Findings Of Fact Prior to July 10, 1984, Son-Mar Propane, Inc. (Son-Mar) was licensed by the Department as a dealer in liquefied petroleum gas, in appliances and in equipment for use of such gas and installation. Virgil Berdeaux was the president of Son-Mar and he and his wife were the sole stockholders. Virgil Berdeaux passed the competency exam which qualified Son-Mar for licensure. Sonny Wade Berdeaux Virgil Berdeaux's son, was the manager of Son-Mar. Son- Mar's business address and place of operation was 16034 U.S. Highway 19 North in Hudson, Florida. Virgil Berdeaux and his wife owned the property located at that address and leased it to Son-Mar. A propane pumping station and a building was located on the property at 16034 U.S. Highway 19. The building housed a pawn shop and supply store for mobile home and RV equipment. Son-Mar operated the pumping station and the stores. It also installed tanks and delivered gas to customers. 1/ On July 10, 1984, a final order was entered by the Department which ordered "[t]hat any and all of [Son-Mar's] licenses issued by the State Fire Marshal Division of Liquefied Petroleum Gas and eligibility to hold said licenses are hereby revoked." The revocation of Son-Mar's licenses was due to its violation of certain safety standards and rules. Specifically, it was found that an employee of Son-Mar, Mr. John Delham, filled a cylinder that had not been recertified, that he lay it horizontally in the customer's van, and that he failed to secure the tank in the van. While the van was still parked at Son-Mar an explosion occurred which destroyed the van and killed its occupant. On July 19, 1984, nine days after Son-Mar's licenses were revoked, Virgil Berdeaux submitted an application for licensure as a dealer in appliances and equipment for use of liquefied petroleum gas, listing the business address as 16034 U.S. Highway 19, Hudson, Florida, and listing the business name as Son- Mar Pawn Shop. On August 3, 1984, twenty-four days after the revocation of Son- Mar's licenses, Sonny Wade Berdeaux submitted an application for licensure as a dealer in liquefied petroleum gas, listing the business address as 16034 U.S. Highway 19, Hudson, Florida. The Department issues several different types of liquefied petroleum gas licenses. A Type 06, Class 02 license, known as a 602 license, is issued to a dealer in appliances and equipment for use of liquefied petroleum gas. The 602 license allows the holder to sell propane appliances and equipment, such as stoves, heaters, and gas grills but it does not permit the holder to install appliances or sell propane gas. A competency examination is not required for this type of license, and there is no inspection of the place of business prior to issuance of the license. Virgil Berdeaux applied for a 602 license. He completed the application and submitted the required fee. The application listed W. C. Johnson, Virgil Berdeaux's son-in-law, as the manager of the business. Bill Johnson had run the pawn shop for Son-Mar. Sonny Wade Berdeaux applied for a Type 06, Class 04 license known as 604 license, which is issued to a dealer in liquefied petroleum gas. This type of license permits the holder to pump liquefied petroleum gas for sale to the public. An applicant for this type of license must pass a competency test and file a surety bond or certificate of insurance. Further, if the licensee has a dispensing station, an inspection of the business location must be performed to ensure that it is in compliance with all safety regulations. Sonny Wade Berdeaux passed the competency examination, filed a certificate of insurance, and submitted the proper fee. Son-Mar held a Type 06, Class 01 license (a 601 license) as a dealer in liquefied petroleum gas, in appliances and in equipment for use of such gas and installation. A 601 license permits the holder to pump liquefied petroleum gas for sale to the public, to sell appliances and equipment for use of liquefied petroleum gas, and to install such appliances and equipment. In essence, it is a combination of a 602 license, a 604 license, and a license to install equipment. Both Sonny Wade Berdeaux and Virgil Berdeaux received letters dated October 8, 1984, which informed them that their applications for licensure had been denied. Both letters referred to the revocation of Son-Mar's licenses and pointed out that the applicants would be operating on the same premises and employing the same staff as Son-Mar. Both letters concluded as follows: Thus, it would appear that your application is seeking licensure for essentially the same entity that has only recently had its liquefied petroleum gas licenses revoked. Therefore, in the interest of public safety, this Bureau cannot permit an Order of Revocation to be obviated by a mere procedural reapplication in your name. The applications for licensure both list the business address as 16034 U.S. Highway 19 in Hudson, Florida. At the time of application Virgil Berdeaux owned that property and Sonny Wade Berdeaux had leased the pumping station. However, on July 1, 1985, the property at 16034 U.S. Highway 19 was sold. The pumping station was moved out along with the inventory that remained in the pawn shop. Neither Virgil Berdeaux or Sonny Wader Berdeaux retained any interest in the property, and at this time neither could operate a business at that location. Although there was testimony concerning the manner in which the business would have been operated and controlled had licensure been granted at the time of applications there was no testimony indicating where or how the business would now be operated. There was no attempt to amend either application to reflect a current business address, and the certificate of insurance entered into evidence lists 16034 U.S. Highway 19, Hudson, Florida, as the location covered. 2/
Recommendation Based on the foregoing findings of fact and conclusions of law; it is RECOMMENDED that a Final Order be entered denying petitioners' applications for licensure. DONE and ENTERED this 21st day of May, 1986, in Tallahassee, Florida. DIANE A. GRUBBS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of May, 1986.
The Issue Whether the Department of Revenue's denial of Petitioner's application for a Florida fuel license should be upheld.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: On or about July 22, 2002, Armando B. Yzaguirre submitted to the Department a completed Florida Fuel Tax Application, Form DR-156, seeking licensure as a private carrier and wholesaler on behalf of My Oil (the "2002 Application"). The application listed Maria Yzaguirre as the president and chairman of the board of My Oil, and listed Armando B. Yzaguirre as the vice-president and chief executive officer of My Oil. This was the second Florida Fuel Tax Application filed by My Oil. On or about June 22, 2001, Maria Yzaguirre submitted to the Department a completed Florida Fuel Tax Application, Form DR-156, seeking licensure as a private carrier and wholesaler on behalf of My Oil (the "2001 Application"). The application listed Mrs. Yzaguirre as the president and sole stockholder of My Oil. The Department's rejection of the 2001 Application was at issue in DOAH Case No. 02-0469. The rejection was based on the fact that Armando Yzaguirre, a convicted felon whose civil rights had not been restored and who was the father of Armando B. Yzaguirre and the husband of Maria Yzaguirre, appeared to be in a position to exert control over the business of My Oil. Shortly before the 2001 Application was filed, Armando Yzaguirre had filed a Florida Fuel Tax Application for Yzaguirre Oil Company Inc. ("Yzaguirre Oil"). The application listed Armando Yzaguirre as the president and sole stockholder of Yzaguirre Oil. The coincidence of the applications, and the fact that they listed many of the same assets, led the Department to suspect that My Oil would operate as a "front" for Yzaguirre Oil, which was presumptively ineligible for licensure because it was owned and operated by a convicted felon. The relevant facts found in the Recommended Order for DOAH Case No. 02-0469 are as follows: In his review of the Yzaguirre Oil and My Oil applications, [Aaron Hood, the Department's revenue specialist] discovered that the companies claimed many of the same assets. Each company listed the same two tanker trucks to be used in transporting fuel. Each company listed 211 New Market Road, East, in Immolakee as its principal business address. Each company claimed exactly $1 million in accounts receivable. The timing of the filings and the common assets led Mr. Hood to suspect that the later My Oil application was submitted under Maria Yzaguirre's name to evade the possible disqualification of the Yzaguirre Oil application because of Mr. Yzaguirre's felony convictions. In short, Mr. Hood suspected that My Oil was a "front" corporation over which Mr. Yzaguirre would exercise control. The common assets also led Mr. Hood to suspect the truthfulness and accuracy of the financial affidavits filed by Maria Yzaguirre on behalf of My Oil. While it investigated the criminal history of Mr. Yzaguirre, the Department also investigated the extent of Mr. Yzaguirre's possible control over My Oil's business activities. Armando B. Yzaguirre is the 25-year- old son of Armando Yzaguirre and the stepson of Maria Yzaguirre. Testimony at the hearing established that Armando B. Yzaguirre completed both license applications and was the driving force behind the creation of both Yzaguirre Oil and My Oil. The elder Armando Yzaguirre's chief business is farming. His tomato and melon operation earns over $1 million per year. To save money on transporting the large amounts of fuel needed for his farming operations, Mr. Yzaguirre purchased two sizable tanker trucks in 2001, a new Peterbilt with a capacity of 9,200 gallons, and a 1998 Ford with a 2,500 gallon capacity. If these trucks were used only for Mr. Yzaguirre's farm, they would sit idle much of the time. This idle capacity gave Armando B. Yzaguirre the idea of going into the fuel transport business, using his father's tankers to deliver fuel to other farms and businesses in the area. Yzaguirre Oil was incorporated to operate as a fuel transport business. The business would be operated entirely by Armando B. Yzaguirre, who was the only member of the family licensed to drive the large tanker truck. The trucks were owned by and licensed to Yzaguirre Oil. Armando B. Yzaguirre was going through a divorce at the time Yzaguirre Oil was established. He was concerned that his wife would have a claim to half of any business he owned, and wished to ensure that ownership of Yzaguirre Oil would remain in his family. Thus, Armando B. Yzaguirre placed all ownership of Yzaguirre Oil in the name of his father, though his father would have no connection with the operation of the company's business. Subsequent to incorporating Yzaguirre Oil, Armando B. Yzaguirre discussed his prospective business with his stepmother, Maria Yzaguirre. Mrs. Yzaguirre was pleased that young Armando was establishing a business for himself. They discussed the future of the six younger Yzaguirre children and ideas for businesses that could be established to eventually be taken over by the children. Ultimately, the younger Armando and Maria Yzaguirre settled on the idea of a convenience store and filling station that could be established on part of a city block in Immolakee that the senior Mr. Yzaguirre already owned. This would be the type of business that the children could learn and work at while they were still in school, then take over after their graduation. This was the genesis of My Oil. Mrs. Yzaguirre contacted a lawyer to draft articles of incorporation and later transferred $100,000 from her personal money market account into a My Oil bank account to provide start-up money. The younger Armando Yzaguirre filled out the fuel license application, using his earlier application for Yzaguirre Oil as a model. As with the earlier application, the younger Armando Yzaguirre kept his name off the corporate documents and the fuel license application to avoid any claim by his soon- to-be ex-wife to the company's assets. He anticipated that My Oil would lease the two tanker trucks from Yzaguirre Oil, and thus listed them on the application as assets of My Oil. At the hearing, Mr. Yzaguirre conceded that he made mistakes on both applications. As noted above, he listed $1 million in accounts receivable for each of the companies. These were actually accounts receivable for his father’s farming operation, and should not have been included as assets for either Yzaguirre Oil or My Oil. * * * The Department pointed to several alleged discrepancies in the My Oil application as grounds for its suspicion that the company was a "front" for Yzaguirre Oil. First, the My Oil application, filed June 20, 2001, lists a corporate asset of $100,000 in cash on deposit at an unnamed bank, when in fact the cash was not deposited in a My Oil account at Florida Community Bank until September 10, 2001. Second, the My Oil application lists the two tanker trucks as corporate assets as of the date of application, when in fact the trucks were titled in the name of Yzaguirre Oil and the anticipated lease arrangement had yet to be consummated. Third, the My Oil application claimed the property at 211 New Market Road, East, as a corporate asset as of the date of application, when in fact the property was titled in the name of the elder Mr. Yzaguirre. Fourth, the My Oil application listed $1 million in accounts receivable as a corporate asset. As noted above, Armando B. Yzaguirre admitted at the hearing that these receivables were from his father's farming operation and should not have been listed on the application as assets of My Oil. Armando B. Yzaguirre plausibly explained that My Oil anticipated leasing the trucks, but that there was no reason to spend the money to finalize that arrangement until the fuel license was obtained and My Oil could actually commence operations. Similarly, Mrs. Yzaguirre clearly had on hand the $100,000 in cash claimed as a My Oil asset, and the timing of her actual transfer of that money into a My Oil account would not alone constitute cause for suspicion, given that My Oil had yet to commence operations when the application was filed. Armando B. Yzaguirre also convincingly explained that leasing the tanker trucks from his father's company would not give Yzaguirre Oil effective control over My Oil's business. The younger Mr. Yzaguirre contemplated that the lease agreement would be an arms-length arrangement between the two companies. If the companies could not arrive at a mutually satisfactory lease agreement, or if the lease agreement should later fall through, My Oil could lease trucks from another company and continue doing business. However, no witness for My Oil offered a satisfactory explanation as to how the elder Mr. Yzaguirre's ownership of the real property would not give him some degree of control over My Oil's business. At the time of the hearing, title to the property at 211 New Market Road, East, was in the name of Armando Yzaguirre. A warranty deed for at least a portion of the property, executed by the prior owners on July 16, 1998, was in the name of Armando Yzaguirre. The Yzaguirres did not explain whether My Oil would purchase or lease the property from the elder Mr. Yzaguirre. The structure of the arrangement is critical to the issue of the elder Mr. Yzaguirre's control over My Oil. Substitutes for the tanker trucks could be obtained in short order with little or no disruption of My Oil's business. However, the physical location of the convenience store and filling station could not be changed so readily, and the elder Mr. Yzaguirre's position as owner of that property could give him great leverage over the operation of the business. The Department also raised the issue of the undisclosed participation of Armando B. Yzaguirre in the business affairs of My Oil. The testimony of Maria Yzaguirre and of her stepson strongly indicated that the younger Mr. Yzaguirre would have substantial control over the business activities of My Oil. However, because Armando B. Yzaguirre's identity was not disclosed on My Oil's application, the Department had no opportunity to conduct a review of his background and character to determine whether he met the standard set by Section 206.026, Florida Statutes. In summary, there was no direct evidence that the Yzaguirres deliberately attempted to deceive the Department or that My Oil was established as a front to obtain licensure for the presumptively ineligible Yzaguirre Oil. The evidence did establish that Armando Yzaguirre has been convicted of at least one felony, and that his ownership of the real property on which My Oil would conduct business could provide him with control of My Oil's business activities. The evidence further established that Armando B. Yzaguirre will have control over My Oil's business, and that the Department should have had the opportunity to conduct a background review to determine his fitness under Section 206.026, Florida Statutes. The relevant conclusions of law set forth in the Recommended Order for DOAH Case No. 02-0469 are as follows: Section 206.026, Florida Statutes, provides in relevant part: (1) No corporation . . . shall hold a terminal supplier, importer, exporter, blender, carrier, terminal operator, or wholesaler license in this state if any one of the persons or entities specified in paragraph (a) has been determined by the department not to be of good moral character or has been convicted of any offense specified in paragraph (b): 1. The licenseholder. The sole proprietor of the licenseholder. A corporate officer or director of the licenseholder. A general or limited partner of the licenseholder. A trustee of the licenseholder. A member of an unincorporated association licenseholder. A joint venturer of the licenseholder. The owner of any equity interest in the licenseholder, whether as a common shareholder, general or limited partner, voting trustee, or trust beneficiary. An owner of any interest in the license or licenseholder, including any immediate family member of the owner, or holder of any debt, mortgage, contract, or concession from the licenseholder, who by virtue thereof is able to control the business of the licenseholder. 1. A felony in this state. Any felony in any other state which would be a felony if committed in this state under the laws of Florida. Any felony under the laws of the United States. (2)(a) If the applicant for a license as specified under subsection (1) or a licenseholder as specified in paragraph (1)(a) has received a full pardon or a restoration of civil rights with respect to the conviction specified in paragraph (1)(b), then the conviction shall not constitute an absolute bar to the issuance or renewal of a license or ground for the revocation or suspension of a license. . . . In December 1990, Armando Yzaguirre entered a no contest plea to a second-degree felony charge of possession of more than five but not more than 50 pounds of marijuana in a Texas court. At the time of Mr. Yzaguirre's Texas conviction, Florida law listed cannabis as a Schedule I substance. Section 893.03(1)(c)4, Florida Statutes (1990). Absent licensure or other authorization, bringing cannabis into the state was a third-degree felony in 1990. Section 893.13(1)(d)2, Florida Statutes (1990). Possession of more than 20 grams of cannabis was a third-degree felony in 1990. Section 893.13(1)(f) and (g), Florida Statutes (1990). There can be little question that Mr. Yzaguirre's felony in Texas would have constituted at least one felony under Florida law, and thus that Mr. Yzaguirre has been convicted of an offense specified in Section 206.026(1)(b), Florida Statutes. Mr. Yzaguirre has not received a full pardon or restoration of civil rights, thus mooting any potential application of Section 206.026(2)(a), Florida Statutes, to this case. Mr. Yzaguirre's ownership of the real property that would hold My Oil's principal place of business would give him the ability to control the business of the licenseholder. This conclusion might have been different had My Oil presented evidence of the business relationship under which it would operate the facility on Mr. Yzaguirre's property. The extent of Armando B. Yzaguirre's involvement in My Oil was not disclosed to the Department. Testimony at the hearing established that the younger Mr. Yzaguirre would be the principal operator of My Oil for the foreseeable future. Due diligence under Section 206.026, Florida Statutes, requires the Department to conduct a background investigation of Armando B. Yzaguirre prior to the issuance of a fuel license to My Oil. In conclusion, My Oil has failed to demonstrate its entitlement to a Florida fuel license on the merits of the application it filed on June 20, 2001. The Recommended Order in DOAH Case No. 02-0469 recommended that My Oil's 2001 Application be denied, but without prejudice to My Oil's ability to file a subsequent application curing the defects of its 2001 Application. In the 2002 Application, My Oil sought to cure those defects. First, the 2002 Application listed Armando B. Yzaguirre as a principal of My Oil, providing the Department an opportunity to conduct an investigation of his background and character. The Department's background check revealed no criminal convictions or other disqualifying factors related to Armando B. Yzaguirre. The Department's background check also revealed no criminal convictions or other disqualifying factors related to Maria Yzaguirre. The 2002 Application included an executed lease agreement, dated July 19, 2002, by which Armando Yzaguirre granted to My Oil a five-year lease on the premises at 211 New Market Road, East, in Immokalee. The lease specifies that My Oil will pay rent of $1,000 per month, and that the premises are to be used for the purpose of "a convenience store and retail gasoline sales to the general public, storage, and uses related to such use . . . and for no other purpose or purposes." The lease expressly states: "Landlord shall have no control over the use of the premises by the Tenant during the period of the lease." The 2002 Application continued to list the two tanker trucks as assets of My Oil, though they remain titled to Yzaguirre Oil. Armando B. Yzaguirre testified that My Oil does have a written lease with Yzaguirre Oil for the use of the tanker trucks. Armando Yzaguirre confirmed the existence of a lease on the trucks. However, the lease was not included in the 2002 Application and was not produced at the hearing. After receiving the 2002 Application, the Department contacted Armando B. Yzaguirre to request a current balance sheet for My Oil. The balance sheet submitted by Mr. Yzaguirre purported to show the assets and liabilities of My Oil as of July 22, 2002. The balance sheet indicated a negative total equity of $5,904.43. It indicated a "credit card" debt of $101,000 to Yzaguirre Farms, and other accounts payable of $36,852.79 to Yzaguirre Farms. At the hearing, the Department produced a canceled check from Armando Yzaguirre to My Oil in the amount of $101,000, with the notation, "My Oil Operating & Payroll." Armando Yzaguirre testified at the hearing that he has taken steps to have his civil rights restored, but that the process is not yet complete and his rights have not been restored. On August 22, 2002, the Department issued its Notice of Intent to Deny the 2002 Application, which stated, in relevant part: Your organization does not qualify for this license as there is a felony conviction of an owner of interest in the license and/or an immediate family member of the owner, as outlined in Chapter 206.026(1)(a)(9)&(b), Florida Statutes. The Department based its denial on several factors. First, the family relationship between My Oil's principals and Armando Yzaguirre itself raised the potential for Armando Yzaguirre to control My Oil. In particular, the Department noted the fact that Armando B. Yzaguirre resides in a mobile home owned by his father, and located a few hundred feet away from Armando Yzaguirre's main residence on the family property. Second, the balance sheet submitted by My Oil indicated a negative equity with large debts owed to Yzaguirre Farms, controlled by Armando Yzaguirre. Third, the Department concluded that the lease on the premises at 211 New Market Road, East, would not prevent Armando Yzaguirre from exerting control over My Oil, by breaking the lease, raising the rent, selling the property, or ejecting My Oil from the premises. Fourth, no proof was offered that My Oil had leased or purchased the tanker trucks from Yzaguirre Oil, meaning that My Oil's means of transporting fuel would be directly controlled by Armando Yzaguirre. Fifth, the $101,000 constituting the startup money for My Oil appears to have come directly from the bank account of Armando Yzaguirre. Sixth, My Oil was administratively dissolved by the Department of State on October 4, 2002, for failure to file an annual report. Finally, the Department stated that, regardless of the arms-length nature of any business dealings between My Oil and Armando Yzaguirre, My Oil would not be granted a license until Armando Yzaguirre's civil rights have been restored. The close family relationship coupled with the fact that Armando Yzaguirre is the source of My Oil's startup funds, its tanker trucks, and its business location, militate against granting My Oil a license so long as Armando Yzaguirre's civil rights have not been restored. In response, My Oil insisted that its 2002 Application cured every specific deficiency noted in the 2001 Application. First, it listed Armando B. Yzaguirre as a principal so that his background and criminal history could be investigated, and the Department's investigation revealed no disqualifying offenses. Armando B. Yzaguirre testified that the July 22, 2002, balance sheet submitted at the Department's request was not an accurate My Oil balance sheet. He stated that in setting up the computer program for My Oil's accounting, he attempted to shortcut the software's lengthy setup process for new businesses by simply copying an existing Yzaguirre Farms spreadsheet, then substituting the name "My Oil" for "Yzaguirre Farms." However, he quickly discovered that his "shortcut" would require him to delete manually every balance sheet entry for Yzaguirre Farms and re-enter the correct entries for My Oil. He abandoned this effort and began a My Oil spreadsheet from scratch, but he never deleted the partially converted Yzaguirre Farms spreadsheet from his computer. Mr. Yzaguirre testified the Department's phone call to request a current balance sheet came to him on his cellular phone while he was working on his father's farm. He relayed the message to his secretary, who printed a My Oil balance sheet and faxed it to the Department. Mr. Yzaguirre stated that, until the Department rejected the 2002 Application, he did not realize that his secretary had faxed a balance sheet generated by his aborted conversion of the Yzaguirre Farms spreadsheet, rather than the actual balance sheet for My Oil. A copy of what Armando B. Yzaguirre claimed was the actual My Oil balance sheet as of July 31, 2002, was introduced at the hearing. This balance sheet indicates an opening equity of $101,000, with $92,078.02 in retained earnings and operating and payroll accounts totaling $8,921.98. The July 31, 2002, balance sheet is accepted as the actual balance sheet for My Oil. While this balance sheet refutes the Department's conclusion that My Oil is starting business with a negative balance sheet indicating over $136,000 in debts to Yzaguirre Farms, it does not refute the evidence that the entire source of My Oil's cash accounts is $101,000, provided in the form of a check from an account in the name of Armando Yzaguirre. Armando B. Yzaguirre testified that the money came from a joint money market account in the name of Armando and Maria Yzaguirre, and that Maria was the source of the funds. This testimony is inconsistent with the fact that the check in question was signed by Armando Yzaguirre, and that his name alone appeared on the account name printed on the check. The elder Mr. Yzaguirre testified that he signed the check, but also testified that the account is in his name and that of his wife, and that they both consider the $101,000 to be her investment in My Oil. Neither of the Yzaguirres offered an explanation as to why Maria Yzaguirre's name did not appear on a check they claimed was drawn on a joint account. The Department's concerns about Armando Yzaguirre, a convicted felon, being the source of My Oil's startup funding were reasonable. My Oil failed to offer evidence sufficient to allay those concerns. Despite My Oil's claims to the contrary, the $101,000 check was plainly signed by Armando Yzaguirre and drawn from an account in his name. My Oil failed to explain the terms under which it accepted this startup funding from Armando Yzaguirre. The Department's explanation of its rejection of the lease submitted by My Oil for the premises at 211 New Market Road, East, was not reasonable. The lease document is a standard, arms-length agreement between My Oil and Armando Yzaguirre. The Department offered no evidence to support its assertions that Armando Yzaguirre would break the terms of the lease, that My Oil would not exercise its legal rights should Mr. Yzaguirre violate the lease's provisions, or that the lease should be considered invalid because a contract between relatives is inherently suspect. The other concerns raised by the Department-- that Mr. Yzaguirre might raise the rent, sell the property, or evict My Oil-- are answered by the terms of the lease itself and raise no issues beyond those that would arise in any lessor/lessee relationship. As to the lease on the tanker trucks, both Armando B. and Armando Yzaguirre testified that My Oil did have a lease on the trucks, to take effect if and when My Oil receives a fuel tax license from the Department. Their testimony is credited as to the existence of the lease, though they offered no testimony specifying the terms of the lease. The fact that My Oil was administratively dissolved for failure to file an annual report should have played no part in the Department's rejection of My Oil's application. Such dissolution is an administrative matter easily cured by the filing of the report. At most, the Department should have required My Oil to provide proof of reinstatement prior to issuance of any fuel tax license. In summary, several of the particular concerns on which the Department based its decision were overstated. However, the Department's overarching concern that Armando Yzaguirre was in a position to control the business of My Oil was reasonable. Armando Yzaguirre was clearly the source of the $101,000 in startup money for My Oil, and no evidence was offered to explain the terms under which this money was provided to My Oil. The lease arrangements for the premises and the tanker trucks may be unobjectionable in themselves, but when coupled with the fact that My Oil is heavily indebted to Armando Yzaguirre, they raise entirely reasonable suspicions regarding My Oil's independence from Mr. Yzaguirre's control. The Department's position that My Oil cannot be granted a license until Armando Yzaguirre's civil rights have been restored is supported by the evidence. Armando Yzaguirre is the source of My Oil's funds, its place of doing business, and its means of transporting fuel. My Oil failed to demonstrate that these facts do not give Armando Yzaguirre the ability to control its business.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order denying the application of My Oil Company, Inc., for a Florida fuel license, without prejudice to the ability of My Oil Company, Inc., to file a new application upon the restoration of Armando Yzaguirre's civil rights. DONE AND ENTERED this 28th day of May, 2003, in Tallahassee, Leon County, Florida. LAWRENCE P. STEVENSON 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 28th day of May, 2003. COPIES FURNISHED: J. Bruce Hoffmann, General Counsel Department of Revenue 204 Carlton Building Post Office Box 6668 Tallahassee, Florida 32314-6668 Robert F. Langford, Jr., Esquire Office of the Attorney General The Capitol-Tax Section Plaza Level 01 Tallahassee, Florida 32399-1050 E. Raymond Shope, II, Esquire 1404 Goodlette Road, North Naples, Florida 34102 R. Lynn Lovejoy, Esquire Office of the Attorney General The Capitol-Tax Section Tallahassee, Florida 32399-1050 James Zingale, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
Findings Of Fact Based upon the oral and documentary evidence adduced at the hearing, the following relevant facts are found: Petitioner William Lineberger, doing business as Jet Oil Company, has, since 1950, continuously used the brand name "Jet" for identifying gasoline sold by him in the State of Florida. At one time, petitioner owned or operated some thirteen stations in various locations in Florida. Since 1980, he has operated only three stations, all located in Pinellas County-- two in St. Petersburg and one in Pinellas Park. Pursuant to Chapter 525, Florida Statutes, the respondent Florida Department of Agriculture and Consumer Services first issued petitioner a liquid fuel brand name registration for the name "JET" in 1973. Pursuant to Chapter 495, Florida Statutes, the Florida Secretary of State issued petitioner mark registration number 922,820 on August 11, 1980, for the mark "JET" as a trademark and a service mark to be used in connection with gasoline and oil product convenience store items. Kayo Oil Company (Kayo) is a Delaware corporation and a wholly-owned subsidiary of Conoco, Inc. Kayo operates a chain of retail gasoline and convenience stores in 22 states. It has approximately 465 locations concentrated mainly in the southeast portion of the country, with 38 locations in Florida, including one in Pinellas Park. Kayo currently has plans for further expansion in Florida. It's fixed asset base in Florida is approximately $10 million. The typical Kayo retail gasoline outlet in Florida has four multiple product dispensers, sells 500 to 600 different convenience items inside an 800 to 1600 square foot building, markets fast food products and employs a color scheme of black on yellow on its signage and building facade. Conoco, Inc. first began using the "JET" trade name in Europe in the 1960's when it acquired a large chain of European retail gasoline outlets selling under that brand name. It currently operates about 2,000 units under the brand name "JET" in Europe. In the United States, Kayo has used various trade names in the operation of its outlets, including "Kayo" and "JET". In the early 1980's, Kayo made the decision to standardize the name it traded under throughout the United States, and selected the name "JET". In most instances, it accomplished the conversion of its stations from "Kayo" to "JET", with the black on yellow color scheme, during the period from the early 1980's through 1984. The intervenor initially sought to obtain from the Florida Department of Agriculture and Consumer Services the liquid fuel brand name "JET". That request was denied for the reason that "JET" had been previously registered to the petitioner. Thereafter, the Department issued to the intervenor the liquid fuel brand name registration, "JET +" on April 27, 1981. Kayo is required to display the "JET +" liquid fuel brand name on its dispensers or pumps. 1/ With the exception of two of its Florida locations, Kayo uses the word "JET" on its street and building signage. At its Pinellas Park and Clearwater stations, it has retained the name "Kayo". Being an independent brand marketer, Kayo attempts to dedicate the majority of its signage to display the price of gasoline, as opposed to the gasoline brand name. It is Kayo's marketing philosophy that the consumer is more influenced by low prices and location than by the fuel brand name. In 1984, the physical appearance of petitioner's three stations did not resemble the physical appearance of the typical Kayo station in Florida. Subsequent to 1984, petitioner did some remodeling work at its Pinellas Park station which included yellow and black signage and the name "JET" in black block letters on a yellow background, resembling Kayo's style of lettering on both its pump decals and its signage in areas outside Pinellas County. The yellow pages of the St. Petersburg telephone directory lists both Kayo's Pinellas Park station and petitioner's Pinellas Park station under the heading of Jet Oil Company. In February or March of 1987, a local cigarette supplier attempted to deliver and present an invoice for cigarettes ordered by Kayo to one of petitioner's facilities. This occurred again with the same supplier in March of 1987. In January of 1987, a Motor Fuel Marketing Complaint against the "Jet" business at 7091 Park Boulevard was filed with the Division of Consumer Services, Department of Agriculture and Consumer Services. Although this is the address of the Kayo station in Pinellas Park, the Consumer Services Consultant, Division of Consumer Services, forwarded the complaint to "Jet Oil Company" at 7879 - 49th Street North, the petitioner's station, for a response. Petitioner presented evidence that other instances of confusion between its stations and Kayo stations had occurred with respect to bills, bank inquiries, and a newspaper article. Also, on one occasion, petitioner was ordered by the Pinellas Park police to close its stations because a bomb threat had been made against Jet Oil. Petitioner did not produce any evidence that the source of any of the incidents related was attributable to the liquid fuel brand names utilized by it or the intervenor.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that petitioner's request for a hearing challenging the issuance of the "JET +" registration to the intervenor be DISMISSED. DONE and ORDERED this 16th day of July, 1987, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of July, 1987.
Findings Of Fact On July 14, 1982, Jimmy Haywood Nixon, an employee of petitioner, took samples of gasoline offered for sale at respondent's Beacon Store No. 7 in Milton, Florida, including a sample of regular gasoline mixed with alcohol, known as "regularhol." Pat Flanagan, a chemist employed by petitioner, performed various tests on the sample of regularhol, including ASTM method 86, and determined that the 50 percent evaporated distillation temperature of the mix as a whole was 150 F. His testimony to this effect was uncontroverted. When he learned the test results, Mr. Nixon locked the regularhol pump at respondent's store in Milton, only unlocking the pump to release the mixture when a thousand dollar bond was posted on July 16, 1982. Respondent began mixing regular gasoline with ethanol and selling it as regularhol in 1978 at the same price as regular gasoline. Until recently, Mocar made less on regularhol sales than on sales of regular gasoline. It originally offered regularhol as its way of helping to reduce the national consumption of petroleum. The Phillips' terminal in Pensacola was respondent's source of the regular gasoline it mixed to make regularhol. This gasoline reached Pensacola by barge, and petitioner's employees sampled and tested each barge's cargo. The 50 percent evaporated distillation temperature of the regular gas Mocar bought from Phillips varied over a range of more than 30 degrees Fahrenheit upwards from 180 F. Mixing ethanol with the gasoline lowered its distillation temperature, but until the batch sampled on July 14, 1982, Mocar's regularhol had passed the testing petitioner has regularly conducted.
Recommendation Respondent has not been shown to be more blameworthy than any of the fuel owners involved in the cases cited above, each of whom regained part of the bond that had been posted. It is, accordingly, RECOMMENDED: That petitioner retain four hundred dollars ($400.00) and return six hundred dollars ($600.00) to the respondent. DONE and ENTERED this 19th day of December, 1982, in Tallahassee, Florida. ROBERT T. BENTON Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of December, 1982. COPIES FURNISHED: Robert A. Chastain, Esquire Department of Agriculture and Consumer Services Room 513 Mayo Building Tallahassee, Florida 32301 James Milton Wilson, Esquire 201 East Government Street Pensacola, Florida 32598 The Honorable Doyle Conner Commissioner of Agriculture The Capitol, Plaza Level Tallahassee, Florida 32301
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made. On September 15, 1960, Earman Oil Company, Inc., was granted License Number 1748 (the "Special Fuels Dealer's License") authorizing it to operate as a User-Dealer of special fuels in the State of Florida. On the face of that License was the following notation: This license is NOT TRANSFERRABLE but will continue in full force and effect until cancelled or revoked as provided by law. The Special Fuels Dealer's License also contained a notation that provided as follows: This license must be returned to RAY F. GREEN, Comptroller, when a licensee terminates his operation as a User-Dealer. On April 1, 1967, Earman Oil Company, Inc., was issued State License Number 375 (the "Motor Fuels Distributor's License") by the Florida Revenue Commission, authorizing Earman to engage in the business of distributing motor fuels in the State of Florida. On the face of that License was the following notation: This license is not transferrable or assignable, and must be displayed conspicuously at all times at the Distributor's office or principle place of business. A Special Fuels Dealer's License and a Motor Fuels Distributor's License entitle a holder to purchase diesel fuel and gasoline for distribution without paying local option taxes pursuant to Chapter 336, Florida Statutes, motor fuel retail sales tax pursuant to Chapter 212, Part II, Florida Statutes and motor fuels tax pursuant to Chapter 206, Part I, Florida Statutes. A holder of such licenses is obligated to collect the taxes upon resale to customers and to remit those taxes to the state. If the resale is to another distributor who holds a valid license, the sale can be made tax free provided the seller follows the procedures set forth in the statutes and applicable DOR rules. In order to obtain either of the licenses during all times pertinent to this case, a company was required to have been in operation for at least one year and had to meet certain other requirements, including the posting of a bond. Sometime in 1983, Barkett, a licensed dealer of special and motor fuels in the state of Florida, purchased Florida Coast Oil Company, Inc. ("Florida Coast"), another licensed dealer of special and motor fuels in the State of Florida. The evidence did not establish the specific terms and details of that acquisition. The licenses held by Florida Coast which enabled it to purchase motor fuels on a tax exempt basis were not cancelled or revoked following Barkett's acquisition of the company. Barkett apparently acquired all of the stock of Florida Coast and Florida Coast continued in operation under that same name. Many, if not all, of the officers and directors of Barkett at this time also became officers and directors in Florida Coast. The evidence was conflicting and confusing as to the status of Earman Oil during 1980-1984. After review of all the evidence, it is concluded that Florida Coast acquired Earman Oil Company in 1980. The evidence did not establish the specific terms and details of that transaction. Apparently, this acquisition was also a stock purchase arrangement and Earman Oil Company initially remained in existence following its acquistion by Florida Coast. However, on August 31, 1981, Earman Oil Company was officially merged into Florida Coast. Harry Barkett, the president of Barkett and Florida Coast (after its acquisition by Barkett in 1983,) testified that the Department was advised of Florida Coast's acquisition of Earman Oil Company and Florida Coast was told by DOR that it could continue to use the licenses issued to Earman Oil Company in order to purchase motor fuels on a tax exempt basis. However, it does not appear that Mr. Barkett had any interest in Florida Coast at the time of the acquisition of Earman and no explanation was provided as to how he learned of DOR's alleged approval of the continued use of Earman's licenses. This contention is discussed in more detail in Findings of Fact 24 below. On September 10, 1984, Florida Coast sold certain assets to Alfred Vittorino. Vittorino had previously worked as a manager for Barkett. The sales agreement provided that the assets being sold included ll rights to operate as Earman Oil Company including but not limited to all rights to the stock, licenses, permits or trademarks that are titled to Earman Oil Company that are required to operate the business. The parties have stipulated that on September 12, 1984, a Certificate of Incorporation for a new Earman Oil Company, Inc., was filed with the Office of the Secretary of State for Florida and that Alfred Vittorino was the president and sole stock holder for that company. The licenses issued to the original Earman Oil Company could not legally be transferred or assigned to the new company. Moreover, the new company could not qualify for new licenses on its own since it had not been in operation for at least one year. There is no dispute that at the time Vittorino acquired the assets from Florida Coast and began operating under the name Earman Oil Company, the Special Fuel Dealer's License and the Motor Fuel Distributor's License previously issued in the name of Earman Oil Company were delivered to Vittorino by Florida Coast. Harry Barkett, who was the president of both Barkett and Florida Coast at the time of the sale to Vittorino, testified that Vittorino told him that he would take whatever steps were necessary to get the licenses reissued and/or obtain new licenses so that Earman could continue to purchase fuel on a tax exempt basis. Earman Oil Company never applied for new licenses after its acquisition by Vittorino. Instead, the company merely obtained and used the old licenses. Since the Special Fuel Dealer's License and the Motor Fuel Distributor's Licenses issued to the original Earman Oil Company has never been cancelled, "Earman Oil Company" was still registered with DOR as a distributor of motor fuel and a dealer of special fuels and it remained registered during the entire period in question, September 1984 to April 1985. Although Harry Barkett testified that he believes DOR was notified of Florida Coast's sale of Earman's assets to Vittorino, DOR has no record of the sale and/or the transfer of the licenses of Earman Oil Company to Vittorino. No persuasive evidence was presented to establish that DOR was fully advised as to the terms of the sale and the status of the companies at the time of the sale. The contention that DOR approved the transfer of the licenses to the new company established by Vittorino is rejected. After Vittorino purchased the above described assets from Florida Coast, Earman Oil Company began engaging in the business of selling motor fuel and special fuels to its customers. During the period from September 1984 through April 1985, Earman Oil Company purchased gasoline and diesel fuel from Barkett and other companies and sold that fuel to, among others, Miami Petroleum Oil Company, Inc., an unlicensed distributor of gasoline and diesel fuel. During that period, the invoices for the sales by Barkett to Earman Oil Company indicated that the sales were tax exempt and there is no indication that taxes were being collected from Earman. Barkett did not obtain an affidavit or "resale" certificate from Earman Oil Co. prior to selling tax exempt. However, Barkett filed tax returns with DOR indicating that the sales were tax exempt. Barkett contends that its typical procedure for selling tax exempt to a customer is to obtain the customer's license number and verbally confirm the validity of that number with the Department. Petitioner contends that it followed this procedure prior to selling tax exempt to Earman Oil Company and that the Department confirmed that the license numbers provided by Earman Oil Company were valid. While Petitioner contends that it contacted the Respondent in order to verify that Earman Oil Company was in possession of a valid license, there is no written evidence of any such communication. The applicable statutes and regulations require a distributor to obtain an affidavit or a "resale certificate" in order to sell fuel tax exempt. There is no provision in the rules or the statutes for verbal confirmation of licensure status. From September 1984 through April 1985, Earman Oil collected motor fuel taxes under Chapters 206 and 212, Florida Statutes, from its customers, but never remitted those taxes to the state. There is no evidence that any of the taxes collected by Earman Oil were transferred to Barkett. Earman Oil Company filed tax returns with DOR indicating that it had not collected any taxes. Criminal charges were subsequently brought against Vittorino for failure to remit collected motor fuel taxes for the period September 1984 through April 1985. Vittorino was found guilty by a jury of failure to remit collected motor fuel taxes and was initially sentenced to nine years in prison, which was subsequently reduced to six years on appeal. As of the date of the hearing in this administrative proceeding, the state has not collected any of the outstanding taxes from Vittorino or Earman Oil. Petitioner contends that during the trial of Vittorino, the State of Florida maintained that Earman Oil Company held valid licenses as a distributor of motor fuel and as a dealer of special fuels during the period September 1984 through May 1985. The transcript of that criminal proceeding confirms that this was one theory advanced by the prosecution during that case. However, there was considerable confusion during that trial as to the licensure status of Earman. Ultimately, Vittorino was convicted of failure to remit collected motor fuel taxes. It was not an essential element of this offense for Earman to be a valid license holder. DOR conducted an audit of Barkett (Audit Number 86-17412886) for the period September 1984 through April 1985. The Department's audit indicated that Barkett sold 9,548,414 gallons of motor fuel on a tax free basis to Earman Oil Company during the period from September 1, 1984 through April 30, 1985. During the audit, the auditor requested Barkett to provide resale certificates or affidavits from Earman Oil Company to substantiate the basis for the tax exempt sales. Barkett was unable to produce any such resale certificates or affidavits. As a result, DOR concluded that Barkett was responsible for collecting and remitting to the state taxes on all the sales made during this period by Barkett to Earman. Barkett contested the results of the audit and the Department's Notice of Decision issued on August 4, 1988. Barkett timely petitioned for reconsideration of that decision on September 2, 1988. The Department issued its Notice of Reconsideration on January 19, 1989. In its Notice of Reconsideration, the Department determined that the balance due for the Local Option Tax pursuant to Chapter 336, Florida Statutes, was $540,173.68, which consisted of $381,936.56 tax, $95,484.14 penalty and $62,752.98 interest (with interest accruing at the rate of $125.50 per day from June 6, 1986, until date of payment.) The Department also determined that the balance due for motor fuel retail sales tax pursuant to Chapter 212, Part II, Florida Statutes, was $769,747.50, which consisted of $544,259.60 tax, $136,064.90 penalty and $89,423.00 interest (with interest accruing at the rate of $178.93 per day from June 6, 1988 until date of payment.) Finally, the Department determined that the balance due for motor fuels tax pursuant to Chapter 206, Part I, Florida Statutes, was $540,173.68, which consisted of $381,936.56 tax, $95,484.14 penalty, and $62,752.98 interest (with interest accruing at the rate of $125.57 per day from June 6, 1986 until date of payment.) 1/ As part of its reconsideration, the Department deleted the fraud penalties that had previously been assessed against Barkett. Barkett timely filed a challenge to the Department's conclusions in the Notice of Reconsideration. 2/ During the late 70's and early 1980's, Barkett Oil acquired a number of different oil companies (including Florida Coast, which had previously acquired Earman). Several of the companies that were acquired by Barkett held licenses from the Department that enabled them to purchase motor fuels on a tax exempt basis for resale. Barkett contends that it notified the Department of each of those acquisitions and was never instructed that it had to reapply for a license to purchase tax exempt. Barkett suggests that these prior experiences justified its conclusion that Earman Oil Company could continue to purchase tax exempt following the sale and transfer of licenses to Vittorino. However, the circumstances and terms of the prior acquisitions by Barkett were not established in this case. It is not clear whether those transactions were stock purchase agreements or simply the acquisition of assets. Furthermore, the evidence regarding the notification supposedly given to the Department was vague and unconvincing. Although Petitioner contends that it notified the Department that Earman Oil Company had been sold to Vittorino, there is no written evidence of any such communication. It is not clear who at the Department was notified of the sale nor is it clear what information was provided regarding the sale. In sum, Petitioner's contention that Respondent should be estopped from claiming that Earman Oil Company did not hold a valid Distributor's License and/or Special Fuel License is rejected. There was insufficient persuasive evidence to establish that an authorized representative of the Department who was provided with full disclosure of the facts surrounding the transfer to Vittorino advised Petitioner that it could sell tax exempt to Earman Oil Company.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered upholding the assessments set forth in the Notice of Reconsideration. RECOMMENDED this 10th day of February, 1992, at Tallahassee, Florida. J. STEPHEN MENTON 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 10th day of February, 1992.
The Issue The question presented here concerns the Petitioner, State of Florida, Department of Agriculture and Consumer Services' Stop Sale Notice placed against Respondent, Pinner Oil Company under the alleged authority of Section 525.06, Florida Statutes (1980), by the process of requiring a refundable bond in the amount of $471.34, pending the outcome of this dispute in which it is contended that the Respondent supplied gasoline for sale which failed to comply with Rule Subsection 5F-2.01(1)(j), Florida Administrative Code, dealing with the allowed lead content in gasoline.
Findings Of Fact The Petitioner, State of Florida, Department of Agriculture and Consumer Services is an agency of government which has, among other responsibilities, the requirement to establish and enforce standards related to maximum allowable lead content in unleaded gasoline offered for sale to the general public. This regulation is designed to avoid the destruction of catalytic devices found in the exhaust systems of certain cars, in which the destruction of a catalyst would bring about problems, with the exhaust system causing its replacement and more importantly, lead to adverse effects on the environment due to an increase in undesired emission from the exhaust system. The Respondent, Pinner Oil Company of Cross City, Florida, is a jobber which supplies gasoline to retail outlets who in turn sales the gasoline to members of the motoring public. The facts reveal that on October 6, 1980, an official with the Petitioner made a routine inspection of the unleaded gasoline reservoir at the B. F. Goodrich-Texaco at 210 Rogers Boulevard, Chiefland, Florida, a customer of Pinner Oil Company. This gasoline was subsequently analyzed and on October 7, 1989, a Stop Sale Notice was served based upon a determination that the unleaded gasoline found in the reservoir at that station contained more than 0.05 grams of lead per U.S. gallon. The gasoline in question was provided to the B. F. Goodrich outlet by an employee of Pinner Oil Company as a part of his duties with the Respondent. In lieu of the total confiscation of the gasoline found in the reservoir tank at the station In question, the Respondent was allowed to post a refundable bond in the amount of $471.34 which represented the price for the number of gallons sold at a retail price since the time of the prior delivery to that station. (By Stipulation entered into between the parties, it was agreed that a finding of fact would be made to the effect that the Respondent, during the course of the last two years, had not been cited for a violation of the Florida Statutes pertaining to contaminated fuels.)
Findings Of Fact On February 27, 1980, Respondent converted one of its service station fuel tanks from gasoline to diesel. The tank was cleaned by Garrison Petroleum Equipment Company at Pinellas Park. Respondent paid $67.08 for this service. That same day, Respondent received 5,176 gallons of No. 2 diesel fuel from Jack Russell Oil Company, Inc., of Clearwater, a Union 76 dealer. On March 18, 1980, a standards inspector employed by Petitioner took samples from the Respondent's gasoline and diesel pumps. These samples were delivered to Petitioner's portable laboratory in Clearwater where they were analyzed. The gasoline was found to be satisfactory, but the diesel sample showed fuel contamination. The tests were conducted in accordance with the methods and standards established by Rule 5F-2.01(4)(b), Florida Administrative Code. Specifically, the "flash point" of the diesel sample was 88 degrees F, but must be 125 degrees F or above to meet the established standard. Petitioner's inspector then returned to the Pronto Car Wash station where he issued a stop-sale order to Respondent. Subsequently, the inspector accepted Respondent's cash bond in lieu of fuel confiscation. This procedure, agreed to by both parties, allowed Respondent to pay $865.36 to the State of Florida and retain the contaminated fuel. Respondent originally paid $5,286.25 for 5,176 gallons of diesel fuel. He had sold 736 gallons of this amount at the time of the stop-sale order on March 18, 1980. Total sales of this diesel fuel amounted to $865.36, which was the amount of bond demanded by Petitioner. Respondent paid $200 to Patriot Oil, Inc., to remove the contaminated fuel, but received a $3,225 credit for this fuel. Respondent does not deny that the fuel was contaminated, but seeks to establish that he acted in good faith. Respondent had the tank cleaned prior to the diesel changeover and dealt with established tank cleaning and fuel wholesaling companies. In addition, he kept the tank locked at all times after delivery of the fuel. Respondent does not contest forfeiture of his bond, but seeks refunds of state and federal taxes paid on the unsold fuel. However, Respondent was correctly informed that refund of tax payments will require him to communicate with agencies which are not parties to this proceeding.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That Petitioner enter its order declaring forfeiture of Respondent's $865.36 bond posted in lieu of confiscation of contaminated diesel fuel. RECOMMENDED this 7th day of August, 1980, in Tallahassee, Florida. COPIES FURNISHED: Stephenson Anderson Pronto Car Wash 220 34th Street North St. Petersburg, Florida 33713 Robert A. Chastain, Esquire General Counsel Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 John Whitton, Chief Gasoline and Oil Section Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 R. T. CARPENTER Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-8584
The Issue The issue posed for decision herein is whether or not Respondent was selling "polluted" gasoline in violation of the standards set forth in Chapter 525.06, Florida Statutes (1980), and Rule Chapter 5F-2, Florida Administrative Code.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received and the entire record compiled herein, the following relevant facts are found. The Petitioner, State of Florida, Department of Agriculture and Consumer Services, is an agency of State government which has the obligation to inspect petroleum products in keeping with the provisions of Chapter 525, Florida Statutes (1980). 2/ The Respondent is a corporation which sells products in the State of Florida at an outlet located at 1050 U.S. 98 North in Brooksville, Florida. On November 11, 1981, a sample of three (3) petroleum products, i.e., regular gasoline, unleaded and diesel fuel was taken from Respondent's location which is known as Chuck's Car Wash. A laboratory analysis by Petitioner revealed that the unleaded gasoline showed a lead content above .110 grams per gallon. This reading is above the .05 gram per gallon maximum allowable lead content as set forth in Rule Subsection 5F-2.01(1)5(j), Florida Administrative Code. An analysis of the regular gasoline revealed an End Point of 494 degrees F. This reading is above the 446 degrees F maximum allowable End Point as set forth in Rule Subsection 5F-2.01(1)(c)4, Florida Administrative Code. Finally, an examination of the diesel product revealed a Flash Point below 60 degrees F. This reading is below the 120 degrees F allowable Flash Point as set forth in Rule Subsection 5F-2.01(3)(b), Florida Administrative Code. The results of these analyses were made known to Respondent and he was afforded the option of either immediately halting the sale of the products or to post a cash bond in the amount of $1,000.00 for 5,900 gallons sold of the above- referred products in lieu of confiscation of the remaining 1,681 gallons of the products. (See Release Notice or Agreement dated November 12, 1981.) Respondent posted a bond in the amount of $1,000.00. In the Release Notice, Respondent was advised that all three (3) products were to be removed from its tanks and new products dropped. Respondent was also afforded the opportunity to remove the no-lead which could he sold as leaded regular with the remaining two (2) products to be used in Respondent's private equipment. Petitioner's inspector who works out of portable laboratory No. 3, Jamie Gillespie, removed the samples from Respondent's tanks and conducted the analyses of the products. Inspector Gillespie made Respondent aware of his findings and his decision to post a Stop Sale Notice of the subject products. Inspector Gillespie obtained the cash bond from Respondent. Use of the above-referred products may cause catalytic converters to become contaminated; restrict exhaust systems and release excessive pollutants in the atmosphere. Use of these products also may clog fuel filters and carburetors. The low Flash Point from the diesel product may cause an engine to "run away" and in some instances may blow the head assembly from a diesel engine. Additionally, use of diesel with such a low Flash Point may contaminate dry injector nozzles and shorten the life of a diesel engine. (Testimony of Gillespie and Morris, inspectors and chemists employed by Petitioner, who conducted analyses of the subject products.) As stated, Respondent did not appear at the hearing to contest or otherwise rebut the charges alleged by Petitioner.
Recommendation Based on the foregoing Findings of Fact, Conclusions of Law and the entire record compiled herein, it is RECOMMENDED: That a final order be entered finding the Respondent in violation of Rule Subsections 5F-2.01(1)5(j), 5F-2.01(1)(c)4, and 5F-2.01(3)(b), Florida Administrative Code, and thereby, Respondent should be subjected to the penalties set forth in Section 525.06, Florida Statutes (1980), and the $1,000.00 bond posted be estreated. RECOMMENDED this 16th day of April, 1982, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of April, 1982.
Findings Of Fact During a routine inspection on March 30, 1983, a sample diesel fuel taken from Respondent's place of business in Clearwater, Florida, was tested and was found to have a flash point of 660F. Normal flash point for diesel fuel is 1000F. A Stop Sale Notice was issued March 30, 1983, and sales from this tank were stopped. On March 31, 1983, Respondent posted a $1,000 bond in lieu of having the fuel confiscated. Before the Stop Sale Notice, 1,282 gallons of contaminated diesel fuel had been sold from this tank at a price of $1.099 per gallon.
The Issue The issues in these cases are (1) whether four tax warrants issued by Petitioner against Respondent, Frances Bowers, a/k/a Francis Bowers, d/b/a Shannon Oil Company and Shannon Service Stations, were properly issued; (2) whether two Notices of Freeze and two Notices of Intent to Levy on Respondent were properly issued; (3) whether the allegations of an Administrative Complaint entered March 1, 1995 by Petitioner against Respondent are correct; and (4) whether an Emergency Order of Suspension issued by Petitioner on or about March 3, 1995 was warranted.
Findings Of Fact At all times relevant to this proceeding, Respondent, Frances Bowers, a/k/a Francis Bowers, held a Special Fuel Dealers License #10-011382, a Motor Fuel Jobbers License #09-001450 and Retail Dealer License #’s 77- 000320 and 40-001175. The motor fuel and special fuel licenses were held at Highway 90 East, Caryville, Florida 32427. The retail dealer licenses were held at 1007 North Waukesh Street, Bonifay, Florida 32425 and Highway 279 South, Caryville, Florida 32427. Ms. Bowers operated under the business names of Shannon Oil Company or Shannon Service Station. Ms. Bowers has been engaged in the sale of fuel at various retail locations since 1986. She has engaged in the sale of special fuels (diesel) since May 10, 1985. She has operated as a motor fuel jobber (gasoline) since January 18, 1989. From April 1994 through December 1994, Ms. Bowers purchased special fuel from Murphy Oil Co. From May 1994 through July 1994, Ms. Bowers purchased special fuel from Beards Oil Co. For the period July 1993 through December 1994 Ms. Bowers delivered unsigned, no-remit tax returns to Petitioner, the Department of Revenue (hereinafter referred to as the “Department”). Those returns were delivered by Ms. Bowers to Kathy Jones, a Department Revenue Specialist, at the Department’s Marianna offices. Returns for some months were not remitted. Ms. Bowers subsequently returned to the Department’s Marianna offices and signed the no-remit returns she had filed in the presence of Ms. Jones. The no-remit returns filed by Ms. Bowers indicate that she owed taxes pursuant to Chapters 206, 212, Part II and 336, Florida Statutes. No part of the tax Ms. Bowers indicated was owed was remitted by Ms. Bowers to the Department. For months for which no return was filed, the Department estimated the amount of tax owed. The Department issued Notices of Assessment and Jeopardy Finding to Ms. Bowers in January 1995. These Notices informed Ms. Bowers of the Department’s intent to cause tax warrants for the outstanding taxes owed by Ms. Bowers to be filed with the Clerk of Court. Based upon the no-remit returns, the Department filed four tax warrants. The warrants were for total taxes of $218,801,56. Additionally, penalties, filing fees and interest was included in the tax warrants. The total amount for the four warrants, without the filing fees, was $187,167.18 attributable to Shannon Service Stations and $183,548.97 attributable to Shannon Oil Company. Included in the no-remit returns filed by Ms. Bowers were Special and Alternative Fuel Tax Returns. These returns indicated that Ms. Bowers had purchased “tax-paid” special fuel, meaning that she had paid the tax at the time she purchased the fuel. The tax was allegedly paid to Murphy Oil Co. or Beard’s Oil Co. Based upon the Special Fuel Tax Returns of Murphy Oil Co. and Beard’s Oil Co. no tax was paid by Ms. Bowers on purchases of special fuel purchased by Ms. Bowers. Copies of these returns were accepted into evidence without objection from Ms. Bowers. Ms. Bowers has admitted during her deposition testimony that she owes the outstanding taxes at issue in this proceeding. See Department’s exhibit 14. On or about February 28, 1995, the Department issued two Notices of Freeze and two Notices of Intent to Levy on Frances Bowers, a/k/a Francis Bowers, d/b/a Shannon Oil Company and Shannon Service Stations. Pursuant to the Notices, the Department notified Ms. Bowers that it intended to levy against her assets, consisting of deposits at the Bank of Bonifay, for outstanding taxes. The Department indicated that it was taking this action for nonpayment of taxes, penalty and interest in the sum of $183,548.97 attributable to Shannon Oil Company and in the sum of $187,267.18 attributable to Shannon Service Stations. On or about March 20, 1995, Ms. Bowers filed a Request for Administrative Hearing with the Department. Ms. Bowers contested the proposed levy and alleged that she had not failed to pay any taxes owed. On or about March 1, 1995, the Department issued an Administrative Complaint against Ms. Bowers. Pursuant to the Administrative Complaint, the Department informed Ms. Bowers that Special Fuel Dealers License #10-011382, Motor Fuel Jobbers License #09-001450 and Retail Dealer License #’s 77-000320 and 40-001175 were being revoked. This action was premised upon allegations that Ms. Bowers “failed to file or pay fuel taxes collected for the period of July, 1993 through December, 1994”. The Department also issued an Emergency Order of Suspension on or about March 3, 1995. Pursuant to this Order, the Department suspended the licenses held by Ms. Bowers which the Department sought to revoke in the Administrative Complaint. On or about March 22, 1995, Ms. Bowers sent a Petition for Administrative hearing to the Department in response tot he Administrative Complaint. Ms. Bowers disputed in the Petition whether she had failed to remit outstanding taxes or that she owed such taxes as alleged in the Administrative Complaint. All of the exhibits and the facts of this matter were stipulated to by Ms. Bowers. Ms. Bowers also stipulated to the revocation of her licenses, the emergency suspension order issued by the Department, the issuance of the tax warrants and the Notices of Freeze and Notices of Intent to Levy.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered upholding the Emergency Order of Suspension, the Department’s Administrative Complaint, the four tax warrants issued by the Department against Respondent and the Notices of Intent to Freeze and Notices of Intent to Levy. DONE and ORDERED this 25th day of February 1997, in Tallahassee, Florida. LARRY J. SARTIN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 25th day of February 1997. COPIES FURNISHED: Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 Linda Lettera General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399 Albert J. Wollermann John N. Upchurch Assistant Attorneys General Office of the Attorney General The Capitol - Tax Section Tallahassee, Florida 32399-1050 Owen N. Powell, Esquire Post Office Box 789 Bonifay, Florida 32425
