The Issue The issue to be resolved in this proceeding concerns whether certain lots of the Respondent's product called Benlate 50DF (Benlate) were adulterated or misbranded and, therefore, whether the Respondent has violated the provisions of Chapter 487, Florida Statutes, cited in the Administrative Complaint, by selling the product as a fungicide in Florida.
Findings Of Fact General Findings-Overview of Test Methods and Results The Petitioner is an agency of the State of Florida charged by the provisions of Chapter 487, Florida Statutes, with regulating the role and use of agricultural chemicals in Florida. That regulatory authority includes the power to regulate and enforce, with regard to the laws at issue in this case, concerning the labeling, branding and use of pesticides, including the fungicide known as Benlate. The Respondent is a corporation doing business in Florida engaged in the manufacture and sale of agricultural chemicals, including Benlate. Benlate is a product used by produce and ornamental plant growers in Florida as a fungicide. Due to complaints by agricultural and horticultural growers in Florida concerning purported injuries to plants caused by application of Benlate, the Department, between 1991 and early 1994, began testing the various lots of the Benlate product, referenced below, in its Pesticide Laboratory. It was attempting to determine if Benlate, or some constituent of the product, was causing injury to plants (phytotoxicity). In April, 1994, believing its laboratory results had been confirmed and showed contamination of the product, primarily with the herbicide, Londax, the original Administrative Complaint was filed. The procedural history delineated in the above Preliminary Statement then ensued. The cause went to hearing on the issues raised in the Amended Administrative Complaint. They are addressed and resolved herein. The Petitioner's Pesticide Laboratory used a new method of trace analysis to purportedly find the contaminants remaining at issue, Londax and DBU, in the relevant Benlate samples. By this new method, a Benlate sample went through a series of "clean up" or "separations" steps. Further analysis was then conducted by taking an extract that had been through the separations process. An extract means a remnant of the sample after extraction and separation in the laboratory's process and equipment. "Sample" refers to the original source material being analyzed or processed; in other words, material from the relevant lots and boxes of Benlate. The extracts were isolated and then "blown down" to a dry state. Extracts were then analyzed by Fourier Transform Infrared spectroscopy ("FTIR" or "IR"). FTIR was used as the Pesticide Laboratory's primary confirmation tool. However, the FTIR method used by the Department is not an established or reliable method. Among other reasons, several factors militate against its reliability. First is the lack of a properly-designed and executed quality assurance and quality control program (QA-QC), which would render the method reliable. The Department recognizes that the use of FTIR has not been extensively employed in the confirmation of low-level pesticides. Indeed, it recognized that this was not the best-established technique for such work when it sought confirmation of its purported findings by using Novamann Laboratories (Novamann), in Canada, to perform liquid chromatography, coupled to tandem mass spectrometry (LC/MS/MS) on Benlate extracts. During the discovery phase of this proceeding, when the Respondent raised the possibility that the purported findings were the result of laboratory contamination of extracts by the Pesticide Laboratory, the Department's laboratory brought actual Benlate samples (as opposed to extracts) to Novamann for analysis. Numerous attempts by Novamann to replicate the Department's findings failed. Simply stated, Novamann was able to detect Londax in the Department's extracts, that had been through the Department's Pesticide Laboratory equipment and process, however, Novamann was unable to detect Londax in any of the actual Benlate samples. This calls into question the Department's findings, based upon its extracts, purporting to show that Londax was present in the Benlate lots at issue. The discrepancy in results between extracts which went through the Department's laboratory equipment and process, and Novamann's failure to find Londax in the actual samples, evinces a strong possibility that laboratory contamination of the extracts with Londax explains the discrepancy. Evidence adduced by the Respondent raises the substantial likelihood that problems with laboratory contamination due to "carry-over", improper flushing techniques, and improper use of "process blanks" resulted in the discrepancy of Londax purportedly being detected in the Department's laboratory extracts, when Novamann could detect none in the actual samples. The Department suggested that the discrepancy in results stems from problems in transferring and adapting its method to the testing regime done at Novamann. This contention is rejected. It was undisputed that a method is "validated" when a successful "spike" occurs. That is, when a sample or extract of Benlate is purposely "spiked" with Londax and the appropriate Londax spectrum, corresponding with the amount spiked or inserted, results from testing, then one knows that a valid method of detecting Londax has been determined. Although the Department contends that Novamann had problems in working with the Department's testing methodology, to the contrary, Mark Mendonca, a scientist with Novamann performed "several" successful spike tests. He further stated that there was "no reason on God's green earth" that he could not find Londax in the Benlate samples, if it were truly present. He was unable to detect Londax in the actual Benlate samples tested at Novamann, independently of the Department's prepared extracts. Additionally, the Respondent showed that serious record-keeping errors led to unreliable data by the Department. For instance, spikes were mis- identified as samples. This is a significant error because, for example, sample "925", which was first purportedly confirmed as containing Londax, and engendered Dr. De Haseth's testimony in support of the Petitioner, was actually not a sample of Benlate taken from the boxes and lots in question but, rather, was erroneously recorded as such. It actually was a "spiked" sample, which the Pesticide Laboratory had intentionally spiked with Londax. This error led to a supposed finding of Londax in a Benlate sample, where actually the Pesticide Laboratory had intentionally spiked that sample with Londax. Even if the Petitioner had made valid findings of Londax, the Department presented no convincing evidence that the presence of Londax in Benlate at the purported levels would have had any injurious effect on plants grown in Florida. Dr. Bruce Hammock and Johanne Strahan performed testing of Benlate by the immunoassay method. This is a sensitive, highly-reliable, trace analysis method, with a detection limit of five parts per billion. Ms. Strahan's testing, indeed, reached levels more than 200 times smaller in detection limits than the Department's purported findings. Dr. Hammock is a widely-accepted expert in this method of trace analysis, and he verified Ms. Strahan's method and conclusions. The immunoassay testing thus performed by Ms. Strahan, and described in the testimony of Ms. Strahan and Dr. Hammock, ruled out the presence of Londax in every lot of Benlate at issue. The Department made four purported confirmed findings of DBU in samples 773, 771, 774 and 775. It is undisputed that DBU is a known breakdown product of Benomyl, the active ingredient in Benlate. It forms in varying degrees in boxes of Benlate depending upon the age of the product and the conditions under which it is stored. The existence of this breakdown product was disclosed by the Respondent when it registered Benomyl with the United States EPA. The relevant question becomes, therefore, whether the alleged findings of DBU in the Benlate would make it phytotoxic and whether a finding of DBU in excess of the level disclosed in the EPA registration, as being contained in Benlate at the point of sale, constitutes a violation of law. There is no showing of phytotoxicity caused by DBU levels in the Benlate samples. Concerning the level of DBU reported in the registration statement, the Respondent, by its federal registration of Benomyl, certified only that at the time of initial shipment, DBU levels in Benlate would not exceed 0.25 percent. There was no evidence presented that DBU levels at the time of shipment of any of the lots exceeded that figure. All of the samples were tested many years after the time of shipment. The lots in question were produced by the Respondent in the years 1987 through 1991. With the exception of sample 775, the DBU levels reported by the Department were very close to the levels that would have been expected at the time of shipment itself, despite the relatively long passage of time in the life of each sample, since shipment and before testing by the Department's laboratory. The level of DBU in sample 775, purportedly found by the Department, was somewhat higher than would have been expected at the time of shipment, but here again, there was no showing that the level was phytotoxic. Additionally, there was no showing that the level at the time sample 775 was shipped was higher than 0.25 percent. It is undisputed that DBU will increase in a box of Benlate over time, especially if the product is not properly stored. The Department was unaware of how sample 775 had been stored. It did not, in its chain of custody testimony and evidence, demonstrate how it was stored and how it had been handled before it came into the custody of the Department after shipment by the Respondent. It is only known that sample 775 was at least seven years old. Because DBU, as a breakdown product of Benlate, will increase in level of concentration over time, especially by exposure to moisture, it is inferred that the breakdown product had to have increased over the seven-year- period in question before testing. Further, although five other contaminants were alleged to be contained in the Benlate lots at issue, no evidence of their presence was adduced. Therefore it was not established that any Atrazine, Flusilazole, Simazine, Chlorothalonil or Aluminum was present in the Benlate lots involved in the proceeding. Findings Concerning Analytical Chemistry Testing for Londax and DBU The Department's Testing and Attempts to Confirm - Reasons for Unreliability. Ms. Wendy King was the chief analytical chemist involved in the Benlate testing program for the Department's Pesticide Laboratory. She is the environmental manager of the formulation and confirmation unit of the Pesticide Laboratory. Ms. King testified that her laboratory detected Londax in several samples and DBU in four samples, as referenced above. Her testimony is unpersuasive for a number of reasons. Ms. King was unaware of all of the details of the data she was presenting. Ms. King and all of the witnesses agreed that a properly-designed and executed QA-QC is a prerequisite to valid laboratory findings. Her laboratory's QA-QC was not adequate, however. Ms. King used only one specific example of data in her direct testimony, concerning the analysis of sample 773. She opined that all proper QA-QC steps had been performed on that sample, but when asked, upon cross-examination, to identify the data that showed that, she took approximately three hours to search for the relevant documents, with the assistance of several laboratory employees. After the search, she was forced to concede that she had been wrong and that critical QA-QC steps had not been performed on sample 773. This reveals a lack of knowledge by Ms. King regarding critical data, especially since sample 773 had been the one explicitly selected by Ms. King to illustrate her laboratory procedures and findings. It is undisputed that QA-QC procedures are critical to data's reliability. Ms. King described the testing process as involving, for every sample, a "process blank" being run through the entire laboratory test procedure in exactly the same manner as a sample. A process blank includes everything to be run through the procedure, except the sample material itself. Process blanks are used to detect "carry-over" or other laboratory contamination which may occur anywhere in the process. "Carry-over" or "laboratory contamination" means adulteration of the sample that occurs somewhere during the testing procedure. To be valid, a process blank must be treated exactly the same as a sample and must be run on the same chromatographic column as the sample. Cross-examination of Ms. King, as well as other testimony, shows that the process blanks run by her laboratory did not conform to this standard. In fact, because she had not reviewed the data, she could not rule out that such errors or omissions, as are attributable to the testing of sample 773, did not occur for the other samples tested. The search for QA-QC data for sample 773, during a recess of Ms. King's testimony, revealed hitherto undisclosed QA-QC data for the "gel permeation chromatography" (GPC) part of the analysis. This data included a summary chart and sequence file kept by Jin Qian, the person who conducted the GPC testing in the Pesticide Laboratory. This data had not previously been produced to the Respondent in discovery. Accordingly, the Respondent was given leave to depose Ms. Qian, during a recess in the hearing called for the following day. The chart prepared by Ms. Qian revealed deficiencies in QA-QC relating to the GPC part of the analysis. This revealed in effect, proper process blanks that were run in improper order and acetonitrile (ACN) washes that were not run before the running of samples in the testing process. These lapses in QA-QC compromise the credibility of the purported findings of Londax by the Pesticide Lab. Dr. Jody Johnson, an expert chemist retained by the Department for testing and investigation before and after the filing of the complaint, authored a memorandum describing the proper procedures for running of process blanks. Ms. King was in agreement with the procedure outlined in that memorandum and even forwarded it to Novamann over her signature. The actual procedures carried out by the Department's Pesticide Laboratory, however, reveal that those procedures or processes were not adhered to, as shown by the chart prepared by Ms. Qian. There were other deficiencies in QA-QC. During months of testing prior to February 16, 1994, in fact, the Pesticide Lab did not perform solvent rinsing and checks of its glassware, which is a standard, generally-accepted, and required procedure in proper trace analysis. This meant that the samples prepared or run prior to February 16, 1994 did not conform to the Department's own protocols or standards, thus, calling into serious question any data related to that period of time of testing of the Benlate samples. Once the laboratory did start to perform such solvent rinses and glassware checks, designed to reveal contamination in its process, it was discovered that there was glassware contaminated with Londax. Moreover, Mr. Mendonca's testimony, concerning his testing at Novamann, revealed a serious possibility for carry-over and other laboratory contamination when he was unable to find Londax in any of the actual samples tested, even though Londax was present in the extracts of Benlate prepared by the Department's Pesticide Laboratory and furnished to Novamann. Concerning confirmation techniques for low-level pesticides, Ms. King established that FTIR was the primary confirmation tool used by her Pesticide Laboratory for Londax and that LC/MS/MS was a secondary confirmational technique. By her own acknowledgment, however, FTIR is not a generally-accepted technique for low-level pesticide analysis. Further, she was not aware of any published data for the analysis for sulfonyl ureas (SU's) (Londax) by the FTIR method, although she was aware of analysis for SU's by the LC/MS method. In tacit recognition that FTIR is not a generally-accepted method for the confirmation of low-level pesticides, the Department sought confirmation of its findings by mass spectrometry from Dr. Jody Johnson, its retained expert witness, as well as by Novamann. It was not until after the Department received purported confirmatory findings from both Dr. Johnson and Novamann that this action was filed. Before the complaint was filed, Dr. Johnson and Novamann had only tested Benlate extracts and not actual samples of Benlate, as formulated by the Respondent. Dr. Johnson and Novamann's testing was done only on sample 925. In fact, however, proper QA/QC procedures were not followed in preparing the extracts of sample 925 that were sent to Dr. Johnson and Novamann. There was unrebutted evidence that the test runs that were purported to be of sample 925 were actually runs of "spiked samples" in which Londax was intentionally added as part of the testing procedure. This critical lapse in QA/QC for the only sample, sample 925, that both Dr. Johnson and Novamann tested before the filing of the complaint, calls into question the findings that resulted in the filing of the complaint. When Novamann analyzed formulated Benlate product from start to finish at its own laboratory in August and September of 1994, it was unable to detect Londax in any of the samples. This discrepancy indicates that the prior findings of Londax in the sample extracts prepared by the Department's laboratory were the result of laboratory contamination. Ms. King asserted that the reason that Novamann could not replicate the Pesticide Laboratory results in samples was that Novamann had not successfully transferred the Department laboratory's method to use in its laboratory and that this was evidenced by Novamann's purported failure to obtain successful "spikes". Mr. Mendonca of Novamann, however, established that he had performed several successful spikes. If Novamann could detect Londax in the spikes, it could detect it in the samples, if it was present. Novamann's inability to detect Londax in any formulated Benlate samples themselves strongly suggests that any prior purported "confirmation" of the Department's findings of Londax in Benlate extracts was the result of laboratory contamination. Ms. King also claimed to have confirmed findings of DBU in four samples of Benlate. She, however, was unaware of how DBU is formed in Benlate. Because she was unaware how it is formed, she could not say whether her own sample preparation analysis had an effect on the levels of DBU in the samples being analyzed. The purported levels of DBU supposedly detected were not reliable for this reason, as well as for the reason that Ms. King had no definitive knowledge regarding the storage, the chain of custody of the samples, nor the history of the samples since they were shipped from the Respondent's manufacturing facility, some of which occurred as long as seven years prior to testing. Dr. James De Haseth, Ph D., is a professor of chemistry at the University of Georgia. He was retained by the Department to review its FTIR data and was accepted as an expert witness in this case. His qualifications and credentials are reflected in the evidentiary record. He is nationally recognized in the field of analytical FTIR and methods development. He opined that, based upon his review of the FTIR spectra performed by the Department's laboratory, for sample extracts 773, 926, 929, 1066 and 1083, that those sample extracts did contain Londax. Dr. De Haseth's review of the data was confined to the FTIR step, the final step in the process. He based his opinion solely on his review of the FTIR data on the extracts provided him that had been through the department laboratory's entire process. However, his review of FTIR spectra from the Department's laboratory was incomplete. Moreover, he did not review data from the earlier steps in the procedure, including the GPC stage, which was shown to be a source of laboratory contamination. He did not review the laboratory notebooks or depositions of the Pesticide Laboratory personnel. Therefore, by failing to review this data, he was unaware of any problems in the testing and procedure at the laboratory. He was unaware of record-keeping errors. He assumed that the FTIR data that he reviewed had been properly labeled. The FTIR spectra that he reviewed contained a legend that was supposed to identify what the spectrum represented, e.g., whether it was a spectrum of a spike, a "Londax standard", or a sample. He conceded that the legend had to be reliable for his opinion to be accurate. He also conceded that a mistake made, whereby a spike was mis-identified on the legend as a sample, would be a serious error. This is obviously true since Londax was intentionally put in the "spikes" in the department's process and any mis-identification of a spike as an actual Benlate sample would lead to a false positive finding as to that Benlate sample. The information contained in the spectra legends was not reliable. The very mistake Dr. De Haseth conceded would be a serious error in fact occurred. A spectrum of a spike was mis-identified as that of a sample. Dr. De Haseth was shown a spectrum that purported to be of sample 925, according to the legend noted in the laboratory records made available to Dr. De Haseth. The underlying IR notebook pages for that spectrum, however, showed that the spectrum was actually that of a spike of sample 4511. This calls into question the reliability of Dr. De Haseth's opinion and shows the harm from his failure to review the underlying data. Sample 925 was the sample upon which he based his opinion. Even Dr. De Haseth recognized the gravity of this issue. He admitted that in light of this mis-identification, he would want to go back and review all of the spectra to insure that his opinion was correct. He was never produced later in the Department's case, or in rebuttal, to explain the results of any re-review, if he did one, nor was any supplemental report of Dr. De Haseth submitted in evidence. This situation is rendered more significant in light of the fact that sample 925 was the "early data" in which Dr. De Haseth found the characteristic bands of Londax. Later spectra in which Dr. De Haseth purports to identify Londax do not, by his own admission, match up with the characteristic spectra bands for Londax. Dr. De Haseth speculated that the reason that the spectra that he had identified as containing Londax did not match up with the characteristic bands was that a chemical change called "cleavage" was occurring. This speculation that Londax in the Benlate samples undergoes a chemical change, such that its spectra no longer matches up with that of the standard reference spectra for Londax, is not persuasive. Dr. De Haseth agrees that IR spectra are unique, and one would expect to see bands in the sample which match up closely with those of the Londax standard. This is what happened with the mis- identified spectra of sample 925, the spectra which was actually that of a spike, in which Londax had been purposely added to the matrix. The other spectra in which Dr. De Haseth claims to see Londax simply do not match up with the characteristic bands of Londax, as identified by Dr. De Haseth in his report. Moreover, he had never previously asserted, in either of his two depositions or in his initial report, that cleavage was responsible for the band shift. Further, he had not identified any particular change, if any, that was occurring, as he had not performed the necessary studies because he was not provided with the necessary materials by the Department. Dr. De Haseth was unaware of any process blanks that were contaminated with Londax, other than that tested on February 16, 1994. If other problems existed, such data had not been shown to him by the Department. However, analysis of the testimony of Dr. Chase, Mr. Mendonca, and Ms. King reveals that there were problems with laboratory contamination after February 16, 1994. Dr. De Haseth was also unaware of problems with laboratory contamination caused by carry-over in the GPC testing and improper procedures. Because he had not reviewed the underlying data, Dr. De Haseth was unaware of deviations from proper procedures pertaining to process blanks. It is also significant that there were FTIR spectra of process blanks and other spectra relevant to QA/QC that Dr. De Haseth simply had not reviewed. During his cross-examination, he was shown Exhibit 93, a spectrum of a process blank created on July 27, 1994. He admitted that he had not reviewed the spectra because he had not been given the data by the Department, nor had he been provided with any data created after July 25, 1994. He needed to examine the data relating to process blanks in reaching his opinion concerning whether a particular sample contains Londax. Even though substantial work was performed by the Department after July 25, 1994, Dr. De Haseth was never shown any of that data. In essence, he had no opinion as to any data generated after that date, even though the Department was permitted to rely upon testing through September 16, 1994, by the Hearing Officer's order. Dr. De Haseth also relied on the fact that sample 4511 had tested negative for Londax, as evidence that there was no laboratory contamination at the Pesticide Laboratory. However, because he had not reviewed the data, he was unaware that extracts of sample 4511 were never analyzed at Novamann by LC/MS/MS for verification. Accordingly, the opinion of Dr. De Haseth can be accorded little weight because he had reviewed data only from the final step in the process; because he made critical, and erroneous, assumptions about the earlier steps and about the QA/QC program; and he did not review any data after July 25, 1994. Dr. Jody Johnson, Ph D., is a graduate of the University of Florida and, at times pertinent, was a research scientist with the university. He was qualified as an expert witness in analytical chemistry and mass spectrometry. His qualifications, credentials and professional experience are contained in his testimony and documentary evidence. He was retained by the Department to perform mass spectrometry analysis on extracts of sample 925, prepared at the Pesticide Laboratory. After performing mass spectrometry analysis on the extracts of sample 925, Dr. Johnson opined that they tested positive for Londax. Dr. Johnson only performed one analysis on the extracts of sample 925, which had been through the entire procedure at the Pesticide Laboratory. He did not perform any of the extraction or sample preparation steps. Moreover, he did not review any of the underlying data pertaining to the extracts that he analyzed. The failure to review the underlying data meant that he was unaware of critical QA/QC lapses. He conceded that laboratory contamination by "carry-over" is a serious issue in trace analysis chemistry and that proper "process blanks" are critical to eliminate the consideration of carry-over contamination. Dr. Johnson conceded that if one does not run process blanks appropriately, then results will not be meaningful. Dr. Johnson agreed that a process blank needs to be run through the entire procedure in the same way as the actual sample, including being run on the same chromatographic column. Dr. Johnson conceded the importance of this identical treatment of process blanks and samples because, in trace analysis, everything must be done in exactly the same way. Dr. Johnson, however, had not reviewed the underlying data concerning the Pesticide Laboratory's process blanks. This is significant because, with respect to the very sample on which Dr. Johnson rendered his opinion, the process blanks were not run properly. Although Dr. Johnson acknowledged the general importance of QA/QC, he had not reviewed the data relevant to those issues and thus was unaware of deficiencies in the Department's work. The underlying data demonstrated, for example, that for sample extracts of sample 925, the process blanks were not treated the same way as the sample. This fact invalidated Dr. Johnson's opinion with respect to sample 925, the only sample he analyzed for the Pesticide Laboratory. He was also unaware that the Department had not followed his advice on QA/QC issues. In a memorandum that he sent to Ms. King, he set forth what he considered to be the necessary order in which to conduct experiments. This order required running a process blank before each sample. The Pesticide Laboratory did not follow the procedure set forth in that memorandum. He conceded that the underlying data he was shown at hearing caused him to have questions about the QA/QC procedures relating to the vials of material sent to him for analysis. Dr. Johnson was not re-called to explain if his questions had been or could be resolved, nor was any other rebuttal offered to the facts established by the Respondent on cross- examination (see pages 892-935 and 938-945 of the transcript). On behalf of the Respondent, Dr. Bruce Chase addressed the validity of the Department's testing method for detection of Londax in response to the Department's position that it had detected Londax in Benlate. His professional education, experience and qualifications are set forth in the evidentiary record. His primary research focus is vibrational spectroscopy, which includes the FTIR method. Dr. Chase co-invented the Fourier Transform Application to Raman Spectroscopy in 1980. He customarily evaluates analytical chemistry methods, including all those having a bearing on this case. He has received the highest national and international recognitions for his work in analytical chemistry, as reflected in more detail in the evidence. He was accepted as an expert in the field of analytical and physical chemistry. His testimony shows an in-depth review and command of the relevant data and a convincingly detailed, logical, presentation on direct and cross-examination. These considerations, as well as the fact that Drs De Haseth and Johnson did not have access to the data underlying the infrared spectra or pertaining to the extracts and process blanks, and because of problems conceded by Drs. De Haseth and Johnson concerning their ability to review data and their review of inaccurate record- keeping concerning sample testing, renders his testimony more credible and persuasive than that of Dr. De Haseth, Dr. Johnson, and Ms. King. Dr. Chase reviewed the laboratory notebooks of the Pesticide Laboratory personnel, the gel permeation chromatography (GPC) data, the liquid chromatography data, mass spectrometry data, IR data, as well as the Pesticide Laboratory's proposed publication of its method. He also reviewed a substantial body of deposition testimony from the Department's witnesses. This level of review was not done by the Department's witnesses, Drs. De Haseth and Johnson. Dr. Chase is unaware of FTIR ever being used for low-level pesticide trace analysis of the type at issue in this case, although it was the method employed by the Pesticide Laboratory. He would not choose FTIR to search for Londax in Benlate because it is not an established method for trace analysis and other methods exist that are more sensitive. These methods include immunoassay or "ELISA", as well as mass spectroscopy. The Respondent concedes that FTIR has not been used extensively in the confirmation of low-level pesticides. It has been demonstrated that FTIR, used in the manner employed by the Department, is not an established method, accepted in the scientific community, for trace analysis of potential contaminants in pesticides. Dr. Chase established that inadequate QA/QC can render it impossible to determine whether Londax, or any other analyte being investigated, if detected in the final analysis, came from the original sample or was introduced at some point in the procedure, such as through laboratory contamination. Each step in an analytical procedure is a potential source of interferences or contamination. One potential source of contamination was the three different stages in the Pesticide Laboratory's method, where the sample was blown down and a new liquid added to it. The GPC step, with the GPC column, was extremely subject to contamination or carry-over. Dr. Chase established that FTIR, as used by the Department, was not an adequate QA/QC method because the FTIR step had too much variability in it and no established limit of detection. Neither Ms. King nor Ms. Qian, the only two people who performed GPC analyses, had any prior training or experience with GPC. Poor laboratory practices can lead to laboratory contamination. The laboratory practices of the Pesticide Laboratory were not adequate for the trace analysis being performed. It is inappropriate laboratory practice to handle samples and spiked samples within one or two feet of each other on the same laboratory bench top; however, the Pesticide Laboratory handled samples and Londax-spiked samples in this manner. The failure to institute glassware checks until February of 1994 is a poor laboratory practice. Several of the Pesticide Laboratory samples, including sample 771, 774 and 775 were prepared prior to the institution of glassware checks. The laboratory method and procedures, and any data generated from these samples has an inherent aspect of unreliability for this reason alone. Inadequate record-keeping can result in mis-identification of samples and other serious deficiencies. Dr. de Haseth based his entire opinion on the legends on the FTIR spectra records he analyzed. The legends purported to show whether the FTIR spectra he was examining was, for example, a spike or a sample. Thus, the record-keeping leading up to the FTIR legend entry was critically important to the reliability of the data investigated by Dr. De Haseth and, therefore, to his ultimate opinion. It was established by Dr. Chase that the Pesticide Laboratory's record-keeping was deficient and unreliable. For example, Respondent's Exhibit 135 in evidence contains what purports to be an FTIR spectrum of sample 925. The records underlying it reveal, however, that it is not a spectrum of sample 925. When the spectrum for sample 925 is traced back through the FTIR notebook to the HPLC notebook, it is identified instead as a spike of sample 4511. If one were simply looking at the FTIR spectrum to evaluate the data, one would come to the incorrect conclusion that the sample contained Londax. Dr. De Haseth made that error because he did not see all of the records related to the spectrum he was analyzing. He therefore could not detect the error in record- keeping so that he could have known that the spectrum which he was examining, which he believed showed the sample contained Londax, was really that of a spike which had been intentionally injected with Londax when its spectrum was generated. Respondent's Exhibit 179 contains data for sample 1083 showing that what purported to be a sample contaminated with Londax was actually a spike or a spike and a sample combined. This is an error of obvious significance as explained by Dr. Chase. Some of the record-keeping errors found by Dr. Chase are depicted at pages 2231 through 2238 of the transcript of this proceeding and are not inclusive of all record-keeping errors he was able to identify. These errors, alone, show the unreliability of the Pesticide Laboratory's work product. The demonstration of such errors was unrebutted. An important element in the material tracking aspect of quality assurance is "recovery" of the analyte in question. If Londax is introduced at the beginning of a testing process by way of a spike, recovery refers to the ability to detect that inserted Londax at the conclusion of the process. The only stated recovery rate for the Pesticide Laboratory's method is between 30-40 percent. A 30-40 percent recovery indicates twice as much Londax was being lost in the analysis than was making it all the way through the process. In trace analysis, it is crucial to determine at what stage Londax is lost, because one has to know what steps to take to insure that successive analyses are not affected or contaminated by it. The Department did not make that determination and its low recovery rate increased the risk for laboratory contamination, because Londax was being lost somewhere in the process. There is insufficient explanation of where or how Londax was being lost in the testing process. The order in which a laboratory runs different types of material through its process, e.g., samples, matrix, spike, process blanks, and process blank spikes is a crucial quality control issue. The order of "runs" suggested by the Department's witness, Dr. Johnson, was as follows: (1) solvent blank, (2) process blank, (3) spiked process blank, (4) solvent blank, (5) Benlate extract, and (6) spiked Benlate extract. (Respondent's Exhibit 154 in evidence contains the relevant definitions.) The Pesticide Laboratory, however, did not follow the order of runs suggested by Dr. Johnson. Dr. Chase advocated a strict approach whereby the process blank should be immediately run before the sample itself. The Pesticide Laboratory's documents show that it considered this order to be appropriate but did not follow it. In particular, the summary table created by Mr. Qian for Ms. King recorded numerous instances when process blanks were not run immediately before the samples. In only three Benlate sample runs did a process blank immediately precede the sample run. In two of those runs, because no IR spectra were generated, it was not possible to tell if the process blanks were clean or contaminated. The IR data for the third Benlate sample run, sample 1083, did not show the presence of Londax in the 1083 process blank. Dr. Chase and Dr. De Haseth agreed on this point. Dr. De Haseth did not look beyond the IR data concerning this run when making conclusions about QA/QC issues. Dr. Chase looked at the underlying data, however, and when he reviewed the mass spectrometry data generated at Novamann for the process blank associated with sample 1083, it revealed the process blank to be contaminated by Londax. A contaminated process blank means that Londax was introduced in the process. Then, if Londax is claimed to be in the Benlate extracts, any such finding is unreliable because the process blank, carried through the same procedure, also showed Londax. This fact shows again that the FTIR is an inadequate QA/QC method. It also shows that the deficiencies established by Dr. Chase did result in error, because when process blanks were run more appropriately, they revealed contamination. Thus, it was shown that the QA/QC for the Benlate samples analyzed by the Pesticide Laboratory, without a process blank being run immediately prior to them, was invalid. This applies to every sample, except 1083, and as discussed above, the process blank for that sample showed laboratory contamination. The absence of valid QA/QC in itself is sufficient to invalidate the data generated for these samples. An additional requirement of a valid process blank is that it be treated exactly the same as the sample itself, including running it on the same chromatographic column as is the sample. There is no dispute between the parties on this important point. Even so, the Pesticide Laboratory's own data shows that process blanks and samples were run on different columns and, at times, not at all. From March 29, 1994 to July 18, 1994, the GPC column being used was column 20. During this time period, samples were run on column 20, but no process blanks were run. The absence of any blanks during this period renders the QA/QC of the Pesticide Laboratory invalid. It also conflicts with Ms. King's testimony to the effect that process blanks had been properly run. That testimony is rejected. Ms. King agreed that process blanks should be run on the same column as samples. However, process blanks and samples were run on separate GPC columns. Further, on July 18, 1994, column 20 was removed and column 23 installed. Changing a column this way is a substantial task. Column 23 is a different column than the column on which the samples were run. With column 23 in place, a series of process blanks were run, but no samples. Then, on July 25, 1994, column 23 was removed, and column 20 was put back on the instrument. Standards and a simulated process blank were run on that column. Thereafter, on July 27, 1994, an additional column change occurred. Column 20 was replaced with column 22. Some standards were run followed by a process blank and a sample. The process blank and sample run on column 22 were one of the three instances identified on the Qian chart where a process blank had actually preceded the sample. It was this sample 1083, whose process blank, when taken to Novamann for analysis, showed Londax contamination, thus invalidating the data. Another requirement of a valid process blank is that it should be collected the same number of times as the sample. In other words, the number of injections made on the GPC column for a sample and a process blank should not vary. There was such a variance, however, and this rendered the process blanks inadequate. The numerous deficiencies in the process blanks mean that the data generated is not reliable. The Pesticide Laboratory also ran solvent blanks, which are a portion of solvent (Acetonitrile or ACN) which is passed through a column. These "ACN washes" pass through just the GPC column and show nothing about steps taken earlier in the process or what may be going on with the LC portion that follows the GPC column portion of the test. ACN washes were not always run before samples or between spikes and samples obviously creating the condition for the samples to become contaminated in the laboratory, rendering invalid results. Data from ACN washes on the GPC column reveal that the GPC column was not functioning properly in the laboratory method used by Petitioner. The Department, however, attempted to take ACN washes from the GPC to the FTIR as a QA/QC step. As explained by Dr. Chase, this was inadequate QA/QC because of the variability in the FTIR and the lack of any established detection limit. Moreover, it is significant that no ACN washes were taken to Novamann for analysis by the more sensitive mass spectrometry. It is not known from this record why this QA/QC step was not performed. "Carry-over" occurs when an analyte has been retained in the testing process apparatus (GPC column), through incomplete recovery, so that it can appear in successive analytical steps. If Londax is trapped on the GPC column, for instance from prior runs of spikes or standards of Londax, it then becomes available to potentially contaminate the next sample that is run through the column. Dr. Chase established that carry-over did take place on the GPC column in the Department's laboratory. This is shown by the fact that carry-over appeared in ACN washes run on the GPC column. Not only did the ACN washes indicate the continued presence of Londax on the column prior to sample runs, but often no ACN washes were even run prior to samples and sometimes were not run before process blanks either. Carry-over also is a problem when columns are changed or switched. GPC columns vary with respect to their capacity to trap and release the analyte in question, Londax. If a different column, with a different potential for carry-over, is then employed for running process blanks, which show up clean of Londax, those process blanks indicate nothing about whether or not the samples were contaminated on the column on which they were run. Additionally, surfactants, such as Siponate, which are found in the Benlate product matrix, can also affect the potential for carry-over showing up in the test results of the samples or the extracts. Surfactants can help free or release materials, including Londax, which may be bound or stuck on a column. Because the column on which samples were run experienced more surfactants running through it, then the effect of carry-over would be enhanced. The establishment by Dr. Chase of the fact of carry-over occurring in the Department's testing process and its effect of rendering unreliable the Department's test results, as described in the above Findings of Fact, is delineated in detail at page 2278 of the transcript, continuing through page 2295. That explanation is accepted as more credible and persuasive than that adduced by the Department. Dr. Chase described in detail the fundamentals of IR and FTIR. The infrared spectrum generated for a given compound is unique for that compound. He explained that the proper way to determine whether Londax is present in a sample is to do a comparison of the Londax standard spectrum with the spectrum of the sample. Dr. De Haseth, however, compared the sample to Londax spikes. Dr. Chase explained in detail why the Pesticide Laboratory's method involving the comparison of a sample to a spike would be invalid; because the intensity varies depending on where on the spot on the test plate the infrared microscope views the relevant material, which is not homogeneous. Dr. Chase's explanation illustrates why the comparison of samples to spikes is invalid. This explanation appearing on pages 2308 and 2309, as well as that appearing on pages 2310-2313 establishes the invalidity of Dr. De Haseth's method of comparing a sample to a spiked sample. It is accepted. It is more persuasive and credible than the testimony of Dr. De Haseth. Dr. Chase also reviewed the work of Novamann. Novamann did not find Londax in any Benlate samples analyzed by them. The disparity between the Department's claim that Novamann confirmed the presence of Londax in extracts of Benlate and Dr. Chase's testimony that no Londax was found in the Benlate samples is consistent with his opinion that where Londax was present in extracts, it was the result of laboratory contamination. Novamann's sensitive mass spectrometry method was able to detect evidence of laboratory contamination when the Pesticide Laboratory's FTIR method could not. For example, both the process blanks and sample run for sample 1083 were negative for Londax after the IR stage, but when those extracts were taken to Novamann for analysis by the more sensitive mass spectrometry method, they were both found positive for Londax. As explained and found above (and in the testimony of Dr. Chase), a contaminated process blank results in data for the extract itself being unreliable. Dr. Chase thus concluded that Londax was not present in the lots of Benlate at issue in this case for a number of reasons. No sample had QA/QC that was adequate or appropriate. Some of the samples, for example, such as 771, 774 and 775 were run at a period of time when there were no glassware checks, no established method, and no quality control. Sample 771 was run through the GPC column immediately after a spike was run, with no ACN flushes and no process blanks in between, which even Ms. King agrees would be the appropriate method and steps. In the case of samples 926, 929, and 1066, the IR spectra for these samples did not match the standard spectrum of Londax. Only one sample at issue, 1083, had a process blank run immediately prior to the sample, which Ms. King agreed in her testimony was the appropriate method and step to use. Even that process blank was otherwise less than optimum, as shown by Dr. Chase's testimony on pages 2324 and 2325 of the transcript. It also turned out to be contaminated with Londax. The absence of adequate QA/QC in the Department's laboratory testing effort was sufficient to render its data unreliable. In explaining why Dr. De Haseth might have come to a different conclusion than he did, Dr. Chase explained that Dr. De Haseth was working from simply the infrared spectra. He did not go into the underlying data so was unaware of mis-labeled samples on the "title lines". He was unaware of the record-keeping problem; unaware, according to his deposition, of the work that had been done at Novamann, which resulted in no finding of Londax. He was simply lacking adequate information. Another limitation on Dr. De Haseth's effort was his lack of consultation with other scientists. Dr. Chase extensively discussed his work with other scientists, in order to validate his opinions and to extract more information about the processes. Another limitation on Dr. De Haseth was that he was operating under a time constraint. Several times in his deposition, he stated that he did not have sufficient time to go into certain matters. Dr. De Haseth did not have access to all of the information he needed to make a valid judgment. (See pages 2325 and 2326 of the transcript, which testimony is accepted). Independent Testing by Novamann Laboratories: Department Extracts Versus Novamann Prepared Samples - No Londax Confirmation Mark Mendonca of Novamann was listed as an expert witness for the Department but was not called by the Department in its case. Instead, the Respondent presented him in its case-in-chief, through his deposition. He supported the Respondent's position that the Petitioner's method was not valid for finding Londax in Benlate nor were its results. Novamann conducted three distinct series of analyses for the Department. First, it analyzed Benlate extracts of sample 925 in April of 1994 and concluded that Londax was present in those extracts. Next, it analyzed additional extracts of Benlate in August of 1994 and concluded that Benlate was present in those extracts, as well. Finally, however, Novamann attempted to duplicate the Department's method and results by analyzing actual Benlate samples from start to finish in its laboratory during August and September of 1994 in an effort to rebut the contention of the Respondent that the purported findings by the Department in reality resulted from laboratory contamination. In this testing of actual samples in its own laboratory, Novamann tested sample 925 and other samples numerous times and detected no Londax in any sample it tested. These results on actual samples, which, contrary to the extracts prepared by the Department's laboratory, were entirely processed at Novamann, on its equipment and by its scientists, supports the Respondent's position that the results obtained at Novamann on Department-prepared extracts were due to laboratory contamination. The Department contended that the discrepancy in results stems from a problem in method transference of the Department's method to Novamann. This contention is rejected. The critical aspect in determining whether a method has been validated is the ability to spike the material of interest into the matrix being analyzed and to successfully detect that Londax spike. It is undisputed that a successful spike shows method validation. Novamann, in fact, had several successful spikes of Benlate samples that had been prepared at Novamann. Thus, if Londax were present in the Benlate samples, worked up and prepared at Novamann from beginning to end, Mr. Mendonca knew of no reason why he should not have been able to find it, because there was nothing inherent in Novamann's equipment, process, or the competence of its scientists, which would prevent it from detecting the presence of Londax in Benlate samples which it prepared and analyzed from start to finish, if it had been there. The quality control methods and ways of handling materials at Novamann differed from the ways in which the Department performed its analyses. In particular, unlike the Department, Novamann had separate work areas for handling Londax that were reasonably far removed from the areas where Benlate samples were handled. Further, Mr. Mendonca also recognized that process blanks "should be run exactly as the sample." As shown by the above findings, there were significant differences between the handling of samples and process blanks by the Department. Mr. Mendonca also acknowledged the impropriety of not running glassware checks for such low-level trace analysis work. If glassware was not routinely washed and checked, it would be very hard to depend on results of data generated using that glassware. He explained the steps Novamann took to insure that the GPC columns it used were completely clean of any carry-over or "memory effect" of Londax. Depending on the column being used, carry-over detection in the GPC varied from as few as three or four runs to as many as over 25 injections of solvent that were needed to clean the columns sufficiently. All of this contrasted with the Department's work and thus shows that the discrepancy in results between Novamann and the Pesticide Laboratory is the result of laboratory contamination of the process and results performed and obtained at the Pesticide Laboratory. Dr. Robert Hannah Corroborates Dr. Chase's Finding of No Londax Contamination Dr. Robert Hannah also critiqued the Department's analytical chemistry methodology and data. He has over 40 years of experience in chemistry, analytical chemistry, and molecular spectroscopy. He was tendered by the Respondent and accepted as an expert in the field of analytical chemistry with particular emphasis in infrared spectroscopy. Dr. Hannah engaged in extensive review of all of the data made available to the Respondent by the Department, respecting the Pesticide Laboratory's search for Londax in Benlate. He spent approximately 380 hours reviewing the data. He agreed with the opinions of Dr. Chase, as outlined in Respondent's Exhibit 156 in evidence. In particular, Dr. Hannah found the Department's FTIR method to be unreliable for detecting the presence of Londax, and he disagreed with the interpretations that Dr. De Haseth made respecting the Department's data. His opinions about the Department's methodology and data were not addressed upon cross-examination. They are accepted. Dupont Testing Dr. Bruce Hammock is a professor at the University of California at Davis. He is a nationally and internationally recognized leader in the field of immuno-technology. He was tendered by the Respondent, and accepted without objection, as an expert in the field of immuno-technology methods of chemical analysis of pesticides and agricultural chemicals. Dr. Hammock described in detail the Enzyme-Linked Immunosorbent Assay (ELISA) methodology used by Johanne Strahan to analyze for the presence of sulfonyl urea herbicides in Benlate. He described in great detail Ms. Strahan's ELISA method by his testimony appearing at pages 2464-2484 of the transcript of this proceeding, which is adopted in these Findings of Fact by reference. The ELISA method involves analysis of an antibody reaction to an antigen; in this case, the Londax molecule. That reaction is expressed in a color, which is measured by a "microtiter plate reader" (MPR). The color generates a numerical reading, through use of a computer, called the "optical density." The darker the yellow color thus produced, the higher the optical density number. A dark yellow and, therefore, high optical density, means that there has been a low response by the antibody and thus that no Londax is present. Some yellow color and a low-optical density means that there has been some response, and Londax may be or may not be present. According to Dr. Hammock, there is always some response of some type due to the matrix used. However, this does not mean that Londax is necessarily present. Any interference in the operation of the assay test will result in less yellow color which, if sufficiently pronounced, would be interpreted as absence of color and thus a false positive for the presence of Londax. Indeed, one of the virtues of the ElISA method is that the only risk factor for error is that a false positive might be produced, not a false negative. Dr. Hammock's testimony, along with that of Ms. Strahan, establishes that the ELISA method is a valid method for trace-level analysis of SU's, including Londax, in Benlate, with the capability of ruling out the presence of such molecules down to a level of five parts per billion detection limit. Dr. Hammock reviewed the ELISA data respecting the lots at issue in this case and found that no Londax could be detected in any of the lots at issue. As a part of his review method, he relied upon the assistance of one of his former Ph.D. students, Qing Li, who reviewed the entire body of data comprising Ms. Strahan's 1,313 lot study. Ms. Li reported back to Dr. Hammock, and they both concluded that there was no indication of Londax in the data from the 1,313 lot study. Dr. Hammock saw no ELISA data which suggested the presence of Londax even at a five parts per billion level, let alone at much higher levels, in the parts per million range, which the Department's findings purportedly revealed. Like Dr. Chase and Dr. Hannah, Dr. Hammock found the FTIR method used by the Department is not reliable for trace-level analysis of pesticides, because of its variability and lack of sufficient sensitivity. Dr. Hammock finds the FTIR method, as used by the Department, insufficient for achieving reliable trace-level analysis. ELISA, on the other hand, was shown by these scientists to be, along with mass spectrometry, a sufficiently-sensitive method to be well suited for the trace-level analysis of SU's, such as Londax. Dr. Robert Tilden is an environmental specialist with the Department's Feed, Seed and Fertilizer Division and has 30 years of experience as an analytical chemist. Although he was an expert witness originally scheduled to be tendered by the Department, the Department elected not to call him. Instead, the Respondent used portions of his deposition in its case-in-chief. Dr. Tilden opined, as did Dr. Hammock, that there is no such thing as a 100 percent pure pesticide on the market. Scientific detection techniques continue to improve, so that smaller and smaller trace levels of compounds can be detected. Scientists are able to detect contaminants at such minuscule levels, in the parts per billion range, for instance, that it is always possible to detect some substance in a pesticide that is not listed on its label. Dr. Tilden, therefore, opined that the relevant question should be whether such a substance or compound purported to be a "contaminant" has any phytotoxic or observable biological effects on any plants in question. Ms. Johanne Strahan is a scientist with degrees in chemistry and zoology, as well as in nursing. She has extensive experience in the health care field and has worked as a scientist for the Respondent for over 19 years. During her tenure with the Respondent, she has worked in the field of immunoassay method development, both for clinical and environmental analysis purposes. She was tendered and accepted without objection as an expert in the field of immunoassay and ELISA technology. She described her analysis of Benlate, with a view toward determining whether the formulated Benlate product was contaminated with SU's, such as Londax. The ELISA technique developed and employed by Ms. Strahan, in addition to being reviewed by Dr. Hammock, was also reviewed by Dr. Richard Rocco, Dr. Robin Charleton, and Dr. Qing Li, as to Ms. Strahan's work with that method to analyze Benlate for the presence of SU's, including Londax. Her report on her methodology and test results is in evidence as Respondent's Exhibit 68A. Ms. Strahan used the ELISA technique to analyze Benlate beginning in 1991, when she was asked by the Respondent to examine the possibility that SU's had contaminated the product. The detection limit in the ELISA testing for such herbicides is five parts per billion in a box of Benlate. However, there is no detection limit established by the Pesticide Laboratory for its method. The lowest reported finding of Londax in Benlate by the Department's Pesticide Laboratory was just under one part per million. Ms. Strahan's detection limit established to be five parts per billion (PPB) is approximately 200 times lower than the lowest level purportedly found by the Department's laboratory. Even with that low limit of detection, she established that no Londax was detected in the Benlate lots at issue in this case. Ms. Strahan tested all of the identifiable lots of Benlate at issue in this proceeding. The lot known as "partial 12" is not identifiable as a proper Dupont lot number for Benlate. "Partial 12" is not a valid Dupont lot number because it does not contain information as to where it was formulated, the date it was formulated, and the lot or batch number it was assigned. Ms. Strahan has never seen a Benlate box with a stamp marked "Partial 12", within the 1,600 boxes of Benlate that were analyzed in her laboratory. The Benlate analyzed by Ms. Strahan came from two sources. First, for all of the identifiable lots at issue in this case, Ms. Strahan received unopened boxes of Benlate from the Respondent's Black Hawk warehouse. Second, for two of the lots at issue, No. 615 and 717, Ms. Strahan also received sub- samples from Dr. Shubert. Lots 615 and 717 were tested as part of the Benlate received from Dr. Shubert and as part of the Benlate received from the Black Hawk warehouse. The ELISA testing performed by Ms. Strahan was negative for Londax on all of these lots of Benlate at issue in this case. Moreover, her testing of the lots in this case was consistent with her testing and findings concerning all 1,313 lots of Benlate. She tested all lots of Benlate available to the Respondent. No SU's, including Londax, have ever been detected. Because homogeneity is obtained through the manufacturing process, it is not necessary to test every box of Benlate from a particular lot in order for Ms. Strahan to draw the conclusion that no Londax was present in a given lot, although Ms. Strahan tested many duplicate boxes in her 1,313 lot study. Ms. Strahan's candid, logical answers to questions on direct and cross-examination and her depth of knowledge of the subject matter shown by the substance of her testimony renders her a credible witness. Her testimony is accepted as persuasive and credible. The ELISA testing performed and addressed by Ms. Strahan and Dr. Hammock is persuasive evidence that Benlate was not contaminated with Londax or other herbicides as alleged. No evidence was presented to rebut the testimony and results of Ms. Strahan and Dr. Hammock. Ultimate Finding - No Londax Contamination and No DBU in Excession of Standard Caused by Dupont The above scientific testimony adduced by the Respondent supportive of the above facts, is found more credible, persuasive and probative than that presented by the Department for the reasons indicated. It is accepted by the Hearing Officer. That testimony supports the finding that there is no evidence of Londax contamination in Benlate. Concerning the substance DBU, the opinion of Drs. Hammock and Tilden are persuasive. DBU was indisputably present in Benlate because it is a known breakdown compound of the Benlate matrix. This has been known and disclosed by the Respondent in the 25 years during which Benlate has been marketed. It has not been shown that DBU is phytotoxic at any of the levels purportedly detected, under any reasonably-conceivable application rates or growing circumstances for plants in the horticulture and agriculture industries in which Benlate is employed. Moreover, even if DBU is present in levels slightly above those specified at the time of manufacture on the Benlate label, it has not been established that those levels are due to anything within the control of the Respondent. The evidence does not establish what sort of storage and use conditions attended the Benlate lots in question from the time they were manufactured and sold by the Respondent, until the time they were obtained from growers and other sources and tested by the Department's Pesticide Laboratory. The length of time since manufacture and sale was as long as seven years and the length of time, together with the temperature, humidity, and other conditions attending the storage of the Benlate lots, can have a varying effect on the degree to which DBU is present in the Benlate boxes and samples taken from the lots at issue in this case. It has not been demonstrated that, at the point the Benlate lots and boxes in question were sold by the Respondent, DBU was present at any level above that disclosed on the labeling and registration statement. The only rebuttal witness presented by the Department in the analytical chemistry phase of this case was Ms. King. Her rebuttal was brief and did not respond effectively to the criticisms of the Pesticide Laboratory's work, methodology and results put forth by the Respondent. Plant Science - Greenhouse and Field Biological Testing The Petitioner's Testing - Findings Showing Unreliability The Department presented Dr. Timothy Shubert as an expert witness, describing certain greenhouse tests in which he applied Benlate from certain lots at issue in this case to plants, specifically, impatiens, petunias, and ornamental peppers. Dr. Shubert is a plant pathologist employed by the Department's Division of Plant Industry (DPI). His qualifications and credentials appear in the evidentiary record. He tested lots U070490-622(DF24), U401900-267(DF20), U72490-717(DF9 and DF22), and U062490-615(DF8). Dr. Shubert opined that based upon his testing, he felt that he had observed plant injuries to certain of his test plants caused by application of Benlate to those plants under the conditions prevailing in his greenhouse testing environment. However, he did not link any plant injury he observed to a particular theory of causation from Benlate or any alleged contaminant purportedly contained in Benlate. The Respondent introduced into evidence a great number of articles authored by non-Dupont scientists over the years which show, after hundreds of tests, that no phytotoxicity caused by Benlate has been reported. Dr. Shubert's opinion and evidence, if germane to a particular theory of causation concerning the plant injuries he observed, would have to relate to some inherent defect in Benlate. The Department claims to have found Londax in the lots of Benlate tested by Dr. Shubert, but he admitted that he lacked any data demonstrating from a biological standpoint that there was any Londax in Benlate nor that the plant injuries he observed were directly caused by Londax. Moreover, Dr. Shubert's tests are inconsistent with the results of testing with Londax conducted by Dr. Tilden on behalf of the Department. Dr. Tilden never observed plant injury from a drench application of Londax, whereas Dr. Shubert saw significant plant injury, or phytotoxicity only with a drench application. When Dr. Tilden conducted tests with Londax on tomato plants and impatiens in a controlled environment chamber, Londax was applied both as a foliar spray and as a drench, at rates that would be equivalent to one part per million and ten parts per million of Londax in a box of Benlate. Dr. Tilden observed no effects on tomatoes from Londax applied as a foliar or as a drench application at either the high or low rate. The only time Dr. Tilden noted any effects on the plants were on the impatiens, at the highest rate, and only as a foliar application, not as a drench application. He never observed any adverse plant effects caused by drench applications of Londax. Dr. Shubert testified about plant injuries he observed from drench applications of Benlate on certain greenhouse plants. However, he did not observe sufficient plant injury with foliar applications, such that it would prevent him from using the product in that manner. Dr. Tilden, in contrast, never observed any plant injury from drench applications of Londax but, rather, only observed injury through foliar application. Thus, Dr. Shubert's testing is in conflict with the demonstrated mode of action of Londax as seen in Dr. Tilden's tests. Therefore, Dr. Shubert's testing does not support an inference that plant injury he observed was due to the alleged contamination of Benlate by Londax. Dr. Shubert's testing and opinions do not link DBU to the injury he observed. Hundreds of successful tests with Benlate over years and the long history of Benlate "wettable powder" (Benlate WP) refute any allegation that DBU is phytotoxic. DBU has always been a known and reported breakdown product of Benlate. There is no evidence that it is a cause of any plant injury, when used according to the Benlate labeling, under normal growing conditions, or in the testing reported and referenced in the evidence in this case. Dr. Shubert's explanation and opinions do not support any inference of plant injury due to the presence of an alleged contaminant in Benlate. The Department alleged that it found Londax in sample 926 from Lot U062490-615. Dr. Shubert, however, did not testify about any plant injury resulting from his use of that lot. Moreover, Dr. Shubert testified about plant injury with respect to applications of Lot U72490-717 (sample 927) or DF22. However, the Department presented no evidence that it found either Londax or DBU in that sample. In fact, it was shown that Dr. Shubert's observed plant injury resulted from unusually-stressful environmental conditions prevailing in the greenhouse where the testing occurred, during the testing. As shown by Dr. Ackerson, for the Respondent, any commonly-used pesticide or other approved and normally-safe agricultural chemical can cause adverse effects on plants under certain conditions involving the plant being unusually stressed. This was corroborated by Dr. Thill and acknowledged by Dr. Shubert. Two chief factors render the results of Dr. Shubert's greenhouse tests unreliable and of little weight in demonstrating that Benlate itself is harmful to plants or that any contaminant, whether Londax or otherwise, which might be contained in Benlate, causes injury to plants. Specifically, the tests did not accurately assess the effects of Benlate, whatever its constituents, when applied under normal growing conditions, since the testing was characterized by two unusually-stressful conditions, an excessively sandy soil media and inordinately-high temperatures. Thus, Dr. Shubert's tests are not persuasive. They do not provide accurate insight as to the manner in which the Benlate product behaves when used by actual growers in Florida under normal growing conditions. This flaw in the testing is dispositive, because Dr. Shubert agreed that the definitive test for any agricultural product such as Benlate was whether or not it is safe and effective at label rates when used under actual conditions. By contrast, the Respondent's field tests showed that Benlate was safe and effective when used in realistic growing conditions. Dr. Shubert used an unusually-sandy mixture as the soil media for growing the plants tested in his greenhouse testing of Benlate. Dr. Shubert used a commercial potting media called "metromix 300" and mixed it with 50 percent sand. He admitted that he added this large amount of sand to the commercial media, even though the commercial media only is normally used, straight from the bag, by nurserymen and growers. Dr. Shubert never referenced any literature concerning media composition or any experience of particular growers of the species he tested, who employ a 50 percent sand potting media in growing those plant species. In contrast, the Respondent's field studies show that the plants used in those studies were specifically grown in the exact same media as the growers used. Dr. Thill, at the University of Idaho, showed that the large percentage of sand used by Dr. Shubert in the soil media would adversely affect the test plants and stress them inordinately by decreasing the water holding capacity of the soil media. Dr. Ackerson, in a like vein, established that the use of a 50 percent sand media was a highly-unusual practice which would have an adverse, stressful effect on the test plants. Both Drs. Ackerson and Thill, for the Respondent, described the role of heat stress in causing plant injury, including scorching, which is one of the primary symptoms seen by Dr. Shubert in some of his test plants. In fact, Dr. Shubert himself agreed that if a plant is stressed due to high temperatures, and then is subjected to application of agricultural chemicals, plant injury can more likely result, including scorching. There is a synergistic effect of environmental stresses, such as excessively-high temperatures, when coupled with the minor stress any plant experiences with the application of many agricultural chemicals. This effect can cause damage such as that observed by Dr. Shubert in some of his test plants. In fact, it was established that Dr. Shubert's test plants in the greenhouse were repeatedly exposed to temperatures substantially in excess of those the plants would normally encounter under the usual growing conditions prevailing at commercial growers' nursery establishments. The temperatures recorded in Dr. Shubert's greenhouse during the tests were shown to be inconsistent with normal grower practices and conditions, as established by Drs. Ackerson and Thill. Such a deviation from the normal grower practices means that Dr. Shubert's testing cannot definitively establish that Benlate causes plant injuries under normal conditions and practices. Dr. Shubert's tests were all conducted in greenhouse number 8 at the DPI facilities in Gainesville, Florida. All of the test plants were located in the same greenhouse. The plants tested, impatiens, petunias, and ornamental peppers, were tested in the greenhouse while a recording thermometer device was operating inside the greenhouse. This instrument produced "hydrothermographs" during the conduct of the tests each day. These are charts on which are recorded all of the temperatures during the seven-day period of the tests. Dr. Shubert conceded that, when confronted with these hydrothermographs recorded in his Greenhouse Number 8 during the testing, they showed temperatures inside the greenhouse which reached and exceeded 110 degrees and, in fact, sometimes showed temperatures as high as 120 degrees. The plant species which Dr. Shubert subjected to his tests are considered to be "bedding plants". Such plants are normally propagated and nurtured by growers in Florida at ambient temperatures of 20 to 30 degrees less than the peak temperatures shown to prevail in Greenhouse Number 8 during the seven-day test period. In addition to the bedding plants, (the impatiens and petunias), the pepper plants tested by Dr. Shubert were also exposed to temperatures 20 to 30 degrees in excess of those normally prevailing when such plants are propagated and nurtured by Florida growers, as reflected by published literature in evidence. It has thus been established that the excessive temperatures prevailing during much of each day of Dr. Shubert's tests in the greenhouse, coupled with the inappropriate 50 percent sand growing media, were the primary reasons for the plant injury observed by Dr. Shubert. Because of these conditions, it was not definitively shown that Benlate had any effect on causing the injuries. It has been shown, especially in light of the results of the Respondent's testing in actual nursery and field growing conditions, that without these stresses, Benlate would have caused no such damage if, indeed, Benlate had any part to play in the damage observed in the plants grown by Dr. Shubert. The differences between actual growing conditions for such plants and the experimental conditions in Dr. Shubert's greenhouse render his tests to have little reliability. These unrealistic conditions constitute a fundamental flaw prevailing throughout Dr. Shubert's test regime. Dr. Shubert revealed, on cross-examination, additional testing he had conducted with Benlate, none of which resulted in any significant phytotoxicity. His field tests are significant, in light of his admission that field tests are designed to expose plants to normal growing conditions. Dr. Shubert, in fact, conducted two field tests in Florida using lots of Benlate at issue in this case, U062490-615(DF8) and U072490-717(DF9). These tests were conducted with strawberries and squash and were conducted at the commercial growing facility of grower Dud Borders. Dr. Shubert observed no phytotoxicities associated with Benlate in this strawberry field study. His studies with strawberries and Benlate confirmed his findings of no phytotoxicity. He mentioned that during his field study of strawberries, he observed a large number of deformed fruit in both treated and untreated plants. He could not associate this phenomenon with Benlate or any constituent chemical making up the Benlate product. He further admitted that neither he, nor anyone at his direction, had taken samples of the soil from Mr. Borders' strawberry fields for analysis. Dr. Ackerson's testimony reveals that, like many strawberry growers in Florida, Mr. Borders' farm experienced a boron deficiency, which is a known cause of the fruit deformities described by Dr. Shubert. Dr. Shubert's squash field study was similar to his work with strawberries. The data he collected from the squash study shows that there was no phytotoxicity with respect to any Benlate applications. Dr. Shubert did not see any significant differences between squash grown on land free of any previous Benlate use and squash grown on land with a history of regular Benlate use. Thus, as will prove to be the case with the Respondent's field tests, when Dr. Shubert tested Benlate on plants at the grower's facility, using the normal grower's practices, no treatment-related effects were observed. The results of these field tests by Dr. Shubert showing no treatment effects from Benlate is consistent with the view of Drs. Ackerson and Thill that the injuries seen in Dr. Shubert's greenhouse experiment resulted from the application of the product under abnormally-stressful environmental conditions. In view of this and the results of numerous tests conducted by the Respondent, Benlate has not been shown to be other than safe and effective under normal usage. It has not been established that Benlate or its chemical constituents has any phytotoxic effect on plants. Respondent's Field Testing - Reliability Dr. Ackerson was accepted without objection as an expert in plant physiology, field test design, assessment of plant phytotoxicity testing and general chemical issues related to plant science testing. His qualifications, education and experience are reflected in the evidentiary record. He oversaw the conduct of field tests by the Respondent in Florida, using commercial growing conditions. He created a test with Benlate which duplicates the conditions experienced by an actual grower during actual use of the Benlate product under Florida-prevailing conditions. This testing showed that the Benlate lots designated by the Department, U070490-649 and U070490-622, are safe and effective when used at label rates and recommendations, and even in excess of the label rates, under commercial growing conditions. This finding was consistent with testing of numerous Benlate lots. There was no evidence from any of the field tests of any Londax or DBU-related plant injuries. It is a practical certainty that, since the Respondent's field tests were conducted under actual growing conditions at the grower's horticultural establishments, if either one of these factors had been responsible for the plant injuries reported by the grower, the Respondent's scientists, and the nationally-recognized, independent scientists who reviewed their work, would have determined it from the field tests and their review of them. The results of the Benlate field testing by the Respondent were corroborated by these independent, non-Dupont scientists who reviewed the tests, procedures, and results. They were also consistent with years of independent testing with the product that has consistently shown no phytotoxicity associated with its use on a wide variety of plants and crops. It is concluded that Dr. Ackerson's opinion is corroborated by the fact of the review by independent, nationally-recognized plant scientists and by the numerous published articles, in evidence as corroborative documentary evidence, which were also shown to be the type of information and materials customarily relied upon by a scientist, such as Dr. Ackerson, practicing in the field in which he was accepted as an expert witness. 1/ His opinions are accepted as more probative, credible and persuasive than those of Drs. Shubert and Schneider. The Respondent's field tests were conducted at four different grower facilities in Florida, in order to duplicate realistic growing conditions at a wide variety of locations and with a wide variety of commercially-grown species, such as woody ornamental plants, as well as foliage plants. The test sites were not owned by the Respondent. They are private, commercial grower facilities, leased from specific growers for this purpose. The use of commercial facilities ensured that the tests would be conducted consistent with the standard production practices of commercial growers in Florida. Accordingly, the actual operators of the nurseries, rather than Respondent's personnel, were responsible for maintaining the test plants according to normal production practices. Approximately 350,000 to 400,000 plants, constituting 80 different species and varieties, have been used in the Florida field tests to date. Approximately 2,000 pounds of Benlate were used in the Florida field tests over a three-year period. Benlate was applied bi-weekly to the test plants as both a foliar and a drench application at the label rates and, in fact, up to four to eight times the label-recommended rates. The particular lots of Benlate used in the field tests were selected based upon their association with grower complaints. Two of the lots happened to be the above-referenced lots, "Lot 649 and Lot 622", which ultimately were two of the lots designated by the Department in this case through the Amended Administrative Complaint. Lots 649 and 622 were tested extensively on a wide variety of plants. The field tests of these lots demonstrated that they were safe and effective products when used according to the label recommendations. In fact, the tests showed that these lots of Benlate can be applied even in excess of the label rate and still be safe and effective without causing plant injury. The field tests conducted with these particular lots were consistent with results obtained from testing of other Benlate lots, as well as testing with Benlate WP. There was no single alternative cause responsible for reported injuries being attributed to Benlate. Factors that caused the reported plant injuries or symptoms include, among others, nematodes, diseases, insects, fertility level issues, and environmental stresses. For example, the Department offered testimony about a sole specific grower, Mr. Dud Borders, a Florida strawberry grower who had used Benlate and reported seeing a high number of deformed fruit. Dr. Ackerson established that an analysis of the soil from Mr. Borders' strawberry fields revealed that the soil has a boron deficiency, which is a common cause of such deformed fruit. Dr. Ackerson has worked with SU's and is familiar with Londax. He finds no evidence of Londax injury in Florida field tests. DBU has been in Benlate since the Benomyl molecule was invented and is an inherent part of the Benomyl chemistry. Benlate has been sold commercially since the early 1970's. If DBU caused phytotoxicity as a result of Benlate use, it would have been evident through the many years of Benlate usage, since the early 1970's, and in the thousands of tests of Benlate conducted through those years, as well as Dr. Ackerson's field tests themselves. Dr. Ackerson found no indication of any DBU- related plant injury. Nationally and internationally recognized scientists in relevant fields of plant science, not employed by the Respondent, also evaluated the Florida test sites, tests, and test results. They visited the test sites and conducted independent evaluations of the plants, including plants treated with Lots 649 and 622. These scientists brought to their evaluations their own experience working with commercial growers and their knowledge and understanding of typical production practices. Dr. Ackerson relied on the opinions of these scientists, which are in agreement with and corroborate his own opinion in establishing that there were no Benlate treatment-related effects observed in the Florida field tests. Prior to the Florida field tests conducted by the Respondent, and Dr. Shubert's testing, there existed much data in the scientific community on the use of Benlate, upon which Dr. Ackerson additionally relied for his opinion that it is safe and effective when used according to the label. 2/ Exhibit 29B, for example, includes tests with Benomyl and Benlate conducted on sensitive greenhouse plants, such as african violets and orchids, and shows that the product is safe and effective for use on such plants. Other articles show the safety and efficacy of Benlate when applied to common food crops, such as strawberries, bananas, peaches, citrus, tomatoes, pecans, and watermelons. Others discuss Benlate testing on ornamental plants, such as roses, rhododendrons, Easter lilies, poinsettias, anthuriums, and others. These articles demonstrate that Benlate is safe and effective when used according to the label requirements and recommendations. In the various reports and documents contained in Respondent's Exhibit 29A, there are hundreds of tests conducted with Benlate from the years 1988 through 1991. These tests show it to be safe and effective on a wide variety of crops. Dr. Ackerson also reviewed the greenhouse tests conducted by Dr. Shubert with Benlate. Dr. Ackerson established that the distinguishing feature between his tests and those of Dr. Shubert was Dr. Shubert's failure to simulate commercial growing conditions and because Dr. Shubert's tests in the greenhouse setting imposed significant stresses on the test plants due to lack of water, caused in part by the excessively-sandy media, and high temperatures. Therefore they were not a replication of normal growing and production practices. Because of this fundamental difference, the Shubert tests cannot answer the question whether Benlate can cause plant injury when used under normal growing conditions by the commercial growers to whom it is sold and for whom it is designed and formulated. Dr. Ackerson's testing, on the other hand, answered that question in the negative. Dr. Ackerson also described his review of Dr. Shubert's strawberry and squash field tests, which were conducted under normal growing conditions. Dr. Ackerson showed that the Benlate treated plants, in fact, had higher berry weights and less poor-quality fruit than those plants which had been treated with other fungicides. Similarly, there was no difference in Dr. Shubert's squash field test in the number of squash produced from plants grown in soil with a prior history of Benlate use, as compared to the number of squash produced from soil that had never been treated with Benlate. These facts support Dr. Ackerson's opinion that the injuries in Dr. Shubert's greenhouse tests were caused by the plants being exposed to unnatural stresses and not attributable to any inherent defect in Benlate or its constituents. Dr. Thill is a professor in the University of Idaho's Department of Plants, Soil and Entomological Sciences. In addition to plant science, he has a background in agronomy and crop physiology. Dr. Thill also reviewed Dr. Shubert's greenhouse tests and gave opinions with respect to the Shubert test design. He reviewed Dr. Shubert's testing against the background of his own personal experience with greenhouse production, conducted routinely at the University of Idaho, and on his knowledge of soils, soil physics, and the water- holding capacities of various soils. It was thus shown that the tests did not follow normal, commercial growing practices and created unnatural plant stresses. Because of his failure to simulate natural growing conditions, Dr. Thill opined that it was impossible to extrapolate from Dr. Shubert's tests to what an actual grower would experience with Benlate use. Like Dr. Ackerson, he determined that the presence of the plant stresses is important, because every time a chemical is applied, the target plant will experience a minor stress. In the situation prevailing in Dr. Shubert's testing, as described above, the minor stress caused by the application of a chemical can interact with the environmental stresses to produce the synergistic effect. In other words, the combined effect of the two stresses is greater than their simple additive effects. Thus, in tests such as Dr. Shubert's, where such environmental stresses are present, Dr. Thill established that it is impossible to determine whether any plant effects observed are due to the application of a chemical at issue or are the result of some interaction with stressful environmental conditions. The fact that Dr. Shubert included water-controlled or untreated plants in his greenhouse experiments does not discount the adverse effect of the test environment on the Benlate-treated plants found by Dr. Thill. It was virtually impossible to evaluate the test plants, as compared to the controlled ones, because the possible effects from the environmental stresses could not be separated from possible effects from the application of the chemical at issue. Dr. Raymond Schneider, in rebuttal, opined in a general way that high temperatures should not be a problem for the testing, as performed by Dr. Shubert, if they only were of short duration. He was unaware of the temperatures in Dr. Shubert's test greenhouse being in excess of recommended levels for six to twelve hours per day, however, and acknowledged that exposure to excessive heat would be a problem for plants in such a greenhouse test. His opinion does not persuasively support the testing and opinion of Dr. Shubert, in the face of the evidence produced by the Respondent that the temperatures were excessive for long durations for these types of plants, especially when coupled with the stress posed by the excessively-sandy media and its effect upon moisture retention. It was not disputed that certain plant species could withstand higher temperatures than others. Dr. Ackerson testified that plants used in his greenhouse tests, indoor foliage plants, as opposed to bedding plants, could withstand higher temperatures. Dr. Shubert's test plants, however, were young bedding plants, a type of plant, and at a stage of development, where they are more sensitive to heat. In establishing this, Dr. Ackerson produced literature on the appropriate temperatures for these plants, in support of his opinion. Drs. Ackerson and Thill's critique of Dr. Shubert's tests related to exposure of his test plants to high temperatures, over extended periods of time, for particularly-sensitive bedding plants of the type tested by Dr. Shubert. These criticisms were not rebutted. Moreover, Dr. Schneider conceded that one of the factors that would allow a scientist to extrapolate from the results of greenhouse testing to commercial greenhouse or shadehouse production is a careful control of environmental conditions. The lack of adequate control over environmental conditions by Dr. Shubert in the form of excessively-high, long- duration temperatures and a soil medium which did not retain sufficient moisture, for a sufficient period of time, was not rebutted by Dr. Schneider. In response to criticisms by Drs. Ackerson and Thill of the Shubert testing soil media, Dr. Schneider testified concerning soil media composition. His testimony can be accorded little weight because it was general in nature and not specifically related to Dr. Shubert's specific test plants. Dr. Schneider offered no opinion nor did he refer to any published literature to suggest that bedding plants should be grown or are grown by commercial producers in a 50 percent sand media mixture. In fact, they are not, because of the reason reflected in the above Findings of Fact, which establishes that if they were grown in such a media, great loss would result due to water deficiency-related stress. Thus, Dr. Schneider did not rebut the showing by Drs. Ackerson and Thill that the testing by Dr. Shubert was not realistic nor reliable because the test plants were exposed to the above-referenced stressful conditions which rendered the tests inconsistent with normal commercial growing practices for such plants. Therefore, the Shubert testing was not a valid, accurate assessment of Benlate's effect on such plants under normal growing conditions, which the composition and labeling of Benlate (and its registration certificate) envisions and directly relates to (as a matter of fact and law). Dr. Schneider also criticized the Respondent's field tests, but he had never visited the test sites, presented no specific data to demonstrate the validity of his criticisms, and had done no testing of his own concerning Benlate. Unlike the growers and the independent, non-Dupont scientists, who reviewed the Respondent's Florida field testing and its results, Dr. Schneider admitted that he would not be able to advise anyone on the cultural conditions necessary to grow a particular kind of ornamental plant. Contrary to his prior statements, he stated at hearing that he was a specialist in ornamental plant pathology. It was later revealed that he had previously stated that he did not claim any expertise in ornamental plant pathology or nutrition. Moreover, Dr. Schneider opined that only three replications in a test design made for an inadequate experiment, but later conceded, on cross-examination, that three replications can be acceptable science and that he had used only three replications in his own testing. Dr. Schneider states that it was improper for growers or the Respondent's scientists to remove diseased plants from a test. The significance of any criticism on this point, however, would depend on how many plants were removed and whether that fact would influence the analysis of the data. He did not provide any such information with respect to any of the tests at issue. In addition, on cross-examination, he admitted that he was unaware that Dr. Shubert himself had removed plants from his greenhouse experiments. Dr. Schneider further admitted that he had been previously informed that diseased plants had been removed from Dr. Shubert's "woody ornamental tests." Indeed, according to Dr. Shubert's testimony and his test data in evidence, over 40 test plants were removed from his greenhouse for disease analysis during the course of a single test. Dr. Shubert, in fact, testified concerning the removal of plants from several of his greenhouse tests and the subsequent, necessary destruction of those plants for routine disease analysis. Dr. Shubert opined, in direct contrast to Dr. Schneider's attempted rebuttal, that it was possible to remove test plants without ruining the integrity of the experiment for statistical analysis purposes. In summary, it has not been demonstrated in this case, by preponderant evidence, that Benlate, or any of its chemical constituents, when applied to plants at the label-recommended rates and procedures, or even at levels exceeding recommendations, recommended rates and procedures, is phytotoxic to plants under normal growing conditions prevailing in fields, shadehouses or greenhouses or similar facilities. It was not shown to be phytotoxic under the conditions prevailing in the testing done by Dr. Shubert. Chain of Custody Issues The integrity of the chain of custody of possession and condition of the samples, and any flaws in it, raise doubts as to the adequacy of proof of the condition of the product being sampled for the relevant testing. This has a direct bearing on the probity of the Department's case, in attempting to impose liability on the Respondent for the product, in the form and condition in which it was produced, sold, and shipped by the Respondent. In other words, boxes of Benlate which had been exposed to moisture, had been previously opened at some time since leaving the Respondent's custody, or which otherwise had been damaged or tampered with, represent an opportunity for deterioration or chemical change of the product, or introduction of a contaminant not caused by any action by the Respondent. DBU, for instance, occurs more rapidly in a box of Benlate which has been exposed to moisture or humidity. Thus, boxes, which in the hands of the grower, consumer, or the scientists, have been open for any significant period of time, (or otherwise exposed to moisture), have been subject to the opportunity for adulteration with some other substance or with the opportunity to have their condition altered by climatic conditions, including moisture. In fact, even if the Department's analytical chemistry procedures and testing resulted in findings that DBU then exceeded the label and registration standard reported by the Respondent as being the acceptable standard at the time of shipment, it was not demonstrated that any excess DBU was the fault of the Respondent. Proof of what happened to the product after it left the custody and control of the Respondent was not sufficiently established by the Department to show that any excess DBU would have occurred during the time that the Respondent had custody and control of the product for sale and shipment. The Department was simply unable to document the history of many of the samples and thus the testing of the samples for this reason alone must be accorded less weight, as to the results purportedly obtained. Some of the boxes from which samples were taken had been opened by consumers prior to sampling. Some boxes appeared to have leaked and some were damaged. A number of the samples are designated as investigative or "INV" samples, which the Department's witness, Ms. Barclay, established were "almost useless for any purpose." The Department was unable to explain the origins of the DF5 and DF6 lots (the westside lots) prior to their sampling by Department personnel. One of these lots or boxes, from which samples were taken, had been open on the shelf at Westside School for an unknown period of time, exposing it to the opportunity for contamination, deterioration or change due to climatic conditions. The Department did not establish the chain of custody of DF9, DF8, or DF21 lots prior to their receipt from the Borders' farm. Thus, the condition and circumstances in which they were maintained in the custody of Mr. Borders, as that relates to their condition and the opportunity for contamination by other chemicals or for deterioration due to moisture and humidity, is unknown. According to Department witnesses, Barclay and Sumner, samples 1066 and 814 came from boxes that could have been tampered with and no chain of custody evidence was presented regarding samples DF24, DF717, and DF1083. One of the Benlate lots upon which the Department relies, "the Z-lot", is a lot manufactured in 1987. This lot is one of the lots collected from the Westside School that had been open on a shelf for an indeterminate period of time. After the samples were collected from consumers, the chain of custody is incomplete. Several samples were in Dr. Shubert's possession for over a year. The samples were repeatedly opened and closed in his laboratory, and the evidence does not reflect that proper sampling protocols were followed. At the Pesticide Laboratory itself, the samples were opened, closed, and reused for over six months without proper records being kept concerning their custody and control. In summary, the deficiencies in the chain of custody concerning the samples, with attendant opportunity for potentially-deleterious changes to the Benlate product, after it left the custody and control of the Respondent, is one other factor showing lack of acceptability and reliability of the analytical chemistry test procedures and results advanced by the Petitioner.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is RECOMMENDED that the Amended Administrative Complaint be dismissed. DONE AND ENTERED this 21st day of September, 1995, in Tallahassee, Florida. P. MICHAEL RUFF, 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 22nd day of September, 1995.
Findings Of Fact The Petitioners and the Respondent had a business relationship by which the Respondent received cucumbers from the Petitioners for the fall 1980 harvest season. Cucumbers on some occasions are sold on a "cash basis," which means that a buyer purchases the cucumbers for a set price, either at the field or upon arrival at the packing house. On other occasions cucumbers are sold on a "handling basis" or "brokerage basis." Under this latter arrangement the "buyer" takes delivery of the load of cucumbers from the grower, the farmer; sells them at the best obtainable market price, and a portion of the sale price goes to the grower or farmer and a portion is retained by the "handler." The Petitioners grow cucumbers in Hardee County and are, therefore, producers of agricultural products in the State of Florida. The Respondent, Southern Cucumber Co., Inc., is a dealer in agricultural products engaged in that business in the State of Florida. The Petitioners began clearing land for the purpose of putting in a cucumber crop in the summer of 1980. During the course of their land clearing and planting of the crop, they obtained certain monetary advances from the Respondent with the oral agreement that they would deliver the produced cucumbers to the Respondent's packinghouse upon the crop's maturity and harvesting. When the crop became ready for harvesting they also got, in addition to fertilizer advances and other cost advances, advances to cover the costs of labor for picking the cucumbers. In approximately October, 1980, the Petitioners began harvesting and delivering cucumbers to the Respondent's packinghouse. By oral agreement the Petitioners and the Respondent agreed that the Respondent would "pack-out" their cucumbers for approximately two dollars to two dollars and twenty-five cents per bushel, which charge covered processing the cucumbers through the machine where they were washed and waxed, packing them and preparing them for shipment. When the cucumbers were delivered by the Petitioners to the Respondent's loading dock, the Petitioners were issued a slip showing the quantity delivered by the Respondent. No money changed hands at this time. The Respondent did not pay for cucumbers upon their delivery to his packinghouse. The Petitioners rather had to wait until the cucumbers were shipped and sold to the ultimate purchaser before they were told of the price received for them and sometimes received no money for the crop until that purchaser had remitted payment for the cucumbers to the Respondent whereupon the Respondent would pay the Petitioners for the cucumbers he had received and sold on their account. The Respondent would deduct from the proceeds of the sale of the cucumbers the amounts representing the costs the Respondent advanced for fertilizer, fuel and picking, and any other items for which the Petitioners owed him. Typically, thirty days or more elapsed before the Petitioners were issued "pack-out slips" for a given lot of their cucumbers which they had delivered to the Respondent. The "pack-out slip" indicated what grade and quantity of cucumbers the Respondent was able to prepare for shipment and sale, out of the cucumbers delivered to him by the Petitioners, as well as price. The Petitioners' oral agreement was negotiated between themselves and Mr. Jack Eason, who was manager or otherwise in charge of the Respondent's packinghouse and shipment business at the time. As acknowledged by witness Connor for the Respondent, a "handler" is one who accepts produce, packs it, sells it, sends it to the ultimate purchaser, gets his remittance back, subtracts his profit from that, and returns the rest to the growers. This is consistent with the Petitioners' arrangement with the Respondent. The Petitioners delivered their cucumbers to the Respondent, had them processed, packed, shipped and sold and received no money for them, typically, until the Respondent received his remittance from the ultimate purchaser where the products were shipped. The Respondent then subtracted the amount of costs advances to the Petitioners, his own profit and then remitted the net over to the Petitioners. The Petitioners were liable for any loss on the sale of the crop. That is the nub of their complaint. They believe that the market price assured to them was less than the true market price on the day their products were sold. On several occasions when the Petitioners sought money for their crop after delivery of it to the Respondent and the ultimate purchaser and discussed the price with the Respondent, the Respondent in stating a price which the cucumbers would bring or had brought, discussed the fact that there was "room for adjustments" or that "adjustments" would be made. A "handler arrangement" (as Respondent's own witness Alvarez established) is one characteristically involving "adjustments" to be made to the portion of the sale-price due the grower because of any variances in quality of the product when delivered to the ultimate purchaser. This his in addition to charges to the grower for processing, packing, and selling the product (and in this case, growing and harvesting costs advances) , all of which charges to the growers, mostly incurred after delivery to the Respondent, are characteristic of a "handler" or agency arrangement. Witness Parker for the Respondent is a packing-house owner and cash buyer of produce in Wauchula. In his cash-buying operation he never makes growers wait for their money, but will borrow money at seventeen to eighteen percent interest if necessary to pay them either on the day or one to two days after produce is delivered to him. The Respondent established that Wauchula is traditionally a "cash market," but that was not the situation with the Petitioners' and Respondent's business arrangement. The Respondent was functioning as the Petitioners' "handler" or agent in the situation at bar. The Petitioners have not filed a complaint for a specified amount of money they feel is due and owing them for the crop, but rather ask for an accounting so that pecuniary question can be determined. In that regard the surety on the bond required of the Respondent as a dealer in agricultural commodities, is Continental Insurance Company, specifically bond number BND218 26 21.
Recommendation Having considered the foregoing findings of fact, conclusions of law, the candor and demeanor of the witnesses and arguments of the parties; it is, therefore, RECOMMENDED: That a final order be entered requiring the Southern Cucumber Co., Inc., to furnish to the Petitioners an accounting of all quantities of cucumbers received by them for the Petitioners; the parties to whom those cucumbers were ultimately sold; the sales price obtained; the prevailing market price for cucumbers with that quality and grade on the date the sales were effected; all adjustments to the gross sales price along with an explanation of the same; an itemized showing of all marketing costs, if any, deducted by the Respondents from that gross sales price; together with all production and harvesting costs deducted by the Respondent representing money advanced to the Petitioners for the growing and harvesting of the crop along with the net amount due the Petitioners. This accounting should be furnished the Petitioners within thirty (30) days of the final order herein. DONE AND ENTERED this 19th day of March, 1982, in Tallahassee, Florida. P. MICHAEL RUFF 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 19th day of March, 1982.
The Issue Whether Respondent is in violation of various provisions of Chapter 403, Florida Statutes, as alleged in the Notice of Violation and Orders for Corrective Action dated October 30, 1991.
Findings Of Fact BEI's composting facility is a potential source of water and air pollution and to operate the facility, BEI requires a permit issued by DER. The original permit issued to DER for this facility expired on June 1, 1991 and has not been renewed. Although its permit had expired, BEI was allowed to continue to operate while informal proceedings were ongoing between BEI and DER. When these informal proceedings were terminated by DER on May 20, 1992, further operation of this composting facility was in violation of Chapter 403.707(1), Florida Statutes, and Rule 17-709.400(1), Florida Administrative Code. On at least two occasions while this composting facility was in operation, the air around the facility was polluted by foul odors. During the period following the expiration of BEI's license, BEI failed to submit monthly operating reports and did not conduct quarterly samplings and testing of the compost and submit the testing to DER as required.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Secretary of the DER enter a Final Order finding that BEI has violated Section 403.161(1)(b), Florida Statutes, on each of five counts; and that BEI should immediately cease operation of its solid waste facility, volume reduction plant, until and unless it obtains an appropriate and valid permit from DER and in that regard, BEI shall: Immediately cease acceptance of all materials on the property. In the event that Respondent does not receive a permit from the Department to resume operations at the facility, within 90 days of the effective date of the Final Order, Respondent shall remove all solid waste from the property to an approved solid waste management facility and provide the Department written documentation of its disposal within 30 days of removal. In the event that Respondent does receive a permit from the Department to resume operation at the facility, Respondent shall remain in strict compliance with all terms and conditions of such permit. Within 30 days of the effective date of the Final Order, Respondent shall, if it has not already done so, provide the following to the Department: All records of testing and monitoring conducted on the compost material since January 1, 1990, including daily reports on the temperature and moisture content of compost material, and any testing of compost material conducted prior to distribution. All records documenting application rates of stillage, manure, and leachate to the compost withdrows since January 1, 1990. All records, documenting distribution of composted or mulch material, including amount of compost or mulch material delivered, date of delivery, specific destination of compost or mulch, and intended use of compost or mulch material delivered, since January 1, 1990. All records documenting amount of yard trash received at the facility since January 1, 1990. Within 30 days of execution of the Final Order, Respondent shall make payment to the Department for costs and expenses in the amount of $500.00. Payment shall be made by, cashier's check or money order to the "State of Florida Department of Environmental Regulation". Payment, specifying Office of General Counsel Case No. 91-2006, shall be sent by certified mail to Administrator, Division of Waste Management, Department of Environmental Regulation, 3804 Coconut Palm Drive, Tampa, Florida 33619. DONE AND ENTERED this 16th day of June, 1993, in Tallahassee, Florida. K. N. AYERS 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 16th day of June, 1993. COPIES FURNISHED: Tracey S. Hartman, Esquire Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Howard C. Batt, Esquire 611 Druid Road East Suite 712 Clearwater, Florida 34616 Virginia B. Wetherell, Secretary Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Ken Plante, Esquire General Counsel Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, Florida 32399-2400
The Issue The issues to be determined are whether Southeast Petro Distributors, Inc. (Petitioner or Southeast Petro), is entitled to a refund for taxes paid on its purchases of identified machinery and equipment based upon an exemption in section 212.08(5)(b), Florida Statutes; and, if so, whether Southeast Petro is entitled to statutory interest on the amount of any refund paid, pursuant to section 213.255, Florida Statutes.
Findings Of Fact Based on the testimony and documentary evidence presented, the demeanor of the witnesses, and the stipulations of the parties, the following facts are found: Southeast Petro is a fuel distributor that distributes fuel to customers in the Southeastern United States, concentrated mostly in Florida. Southeast Petro does not operate any of the locations to which it delivers fuel, but the operators of many of the locations, like Southeast Petro, are affiliate 1 Petitioner’s Exhibit 22 is for demonstrative purposes only. companies of M&R High Point Holdings, Inc. Summit Shah is the President of Southeast Petro and has been with the company for 22 years. He referred to these affiliate companies as “disregarded entities,” and testified that the companies are part of a family business, with all of the same officers and common ownership under a single federal tax return. Those other than Southeast Petro are referenced in this Recommended Order as affiliate sites. Southeast Petro also delivers fuel to locations in which it has no ownership interest. For these locations, which are referred to as dealer locations, Southeast Petro has entered into Dealer Supply Agreements. Under these agreements, Southeast Petro supplies not only the fuel to the dealers, but equipment to store and dispense the fuel, including gasoline tanks and dispensing pumps. While ownership of the fuel passes to the dealer when it is transferred to the storage tanks, the storage tanks, dispensing pumps, and related equipment remain the property of Southeast Petro. Southeast Petro is required to supply fuel to the dealer as necessary to meet customer demand. Southeast Petro purchases the underground tanks and dispensing pumps for both its affiliate sites and the dealer locations that buy its fuel. Fuel tanks generally last approximately 20 years, and have warranties for 10-20 years, while dispensing pumps last about 10 years, with most warranties lasting for four years. Both the dispensing pumps and the underground storage tanks have a depreciable life of over three years. As the pumps age, they become less efficient and the flow of the gasoline slows. This case involves the replacement of dispensing pumps and a few underground storage tanks at gas stations serviced by Southeast Petro. Most gas stations sell unleaded gasoline with three octane ratings: premium, with a 93 rating; mid-grade, with an 89 rating; and regular unleaded, with an 87 rating. Different vehicles require different fuel octane levels to maximize the performance of the vehicle. For example, a high performance sports car requires premium gas, while a typical sedan runs just fine on regular unleaded gasoline. At one time, an underground tank was required for each kind of fuel. However, within the last approximately 20 years, dispensing pumps have been manufactured with a blender mechanism that allows for the elimination of one storage tank and blends percentages of unleaded and premium fuel to create mid-grade fuel at the dispensing location. With the use of this type of dispensing pump, the need to transport and store mid-grade fuel is eliminated. Reducing the number of tanks required at each location reduces cost of insurance, as well as the cost related to supplying the tanks, and the risk of fuel leaks from the underground tanks. The Department contends that while Southeast Petro is purchasing these dispensing pumps with the blender capability, it is the customer, as opposed to Southeast Petro, that is “making” the mid-grade fuel through his or her selection of mid-grade when making the fuel purchase. However, unless the dispensing pump is equipped with the mechanism that blends the fuel, the customer cannot access mid-grade fuel. On or about May 22, 2017, Southeast Petro filed a DR-26S, Application for Refund – Sales and Use Tax form (application), with the Department, claiming that it was entitled to a refund of $146,846.47 in sales tax paid for dispensing pumps and underground storage tanks it purchased to replace the dispensing pumps and tanks at several locations. The purchases were for dispensing pumps for both affiliated entities and for dealer locations. The replacement of some underground storage tanks was also included in the claimed purchases. Dispensing pumps were purchased from Central Industries, Inc.; Guardian Fueling Technologies, LLC; and Sunoco, LLC, and underground storage tanks were purchased from Modern Welding Company of Florida, Inc. In addition to the application, Petitioner provided a power of attorney form, a spreadsheet listing job code, invoice date, invoice number, taxable amount, sales tax, sales tax percentage, and invoice totals for the purchases at issue; and several invoices for purchases of gasoline pumps, tanks, and related hardware necessary for installation. The invoices reflect the different sites to which pumps were installed. At least some portion of the address for the site was included on the invoices, such as the street address, although they did not always identify the cities where the sites were located. The refund period in the application is May 2014 through April 2017. On June 20, 2017, the Department issued a Notice of Intent to Make Tax Refund Changes. In an attachment to the Notice, the Department stated that the information provided in the request for refund was insufficient, and requested that Petitioner provide an assignment of rights to refund of sales tax form; a plant schematic of the manufacturing facility identifying the location of the equipment included in the refund request; citations to applicable Florida Statutes and administrative rules upon which Petitioner was relying for the request for exemption and refund, along with any documentation (not specified) required to support the exemption/refund request; and information related to the claimed pollution control exemption, which is no longer relevant to these proceedings. The Notice of Intent to Make Refund Changes stated, “If you do not agree with these findings, you may request an informal conference to discuss any factual, statutory, or regulatory issues related to the above refund denial. Your request for informal conference must be made, in writing, to the above referenced office within 30 days of the issuance of this Notice.” It also advised that if the taxpayer did not request an informal hearing within 30 days, a Notice of Proposed Refund Denial would be issued on or about July 20, 2017. The attachment requesting additional documents did not expressly state a deadline for the submission of the documents requested. On July 20, 2017, the Department issued a Notice of Proposed Refund Denial for the Refund Claim. The attachment to the Notice of Proposed Refund Denial stated that the request for refund was being denied because the documentation requested in the Notice of Intent to Make Tax Refund Changes had not been provided. Southeast Petro timely protested the Notice of Decision of Refund Denial pursuant to Florida Administrative Code Chapter 12-6. Southeast Petro’s Protest letter, dated August 2, 2017, included the documents previously provided to the Department. No plant schematic identifying the equipment included in the refund request was ever provided to the Department, or produced at hearing, because no plant is involved. Instead, Petitioner asserts that each gas station is a fixed site where “manufacturing, processing, compounding, or producing for sale” is taking place. On November 17, 2017, Alan Fulton, who at that time was a tax law specialist for the Department, issued a letter to counsel for Petitioner stating that the documentation to date was not sufficient to support the claim, and that the Department needed, for each transaction/refund amount requested, a properly executed assignment of rights form from each of the selling dealers to which Petitioner asserts was paid in error; the amount of tax requested for each transaction in the refund claim; a clear and concise reconciliation of the invoices/transactions for which Petitioner was seeking a refund; and proof of tax paid to the vendor that reconciles to the refund amount. Mr. Fulton also asked for production records or documents to support the claim that the machinery and equipment purchased is used in a manufacturing process to produce a new product; and a thorough description of the manufacturing process, including the specific machinery used. Mr. Fulton advised that this information, as well as any other documentation that may support the protest, needed to be provided to the Department no later than December 12, 2017. On February 28, 2018, the Department issued a Notice of Decision (NOD) of Refund Denial, in which the Department denied the refund in its entirety. In the NOD, the Department noted that it had requested additional documentation from Petitioner that it did not receive. With respect for the claim under the new or expanding business exemption, the NOD stated in part: By asserting its purchases qualify for tax exemption under s. 212.08(5)(b), F.S., Taxpayer implies its purchases are used to manufacture of process tangible personal property for sale. However, Taxpayer provides no arguments as to how its retail gasoline stations are engaged in manufacturing, processing, compounding, or producing for sale tangible personal property at fixed locations. Additionally, Taxpayer has failed to submit documentation specifically requested, such as properly executed Assignment of Rights to Refund of Sales Tax, an Application for Temporary tax Exemption Permit, form DR-1214; proof of tax paid to vendors; production records supporting Taxpayers contention that the machinery and equipment purchased is used in a manufacturing process to produce a new product; a description of the manufacturing process, including the specific machinery and equipment used; and documentation received from the Florida Department of Environmental Protection for the projects. Nonetheless, in considering Taxpayer’s assertions of tax exemption, it is reiterated, pursuant to Rule 12A-1.096(1)(d), F.A.C., promulgated to administer s. 212.08(5)(b), F.S., the phrase “manufacture, process, compound, or produce for sale” means the various industrial operations of a business where raw materials will be put through a series of steps to make an item of tangible personal property that will be sold. The gasoline was previously manufactured by a refinery from crude oil. Furthermore, it is the Taxpayer’s customers that operate the gasoline dispensing pumps at the retail stations, and not for the purpose of conducting industrial operations. As such, the Department does not find that Taxpayer is engaged in manufacturing operations at its retail gasoline stations with the dispensing pumps and underground tanks. Instead, it is the Department’s position, as indicated above, the dispensing pumps and underground storage tanks are more properly classified as storage and delivery systems utilized subsequent to the conclusion of the manufacturing process by a refinery. Therefore, these items would not qualify for the exemption from tax provided under s. 212.08(5)(b), F.S., and Rule 12S-1.096, F.A.C. (emphasis in original) On March 21, 2018, Southeast Petro filed a Petition for Reconsideration contesting the Notice of Decision of Refund Denial. With the Petition for Reconsideration, Petitioner provided, along with some other documentation, a schedule of the transactions at issue; the assignment of rights to refund from each of the selling dealers to which sales tax were paid; the corresponding invoices; the application for temporary exemption permit (DR-1214); and an explanation of how the refund amount was computed. On August 22, 2018, the Department issued its Notice of Reconsideration of Refund Denial, fully sustaining its denial of Southeast Petro’s refund claim. In its Notice of Reconsideration of Refund Denial, the Department reiterated its position stated in the NOD, and added the following statement: For both of the exemptions sought by Taxpayer, the Department acknowledges Taxpayer has submitted an Application for Temporary Tax Exemption Permit, form DR-1213, a reconciliation spreadsheet of the refund claimed, proper [sic] executed Assignment of Rights to Refund of Sales Tax, and various invoices for review and consideration. However, this information is not germane to the refund claim, because the dispensing pumps and underground storage tanks are not qualifying industrial machinery and equipment under the provisions of s. 212.051, F.S. and s. 212.08(5)(b), F.S. On October 19, 2018, Southeast Petro filed its Petition for Chapter 120 Hearing, contesting the Notice of Reconsideration. The case was referred to the Division of Administrative Hearings on November 6, 2019. Southeast Petro paid sales taxes on the purchases of underground storage tanks and dispensing pumps to the vendors supplying the equipment. Those vendors then provided to Southeast Petro Assignment of Rights to Refund of Sales Tax forms, identifying the amount of tax for which they assigned the rights to Southeast Petro. Central Industries, Inc., sold dispensing pumps to Southeast Petro, and on August 23, 2017, assigned the rights to Southeast Petro for refund of the taxes it collected. The amount assigned for transactions occurring from May 1, 2015, through April 30, 2017, is $52,592.92. Guardian Fueling Technologies, LLC, sold dispensing pumps to Southeast Petro, and on August 23, 2017, assigned the rights to Southeast Petro for refund of taxes it collected. The amount assigned for transactions occurring from May 1, 2015, to April 30, 2017, is $41,593.82. Guardian Fueling Technologies, LLC, also executed an assignment of rights for a purchase made in March 2015, where the tax paid was $36,269.31. Sunoco, LLC, sold dispensing pumps to Southeast Petro, and on September 14, 2017, assigned the rights to Southeast Petro for refund of taxes it collected. The amount assigned for transactions occurring from May 1, 2015, to April 30, 2017, is $8,953.41. Modern Welding Company of Florida, Inc., sold underground storage tanks to Southeast Petro, and on June 29, 2015, assigned the rights to Southeast Petro for refund of the taxes it collected. The amount assigned for transactions occurring from June 2012 to March 2015 was $16,646.00. It is noted that this assignment covers purchases that extend back past the refund period. When Southeast Petro originally filed its application for a refund, the requested amount was over $146,000. Over the course of the litigation, Southeast Petro withdrew its claim for refund with respect to some of its sites. The relevant information presented to substantiate the refund claim for each location for which a refund is still sought is listed below. With each transaction, the information presented is taken from the records provided, as opposed to the composite spread sheets. Fractions of a gallon have been discarded in the calculations, as they do not affect the percentages reached. Site 21 Site 21 is an affiliate site located at 5230 University Boulevard, Jacksonville, Florida. Guardian Fueling Technologies sold Southeast Petro four Gilbarco dispensing pumps. The invoice dated October 14, 2016, indicates that it was billed to “M&R Enterprises of Brevard/Southeast Petro.” The total amount invoiced was $58,747.76, and the tax paid for the purchase was $3,585.56. The invoice was paid by M&R United, Inc. The invoice includes references to ancillary features, such as a color screen and an HCR card reader for EMV, but the prices for those items are not listed separately. The dispensing pumps were installed by Petroleum Technicians, Inc., on or about December 22, 2016. In the 12 months prior to the installation of the new dispensing pumps, Site 21 sold approximately 675,257 gallons of fuel. In the 12-month period following the installation, from January 1, 2018, through December 31, 2018, Site 21 sold approximately 754,287 gallons of fuel, for an increase in sales of 11.7%. With respect to mid-grade blended fuel, in the 12 months prior to the installation, Site 21 sold 47,891 gallons, as opposed to 63,224 gallons for the identified 12-month period after installation, for an increase in sales of 32%. Site 99 Site 99 is an affiliate site located at 1600 Aurora Road, in Melbourne, Florida. Southeast Petro bought new Gilbarco dispensing pumps and related hardware for Site 99 as part of a bulk purchase from Guardian Fueling Technologies. The four dispensing pumps bought as part of the bulk purchase for Site 99, cost $56,574, with corresponding tax of $3,960.18. The invoice, dated March 24, 2015, is billed to M&R Enterprise of Brevard/Southeast Petro. The dispensing pumps were installed by Petroleum Technicians, Inc., on or about May 24, 2015. In the 12 months prior to installation, Site 99 sold approximately 656,820 gallons of fuel. In a 12-month period following the installation, from August 2015 through July 2016, Site 99 sold approximately 693,009 gallons of fuel, for an increase of 5.51%. With respect to mid-grade blended fuel, from September 2014, through May 2015, Site 99 sold 16,733 gallons. The records submitted in Petitioner’s Exhibit 33 identifies gasoline sold for the period comprising May through August 2014 on a single page. There is no legend for the types of gasoline sold on this page, and the gas code found in other records corresponding to mid- grade blended gasoline does not appear, so a total for mid-grade fuel sold during the 12-month period cannot be clearly identified. The records are not sufficient to show 12 contiguous months of production or sale of mid-grade fuel. Site 101 Site 101 is an affiliate site located at 6842 Wilson Boulevard, Jacksonville, Florida. Southeast Petro bought four new Gilbarco dispensing pumps from Central Industries. The invoice, dated January 4, 2017, is billed to Southeast Petro. The total amount invoiced is $55,813.49, and the tax paid is $3,157.84. The invoice includes charges for ancillary items not involved in the blending process, such as speakers, hybrid card readers, and image/ graphics. The dispensing pumps were installed by Petroleum Technicians, Inc., on February 9, 2017. In the 12 months prior to the installation of the new dispensing pumps, Site 101 sold approximately 659,658 gallons of fuel. In the selected 12-month period following the installation, from January through December 2018, Site 101 sold approximately 836,764 gallons of fuel, for an increase of 26.85%. With respect to mid-grade blended fuel, in the 12 months prior to the installation of the new dispensing pumps, Site 101 sold 72,575 gallons, as opposed to 86,312 gallons for the period selected, for an increase of 18.93%. Site 122 Site 122 is an affiliate site located at 700 Columbia Boulevard in Titusville, Florida. Central Industries, Inc., sold Southeast Petro five new Gilbarco dispensing pumps and related hardware. The invoice, dated January 5, 2017, is billed to Southeast Petro. The total amount invoiced is $70,806, and the sales tax paid is $4,006.49. Included in the invoice are charges for ancillary items not involved in the blending process, such as speakers, hybrid card readers, and image/graphics. The new dispensing pumps were installed by Petroleum Technicians, Inc., on January 19, 2017. In the 12 months prior to the installation of the new dispensing pumps, Site 122 sold approximately 1,208,313 gallons of fuel. In the selected 12-month period following the installation, from February 2017 through January 2018, Site 122 sold approximately 1,310,010 gallons of fuel, for an increase of 8.42%. With respect to mid-grade blended fuel, in the 12 months prior to installation of the new dispensing pumps, Site 122 sold 67,918 gallons, as opposed to 58,940 gallons for the identified 12-month period after installation. As sales of this grade of fuel actually went down, mid-grade fuel did not see an increase of 5%. Site 234 Site 234 is an affiliate site located at 3860 Highway A1A in Melbourne, Florida. Central Industries, Inc., sold Southeast Petro six new Gilbarco dispensing pumps and related hardware. The invoice, dated January 4, 2017, is billed to Southeast Petro. The total amount invoiced is $84,404.90 and the sales tax paid is $4,776.22. Included in the invoice are charges for ancillary items not involved in the blending process, such as speakers, hybrid card readers, and the Mobil image. Petroleum Technicians, Inc., installed the new dispensing pumps on January 13, 2017. In the 12 months prior to the installation of the new dispensing pumps, Site 234 sold 582,758 gallons of fuel. In the selected 12-month period following the installation, from January through December 2018, Site 234 sold 639,150 gallons of fuel, for an increase of 9.68%. With respect to mid-grade blended fuel, in the 12 months prior to the installation of the new dispensing pumps, Site 234 sold 37,702 gallons, as opposed to 43,842 gallons for the post-installation period selected, for an increase in sales of 16.29%. Site 320 Site 320 is an affiliate site located at 4353 West Main Street in Mims, Florida. Central Industries sold Southeast Petro four new dispensing pumps and related hardware for this site. The invoice, dated January 5, 2017, is billed to Southeast Petro. The total amount invoiced is $54,329.49, and the sales tax paid is $3,073.84. Additional hardware was invoiced for this site on January 20, 2017, for $1,484.00, and sales tax paid of $84.00. The total for the combined invoices is $55,813.49, with total sales tax of $3,157.84. Included in the invoice are charges for ancillary items not involved in the blending process, such as speakers, hybrid card readers, and the BP image. Petroleum Technicians, Inc., installed the new dispensing pumps on January 18, 2017. In the 12 months prior to the installation of the new dispensing pumps, Site 320 sold 1,135,378 gallons of fuel. In the selected 12-month period following the installation, from January through December 2018, Site 320 sold approximately 1,200,945 gallons of fuel, for an increase of 5.77%. With respect to mid-grade blended fuel, in the 12 months prior to the installation of the new dispensing pumps, Site 320 sold 33,106 gallons, as opposed to 36,235 gallons for the period selected, for an increase in sales of 9.45%. Site 343 Site 343 is an affiliate site located at 4090 West Midway Road in Fort Pierce, Florida. Central Industries, Inc., sold Southeast Petro six Gilbarco dispensing pumps and related hardware. The invoice, dated January 5, 2017, is billed to Southeast Petro. The total amount invoiced for the six dispensing pumps is $84,404.90, and the sales tax paid is $4,776.22. Included in the invoice are charges for ancillary items not involved in the blending process, such as speakers, hybrid card readers, and image/graphics. There is a second invoice for Site 343 from Central Industries, Inc., for the purchase of a Gilbarco diesel dispensing pump. However, this pump does not have the blending capability of the other pumps purchased, and Petitioner acknowledges it would not support the criteria for a new and expanding business exemption, so it is not included. Petroleum Technicians, Inc., installed the six dispensing pumps on February 23, 2017. In the 12 months prior to the installation of the new dispensing pumps, Site 343 sold 1,107,473 gallons of fuel. In the selected 12-month period following the installation, from January through December 2018, Site 343 sold 1,289,854 gallons of fuel, for an increase of 16.47%. With respect to the mid-grade blended fuel, in the 12 months prior to installation of the new dispensing pumps, Site 343 sold 47,811 gallons, as opposed to 57,614 gallons for the post-installation period selected, for an increase of 20.5%. Site 346 Site 346 is an affiliate site located at 1595 Island Lane in Orange Park, Florida. Guardian Fueling Technologies sold Southeast Petro eight Gilbarco dispending pumps and related hardware for Site 346. The invoice, dated November 25, 2016, is billed to M&R Enterprises of Brevard/Southeast Petro. The total amount invoiced for the eight dispensing pumps is $118,047.12, and the sales tax paid is $7,722.72. The invoice includes references to ancillary features, such as a color screen and an HCR card reader for EMV, but the prices for those items are not listed separately. Petroleum Technicians, Inc., installed the eight new dispensing pumps for Site 346 on December 29, 2016. In the 12 months prior to the installation of the new dispensing pumps, Site 346 sold 1,004,375 gallons of fuel. In the selected 12-month period following the installation, from January through December 2018, Site 346 sold approximately 1,084,628 gallons of fuel, for an increase of 7.99%. With respect to the mid-grade blended fuel, in the 12 months prior to installation of the new dispensing pumps, Site 346 sold 70,508 gallons, as opposed to 84,059 gallons for the selected post-installation period selected, for an increase of 19.22%. Site 349 Site 349 is an affiliate site located at 11555 Bonita Beach Road Southeast, in Bonita Springs, Florida. Guardian Fueling Technologies sold Southeast Petro four Gilbarco dispensing pumps and related hardware for Site 349. The invoice, dated October 14, 2016, is billed to M&R Enterprise of Brevard/Southeast Petro. The total amount invoiced for the four dispensing pumps is $56,928.61, and the sales tax paid is $3,474.53. The invoice includes references to ancillary features, such as a color screen and an HCR card reader for EMV, but the prices for those items are not listed separately. Guardian Fueling Technologies also installed these pumps on November 18, 2016. In the 12 months prior to the installation of the new dispensing pumps, Site 349 sold 702,975 gallons of fuel. In the selected 12-month period following the installation, from January through December 2018, Site 349 sold approximately 815,819 gallons of fuel, for an increase of 16.05%. With respect to mid-grade blended fuel, in the 12 months prior to installation of the new dispensing pumps, Site 349 sold 66,228 gallons, as compared to 85,116 gallons for the selected post-installation period, for an increase in sales of 28.52%. Site 355 Site 355 is an affiliate site located at 2653 Boggy Creek Road in Kissimmee, Florida. Southeast Petro bought six Gilbarco dispensing pumps and related hardware from Guardian Fueling Technologies as part of a bulk purchase. The invoice, dated March 24, 2015, is billed to M&R Enterprises of Brevard/Southeast Petro. For the pumps and equipment purchased for Site 355, the cost for the pumps (pretax) was $83,738.00, and the sales tax was $5,861.66. Petroleum Technicians, Inc., removed the old pumps and installed the new dispensing pumps on April 27, 2015. For the period from September 1, 2014, through March 31, 2015, Site 355 sold 646,383 gallons of fuel. Only seven months of data is included because Southeast Petro and its affiliated companies did not own the site for a full year before the new pumps were installed, and the gas station was closed before ownership was transferred. No evidence was submitted regarding how long the station was closed prior to purchase. The evidence presented does not provide 12 contiguous months of production or sales records prior to installation of the new equipment. Site 385 Site 385 is an affiliate site located at 420 United States Highway 1, in Vero Beach, Florida. Central Industries, Inc., sold Southeast Petro five new Gilbarco dispensing pumps and related hardware. The invoice, dated October 28, 2016, is billed to Southeast Petro. The total cost of the invoice, including tax, is $69,305.34, and the sales tax paid is $4,457.57. Included in the invoice are charges for ancillary items not involved in the blending process, such as speakers, hybrid card readers, and Exxon graphics. There is an additional invoice for this site dated October 27, 2016, for hanging hardware. The total of this invoice is $2,176.69, with sales tax paid of $127.00. Petroleum Technicians, Inc., installed the dispensing pumps on March 7, 2017. For the 12-month period prior to installation, Site 385 sold 599,935 gallons of fuel. For the selected 12-month period following the installation, January through December 2018, Site 385 sold 630,265 gallons, for an increase of 5.06%. With respect to the mid-grade blended fuel, for the 12 months prior to installation, Site 385 sold 39,588 gallons, as opposed to 45,098 gallons for the post-installation period selected, for an increase of 13.92%. Site 403 Site 403 is an affiliate site located at 5385 Timuquana Road in Jacksonville, Florida. Central Industries, Inc., sold Southeast Petro four Gilbarco dispensing pumps and related hardware for this location. The invoice, dated January 4, 2017, bills Southeast Petro for the purchase. The total billed is $55,813.49, with sales tax paid of $3,157. Included in the invoice are charges for ancillary items not involved in the blending process, such as speakers, hybrid card readers, and image/graphics. Petroleum Technicians, Inc., installed the dispensing pumps on March 28, 2017. Southeast Petro’s affiliate owned Site 403 for only nine months prior to the installation of the dispensing pumps by Petroleum Technicians, so Southeast only submitted sales data for the nine months prior to the installation that an affiliate owned the location. Unlike Site 355, it is not clear whether the site was closed prior to the installation of the new pumps or simply changed ownership. For the nine months provided, Site 403 sold a total of 139,319 gallons of fuel. Using an average of gallons sold for that period, it is estimated that a year’s worth of sales would be approximately 185,759 gallons. For the selected post-installation period, January through December 2018, Site 403 sold 395,300 gallons of fuel. However, Petitioner did not provide 12 contiguous months of production or sales records prior to the installation of the new dispensing pumps. With respect to the mid-grade blended fuel, for the nine months the affiliated entity owned Site 403 prior to installation, it sold 11,362 gallons. Twelve contiguous months of records related to mid-grade fuel were not provided. JQ Trading JQ Trading is not an affiliate entity. It is an independent dealer location owned by Mills Chevron, LLC, located at 900 Mills Avenue in Orlando, Florida, to whom Southeast Petro sells fuel and has a dealer supply agreement. Pursuant to that dealer supply agreement, Southeast Petro supplies the pumps and related equipment in addition to delivering fuel to the site. Central Industries, Inc., sold Southeast Petro two new Gilbarco dispensing pumps and related hardware for JQ Trading. The invoice, dated January 5, 2017, is billed to Southeast Petro. The total cost of the invoice is $28,616.41, and the sales tax paid is $1,618.38. Included in the invoice are charges for ancillary items not involved in the blending process, such as speakers, hybrid card readers, and image/graphics. Petroleum Technicians, Inc., installed the dispensing pumps on January 30, 2017. Southeast Petro’s records show no gasoline sales for January 2017. For the 12 months preceding January 2017, JQ Trading sold 270,977 gallons of fuel. For the selected 12-month period following the installation, March 2017 through February 2018, JQ Trading sold 291,177 gallons, for an increase of 7.45%. Petitioner did not submit adequate documentation to determine the amount of mid-grade gasoline sold or the percentage of change. Aahan/Citrus Aahan/Citrus is an independent dealer location owned by Aahan, Inc., and located at 9548 North Citrus Springs Boulevard in Citrus Springs, Florida. Sunoco, LLC, sold Southeast Petro one dispensing pump for this location. The invoice, dated July 15, 2016, is billed to Southeast Petro. The total billed is $12,041.60, and the sales tax paid is $681.60. Southeast Petro acknowledges that it did not submit the invoice for the installation of the dispensing pump, but Mr. Clark, the owner of Petroleum Technicians, testified credibly that he installed the pump. The invoice indicates that the ship date for the dispensing pump was July 15, 2016. Mr. Clark also testified that installation can take place immediately after dispensing pumps are shipped, or as much as six months later, so relying on the ship date as the installation date is unrealistic. In the end, it does not matter, because regardless of when the dispensing pumps were installed, the increase in sales compared to the selected 12-month post- installation period is more than five percent. More specifically, the selected post-installation period is January through December 2018, and during that period, Aahan/Citrus sold 334,546 gallons of fuel. Assuming that the installation occurred within six months of the invoice, consistent with Mr. Clark’s testimony, the pre-installation comparators and the percentage increases are as follows: August 2015 - July 2016: 203,669 gallons, for a 64.26% increase; September 2015 - August 2016: 203,675 gallons, for 64.24% increase; October 2015 - September 2016: 203,960 gallons, for a 64.03% increase; November 2015 - October 2016: 195,340 gallons, for a 71.26% increase; December 2015 - November 2016: 202,772 gallons, for 64.99% increase; or January 2016 -December 2016: 202,779 gallons, for a 64.98% increase. No records were submitted from which the sales of mid-grade blended fuel can be identified or the percentage of increase, if any, can be determined. Snappy Food Mart Snappy Food Mart is an independent dealer location located at 1716 Oceanshore Boulevard in Ormond Beach, Florida. Sunoco, Inc., sold Southeast Petro three Gilbarco dispensing pumps for this location. The invoice, dated November 30, 2015, with a ship date listed as the same day, is billed to Southeast Petro. The total cost of the invoice is $35,189.73, with sales tax paid of $2,147.73. Like Aahan/Citrus, the installation invoice could not be located, although Mr. Clark testified that his company installed the pumps. As noted above, since pumps are sometimes installed up to six months after purchase, using the ship date (or the day after) as the installation date is unrealistic. The total gallons of fuel sold for the selected post-installation period of January through December 2018 is 251,355 gallons. Using the scenarios outlined below, the percentage increase for each is still over five percent. December 2014 – November 2015: 205,142 gallons,, for a 22.53% increase; January 2015 – December 2015: 200,807 gallons, for a 25.17% increase; February 2015 - January 2016: 201,664 gallons, for a 24.64% increase; March 2015 – February 2016: 198,116 gallons, for a 26.87% increase; April 2015 – March 2016: 214,614 gallons, for a 17.12% increase; or May 2015 – April 2016: 212,416 gallons, for an 18.33% increase. No records were submitted from which the sales of mid-grade blended fuel can be identified or the percentage of increase, if any, can be determined. Zack’s Zack’s is an independent dealer location owned by Zack’s Oil Enterprises, LLC, and located at 4201 Southwest 64th Avenue, in Davie, Florida. Southeast Petro purchased four dispensing pumps and related hardware for Zack’s from Sunoco, LLC, at a total cost of $45,444.32, with tax paid of $2,572.32. The invoice, dated October 6, 2014, is billed to Southeast Petro. Unlike other vendors for dispensing pumps, Sunoco issues its invoices after it ships the pumps, so, according to Summit Shah, pumps purchased from Sunoco are sometimes installed prior to the date on the invoice. In this case, the invoice from Petroleum Technicians, Inc., indicates that the dispensing pumps were installed August 24, 2015. Petitioner submitted gasoline sales records from September 2014 forward. The Dealer Supply Agreement for this location was assigned to Southeast Petro in July 2015, shortly before the installation of the new dispensing pumps. For the period beginning September 1, 2014, through August 30, 2015 (with no sales in August 2015), Zack’s sold 697,198 gallons of fuel. For the selected 12-month post-installation period, January through December 2017, Zack’s sold 743,104 gallons of fuel, for an increase of 6.58%. No records were submitted from which the sales of mid-grade blended fuel can be identified or the percentage of increase, if any, can be determined. BAM BAM is also an independent dealer location to whom Southeast Petro supplies fuel, and is located at 500 Highway A1A, in Satellite Beach, Florida. Southeast Petro purchased three dispensing pumps and related hardware for BAM from Sunoco, Inc. The invoice, dated July 1, 2013, is billed to Southeast Petro and lists a total of $35,024.52, with sales tax paid of $1,982.52. However, the assignment of rights from Sunoco, LLC, only covers sales tax paid from May 1, 2015, to April 30, 2017. Without an assignment of rights for the time period when these dispensing pumps were purchased, they cannot form the basis for a refund of the taxes paid. All of the records regarding fuel sold at each location described above were submitted for the purpose of establishing “production.” However, the records do not reflect production of any product, but rather, the volume of sales experienced at each location prior to and after the installation of the new dispensing pumps. While it is clear that overall sales at each location increased more than 5%, sometimes markedly so, the records submitted do not establish changes in production. Moreover, inasmuch as Petitioner is not contending that it “manufactures, processes, compounds or produces” premium or regular unleaded gas, sales records related to these products that Southeast Petro distributes, as opposed to manufacturing, processing, compounding, or producing, cannot establish production increases. Based upon all of the evidence presented, the more persuasive and compelling evidence is that the dispensing pumps provide a valuable improvement in the delivery of fuel to the customer, but are not a part of the production of the fuel itself. Petro also purchased two storage tanks from Modern Welding, for which they paid a total of $95,529.50 and sales tax of $5,454.50. However, unlike the dispensing pumps, storage tanks do not contribute to the “making” of a different octane-rated fuel. The evidence presented indicates that the storage tanks’ primary purpose is to store the gasoline held at each fuel location until the fuel is purchased by a customer. The tanks, like the dispensing pumps, are part of the delivery system for fuel as opposed to its production. Both tanks were installed at locations that were new businesses at the time of installation. Therefore, no prior production records for these locations were submitted.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner’s Application for Refund as a new or expanding business be denied, and its Petition for Chapter 120 Hearing be dismissed. DONE AND ENTERED this 19th day of October, 2020, in Tallahassee, Leon County, Florida. S LISA SHEARER NELSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 19th day of October, 2020. COPIES FURNISHED: Gerald J. Donnini, II, Esquire Moffa, Sutton & Donnini, P.A. Trade Center South, Suite 930 100 West Cypress Creek Road Fort Lauderdale, Florida 33309 (eServed) Mark S. Hamilton, General Counsel Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 (eServed) John Mika, Esquire Office of the Attorney General Plaza Level 01 The Capitol Tallahassee, Florida 32399-1050 (eServed) Rex D. Ware, Esquire Moffa, Sutton & Donnini, P.A. Suite 330 3500 Financial Plaza Tallahassee, Florida 32312 (eServed) Paula Antonovna Savchenko, Esquire Moffa Sutton & Donni, P.A. Suite 930 100 West Cypress Creek Road Fort Lauderdale, Florida 33309 (eServed) James A. Zingale, Executive Director Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 (eServed)
The Issue The issues for determination in this case are whether Respondent is indebted to Petitioner for the purchase of agricultural products, and whether such indebtedness constitutes a breach of the conditions of the bond posted by the Surety for which payment should issue.
Findings Of Fact Petitioner, SARASOTA GROWERS INCORPORATED (SARASOTA GROWERS), is a producer of agricultural products, primarily nursery ornamental plants, in Sarasota County, Florida. W.R. Walden is president of SARASOTA GROWERS. Respondent, TOULIA XIOTAS INCORPORATED, d/b/a GULF BREEZE LANDSCAPING (GULF BREEZE), is a licensed dealer in agricultural products, holding License Number 10091, issued by the Department of Agriculture and Consumer Services. At all material times, David Joy was the manager of GULF BREEZE. Co-Respondent and Surety, FRONTIER INSURANCE COMPANY OF NEW YORK (FRONTIER), posted Bond Number 5004806 in the amount of $9,999.00 in support of Respondent's license as a dealer in agricultural products. The inception date of the bond was April 30, 1996, and the expiration date of the bond was April 30, 1997. In early 1997, Respondent GULF BREEZE through its manager, David Joy, contacted SARASOTA GROWERS and ordered the delivery of certain agricultural products. By usual business practices, payment was demanded upon delivery. On February 10, 1997, SARASOTA GROWERS delivered agricultural products to GULF BREEZE. The invoiced value of the agricultural products delivered to GULF BREEZE was $2,255.00. On February 12, 1997, SARASOTA GROWERS delivered agricultural products valued at $302.50 to GULF BREEZE. On March 7, 1997, SARASOTA GROWERS delivered agricultural products valued at $18.00 to GULF BREEZE GULF BREEZE did not pay for the agricultural products at the time of delivery by SARASOTA GROWERS. At each of these deliveries, SARASOTA GROWERS was informed by an employee of GULF BREEZE that the manager David Joy, was not present, but that payment by check would be mailed. After the delivery of March 7, 1997, SARASOTA GROWERS ceased making deliveries to GULF BREEZE. After several demands for payment by SARASOTA GROWERS, GULF BREEZE remitted a partial payment of $1,000.00 for the agricultural products delivered by SARASOTA GROWERS. GULF BREEZE failed to properly make payment for agricultural products delivered by SARASOTA GROWERS and is indebted to SARASOTA GROWERS in the amount of $1,575.50.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered directing Respondent TOULIA XIOTAS INCORPORATED, d/b/a GULF BREEZE LANDSCAPING, to pay Petitioner SARASOTA GROWERS INCORPORATED $1,575.50 for agricultural products sold to Respondent, and in the event Respondent fails to make such payment, within fifteen (15) days of that order, that the Surety be required to pay pursuant to the bond posted. DONE AND ENTERED this 14th day of November, 1997, in Tallahassee, Leon County, Florida. RICHARD HIXSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUMCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 14th day of November, 1997. COPIES FURNISHED: Brenda Hyatt, Chief Department of Agriculture and Consumer Services 508 Mayo Building Tallahassee, Florida 32399-0800 Sharon Moultry, Clerk Human Relations Commission Building F, Suite 240 325 John Knox Road Tallahassee, Florida 32303-4149 Richard Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399 W. R. Walden, President Sarasota Growers, Incorporated 1001 Sinclair Drive Sarasota, Florida 34240 Toulia Xioutas, Incorporated Gulf Breeze Landscaping 901 MacEwen Drive Osprey, Florida 34229 Frontier Insurance Company of New York 195 Lake Louise Marie Road Rock Hill, New York 12775-8000
Findings Of Fact Upon consideration of the oral testimony and the documentary evidence adduced at the hearing, the following relevant facts are found: At all times pertinent to this proceeding, Petitioner, L. L. Hiers was a "producer" of agricultural products in the state of Florida as defined in Section 604.15(5), Florida Statutes. At all times pertinent to this proceeding, Respondent, Jay Nichols, Inc. (Nichols) was a licensed "dealer in agricultural products" as defined in Section 604.15(1), Florida Statutes, issued license number 1547 by the Department, and bonded by U.S. Fidelity & Guaranty Co. (Fidelity) for the sum of $50,000.00 bond number 790103-10-115-88-1, with an effective date of March 22, 2988 and a termination date of March 22, 1989. At all times pertinent to this proceeding, Nichols was authorized to do business in the state of Florida. The Complaint was timely filed by Petitioner in accordance with Section 604.21(1), Florida Statutes. Prior to Petitioner selling or delivering any watermelons (melons) to Nichols, Petitioner and Nichols agreed verbally that: (a) Petitioner would sell Nichols melons on a per pound basis at a price to be quoted by Nichols on the day of shipment, (b) Petitioner would harvest and load the melons on trucks furnished by Nichols (c) a weight ticket with the weight of the truck before and after loading would be furnished to Petitioner; (d) Nichols or its agent in the field would have the authority to reject melons at the place of shipment (loading) which did not meet the quality or grade contracted for by Nichols; (e) the melons were to be of U.S. No. 1 grade and; (f) settlement was to be made within a reasonable time after shipment. Although Nichols assisted Petitioner in obtaining the crew to harvest and load the melons, Petitioner had authority over the crew and was responsible for paying the crew. On a daily basis, Petitioner would contact Nichols and obtain the price being paid for melons that day. The price was marked in the field book with the net weight of each load. Nichols contends that the price quoted each day was the general price melons were bringing on the market that day, but the price to be paid Petitioner was the price Nichols received for the melons at their destination minus a 1 cent per pound commission for Nichols, taking into consideration freight, if any. Nichols was not acting at Petitioner's agent in the sale of the melons for the account of the petitioner on a net return basis nor was Nichols acting as a negotiating broker between the Petitioner and the buyer. Nichols did not make the type of accounting to Petitioner as required by Section 604.22, Florida Statutes, had Nichols been Petitioner's agent. The prices quoted by Nichols to Petitioner each day was the agreed upon price to be paid for melons shipped that day subject to any adjustment for failure of the melons to meet the quality or grade contracted for by Nichols. On June 10, 1988, Petitioner contacted Nichols and was informed that the price to be paid for melons shipped that day was 6 cents per pound. This price was recorded in the field book with the net weight of each truckload of melons shipped that day. Petitioner shipped 4 loads of melons on June 10, 1988 but only 3 loads are in dispute, as follows: (a) load no. 10891 weighing 45,830 lbs. for which Nichols paid 3 cents per pound; (b) load no. 10892 weighing 43,950 lbs. for which Nichols paid 5 cents per pound and; (c) load 10893 weighing 47,190 lbs. for which Nichols paid 5 cents per pound. On June 22, 1988, Petitioner contacted Nichols and was informed that the price to be paid ford melons shipped that day was 5.25 cents per pound. This price was recorded in the field book with the net weight the loads shipped that day. Only load no. 10174 weighing 44,550 lbs. for which Nichols paid 3 cents per pound is in dispute. On June 23, 1988, Petitioner contacted Nichols and was informed that the price to be paid for melons shipped that day was 5.5 cents per pound. This price was recorded in the field book with the net weight of the loads shipped that day. Two loads were shipped, but only load no. 11227 weighing 48,490 pounds for which Nichols paid 5 cents per lbs. is in dispute. The differences in the price paid for each load and the agreed upon price are as follows: (a) load no. 10891-$1324.90; (b) load no. 10892-$479.50; (c) load no. 10893-$471.90; (d) load no. 11174-$891.00 and; (c) load no. 11227- $242.45. The total amount in dispute is $3,419.75. Nichols contends that load no. 10891 was rejected because it failed to pass government inspection due to quality, and that the quality of load nos. 10982, 10893, 1174 and 1122 was poor, resulting in a lower price than the price agreed upon. There was insufficient evidence to support this contention. Nichols has refused to pay Petitioner the difference between the agreed upon price for load nos. 10891, 10892, 10893, 11174 and 11227 and the price paid by Nichols as indicated on the settlement sheet. The difference is $3,419.75, and is owed to Petitioner by Nichols.
Recommendation Upon consideration of the foregoing Findings of Fact, Conclusions of Law, the evidence of record and the candor and demeanor of the witnesses, it is, therefore, RECOMMENDED that Respondent, Jay Nichols, Inc. be ordered to pay to Petitioner, L. L. Hiers the sum of $3,419.75. It is further RECOMMENDED that if Respondent, Jay Nichols, Inc. fails to timely pay Petitioner, L. L. Hiers as ordered, then Respondent, U.S. Fidelity & Guaranty Co. be ordered to pay the Department as required by section 604.21, Florida Statutes, and that the Department reimburse the Petitioner in accordance with Section 604.21, Florida Statutes. Respectfully submitted and entered this 20th day of March, 1989, in Tallahassee, Florida. WILLIAM R. CAVE 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 20th day of March, 1989. COPIES FURNISHED: Carl Hiers, Qualified Representative Route 5, Box 339 Dunnellon, Florida 32630 Steve Nichols, Vice President Jay Nichols, Inc. Qualified Representative Post Office Box 1705 Lakeland, Florida 33802 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-0810 Mallory Horne, General Counsel Department of Agriculture and Consumer Services 513 Mayo Building Tallahassee, Florida 32399-0800 Ben Pridgeon, Chief Bureau of Licensing & Bond Department of Agriculture Lab Complex Tallahassee, Florida 32399-1650 U.S. Fidelity & Guaranty Co. Post Office Box 1138 Baltimore, MD 21203
The Issue This case arises from a complaint filed by Jay Nelson and Ernest Leclercq, d/b/a Sun Coast Farms, in which it is asserted that H. M. Shield, Inc., is indebted to the Complainants in the amount of $7,266.20 for agricultural products sold to the Respondent. At the hearing the representative for the Complainant stated that most of the matters asserted in the complaint had been resolved by settlement, but that six items remained in dispute and that the total amount remaining in dispute was $1,041.20. Ms. Ernst testified as a witness for the Complainant and also offered several documents as exhibits, which documents were marked as a composite exhibit and received in evidence.
Findings Of Fact Based on the testimony of the witness and on the exhibits offered and received in evidence, I make the following findings of fact: On February 23, 1984, the Complainant sold agricultural products consisting of Snap Beans, Wax Beans, and Zukes (Lot No. 1116) to the Respondent. At the time of the hearing there was still unpaid and owing the amount of $327.00 on this sale. On March 8, 1984, the Complainant sold agricultural products consisting of Snap Beans and Wax Beans (Lot No. 1294) to the Respondent. At the time of the hearing there was still unpaid and owing the amount of $184.20 on this sale. On March 8, 1984, the Complainant sold agricultural products consisting of Wax Beans (Lot No. 1295) to the Respondent. At the time of the hearing there was still unpaid and owing the amount of $184.20 on this sale. On March 19, 1984, the Complainant sold agricultural products consisting of Snap Beans and Zukes (Lot No. 1453) to the Respondent. At the time of the hearing there was still unpaid and owing the amount of $202.50 on this sale. On March 19, 1984, the Complainant sold agricultural products consisting of Snap Beans and Zukes (Lot No. 1454) to the Respondent. At the time of the hearing there was still unpaid and owing the amount of $110.00 on this sale. On March 19, 1984, the Complainant sold agricultural products consisting of Snap Beans and Zukes (Lot No. 1457) to the Respondent. At the time of the hearing there was still unpaid and owing the amount of $202.50. The total amount owed for agricultural products by the Respondent to the Complainant, which amount was unpaid as of the time of the hearing, is $1,401.20.
Recommendation On the basis of all of the foregoing, it is recommended that a Final Order be entered directing H. M. Shield, Inc., to pay Jay Nelson and Ernest Leclercq, d/b/a Sun Coast Farms, the amount of $1,401.20 for the agricultural products described in the findings of fact, above. In the event the Respondent fails to make such payment within 15 days of the Final Order, it is recommended that the surety be required to pay pursuant to the bond. DONE and ORDERED this 6th day of June, 1985, at Tallahassee, Florida. Hearings Hearings MICHAEL M. PARRISH Hearing Officer Division of Administrative The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative this 6th day of June, 1985. COPIES FURNISHED: Jay Nelson & Ernest Leclercq d/b/a Sun Coast Farms P.O. Box 3064 Florida City, Florida 33034 H. M. Shield, Inc. Room 82 State Farmer's Market Pompano Beach, Florida 33060 Hartford Insurance Company of the Southeast 200 East Robinson Street Orlando, Florida 32801 Robert A. Chastain, Esquire Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 Joe W. Kight, Chief Bureau of License and Bond Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 The Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32301
The Issue The issue for determination is whether Respondents owe Petitioner approximately $65 for one pallet of sod which Petitioner delivered to a third party building contractor's construction site at the instigation of Respondent.
Findings Of Fact Petitioner is a producer of agricultural products, grass sod, and Respondent Arsham & Associates, Inc., (Arsham), is a dealer of such products in the course of its normal landscaping business activity. Respondent Safeco Insurance Company is the bonding agent for Respondent Arsham pursuant to Section 604.20, Florida Statutes. Petitioner generally deals on a cash basis with customers, unless the customer is licensed by the Department of Agriculture and Consumer Services for the sale of agricultural or horticultural products. Customers, who are licensed, may maintain an open account status with Petitioner. Respondent Arsham was such a customer. For approximately two years, Respondent Arsham and Petitioner enjoyed a relationship whereby Petitioner sold Respondent Arsham grass sod for various projects. An employee of Petitioner provided sod installation services on an independent basis to Respondent Arsham for these shipments. On Monday, September 26, 1988, Tom Shaldjian, the president of Respondent Arsham, discussed with Petitioner's personnel an arrangement whereby Petitioner would provide grass sod for a particular project under construction by a third party builder. Shaldjian told Petitioner that billing for the sod should be made directly to this builder, rather than to Respondent Arsham as had been the practice on previous occasions. However, Shaldjian promised Petitioner personnel that if payment for the sod was not made by the builder, then Respondent Arsham would pay the bill. Petitioner agreed with this arrangement. Confirmation of the required quantity of sod, approximately 15 pallets or 7500 square feet, was made by Shaldjian on Wednesday, September 28, 1988. Petitioner delivered 15 pallets of grass sod to the building site on Friday, October 28, 1988. In his independent capacity, an employee of Petitioner provided installation services at the site for the grass sod. Subsequent to the delivery and installation of the sod, Petitioner followed Respondent's instructions and submitted a bill to the construction builder for a total amount of $ 1033.50. Of this amount, $975 was allocated to 15 pallets of sod at a cost per pallet of $65. The remainder of the amount consisted of sales tax in the amount of $58.50. The builder paid only $964.60, or an amount equal to the cost of 14 pallets plus 6 per cent sales tax. Shaldjian, Respondent Arsham's president, visited the construction site after what he determined to be the completion of the grass sod installation and noted that almost one complete pallet of grass sod had not been utilized. Only a few pieces of sod were missing from the pallet. As a result of this observation, he later advised Petitioner that Respondent Arsham would not be responsible for paying the $65 deducted by the builder from the initial bill for the 15th pallet of sod. Shaldjian's testimony that Petitioner worked this particular sod job alone and without the involvement of Respondents is not credited in view of other testimony establishing that Petitioner had no arrangement or contract with the builder regarding the sale of the grass sod in question beyond submission of the bill for the product, after delivery, to the builder as opposed to Respondent Arsham. Testimony of personnel employed by Petitioner establishes that the sod in this instance was a perishable product in view of weather conditions at the time, making salvage of any sod remaining after the installation impossible. The proof fails to establish that Petitioner took possession of any grass sod remaining at the conclusion of its installation or otherwise obtained any salvage value from any of the product which may have been left over.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered requiring Respondents to pay Petitioner the sum of $68.90. DONE AND ENTERED this 7th day of June, 1989, in Tallahassee, Leon County, Florida. DON W. DAVIS 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 7th day of June, 1989. COPIES FURNISHED: Arsham & Associates, Inc. 254 Longwood Hills Road Longwood, Florida 32750 Safeco Insurance Company of America Safeco Plaza Seattle, Washington 98185 Hillside Sod Farms, Inc. 1620 E. State Road 46 Geneva, Florida Hon. Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-1550 Mallory Horne General Counsel 513 Mayo Building Tallahassee, Florida 32399-0800 Ben Pridgeon, Chief Bureau of Licensing & Bond Department of Agriculture Lab Complex Tallahassee, Florida 32399-1650
The Issue At issue in this proceeding is the reasonable cost to be reimbursed Petitioner, under the provisions of Section 376.3071(12), Florida Statutes, for the development of a Monitoring Only Plan (MOP) program for the Dagam Oil Company (DEP Facility No. 138504146), at 331 23rd Street, Miami Beach, Florida.
Findings Of Fact Background Petitioner, Panhandle Industries, Inc., is a Florida corporation engaged in the business of consulting, engineering and construction. George M. Hidle, a professional geologist licensed in the State of Florida, is the president and sole owner of the Petitioner corporation. In September 1992, Dagam Oil Company, doing business as Sierra Fina, employed Petitioner to do environmental assessment work and prepare a Contamination Assessment Report (CAR) under the then existing Rule 17-770.630, Florida Administrative Code, for a site located at 331 23rd Street, Miami Beach, Florida (DEP Facility No. 138504146).4 That CAR was submitted to DERM (Metropolitan Dade County, Department of Environmental Resources Management) July 13, 1993. (Petitioner's Exhibit 1.) Pertinent to this case, the CAR provides the following background or historical information: . . . PHYSICAL SETTING . . . Sierra Fina is located at 331 23rd Street in Miami Beach, Florida . . . The facility is bordered to the north by Collins Canal, to the east by the light commercial properties, and to the south/southeast by property that once contained Chevron and Fina service stations. . . . * * * . . . FACILITY HISTORY AND OPERATION Sierra Fina was built in 1963. The station originally operated as a Sunoco service station with a 3 bay garage. Dagam Oil Company purchased the facility in March 1981 from Charles Rosenblatt. At the time the station had five underground fuel tanks. . . . * * * . . . PREVIOUS INVESTIGATIONS Dagam Oil Company contracted with another environmental company in November 1988 to collect groundwater samples from . . . five monitoring wells at the facility. Groundwater samples were collected on November 9, 1988 and analyzed by EPA Method 602. Monitoring well MW-3 was also analyzed by EPA Method 610. All five of the wells had hydrocarbon contaminant concentrations in excess of state guidelines. . . . A discharge notification form was mailed to the DER and DERM on December 9, 1988, the date of receipt of the analytical results from the November 9, 1988 groundwater sampling event. . . . * * * . . . INITIAL REMEDIAL ACTIONS [IRA] [The F]ive underground storage tanks [and associated piping] were removed from the facility during March and April 1989 [, and replaced with four new cathodically protected underground petroleum storage tanks]. Approximately 400 cubic yards of contaminated soil was also removed at that time. On March 31, 1989 a composite sample of the soil was collected for analysis . . . Because of limited space at the station, the contaminated soil was hauled to a Metro Trucking Inc. storage yard located at 112th Avenue and 143 Street in Miami. The contaminated soil was landfarmed at this Metro Trucking facility for a period of seven months, during which time the soil was spread onto visqueen and tilled on a regular basis. On November 21, 1989 the soil was resampled and analyzed . . . Results of this second round of analyses met clean fill criteria. Also at the time of tank replacement, a sheen of free floating hydrocarbons was observed on water in the tank pit. A vac truck was used to skim this product from the pit prior to tank replacement. Approximately 2100 gallons of oily water were removed, transported, and disposed of by Cliff Berry, Inc. . . . Other than these IRA activities, no other assessment or remediation work had been performed at the facility until Petitioner was employed in September 1992. Petitioner's CAR concluded that: Soil and groundwater at Sierra Fina are contaminated with gasoline and diesel hydrocarbons. Excessively contaminated soil is confined to an area at the western end of the station building that is approximately 20 feet in width by 30 feet in length, extending down to a water table of between 6 and 8 feet below land surface. No free phase floating product is present on the groundwater underlying this facility. However, dissolved hydrocarbon contamination is present in the groundwater. A dissolved hydrocarbon plume is present in the western half of the site. This plume measures 80 feet in length by 60 feet in width and extends to a depth of less than 22 feet below land surface, yielding approximately 134,640 gallons of hydrocarbon contaminated water. Volume calculations are based on an average depth to groundwater of 7 feet below land surface and an effective soil porosity of 25%. The highest benzene (53.3 ppb) and total napthalenes (752 ppb) concentrations were detected in MW-12. * * * Groundwater within the Biscayne Aquifer beneath Sierra Fina is nonpotable because of salt water intrusion from the Atlantic Ocean. For this reason there are no private or public potable wells in the area. Contamination at Sierra Fina is limited onsite to the western half of the station, and poses no threats to sensitive receptors in the area, with the possible exception of Collins Canal. The cause of hydrocarbon contamination was never determined; however, the most probable source, i.e. previous petroleum tanks and lines, were removed in March and April of 1989. Based on these findings and the data presented about or elsewhere in this report, it is known that soil and groundwater contamination does exist at this facility in concentrations that exceed guidelines specified in Section 17- 770.730(5)FAC; however, the levels of contamination may not warrant the need for any extensive remediation activities at this site. Petitioner's CAR was approved by DERM on October 8, 1993, and Petitioner was directed to submit a Remedial Action Plan (RAP) within 60 days.5 At the time, Mr. Hidle (Petitioner) was aware that the levels of contamination were low or near target levels, and that it was likely that the contamination levels would decrease naturally over time. Consequently, Petitioner elected to seek approval of a Monitor Only Plan (MOP), as opposed to a RAP. Such choice was favored based on the nature and location of the contaminants. In this regard, it was observed that the soil contamination consisted of both gasoline and diesel fuel, with much of the contaminated soil abutting or underneath the building. Excavation and removal of the soil was not an alternative because it would undermine the structural integrity of the building. Moreover, given the fuel mix, vapor extraction was not a viable option. Given Petitioner's choice to pursue approval of a MOP, it gave notice to the Department and DERM on October 18, 1993, as well as November 12, 1993, and December 2, 1993, of its intention to undertake groundwater sampling and soil sampling on the site. Groundwater sampling was undertaken by Mr. Hidle between 1:30 p.m., November 30, 1993, and 2:30 a.m., December 1, 1993,6 at which time he drew water samples for laboratory analysis from 10 monitor wells (MW) and one deep well (DW). A duplicate sample was also retrieved at MWs 12R and 14, and equipment blanks were also obtained for laboratory analysis. Between 8:25 p.m., December 4, 1993, and 3:40 a.m. December 5, 1993,7 Mr. Hidle and a senior technician (Martin Hidle) augured 6 soil borings for use in preparing the MOP and collected one soil sample for laboratory analysis. Petitioner delivered the water samples to the laboratory (Envirodyne, Inc.) on December 2, 1993, and the soil sample on December 6, 1993, for analysis. The laboratory completed its analysis of the water samples on December 13, 1993, and of the soil sample on December 14, 1993, and rendered its written reports (analysis) to Petitioner.8 Upon receipt of the laboratory data, Mr. Hidle completed his preparation of the MOP. (Petitioner's Exhibit 4.) That MOP contained the following conclusions and recommendations: The initial dissolved hydrocarbon plume dimensions were based on data from groundwater sampling events of January and February 1993. Laboratory results from a more recent sampling event (11/30/93) indicate that plume size and hydrocarbon compound concentrations therein have decreased substantially (Table 4-2). Maximum groundwater contaminant concentrations decreased as follows: benzene from 53.3 ppb to 11.1 ppb; BTEX from 111.7 ppb to 20.6 ppb; total naphthalenes from 752 ppb to 246.1 ppb. During the contamination assessment program task a small area of contaminated soil was found to be abutting the western end of the station building (CAR, Fig. 3-1, p. 35). Because of the presence of diesel compounds in the groundwater, it was assumed during preparation of the CAR that the soil too was contaminated with diesel. In early December 1993 PI Environmental personnel installed six additional soil borings (Figure 3-1, SB-16 through SB-21) and collected one soil sample for laboratory analyses. The soil borings were augered in the immediate area of the previously defined contaminated soil plume, and soil samples were analyzed in the field by using a Foxboro OVA 128. Soil samples were collected vertically every two feet, beginning at one foot below ground surface and continuing until the water table was encountered. A soil sample was collected from boring SB-17 at a depth of six feet below land surface. A net OVA reading of 160 ppm was observed from a duplicate sample taken from the same depth. The soil sample was tested by EPA Methods 3540/8100 (diesel compounds) and 9073 (TRPH). Laboratory results indicated that all diesel compounds were below laboratory detection limits, and the TRPH concentration was below normal background readings. Soil contamination was reclassified as being gasoline in origin, because no diesel compounds were detected in the soil sample from SB-17. Section 17-770.200(2) Florida Administrative Code defines excessively contaminated soil, associated with gasoline contamination, as those that have a net OVA/FID reading equal to or greater than 500 ppm. From December 1993 sampling event, a maximum net OVA/FID reading of 316 ppm was obtained from a sample that was collected at five fee below land surface in SB-17. Based on these results, no excessively contaminated soil was found during the most recent sampling event. It is the recommendation of PI Environmental Inc. that a Monitoring Only Plan be implemented at Sierra Fina. This recommendation is based on the following findings: 1) Absence in the study area of any potable water wells within the Biscayne Aquifer because of salt water intrusion from the Atlantic Ocean 2) Absence of free phase hydrocarbons 3) Absence of excessively contaminated soil 4) Substantial decrease in concentrations of dissolved hydrocarbon compounds within the groundwater during the last year, and 5) relatively low levels of hydrocarbon contamination in the groundwater, i.e., based on the November 30, 1993 sampling event, maximum benzene of 11.1 ppb, maximum BTEX of 20.6 ppb, and maximum total naphthalenes of 246.1 ppb. It is our recommendation that groundwater from monitoring wells MW-8, MW-12R, MW-6, and MW-17 be sampled on a quarterly basis. Groundwater from the source area wells, MW-8 and MW-12R, should be analyzed quarterly by EPA Methods 602 and 610. Groundwater from the perimeter wells, MW-6 and MW-17, should be analyzed quarterly by EPB Method 602 and semiannually by EPA Methods 602 and 610. Petitioner submitted the MOP to DERM on January 24, 1994. Pertinent to this case, it is observed that the MOP was a brief document, consisting of only 13 pages of textual material, much of which was a restatement of material contained in the CAR. The balance of the report consisted of 5 "Figures" (three of which were contained in the CAR and one of which is an updated version of a CAR Figure); 2 "Tables" (an update of the Water Table Elevation table contained in the CAR to include the November 30, 1993, data, and an update of the Summary of Groundwater Analyses contained in the CAR to include the November 30, 1993, and December 1, 1993, data); 6 "Geologic Log[s]" (a restating of the soil boring results noted in the field notes for December 4 and 5, 1993); copies of the laboratory (Envirodyne, Inc.'s) reports of groundwater analysis; and the laboratory's report on the soil analysis. In all, while apparently adequate and nicely presented, the MOP does not address a complex or unique issue, and does not evidence the expenditure, or need to expend, an inordinate amount of effort to produce. Petitioner's MOP was disapproved by DERM on May 11, 1994, for the following reasons: A complete round of groundwater analyses, no greater than six months old, is required. Therefore, all wells at this site must be sampled for EPA Method 418.1, and monitoring wells numbered MW-6, MW-9, MW-10, MW-11, MW-13, MW-16, and MW-17 must be sampled for EPA Method 610. Because diesel contamination is present at this site, soil OVA readings above 50 ppm are considered to indicate excessively contaminated soil. Based on this OVA readings obtained for your Contamination Assessment Report (CAR) and this MOP, excessively contaminated soil does exist at this site. Since this coil could be a continuing source of contamination, it must be removed prior to the approval of a MOP. Consequently, Petitioner was directed to submit an addendum to the MOP to address those issues. On June 1, 1994, Petitioner gave notice to the Department and DERM of its intent to collect groundwater samples to address issues raised by DERM's MOP review letter. These samples were collected by Mr. Hidle and a technician (Leo Iannone) between 1:15 p.m. and 10:00 p.m., June 15, 1994.9 Petitioner delivered the water samples to the laboratory (Envirodyne, Inc.) on June 16, 1994. The laboratory completed its analysis and delivered its written reports to Petitioner on or about June 23, 1994. Upon receipt of the laboratory data, Mr. Hidle completed the Monitoring Only Plan Addendum (Petitioner's Exhibit 8), and submitted it to DERM on July 5, 1994. The addendum addressed the additional groundwater analysis that was performed, and with regard to the diesel contamination it observed, as follows: Soil analytical results (MOP, Page 62) are below laboratory detection limits for EPA 610 compounds; however, because groundwater at this facility is contaminated with both gasoline and diesel, we are concurring with DERM by reclassifying excessively contaminated soil as any soil that exhibits net OVA/FID readings of 50 ppm or greater, per Chapter 17-770 FAC. OVA/FID soil analyses were performed in accordance to Panhandle Industries, Inc. approved Comp QAP. Net OVA/FID soil results obtained during the CAR program task are shown in Figure 1-5. A maximum net OVA/FID reading of 887 ppm was obtained during CAR soil assessment activities which ended on November 29, 1992. Figure 1-6 shows net OVA/FID results obtained during the MOP program task. These MOP analyses are current through December 5, 1993. A maximum net OVA/FID of 316 ppm was obtained during this latter event. As is shown in comparison of Figures 1-5 and 1-6, it can be seen that the size of the soil contaminant plume and OVA/FID net soil readings therein have decreased significantly since initiation of the CAR. Also, by observing Figure 1-6, which has a scale of 1" = 20', it is evident that very little soil, if any can be excavated without jeopardizing the structural integrity of the station building. Furthermore, there exist the possibility that some soil contamination may underlie the building itself; therefore, soil excavation would most likely result in only partial removal of the contaminated soil plume. The addendum concluded by recommending that the MOP be implemented as originally proposed, but with additional monitoring to assure a continuing decline in contamination. The addendum, like the MOP, was a brief document and contains only 6 pages of textual material. The balance of the addendum contains 6 "Figures" (all of which appeared in the CAR or MOP); 2 "Tables" (an update of the Water Table Elevations table contained in the MOP to include June 15, 1994, data, and an update of the Summary of Groundwater Analyses contained in the MOP to include the June 15, 1994, data); and the laboratory reports of groundwater analyses. As with the MOP, the addendum did not appear to address any complex or unique issues, and did not evidence the expenditure, or need to expend, an inordinate amount of time to produce. On August 16, 1994, and August 26, 1994, DERM and the Department, respectively, approved the "monitoring only" proposal. The request for reimbursement Petitioner submitted its reimbursement application on or about August 23, 1994, and it was apparently complete on or about April 18, 1996. (Petitioner's Exhibit 11). That application sought recovery of the following sums for the items noted: 6. REMEDIAL ACTION PLAN [MOP and MOP Addendum] PREPARATION . . . Personnel 31442.55 Capital Expense Items Rentals 1127.45 Mileage 68.05 Shipping 35.00 Well Drilling Permits Analysis 3680.00 Miscellaneous 1601.25 REMEDIAL ACTION PLAN PREPARATION TOTAL 37954.30 * * * 13. REIMBURSEMENT APPLICATION PREPARATION Supplementary Forms Personnel 795.00 Capital Expense Items Rentals 15.00 Mileage .80 Shipping 86.81 Well Drilling Permits Analysis Miscellaneous 60.75 APPLICATION PREPARATION TOTAL 958.36 CERTIFIED PUBLIC ACCOUNTANT REVIEW FEE 500.00 APPLICATION GRAND TOTAL 39412.66 By letter (Order of Determination of Reimbursement) of June 27, 1996, the Department responded to Petitioner's reimbursement request as follows: We have completed review of your Reimbursement Application for expenses incurred during the Remedial Action Plan/Monitoring Only Plan program task at this site and have determined that $13,198.70 of the total $39,412.66 requested is allowable for reimbursement. This amount will be paid to the person responsible for conducting site rehabilitation when processing is completed by the Comptroller's Office. Some adjustments to the amount of reimbursement requested have been made. The following list details these adjustments. Citations refer to the specific sections of the enclosed Reimbursement Application Summary Sheets: 1. $24,766.25 in Section 6A, $259.95 in Section 6C, $28.20 in Section 6D and $63.25 in Section 6I were deducted because the total personnel hours (413.15 hours) and the total cost of $39,412.66 claimed for performing a limited scope of work consisting of 78.34 hours of field activities, two rounds of analyses (59 samples) and two letter reports have been determined to be excessive. However, actual field activities (including a reasonable amount of preparation), two rounds of analyses and a reasonable amount of personnel time to prepare two letter reports have been allowed. 2. $162.50 in Section 6A, $9.00 in Section 6E and $331.15 in Section 6I were deducted for costs associated with providing backup for the Contamination Assessment reimbursement application. These costs are not reimbursable in this application which is for the Remedial Action Plan/Monitoring Only Plan program task. $184.80 in Section 6A and $394.56 in Section 6I were deducted for field supplies, ice, conducting database modifications and purchasing office supplies, which are considered to be overhead. These costs are not justified in addition to the loaded personnel rates which already include overhead and profit. $11.76 in Section 6I was deducted because the rate for reproduction ($0.99 per page) has been determined to be excessive. However, $0.15 (per page) has been allowed based on the predominant rate claimed in other reimbursement applications for similar rates. $19.56 in Section 13E was deducted for costs added to the application preparation claimed as a markup. Reimbursement for application preparation is limited to actual costs only. $17.02 was added to the application grand total to cover the cost of reproducing the reimbursement application and invoices and shipping the replacements to the Department. (Petitioner's Exhibit 12.) Petitioner filed a timely challenge to contest the Department's decision. That challenge disputed the Department's action, as set forth in paragraphs numbered 1 through 4 of the letter, but Petitioner did not then, or at hearing, dispute the Department's action with regard to the matters contained in paragraphs numbered 5 and 6 of the Department's letter. (Petitioner's Exhibit 13). Subsequently, at hearing, Petitioner withdrew its request for reimbursement regarding the items contained in paragraph 3 of the Department's letter. (Transcript, page 101). The claim for the cost of preparing the reimbursement application Petitioner's claim for the cost of preparation of the reimbursement application totalled $1,458.36 (including the certified public accountant review fee). The Department proposed to deduct $19.56 (in Section 13E), and to add $17.02 to cover certain costs, as noted in the Department's letter. (Petitioner's Exhibits 12 and 13). Petitioner offered no objection to the Department's decision and, therefore, Petitioner should be awarded $1,455.82, without the need for further discussion, as the cost of preparing the reimbursement application. The claim for the cost of preparation of the MOP and MOP Addendum Petitioner's application for reimbursement claimed 413.15 personnel hours ($31,442.55) were dedicated to the development of the MOP (329.42 hours/$25,500.95) and the MOP Addendum (83.73 hours/$5,941.60). (Respondent's Exhibit 7, and Transcript, pages 188-190). In its initial review, the Department approved 55.67 hours ($3,790.45) for the MOP and 41.92 hours ($2,538.55) for the MOP Addendum, for a total award of $6,329.00. Subsequently, the Department resolved to accept as reasonable, 89 hours ($6,308.00) for the MOP and 83.73 hours ($5,941.60) for the MOP Addendum, for a total award of $12,249.60 for personnel costs.10 The 83.73 hours ($5,941.60) agreed to by the Department for the MOP Addendum was the precise amount Petitioner requested in its reimbursement application; however, the 89 hours ($6,308.00) accepted by the Department for the MOP is clearly less than the 329.42 hours ($25,500.95) Petitioner had requested. With regard to the difference, the Department views the request as excessive. In contrast, Petitioner contends the time requested was reasonable. Here, the Department's view has merit. To support the reasonableness of the hours (labor) claimed, Petitioner pointed to the "Daily Time Log[s]" which were contained within the reimbursement application, and which it contended contain an accurate recording of the hours worked and the task performed. (Petitioner's Exhibits 11, and Transcript, pages 29 through 31). According to Mr. Hidle, all employees of the company were required to keep a notepad on which they were to record the job (customer), hours worked, and task performed. At some future date, perhaps up to a week or more, those entries were ostensibly transferred to the "Daily Time Log." (Transcript, pages 29 through 31, and page 84). Consequently, Mr. Hidle contends Petitioner's "Daily Time Log[s]" may be relied upon to accurately reflect the hours actually worked, and that those hours were reasonably expended. Here, considering the record, Mr. Hidle's testimony is rejected as not credible or, stated otherwise, inherently improbable and unworthy of belief. In so concluding, it is observed that there is nothing of record, either in the exhibits or testimony offered at hearing, that could possibly explain the dichotomy between the number of hours claimed for development of the MOP (329.42) and the number of hours claimed for development of the MOP Addendum (83.73). Notably, neither project was particularly complex, and the tasks performed were reasonably alike. Similarly, it is inherently improbable, given the limited field work and the product produced (the MOP), that production of the MOP could require 329.42 hours or, stated differently, eight and one-quarter weeks, at 40 hours per week. Finally, most of the entries for which substantial blocks of time are assigned contain only vague or general terms to describe the task, such as "literature review," "MOP/RAP preparation," "file review," and "schedule/plan/coordinate RAP/MOP." Such practice renders it impossible to determine what work was actually done, whether the work was duplicative, and whether the time was actually expended or reasonable. Given the record, it must be concluded that the proof offered by Petitioner to support the number of hours claimed for development of the MOP is not credible or persuasive, and that it would be pure speculation to attempt to derive any calculation or meaningful estimate based on such proof. In the end, Petitioner must bear the responsibility for such failure. While Petitioner's proof offers no credible basis upon which to derive the number of hours dedicated to the MOP and their reasonableness, Petitioner obviously dedicated time to the MOP, and to the extent the record provides a reasonable basis on which to predicate an award, it is appropriate to do so. Here, given the lack of credibility of Petitioner's "Daily time Log[s]," as well as the testimony of Mr. Hidle, to provide a basis on which to derive the number of hours actually worked, and then test those hours against the standard of reasonableness, the only option is to award the 89 hours or $6,308.00, which the Department agrees were reasonably expended. Finally, with regard to the miscellaneous cost items, as opposed to personnel hours, rejected by the Department's letter of June 27, 1996, it must be resolved that Petitioner failed to offer, at hearing, any compelling proof that the items rejected by the Department were reasonable expenditures incurred in development of the monitor only program. Consequently, the following sections of Petitioner's reimbursement application have been reduced by the sums stated: $295.95 deducted from Section 6C; $28.20 deducted from Section 6D; $9.00 deducted from Section 6E; and $800.72 deducted from Section 6I. The award for reimbursement Given the proof, Petitioner should be awarded the following sums, for the items indicated, as reimbursement for preparation of the MOP and MOP Addendum: Personnel $12,249.60 Capital Expense Items Rentals 867.50 Mileage 39.85 Shipping 26.00 Well Drilling Permits Analysis 3680.00 Miscellaneous 800.53 TOTAL 17,663.48 For expenses involved in preparation of the reimbursement application, Petitioner should be awarded the following sums for the items indicated: Personnel $ 795.00 Capital Expense Items Rentals 15.00 Mileage .80 Shipping 67.25 Well Drilling Permits Analysis Miscellaneous 77.77 APPLICATION PREPARATION TOTAL 955.82 CERTIFIED PUBLIC ACCOUNTANT REVIEW FEE 500.00 TOTAL FOR APPLICATION PREPARATION 1,455.82 In all, Petitioner should be accorded a total reimbursement of $19,119.30.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered which awards Petitioner the sum of $19,119.30, as reimbursable costs. DONE AND ENTERED this 22nd day of February, 1999, in Tallahassee, Leon County, Florida. WILLIAM J. KENDRICK 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 22nd day of February, 1999.
The Issue Whether Respondent, FYV, Inc., d/b/a Miami Tropical Nursery, Inc. (Respondent or Buyer), owes Petitioner, Bud Sod, LLC (Petitioner or Seller), the sum of $7,168.09 for pallets of sod sold to the Buyer by the Seller.
Findings Of Fact At all times material to the instant case, Petitioner and Respondent were involved in the purchase and sale of an agricultural product grown and delivered in Florida. Under the terms of their on-going business relationship, Petitioner supplied Respondent with sod. There is no disagreement that Petitioner produced and sold the sod to Respondent. In fact, the parties had numerous dealings that covered many tickets noting deliveries and invoices noting the monies owed. Prior to July 7, 2010, the parties met without their attorneys to try and agree upon an amount owed by Respondent. At that time, they went through the volumes of paperwork related to the claim and reached a mutually-acceptable decision. Petitioner maintains that Respondent owes $17,168.09 as a compromised sum for the sod sold by Petitioner to Respondent. Of that amount, Petitioner acknowledges that Respondent remitted $10,000 to the Seller. Accordingly, Petitioner asserts that the sum of $7,168.09 is owed and unpaid for the sod purchased by Respondent. Respondent presented no evidence to refute this amount.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order approving Petitioner's complaint against Respondent in the amount of $7,168.09. DONE AND ENTERED this 9th day of August, 2010, in Tallahassee, Leon County, Florida. J. D. PARRISH 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 9th day of August, 2010. COPIES FURNISHED: Christopher E. Green, Esquire Department of Agriculture and Consumer Services Office of Citrus License and Bond Mayo Building, M-38 Tallahassee, Florida 32399-0800 Kathy Alves Fidelity & Deposit Company of Maryland Post Office Box 968036 Schaumberg, Illinois 60196 Steven J. Polhemus, Esquire Post Office Box 2188 LaBelle, Florida 33975 Yolanda More FYV, Inc., d/b/a Miami Tropical Nursery, Inc. 104475 Overseas Highway Key Largo, Florida 33037 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services Mayo Building, Suite 520 407 South Calhoun Street Tallahassee, Florida 32399-0800 Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
