vs. ) Case No. 09-3011EF
) JACQUELINE S. FREEMAN FAMILY ) TRUST and JOHN K. FREEMAN, )
Respondents. )
Robert E. Meale, Administrative Law Judge of the Division of Administrative Hearings, conducted the final hearing in Tavares, Florida, on September 1, 2009.
For Petitioner: Christopher T. Byrd
of the Jacqueline S. Freeman Family Trust
18950 U.S. Highway 441, Number 212 Mount Dora, Florida 32757
The issues are whether Respondents dredged and filled within wetlands and surface waters without a permit and, if so, what penalty and corrective action should be imposed.
By Notice of Violation, Orders for Corrective Action and Administrative Penalty Assessment dated February 25, 2009 (NOV), Petitioner alleged that Respondent Jacqueline S. Freeman Family Trust (Trust) is the owner of real property with the address of 1505 East Crooked Lake Drive, Eustis, Lake County, Florida (Property). The NOV alleges that the Property abuts Lake Nettie, a Class III water.
The NOV alleges that Respondent John K. Freeman (Freeman) dredged and filled wetlands on the Property without a permit. Specifically, the NOV alleges that Freeman constructed an unauthorized seawall, placing about 500 "square" feet of sand fill within the wetlands and surface waters on the property (Seawall Project), and adding a roof to an existing dock, expanding the total dock area over wetlands and surface waters to about 1216 square feet (Dock Project). These allegations are stated in two separate counts.
The NOV alleges that the processing fee for the Seawall Project is $600, and Trust and Freeman (Respondents) received an economic benefit by not applying for and obtaining the required permit.
The NOV alleges that Petitioner has incurred investigative expenses to date of at least $500. This expense forms the basis
of the third count, and the NOV states that these costs are recoverable under Section 403.141(1), Florida Statutes.
The NOV states that Petitioner is imposing an administrative penalty of no more than $10,000 against each Respondent, as calculated in accordance with Section 403.121, Florida Statutes. The NOV states that the Seawall Project and Dock Project each constitutes a violation of Florida Administrative Code Rule 62-343.050 and Section 403.161, Florida Statutes. Pursuant to Section 403.121(3)(c), Florida Statutes, the NOV states that Petitioner is imposing a $1000 penalty for the Dock Project, a $1000 penalty for the Seawall Project, and a
$600 claim for the economic benefit that Respondents obtained by not applying for and obtaining a permit prior to construction.
The NOV concludes with Orders for Corrective Action. The conditions of the corrective actions are set forth below in number seven of the Findings of Fact.
At the hearing, Petitioner called two witnesses and offered into evidence 13 exhibits. Respondent called one witness, himself, and offered into evidence one exhibit. All exhibits were admitted.
The parties did not order a transcript. Petitioner filed a Proposed Final Order on September 11, 2009.
The Trust owns the Property, and Freeman is the sole trustee of Trust and its sole beneficiary. The Property, which is located in Lake County, abuts Lake Nettie, a 45-acre lake with no outlet, under ordinary water conditions. A portion of the Property occupies wetlands and surface waters of Lake Nettie. Much of the upland abutting the lake in the vicinity of the Property is developed, although no other seawalls are visible. The shoreline in the vicinity of the Property is not heavily developed, but it bears clear signs of maintenance to control the growth of vegetation in the sandy beach.
Sometime after October 29, 2003, Freeman's late mother purchased the Property, on which is located a single-family home. At the time, the Property did not have a dock or seawall. Shortly after Ms. Freeman acquired the Property, Freeman, an accountant, or his mother hired a contractor to build a dock. The dock was constructed in early 2004. Because it did not exceed 1000 square feet over water, this activity qualified for a noticed general permit, under Florida Administrative Code Rule 62-341.475(1)(a), although the record does not reveal whether Ms. Freeman provided the notice required for this activity.
Nothing in the record suggests that the construction of the dock altered the pattern of limited vegetation of the Property waterward of the wetlands line. However, nothing in
the record suggests that erosion, siltation, or turbidity has been a problem at the waterward end of the Property. The only evidence touching on the issue of drainage into the lake is that, in the vicinity of the Property, runoff enters the lake by sheetflow.
In 2007, by which time title to the Property had passed to the Trust, Freeman sought to add a roof to the dock that his mother had had constructed. Finding that the contractor who had built the dock was no longer in business, Freeman obtained the required local building permit and did the work himself.
Shortly after completing this job, Freeman constructed the seawall, obtaining the fill from a neighbor who was excavating a basement.
In connection with this dispute, Petitioner has established a wetlands line on the Property. The wetlands line is amply supported by the evidence, including careful analysis by Petitioner's representatives of the vegetation and soils, as well as hydrologic indicators, such as algal mats, that are present on the Property within the area of the Seawall Project. Based on this wetlands line, the Seawall Project is in the wetlands, so that the construction of the project constituted dredging and filling of wetlands. The waterward face of the seawall is entirely in wetlands, as are the return walls that run upland from the seawall face and the fill placed upland of
the seawall face. DEP Exhibit 11, which is incorporated by reference herein, accurately depicts the wetlands line on the Property.
There is some confusion in Petitioner's pleadings between the surface area of wetlands that Freeman filled and the amount of fill. The surface area of disturbed wetlands is about
500 square feet. According to Freeman, whose testimony is credited, the amount of fill was about what would be contained in a small dump truck, so it might be in the neighborhood of five cubic yards.
In the NOV, Petitioner describes the corrective action that it is imposing on Respondents. Within 45 days of the NOV, "Respondent" would be required to conduct certain preliminary activities and then: 1) remove the seawall and all associated fill waterward of the wetland line; 2) place the removed fill in a contained upland location where it will not discharge into wetlands or surface waters; 3) during and after regrading, stabilize with vegetation all slopes adjacent to the restored area as soon as possible (not more than 72 hours after attaining final grade) to prevent erosion, siltation, or turbid runoff into the wetlands and surface waters; remove nuisance and exotic vegetation prior to planting; replant the restoration area with listed wetland species on three-foot centers within elevation- based zones depicted on an attached drawing; plant healthy,
nursery-grown stock from a state-licensed nursery; provide receipts for all plants used in the restoration area; monitor the restoration area at four-month intervals until the restoration area contains less than ten percent coverage of nuisance and exotic species and 80 percent of the plantings have survived for at least one year and are viable, reproducing plants; submit monitoring reports to Petitioner; and allow Petitioner's representatives access to the Property at reasonable times to determine compliance with the NOV conditions.
Petitioner does not seek corrective action for the addition of the roof to the dock, which resulted in the addition of about 216 square feet to the original, 1000 square-foot dock. Presumably, this decision acknowledges the relative ease of obtaining a standard general permit for a dock of no more than 2000 square feet serving a single-family home under Florida Administrative Code Rule 62-341.427(1)(a)2. For this reason, the violation arising out of the Dock Project is relatively minor.
The corrective actions focus on the seawall because the violation arising out of the Seawall Project is more significant. Under Florida Administrative Code Rule
62-341.475(1)(c), this activity involved 400 square feet more than the 100 square feet of dredging and filling that is allowed
as a "minor system" under a noticed general permit. An individual environmental resource permit would be required for this project, and there is no reason to assume that Respondents would be able to obtain such a permit. Corrective action is therefore necessary in the form of the removal of the entire Seawall Project, including all of the fill, and the restoration of the pre-project grade.
The question concerning corrective action is the extent of Respondents' liability for undertaking the planting scheme outlined above in the NOV. The record fails to establish the restorative nature of this activity because, immediately before the commencement of the Seawall Project, the shoreline in the impacted area was unvegetated.
If Respondents had applied for permits for these two activities, Petitioner would have charged the fee for the proposed activity that carried the higher fee, which is the Seawall Project. The application fee would have been $600. By not applying for and obtaining this permit, Respondents wrongly obtained an economic benefit of $600. The fact that Respondents will only be allowed to keep the product of the Dock Project suggests that the final economic benefit should be based on the reduced fee associated with this activity, but, for reasons stated in the Conclusions of Law, this point is irrelevant
because Petitioner is not authorized to recover either application fee in this case.
Two of Petitioner's representatives testified as to the cost of their investigatory services in this case. Based on the total hours expended, at their respective hourly rates, without regard to any fringe benefits, the cost of the investigation is about $1700, but, for the reasons stated in the Conclusions of Law, this fact is also irrelevant because Petitioner is not authorized to recover these costs in this case.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter. §§ 120.569, 120.57(1), and 403.121(2)(d), Fla. Stat. (2009).
Section 403.121(2), Florida Statutes, authorizes Petitioner to pursue administrative relief for a violation of Chapter 403, Florida Statutes, as specified in Section 403.161(1), Florida Statutes.
Section 403.121(2)(b), Florida Statutes, provides that Petitioner may proceed administratively "to order the prevention, abatement, or control of the conditions creating the violation or other appropriate corrective action." Except for certain violations not involved in this case, Section 403.121(2)(b) provides that Petitioner must proceed
administratively in all cases in which it seeks administrative penalties of less than $10,000 per assessment.
Section 403.161(1)(b), Florida Statutes, provides that it is a violation of Chapter 403 for "any person" to " fail to obtain any permit required by this chapter or by rule or regulation, or to violate or fail to comply with any rule, regulation, order, permit, or certification adopted or issued by the department pursuant to its lawful authority."
As relevant to this case, under Section 403.031(5), Florida Statutes, a "person" is
. . . any . . . public or private corporation, individual, partnership, association, or other entity and includes any officer or governing or managing body of the state, the United States, any agency, any municipality, political subdivision, or public or private corporation.
Implementing Section 373.414, Florida Statutes, Florida Administrative Code Rule 62-343.050 requires a noticed general permit, standard general permit, or individual environmental resource permit prior to dredging or filling wetlands or surface waters.
Section 403.121(2)(d), Florida Statutes, provides that Petitioner has the burden of proving by a preponderance of the evidence that Respondents are responsible for the alleged violations. This section also requires the Division of
Administrative Hearings to issue a final order on all matters, including the administrative penalty.
For dredge and fill violations, Section 403.121(3)(c), Florida Statutes, authorizes Petitioner to assess a penalty of
$1000 for unpermitted dredging or filling "against the person or persons responsible for the illegal dredging or filling." This section authorizes a penalty of $5000 per violation "against the contractor or agent of the owner" that conducts unauthorized dredging or filling.
Section 403.121(8), Florida Statutes, requires the addition to the penalty of the "direct economic benefit" gained by the violator by the violation, provided consideration of economic benefit is provided by Florida law or required by federal law.
Section 403.121(2)(f), Florida Statutes, states that the prevailing party shall recover its costs, as provided in Sections 57.041 and 57.071, Florida Statutes. Section 57.041 authorizes the party recovering a judgment to recover all of its "legal costs and charges," and Section 57.071 includes within costs all bond premiums, court reporter expenses, and sales tax imposed on legal services, as well as expert witness fees under certain circumstances. Neither of these provisions expressly allows the recovery of the cost of an investigation.
Section 403.121(10), Florida Statutes, allows mitigation of the penalties identified in Section 403.121(3), Florida Statutes. Mitigation of up to 50 percent is allowed for "mitigating circumstances," which include a good faith effort to comply before or after Petitioner's discovery of the violations, but mitigation in excess of 50 percent is allowed only if the violations were outside the control of the respondent.
Section 403.121(11), Florida Statutes, provides that the penalties shall be paid to the Ecosystem Management and Restoration Trust Fund.
The first legal issue is to identify the party or parties that may be liable. The statutory definition of a "person" includes other entities, such as trusts. As the owner of the Property, the Trust is the person responsible for the illegal dredging and filling, as it necessarily consented to the unpermitted work and has benefited from the illegal improvements.
The closer question concerns the liability of Freeman.
Although he performed the unpermitted work, Freeman is not a contractor, nor an agent of the owner; he is the natural
person--in this case, the trustee--through whom the Trust acts. To some extent, extending liability to Freeman seems to double the penalties when the violator is not a natural person, so that the same penalties may be imposed against the entity and the
natural person through whom it must act. However, at least in the case of trusts, this double liability seems to be condoned by Section 736.1013(2), Florida Statutes, which states:
A trustee is personally liable for torts committed in the course of administering a trust or for obligations arising from ownership or control of trust property only if the trustee is personally at fault.
This statutory limitation upon the personal liability of a trustee implicit in this statute applies to trustees of inter vivos and testamentary trusts, not land trusts, for which there is no limitation of liability for trustees. Taylor v. Richmond's New Approach Association, Inc., 351 So. 2d 1094 (Fla. 2d DCA 1977). The circumstances of this case suggest that the Trust is a testamentary or inter vivos trust covered by the statute, but the distinction in the kinds of trusts is irrelevant in this case because Freeman was personally at fault. Because of his acts and omissions in connection with the ownership or control of the Trust Property, the Trust is liable for penalties and corrective actions. Thus, he is personally liable, even if the Trust is testamentary or inter vivos in nature.
The next issue is to identify the amount of the penalty for the two violations. The Seawall Project is a major violation and should carry the full $1000 penalty. The construction of the Seawall Project required an individual
environmental resource permit, and there is no assurance that the Trust could have met the requirements for this permit.
However, the Dock Project is a minor violation and should be mitigated by the full 50 percent. The addition of the dock roof required only a standard general permit, and there is little chance that the Trust would have had any difficulty in obtaining such a permit. There are no other mitigating factors to consider. The ignorance of the law by Freeman is not a mitigating factor, and the financial impact of these penalties on the Trust or Freeman is impossible to determine on this record.
The costs of the investigation are not authorized by Sections 57.041 or 57.071, Florida Statutes, so they are not included under Section 403.121(2)(f), Florida Statutes. The investigative costs incurred by the services of two of Petitioner's employees are, under Sections 57.041 and 57.071, Florida Statutes, general overhead, which is not recoverable under these statutes. Cf. Wood v. Panton & Co. Realty, Inc., 950 So. 2d 534 (Fla. 4th DCA 2007) (attorney's computerized research costs not taxable under Section 57.041 because they are merely overhead). This is not a case of a specific statutory authorization for the recovery of investigative costs, such as in Section 403.141(1), Florida Statutes, which authorizes "reasonable costs and expenses . . . in tracing the source of
the discharge" because, among other things, there was no need to trace the source of a discharge.
Nor is the economic benefit of not paying a permit application fee properly assessed against Respondents in this case. Section 403.121(8) is not a substantive statute authorizing the assessment of such a benefit within the penalty. This statute requires the existence of other statutory provisions that authorize (Florida) or mandate (federal) consideration of economic benefit in particular types of cases. Petitioner has cited no such statute, nor has the Administrative Law Judge found one.
The corrective actions of removing the seawall, including the fill and return walls, and restoring the pre-project grade are clearly authorized by Section
403.121(2)(b), Florida Statutes. The products of unpermitted activities, these improvements remain unauthorized impacts to the water resources of Florida, for which there is no assurance that the required permit would be granted upon the filing of an application.
The portion of the corrective action requiring an elaborate vegetative plan is not authorized by Section 403.121(2)(b), Florida Statutes. The relevant language of this statute is limited to restorative actions to eliminate the products of the unpermitted activities. No vegetation existed
waterward of the wetlands line immediately before the construction of the Seawall Project, and Petitioner may not affirmatively require Respondents to provide this net gain to the shoreline ecosystem, at least in an administrative proceeding in which injunctive relief is obviously unavailable. For obvious reasons involving separation of powers, see, e.g., Biltmore Construction Company v. Department of General Services, 363 So. 2d 851, 853-54 (Fla. 1st DCA 1978), Section
403.121(2)(g), Florida Statutes, acknowledges that injunctive relief lies within the judicial branch and provides further that Petitioner waives its right to pursue broad injunctive relief when it files administratively.
Notwithstanding the provisions in the NOV addressing nuisance and exotic plants colonizing the restored area, the evidentiary record does not establish any reason, such as soil disturbance, that might intensify the establishment of nuisance and exotic plants in the project area. In any event, it is likely that the same anthropogenic factors, besides the construction of the Seawall Project itself, that have discouraged the recruitment of native vegetation to this small portion of the shoreline ecosystem will also discourage the establishment of nuisance or exotic vegetation in this area after the removal of the Seawall Project.
Within 30 days from the date of this Order, the Trust shall pay an administrative penalty of $1500 and Freeman shall pay an administrative penalty of $1500. Each party's payment shall be by cashier's check or money order payable to the Florida Department of Environmental Protection and shall bear the notations, "OGC Case No. 08-2378" and "Ecosystem Management and Restoration Trust Fund." The payments shall be sent to the
Department of Environmental Protection Attn: Terry Riordan
3319 Maguire Boulevard, Suite 232
Orlando, Florida 32803
Within 30 days from the date of this Order, Freeman shall attend an onsite prerestoration meeting with Petitioner's representatives to review the work that is required by this Order. At this meeting, the representatives will flag the area from which the Trust and Freeman are to remove all Seawall Project improvements, including the seawall, return walls, and fill.
Within 60 days from the date of this Order, the Trust and Freeman, jointly and severally, will complete all work required to remove all Seawall Project improvements. Prior to
commencing any earthmoving, the Trust and Freeman, jointly and severally, will properly install and maintain erosion, sedimentation, and turbidity control devices around the work areas. The Trust and Freeman may relocate the Seawall Project improvements to a location landward of the wetlands line on the Property, but, jointly and severally, will ensure that the relocated fill will be placed in a contained upland location so that it cannot discharge to wetlands or surface waters of the State.
Within 75 days of the date of this Order, the Trust and Freeman, jointly and severally, will regrade the area disturbed by the Seawall Project to pre-disturbance elevations. During regrading, the Trust and Freeman, jointly and severally, will maintain the turbidity and erosion control measures to ensure that Florida Administrative Code Chapter 62-302 is not violated. Further, the Trust and Freeman, jointly and severally, will undertake the regrading so as not to impact wetlands or surface waters outside of the area already disturbed by the Seawall Project.
Within 10 days after the completion of all restorative work, the Trust and Freeman will inform the Florida Department of Environmental Protection in writing, to a person to be designated at the prerestoration meeting, that the affected portion of the Property is ready for inspection to confirm that
the Trust and Freeman have properly removed the Seawall Project improvements and regraded the affected area, both in accordance with the conditions set forth in this Order.
This Order constitutes the required permission of the Florida Department of Environmental Protection for the above- described restorative work within the time limits stated above, which the Florida Department of Environmental Protection may extend, in its sole discretion. Additionally, this Order constitutes the required permission of the Florida Department of Environmental Protection for the Dock Work described in the Order, but only in the configuration and area that existed on the date of the last site visit by Petitioner's representatives prior to the final hearing in this case. The Trust, Freeman, and the successors or assigns of either party will not make any additions or alterations to the docking facility without first obtaining the necessary permit from the Florida Department of Environmental Protection.
If, within one year after the inspection by Petitioner's representative certifying satisfactory completion of the work described above, erosion, siltation, or turbidity exists at levels or rates in excess of those that existed immediately prior to the commencement of the Seawall Project, nothing in this Order prevents Petitioner from pursuing additional administrative or judicial relief, such as to require
the addition and maintenance of native vegetation in order to restore pre-project conditions in terms of erosion, siltation, and turbidity.
The Trust and Freeman will allow Petitioner's representatives reasonable access to the Property to inspect or reinspect the work described above and to inspect for post-work erosion, siltation, or turbidity.
If the Trust conveys the Property prior to the completion of the work described above and the expiration of the one-year, post-work period to determine if erosion, siltation, or turbidity needs to be addressed--and, if so, pending completion of the additional work to correct the excess erosion, siltation, or turbidity--the Trust and Freeman, jointly and severally, shall remain liable under this Order. Additionally, if Petitioner records a copy of this Order in the public records of Lake County, Florida (together with a legal description of the Property), prior to the recordation of a deed of conveyance or other instrument of encumbrance, such as a lien, the grantee and its grantees will also be liable for, and the lienholder's interest will be subordinate to, the above-described work, including the additional work identified in this paragraph, but not the monetary penalties. Regardless whether a copy of this Order has been recorded, the Trust and Freeman, jointly and
severally, shall provide a purchaser with a copy of this Order prior to closing of the sale of the Property to the purchaser.
The remaining relief sought by Petitioner is denied.
DONE AND ORDERED this 30th day of September, 2009, in Tallahassee, Leon County, Florida.
ROBERT E. MEALE
Filed with the Clerk of the Division of Administrative Hearings this 30th day of September, 2009.
Michael W. Sole, Secretary
John K. Freeman
Jacqueline S. Freeman Family Trust 18950 US Highway 441, No. 212
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 the original Notice of Appeal with the agency clerk of the Division of Administrative Hearings and a copy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or with 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.
