the statute has excluded facilities from eligibility if the facility was "operated in a grossly negligent manner at any time on or after November 19, 1980." Section 376.3078(3)(a)3, Florida Statutes (1995).

Section 376.3078(9)(c), Florida Statutes (1999), formerly 376.3078(7)(c), describes the containment requirements for dry- cleaning facilities including the requirement to report spills of dry-cleaning solvent:

1. Notwithstanding the provisions of subsection (3), the owner or operator of a dry cleaning facility or wholesale supply facility at which there is a spill of more than one quart of dry cleaning outside of a containment structure, on or after July 1, 1995, shall report the spill to the state warning point pursuant to s. 403.161(1)(d), immediately upon the discovery of such spill, and immediately initiate and complete actions to abate the source of the spill, remove

   product from all indoor and outdoor surface areas, remove product and dissolved product from any septic tanks or catch basin in which the solvent has accumulated and remove all affected soils, if any.

   
   

   Section 376.3078(9)(d), Florida Statutes (1999), formerly 376.3078(7)(d), provides:

2. Failure to comply with the requirements of this subsection shall constitute gross negligence with regard to determining site eligibility in subsection (3).

The statute is thus clear on its face that the failure to report a spill of more than one quart after July 1, 1995, constitutes gross negligence.

The Dry-Cleaning Solvent Program application, on page three, item ten, asks the applicant "has a spill of one quart or more of dry-cleaning solvents outside a containment structure occurred at the dry-cleaning facility or wholesale facility after July 1, 1999?" The Petitioner answered, "Yes." Additional information required on the application and provided by the Petitioner included the date of this spill (October 10, 1996), the type of solvent spilled, and the duration and volume of the spill. The application requires signature on page six, item eighteen, where the application contains the following language: "to the best of my knowledge and belief, all information submitted on this form is true, accurate, and complete." The application was signed by the Petitioner. On the basis of the information contained in the

Petitioner's application, the Department was required by law to determine the Petitioner ineligible for participation in the subject program. The initial determination made by the Department declaring the Petitioner ineligible for participation in the Dry-Cleaning Solvent Program was legally and factually supported at that point.

The Department's regular practice was, upon declaring an applicant ineligible for participation in the program, to accept supplemental information to support claims by the applicant which would render the applicant eligible. Acceptable documentation under Department policy, included evidence of a contract for installation of a secondary containment, evidence of paying taxes owed, and the like. However, on the advice of its legal counsel, the Department staff did not accept supplemental application from any applicant in the form of a self-serving affidavit, where the original application file contained information that rendered that applicant ineligible. This practice was advised, in part, because the application includes the attestation that the information contained therein is true, accurate, and correct.

On the basis of information provided by the Petitioner in his application to the Dry-Cleaning Solvent Program and pursuant to the plain statutory language of Section 376.3078, Florida Statutes, a facility that is operated in a grossly negligent manner is ineligible for participation in the Dry-Cleaning

Solvent Program. See Soap Opera Laundry and Dry Cleaners v.

Department of Environmental Protection, OGC 98-2371 (Final Order, November 4, 1999), incorporating DOAH 98-4177 (Recommended Order, September 20, 1999); David Kim (Nu-Look One Hour Dry-Cleaning) v. Department of Environmental Protection, OGC 98-1229 (Final Order,

June 6, 1999), incorporating DOAH 98-2678 (Recommended Order, May 4, 1999). The Respondent's action in issuing the initial order of ineligibility, dated August 19, 1998, was substantially justified. Ann & Jan Retirement Villa, Inc. v. Department of Health and Rehabilitative Services, 580 So. 2d 278, 279-80 (Fla. 4th DCA 1991)(an Agency's actions are substantially justified where there exists a reasonable basis in law and fact for the agency action at the time the Agency initiates the action).

The Petitioner's counsel asserts that the original letter of ineligibility, dated August 19, 1998, contained a typographical error referring to Section 376.0378(7), Florida Statutes, instead of Section 376.3078(7), Florida Statutes, and that as a result the Petitioner must be found eligible to participate in the program because he was cited under a non-existent statute. In other circumstances, an error of this nature may have affected the Petitioner's rights but in this case there is no question from the context that the reference is to the Dry-Cleaning Solvent Program statute. This was merely a scrivener's error and that argument is without merit.

Case law addressing the issue whether an Agency's action was substantially justified involves issues of blatant wrong-doing or negligence on the part of the Agency. See Helmy v. Department of Business and Professional Regulation, 707 So. 2d 613 (Fla. 1st DCA 1998), wherein the court dealt with a case where attorneys' fees were awarded where a reviewing board failed to make requisite inquiry into probable cause and failed to consider an applicable statute before revoking a professional license. In Department of Health and Rehabilitative Services v. South Beach Pharmacy, Inc., 635 So. 2d 117 (Fla. 1st DCA 1994), attorneys' fees were awarded where the Agency had failed to properly investigate issues pertaining to an audit report. Similarly, in Department of Health and Rehabilitative Services v. S.G., 613 So. 2d 1380 (Fla. 1st DCA 1993), attorneys' fees were awarded against the Department of Health and Rehabilitative Services where that Agency was determined to be "totally irresponsible" in investigating charges made by the Department against an individual. "The act is designed to discourage unreasonable governmental action, not to paralyze agencies doing the necessary and beneficial work of government." See South Beach Pharmacy, supra at 121 quoting Rudloe v. Department of Environmental Protection, 33 Fla. Supp. 2d 203 (DOAH 1987).

The Department's ineligibility determination in this case was substantially justified. It would be unjust to award

attorneys' fees and costs against the Department where it was carrying out its statutory duties under the circumstances of this case. Under the above-delineated circumstances it would be unjust to penalize the Department by attorneys' fees and costs where the original determination of ineligibility for this Petitioner was legally and factually supported at the time it was made and thus substantially justified for purpose of Section 57.111, Florida Statutes. In enacting Section 57.111, Florida Statutes, the Legislature did not intend when a state Agency correctly makes a determination under an operative statute based on information provided by the applicant and attested to by that applicant as true, accurate, and correct that the Agency should be punished and made to pay fees and costs upon re-visiting the eligibility issue when provided with supplemental and corrected information by that same applicant. It is certainly apparent from the circumstances of this case that the Agency's actions are reasonably based in law and fact and substantially justified where it elected not to rely simply on a self-serving, corrective affidavit by the same applicant who attested to information which proved to be originally erroneous. It reasonably conducted further information-gathering in the form of taking that applicant's sworn deposition before deciding that the applicant was truthful, whereupon it changed its position after the deposition to find eligibility.

Under these circumstances, where the initial denial was the result of the erroneous information supplied by the applicant himself, it was certainly not unreasonable for the Agency to follow its consistent policy of not relying simply upon a corrective, sworn affidavit by that same applicant but rather to pursue its information-gathering one step further for verification and take testimony from that applicant under oath in the form of a deposition. It is understandable that during the course of the time period after the filing of the corrective affidavit by the Petitioner that the Petitioner would file a petition for formal proceeding because it had to do so in order to protect its rights. It cannot be found, however, that the Agency forced the Petitioner to take that step because of an unreasonable position on the Agency's part. The Agency's desire to obtain further information beyond the self-serving, corrective affidavit submitted by the Petitioner was reasonable in terms of the law and facts as it then knew them and thus its action in this case was substantially justified.

Accordingly, having considered the stipulated record in this proceeding and the pleadings and arguments of the parties it is determined that no fees and costs should be awarded. It is therefore determined that the petition filed in Case No. 99-4787F be and the same is hereby dismissed.

DONE AND ORDERED this 15th day of December, 2000, in

Tallahassee, Leon County, Florida.

P. MICHAEL RUFF Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 15th day of December, 2000.

COPIES FURNISHED:

Larry K. White, Esquire Larry K. White, P.A.

1100 East Park Avenue Tallahassee, Florida 32301

Martha L. Nebelsiek, Esquire Department of Environmental Protection

3900 Commonwealth Boulevard, Mail Station 35

Tallahassee, Florida 32399-3000

Kathy C. Carter, Agency Clerk Office of General Counsel

Department of Environmental Protection

3900 Commonwealth Boulevard, Mail Station 35

Tallahassee, Florida 32399-3000

Teri L. Donaldson, General Counsel Department of Environmental Protection

3900 Commonwealth Boulevard, Mail Station 35

Tallahassee, Florida 32399-3000

David B. Struhs, Secretary

Department of Environmental Protection 3900 Commonwealth Boulevard

Tallahassee, Florida 32399-3000

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is entitled to judicial review pursuant to Section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing one copy of a notice of appeal with the agency clerk of the Division of Administrative Hearings and a second coy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or in the district court of appeal in the appellate district where the party resides. The notice of appeal must be filed within 30 days of rendition of the order to be reviewed.

Docket for Case No: 99-004787F

Orders for Case No: 99-004787F