Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received, and the entire record compiled herein, I hereby make the following relevant factual findings: Respondent, Hudson Oil Company, is the owner of a retail gasoline outlet located at 1000 Ninth Street North, St. Petersburg, Florida. John H. Newburn is the manager of Respondent's retail station. On August 25, 1989, Petitioner, Department of Agriculture and Consumer Services' inspector, Henry J. Crafa, made a routine inspection of Respondent's retail gasoline station and took a sample of the unleaded, regular and premium unleaded gasolines. Inspector Crafa submitted the samples taken from Respondent's facility to Petitioner's laboratory for analysis. The results of Petitioner's laboratory analysis revealed that the unleaded and premium gasoline contained ethanol. Additionally, the lab analysis revealed that Respondent's regular gasoline contained water. The lab analysis revealed that Respondent's premium unleaded had an Antiknock Index of 91.6, whereas the posted Antiknock Index was 93.0. This indicates that the Antiknock Index of the premium unleaded fuel was 1.4% less than the Antiknock Index which was displayed on the dispensing tank. The lab analysis also revealed that the Respondent's unleaded gasoline contained 10.5% ethanol and the premium unleaded gasoline contained 8.8% ethanol. At the time of Petitioner's inspection on August 25, 1989, there were approximately 8,000 gallons of unleaded gasoline and approximately 2,000 gallons of premium unleaded gasoline in Respondent's dispensing tanks, and for both grades of gasoline, the retail price per gallon was in excess of $1.00. More than 2,000 gallons of gasoline was sold to retail customers at a price in excess of $1.00 per gallon. At the time of Inspector Crafa's inspection, Respondent's fuel tanks failed to display on the upper one-half of the front panel, in a position clear and conspicuous from the driver's position, that its unleaded and premium unleaded gasoline contained ethanol. On August 31, 1989, Petitioner issued a "Stop Sale Notice" for Respondent's unleaded and premium unleaded gasoline. In lieu of confiscation, and in order to gain release and possession of its unleaded and premium unleaded gasoline, Respondent entered into a release notice and/or agreement with Petitioner whereby Respondent posted a $1,000.00 bond in lieu of confiscation of its gasoline.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: Petitioner enter a Final Order denying Respondent's request for a refund of the $1,000.00 bond that it posted in lieu of confiscation or its fuel products.1 DONE and ENTERED this 2nd day of November, 1990, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of November, 1990. Copies furnished: Clinton H. Coulter, Jr., Esquire Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32399-0800 John H. Newburn 1000 Ninth Street North St. Petersburg, Florida 33705 Mary Hudson Hudson Energy Corporation Post Office Box B Kansas City, Kansas 66103 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-0810 Mallory Horne, Esquire General Counsel Department of Agriculture and Consumer Services 515 Mayo Building Tallahassee, Florida 32399-0800 Ben Pridgeon, Chief Bureau of License & Bond Department of Agriculture and Consumer Services 508 Mayo Building Tallahassee, Florida 32399-0800
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found. On January 15, 1980, Nick Pappas, a petroleum inspector with respondent's Division of Standards, took samples of regular and no lead gasoline from petitioner's station No. 582 located at 3130 Gulf to Bay Boulevard in Clearwater, Florida. An analysis of the samples was performed in the Tallahassee lab showing lead contents in the amount of 0.56 grams per gallon in the no lead gasoline sample. The standard for unleaded gasoline offered for sale in Florida is 0.05 gram of lead per gallon. A second sampling and analysis was performed approximately eleven days later because more gasoline had been dumped into the tank since the first sampling. Test results indicated essentially the same level of lead content in the unleaded gasoline. The respondent thereupon issued a "stop sale notice" on January 26, 1980, due to the high content of lead in the product. Tom Nestor, the station manager, was informed that he had several alternatives, including confiscation of the product, with the petitioner posting a bond in the amount of $1,000.00 for the release of the product to be sold as regular gasoline. Having elected this alternative, a "release notice or agreement" was entered into on January 28, 1980. Respondent received a bond in the amount of $1,000.00 from Petitioner, and this amount was deposited into the Gasoline Trust Fund. Tom Nestor admitted the truth of the above facts and admitted that he did not check the product after it was dumped into the tank. He stated that the driver of the delivery truck delivered the product to the wrong gasoline tank. According to Mr. Nestor, the tanks at his station were not properly marked at the time the delivery was made. The "premium" tank was being used to dispense "unleaded" gas, and the deliverer dumped "regular" gasoline into the "unleaded" tank.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the petitioner's request for a return of the cash bond be DENIED. Respectfully submitted and entered this 28th day of July, 1980, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301
The Issue The issues for determination are whether the emergency suspension of Respondents' licenses was proper and whether revocation of those licenses is required.
Findings Of Fact Respondent Robinson, an authorized Chevron representative, is the sole proprietor of Jack A. Robinson, Distributor. Respondent R&R Partnership (R&R) is a partnership between Jack A. Robinson and Dee Ann Rich (Rich). Respondent I-10 Corporation (Stacks) is a subchapter S corporation in which Respondent Robinson is a 50 percent shareholder. Rich is the general manager of Jack A. Robinson, Distributor and exercises administrative responsibilities with regard to Respondents Stacks and R & R Corporation. Robinson holds Special Fuel Dealer's License No. 10 Wholesaler's License No. 09000950/9356 issued by Petitioner. Robinson sells diesel fuel and gasoline at wholesale to I unrelated parties. I products at retail. Robinson admits in response to Counts III, IV, VI, VII, VIII, IX, X, XI, XII, XVI, XIX, XXII, XXIII, XXIV, XXVII, and XXX, of the Notice To Show Cause in DOAH Case No. 93-1563 that $210,876.19 of tax remains due and owing. Rich is Jack A. Robinson's step supervising and preparing tax returns for Robinson. With regard to the $210,876.19 admitted as due and owing, these state funds were collected by Respondent Jack A. Robinson as an agent for the State of Florida but, instead of being remitted to the state, these funds were spent by Respondent in the course of business operation. DOAH Case No. 93-1563 In response to Counts I, II, V, XV, XVII, XXI, XVI, XXVIII, and XXIX of the Notice To Show Cause in DOAH Case No. 93 that $103,452.71 tax is due. As to Count I, the balance for the tax return period of February 1990, for motor fuel tax due is $2,524.14. In regard to Count II, Respondent also owes motor fuel tax in the amount of $26,839.71 for the tax return period of March, 1990. Although Rich requested Respondent's bank to make the appropriate electronic funds transfer to Petitioner, the amount was not received by Petitioner and no explanation was provided by Respondent for the failure of Petitioner to receive this amount. As to Count V, Respondent owes a total motor fuel tax of $12,900.27. The previous total of $36,232.69 was reduced by a late partial payment of $11,562.53, and an additional payment of $11,769.87 on September 25, 1991. No payment of tax was made for the period of March 1992. As to Count XIV, Respondent Robinson filed a tax return for January 1993, motor fuel local option tax in the month of February 1993. The return showed a total tax due of $21,044.62. A collection allowance of $148.56 is shown deducted. No proof of payment of the tax was presented. In regard to Count XVII, a return for the tax period of March 1990, was filed on behalf of Respondent Robinson, declaring a total special fuel tax due of $23,572.82. No evidence was presented that payment was actually made, although Rich testified that a wire transfer payment of that amount was requested by Respondent. With regard to Respondent Robinson, the amounts of tax admitted in responsive pleading together with all counts of the Notice To Show Cause where no evidence or allegation of payment was presented total: Admitted in pleading $210,876.19 Admitted owing for March of 1990 in Motor Fuel and Special Fuel Tax $ 50,412.53 Copies of Returns introduced and alleged to have been filed, but unsupported by Petitioner's records and otherwise unsubstan- tiated by proof (for August of 1992 and January of 1993). $ 35,655.06 No proof of payment presented for balance of November of 1990 tax. $ 12,900.27 Admitted, paid less than due for January 1990; August 1990; and November, 1990. $ 8,058.52 This amount does not include applicable penalties and interest. DOAH Case No. 93-1565 Counts I through IV are admitted by Respondent R & R Partnership as to the amounts owned for a total tax due of $9,189.12. This amount does not include applicable penalties and accrued interest. While R & R reported taxes due on Respondent Robinson's returns, no proof was submitted that these taxes were paid to Petitioner. For the tax period of January, 1993, Rich maintained that a return was filed on behalf of R & R partnership and payment made. However, the copy of the payment check presented at hearing had "2/93" written in pencil as the date of the check and no evidence was presented that the check was presented for payment to Respondent's bank. DOAH CASE NO. 93-1564 With regard to I allegations of Counts I, II, III, IV, V, VII, VIII, X, XI, and XII. As to Counts VI and IX, Respondent denies only that there was improper reporting, not that the amount of tax is not due. Respondent maintains that all taxes collected by Stacks were paid to Respondent Robinson and reported on those returns. The periods of January 1990; February 1990; March 1990; April 1990; August 1990; November 1990; February 1992; correspond to the counts of the Notice To Show Cause to which Stacks denies all allegations. These periods and denied counts match precisely with periods in Counts IX, X, XI, XII, XV, XVI, XVII, XVIII, XIX, XX, XXI, XXII, of the Notice To Show Cause filed against Respondent Robinson. Robinson admits Counts IX, X, XI, XII, XVI, XVII, XIX, XX, and XXII and presented no proof of payment at hearing with regard to Count XV and XVII. This fact, coupled with testimony that Stacks and R & R taxes were paid to Robinson and reported as line items on his returns, show that Stacks does owe the taxes claimed by Petitioner in the amount of $36,029.45 exclusive of interest and penalties. Debra Swift, a Certified Public Accountant, employed by Petitioner, personally reviewed records of Petitioner in determining the amounts of tax, penalty and interest due from each Respondent. All payments received by Petitioner were credited by Swift in performing her calculations.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered revoking the fuel licenses of all three Respondents. DONE AND ENTERED this 13th day of May, 1993, 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 13th day of May, 1993. APPENDIX The following constitutes my rulings pursuant to Section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties. Petitioner's Proposed Findings: 1.-12. Adopted, though not verbatim. 13.-15. Accepted. 16.-22. Accepted. Respondent's Proposed Findings: 1. Rejected, no record citation. 2.-3. Adopted. 4. Accepted, except for last sentence which is rejected as legal conclusion. 5.-7. Adopted. 8.-9. Rejected, subordinate to HO findings on this point. 10.-12. Rejected, weight of the evidence. 13. Rejected, relevancy. 14.-16. Rejected, subordinate to HO findings. 17. Adopted by reference. 18.-21. Rejected, subordinate to HO findings. 22.-24. Rejected, weight of the evidence, no citation. 25._38. Rejected, subordinate to HO findings. 39.-40. Rejected, weight of the evidence. 41.-42. Adopted by reference. 43.-44. Rejected, subordinate, misconstruction of testimony. 45. Rejected, conclusion of law, weight of the evidence. 46.-48. Rejected, subordinate, argumentative, relevancy. COPIES FURNISHED: Lealand L. McCharen Assistant Attorney General Department of Legal Affairs The Capitol-Tax Section Tallahassee, FL 32399-1050 Timothy J. Warfel Messer, Vickers Suite 701 First Florida Bank Building 215 South Monroe Street Post Office Box 1878 Tallahassee, FL 32302 Linda Lettera General Counsel 204 Carlton Building Tallahassee, FL 32399-0100 Larry Fuchs Executive Director 104 Carlton Building Tallahassee, FL 32399-0100
Findings Of Fact The following findings of fact are based upon the stipulation of the parties and the evidence presented: During a routine inspection on June 11, 1986 at Ron's Chevron #4, 1790 North Hercules, Clearwater, Florida, samples of all grades of gasoline were taken. A sample was taken from each side of a pump labeled "Chevron Unleaded". Using a field method for measuring lead content, it was determined that both samples contained more than 0.11 grams of lead per gallon, which exceeds the standard of 0.05 grams per gallon. The results of the field measurement were confirmed at the Department's main laboratory by Nancy Fischer on June 16, 1986. A stop sale notice was issued on June 12, 1986, and the contaminated product was withheld from sale to the public. On June 17, 1986, Petitioner was required to post a bond in the amount of $1,000 in lieu of the Department confiscating 5,850 gallons of fuel. The product was released for sale as Chevron Regular, a leaded fuel. New product was placed in the tank and proved lead free. Lead in gasoline is detrimental to a car designed to run on unleaded fuel. The lead can cause serious damage to the emission system and possibly the engine by stopping up the catalytic converter. The parties stipulated that the sole issue in this case is the amount of the bond. There is no evidence that Petitioner intentionally contaminated the fuel for financial gain. The cause appears to have been carelessness at some point between, or at, wholesale and retail. The Department accepted a bond of $1,000 and allowed Petitioner to retain the fuel for relabeling and sale as leaded fuel. The Department's penalty imposed in this case is consistent with its past practice in factually similar cases.
Recommendation Based upon the foregoing, it is recommended that the Department enter a Final Order requiring Petitioner to post a $1,000 refundable bond. DONE AND ENTERED this 23rd day of October 1986 in Tallahassee, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 23rd day of October 1986. COPIES FURNISHED: Ronald Trimm Ron's Chevron #4 1790 North Hercules Clearwater, Florida 33515 William C. Harris, Esquire Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 The Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32301
Findings Of Fact Based upon the oral and documentary evidence adduced at the hearing, the following relevant facts are found: Petitioner William Lineberger, doing business as Jet Oil Company, has, since 1950, continuously used the brand name "Jet" for identifying gasoline sold by him in the State of Florida. At one time, petitioner owned or operated some thirteen stations in various locations in Florida. Since 1980, he has operated only three stations, all located in Pinellas County-- two in St. Petersburg and one in Pinellas Park. Pursuant to Chapter 525, Florida Statutes, the respondent Florida Department of Agriculture and Consumer Services first issued petitioner a liquid fuel brand name registration for the name "JET" in 1973. Pursuant to Chapter 495, Florida Statutes, the Florida Secretary of State issued petitioner mark registration number 922,820 on August 11, 1980, for the mark "JET" as a trademark and a service mark to be used in connection with gasoline and oil product convenience store items. Kayo Oil Company (Kayo) is a Delaware corporation and a wholly-owned subsidiary of Conoco, Inc. Kayo operates a chain of retail gasoline and convenience stores in 22 states. It has approximately 465 locations concentrated mainly in the southeast portion of the country, with 38 locations in Florida, including one in Pinellas Park. Kayo currently has plans for further expansion in Florida. It's fixed asset base in Florida is approximately $10 million. The typical Kayo retail gasoline outlet in Florida has four multiple product dispensers, sells 500 to 600 different convenience items inside an 800 to 1600 square foot building, markets fast food products and employs a color scheme of black on yellow on its signage and building facade. Conoco, Inc. first began using the "JET" trade name in Europe in the 1960's when it acquired a large chain of European retail gasoline outlets selling under that brand name. It currently operates about 2,000 units under the brand name "JET" in Europe. In the United States, Kayo has used various trade names in the operation of its outlets, including "Kayo" and "JET". In the early 1980's, Kayo made the decision to standardize the name it traded under throughout the United States, and selected the name "JET". In most instances, it accomplished the conversion of its stations from "Kayo" to "JET", with the black on yellow color scheme, during the period from the early 1980's through 1984. The intervenor initially sought to obtain from the Florida Department of Agriculture and Consumer Services the liquid fuel brand name "JET". That request was denied for the reason that "JET" had been previously registered to the petitioner. Thereafter, the Department issued to the intervenor the liquid fuel brand name registration, "JET +" on April 27, 1981. Kayo is required to display the "JET +" liquid fuel brand name on its dispensers or pumps. 1/ With the exception of two of its Florida locations, Kayo uses the word "JET" on its street and building signage. At its Pinellas Park and Clearwater stations, it has retained the name "Kayo". Being an independent brand marketer, Kayo attempts to dedicate the majority of its signage to display the price of gasoline, as opposed to the gasoline brand name. It is Kayo's marketing philosophy that the consumer is more influenced by low prices and location than by the fuel brand name. In 1984, the physical appearance of petitioner's three stations did not resemble the physical appearance of the typical Kayo station in Florida. Subsequent to 1984, petitioner did some remodeling work at its Pinellas Park station which included yellow and black signage and the name "JET" in black block letters on a yellow background, resembling Kayo's style of lettering on both its pump decals and its signage in areas outside Pinellas County. The yellow pages of the St. Petersburg telephone directory lists both Kayo's Pinellas Park station and petitioner's Pinellas Park station under the heading of Jet Oil Company. In February or March of 1987, a local cigarette supplier attempted to deliver and present an invoice for cigarettes ordered by Kayo to one of petitioner's facilities. This occurred again with the same supplier in March of 1987. In January of 1987, a Motor Fuel Marketing Complaint against the "Jet" business at 7091 Park Boulevard was filed with the Division of Consumer Services, Department of Agriculture and Consumer Services. Although this is the address of the Kayo station in Pinellas Park, the Consumer Services Consultant, Division of Consumer Services, forwarded the complaint to "Jet Oil Company" at 7879 - 49th Street North, the petitioner's station, for a response. Petitioner presented evidence that other instances of confusion between its stations and Kayo stations had occurred with respect to bills, bank inquiries, and a newspaper article. Also, on one occasion, petitioner was ordered by the Pinellas Park police to close its stations because a bomb threat had been made against Jet Oil. Petitioner did not produce any evidence that the source of any of the incidents related was attributable to the liquid fuel brand names utilized by it or the intervenor.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that petitioner's request for a hearing challenging the issuance of the "JET +" registration to the intervenor be DISMISSED. DONE and ORDERED this 16th day of July, 1987, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of July, 1987.
Findings Of Fact Petitioner deals in fuel oil. It buys fuel oil from several wholesalers and sells it at retail, mainly to people who use fuel oil for heating purposes. Petitioner operates a low pressure pump on its premises for pumping fuel oil from a ten thousand gallon tank into five gallon cans and similar containers brought to the pump by its customers. At peak demand, the ten thousand gallon tank supplying this pump had to be refilled twice a week. In general, however, during the cold season, the tank was refilled only every other week or less often still. No fuel oil was ever pumped from the low pressure pump into any motor vehicle. Petitioner also maintained two big dispersing pumps for filling its tank trucks with fuel oil and a gasoline pump for fueling the truck engines. The trucks were equipped with pumps for emptying their fuel oil tanks, which pumped at the rate of forty gallons per minute. Petitioner advertised home delivery of fuel oil in the newspaper, and dispatched its trucks in response to the resulting telephone calls. In addition to delivering fuel oil for home heating purposes, petitioner occasionally sold larger quantities to fellow fuel oil dealers and to other commercial concerns. In February, March and April of 1974, petitioner sold particularly large quantities of fuel oil to Tampa Electric Company. During the period covered by the audit, petitioner sold from 50,000 to 70,000 gallons to other fuel oil dealers. Petitioner did not get resale certificates from its commercial customers, but Mr. Hayes, until recently petitioner's proprietor, required dealers to show him their dealer's licenses and he copied the dealers' license numbers onto the invoices. In March of 1976, Mr. Donald E. Snyder, a tax examiner in respondent's employ, began auditing petitioner's books. At this time most of petitioner's records were in Orlando in the custody of the Federal Energy Administration. Subsequently, some, but not all, of these records were returned to petitioner. In an effort to reconstruct records which were unavailable, Mr. Snyder contacted petitioner's suppliers and examined their records of sales to petitioner. On January 2, 1977, Mr. Hayes and Mr. Snyder took an inventory of petitioner's fuel oil. Mr. Snyder used this information as well as what records petitioner was able to furnish him, and concluded that petitioner had sold, during the audit period, two thousand four hundred seventy-nine (2,479) gallons of fuel oil to persons or concerns who were users of fuel oil for non-exempt purposes. Written on the invoices evidencing these sales, however, was the phrase "non-road use" or words to that effect. The limited materials with which he worked gave Mr. Snyder no indication as to the disposition of an additional two hundred fifty- eight thousand three hundred forty (258,340) gallons of fuel oil. Although Mr. Snyder approximated petitioner's sales month by month, these figures were unreliable because of certain erroneous assumptions, notably the assumption that petitioner never used additional storage facilities.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That respondent abandon its notice of proposed assessment, as revised. DONE and ENTERED this 10th day of January, 1978, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Mr. James P. LaRussa, Esquire Flagship Bank Building, Suite 416 315 East Madison Street Tampa, Florida 33602 Mr. Cecil L. Davis, Jr., Esquire Assistant Attorney General The Capitol Tallahassee, Florida 32304
Findings Of Fact On February 27, 1980, Respondent converted one of its service station fuel tanks from gasoline to diesel. The tank was cleaned by Garrison Petroleum Equipment Company at Pinellas Park. Respondent paid $67.08 for this service. That same day, Respondent received 5,176 gallons of No. 2 diesel fuel from Jack Russell Oil Company, Inc., of Clearwater, a Union 76 dealer. On March 18, 1980, a standards inspector employed by Petitioner took samples from the Respondent's gasoline and diesel pumps. These samples were delivered to Petitioner's portable laboratory in Clearwater where they were analyzed. The gasoline was found to be satisfactory, but the diesel sample showed fuel contamination. The tests were conducted in accordance with the methods and standards established by Rule 5F-2.01(4)(b), Florida Administrative Code. Specifically, the "flash point" of the diesel sample was 88 degrees F, but must be 125 degrees F or above to meet the established standard. Petitioner's inspector then returned to the Pronto Car Wash station where he issued a stop-sale order to Respondent. Subsequently, the inspector accepted Respondent's cash bond in lieu of fuel confiscation. This procedure, agreed to by both parties, allowed Respondent to pay $865.36 to the State of Florida and retain the contaminated fuel. Respondent originally paid $5,286.25 for 5,176 gallons of diesel fuel. He had sold 736 gallons of this amount at the time of the stop-sale order on March 18, 1980. Total sales of this diesel fuel amounted to $865.36, which was the amount of bond demanded by Petitioner. Respondent paid $200 to Patriot Oil, Inc., to remove the contaminated fuel, but received a $3,225 credit for this fuel. Respondent does not deny that the fuel was contaminated, but seeks to establish that he acted in good faith. Respondent had the tank cleaned prior to the diesel changeover and dealt with established tank cleaning and fuel wholesaling companies. In addition, he kept the tank locked at all times after delivery of the fuel. Respondent does not contest forfeiture of his bond, but seeks refunds of state and federal taxes paid on the unsold fuel. However, Respondent was correctly informed that refund of tax payments will require him to communicate with agencies which are not parties to this proceeding.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That Petitioner enter its order declaring forfeiture of Respondent's $865.36 bond posted in lieu of confiscation of contaminated diesel fuel. RECOMMENDED this 7th day of August, 1980, in Tallahassee, Florida. COPIES FURNISHED: Stephenson Anderson Pronto Car Wash 220 34th Street North St. Petersburg, Florida 33713 Robert A. Chastain, Esquire General Counsel Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 John Whitton, Chief Gasoline and Oil Section Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 R. T. CARPENTER Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-8584
The Issue The question presented here concerns the Petitioner, State of Florida, Department of Agriculture and Consumer Services' Stop Sale Notice placed against Respondent, Pinner Oil Company under the alleged authority of Section 525.06, Florida Statutes (1980), by the process of requiring a refundable bond in the amount of $471.34, pending the outcome of this dispute in which it is contended that the Respondent supplied gasoline for sale which failed to comply with Rule Subsection 5F-2.01(1)(j), Florida Administrative Code, dealing with the allowed lead content in gasoline.
Findings Of Fact The Petitioner, State of Florida, Department of Agriculture and Consumer Services is an agency of government which has, among other responsibilities, the requirement to establish and enforce standards related to maximum allowable lead content in unleaded gasoline offered for sale to the general public. This regulation is designed to avoid the destruction of catalytic devices found in the exhaust systems of certain cars, in which the destruction of a catalyst would bring about problems, with the exhaust system causing its replacement and more importantly, lead to adverse effects on the environment due to an increase in undesired emission from the exhaust system. The Respondent, Pinner Oil Company of Cross City, Florida, is a jobber which supplies gasoline to retail outlets who in turn sales the gasoline to members of the motoring public. The facts reveal that on October 6, 1980, an official with the Petitioner made a routine inspection of the unleaded gasoline reservoir at the B. F. Goodrich-Texaco at 210 Rogers Boulevard, Chiefland, Florida, a customer of Pinner Oil Company. This gasoline was subsequently analyzed and on October 7, 1989, a Stop Sale Notice was served based upon a determination that the unleaded gasoline found in the reservoir at that station contained more than 0.05 grams of lead per U.S. gallon. The gasoline in question was provided to the B. F. Goodrich outlet by an employee of Pinner Oil Company as a part of his duties with the Respondent. In lieu of the total confiscation of the gasoline found in the reservoir tank at the station In question, the Respondent was allowed to post a refundable bond in the amount of $471.34 which represented the price for the number of gallons sold at a retail price since the time of the prior delivery to that station. (By Stipulation entered into between the parties, it was agreed that a finding of fact would be made to the effect that the Respondent, during the course of the last two years, had not been cited for a violation of the Florida Statutes pertaining to contaminated fuels.)
Findings Of Fact The Respondent owns and operates the Heart of Florida Truck/Auto Plaza ("Truck-Stop"), on U.S. 27 North, Haines City, Florida. When he purchased the truck-stop in October of 1978, he had no prior experience in the operation of such facilities. (Stipulation, Testimony of Respondent) During September of 1979, the Respondent's fuel supplier notified him that premium gasoline would no longer be delivered. Respondent decided, therefore, to convert his 6,000 gallon premium gasoline tank into a diesel fuel storage tank. (Stipulation, Testimony of Respondent) In order to convert the tank to diesel fuel usage, Respondent pumped out all but a residual consisting of approximately 100 gallons of gasoline and 200 gallons of water. Even with the use of an auxiliary electric pump, the Respondent could not succeed in removing the remaining 238 gallons of residual. (Stipulation, Testimony of Respondent) He, then, sought advice from others on ways to empty the tank, including his jobber, diesel mechanic, truck drivers and trucking firms served by his truck-stop. While no one could suggest a method of removing the residual, they assured Respondent that truckers and diesel mechanics preferred a fuel mixture of 1 gallon of gasoline per 100 gallons of diesel fuel because of improved engine performance. (Testimony of Respondent) Based on such advice, the Respondent filled the tank in question with diesel fuel No. 2 and sold the resulting diesel/gasoline mixture to truckers as diesel fuel No. 2. Because of the presence of gasoline, this diesel fuel had a flash point at 440 F. (Testimony of Respondent, John Whitton, and petitioner's exhibit 3) In mixing the diesel with the gasoline in the tank, Respondent reasonably believed, in good faith, that the resulting mixture would not be hazardous or dangerous to its users. He did not know, and had not been previously notified, that the Department had set standards which strictly regulated the quality of gasoline and diesel fuel sold in Florida. Nor did he know that gasoline and diesel fuel sold in violation of such standards would be subject to confiscation and sale by the Department. (Testimony of Respondent) Although the Department regularly mails freight surcharge information every two weeks to retail gasoline outlets such as Respondent's, it does not periodically disseminate information on its petroleum regulatory program. Copies of the Department's rules, and gasoline standards, are available only on request. (Testimony of Lois W. Thornton and John Whitton) Each month, the Department issues approximately 100 Stop Sale Notices to gasoline retailers in Florida. Approximately 12 percent of these Notices are based on unlawful sale of fuel with flash points below Department standards. In such cases, the Department has consistently followed a practice of allowing the retailer to continue ownership of the fuel (in lieu of Department confiscation) only upon the posting of a bond equal to the value of the substandard fuel. However, notwithstanding the value of the substandard fuel, the Department does not require posting of a bond in excess of $1,000.00. Upon resolution of the administrative enforcement actions in favor of the Department, the bonds are forfeited to the Department, in lieu of confiscation. (Testimony of John Whitton) Since, in this case, the value of the offending fuel far exceeded $1,000.00, the Department allowed, and Respondent willingly posted a $1,000.00 bond with the Department. (Testimony of Respondent and John Whitton, and Petitioner's exhibit 2)
Conclusions Respondent violated the Department's gasoline and oil standards. He should, therefore (in lieu of confiscation) forfeit the cash bond he previously posted.
The Issue Whether Petitioner owes tax in the amount of $4,554.80 plus a penalty and interest on the sale of special fuel between December 1, 1976, and December 31, 1979.
Findings Of Fact Miami Tiresoles, Inc., sells both new and retreaded tires for cars and trucks. The company also sells gasoline and diesel fuel. It is licensed by the Department as a dealer in special fuels. As far as this case is concerned special fuel is number 2 diesel oil. Unless an exemption is met each gallon of special fuel sold by MTS is taxed by the Department at a rate of eight cents per gallon. The Department has given BITS a revised notice of proposed assessment of tax for the sale of special fuel in the amount of $4,551.88 plus a penalty of $455.48 and interest in the amount of $735.11 (through April 21, 1980). The tax figure on the assessment appears to reflect a typographical error. The Department's records (Exhibit A) indicate that for the period in question, 2/ MTS sold 56,936 gallons of special fuel subject to tax according to the Department's interpretation of the law. If a tax at a rate of eight cents per gallon is due, then the amount due should be $4,554.88 and not $4,551.88. The correct tax figure is reflected on the Department's work sheets but was probably misread when the figure was transferred to the revised Notice of Assessment issued on April 21, 1980. The foregoing assessment is based on MTS' invoices which reflect sales of special fuel to customers in amounts of more than 110 gallons at one time. Those sales were made to MTS customers who have filed with MTS a document called "Purchaser's Exemption Certificate". A typical example of such a certificate states: PURCHASER'S EXEMPTION CERTIFICATE The undersigned hereby certifies that the motor duel (sic) and/or special fuel pur- chased on 1-19-79 is for the following purpose as checked in the space provided. (X) Purchased for home, industrial, com- mercial, agricultural or marine purposes for consumption other than for the propul- sion of a motor vehicle. ( ) Purchased at bulk plant or terminal in volumes of not more than 110 gallons for delivery into a receptacle not connected to the fuel supply system of a motor vehicle for consumption other than for the propulsion of a motor vehicle. Purchaser is aware that if this exemption if (sic) falsely claimed, or if this certificate is not rescinded at the time he fails to quality (sic) for the exemption, he shall be liable for the taxes imposed under Chapter 206, F.S. Furthermore, by issuing this certificate, the purchaser also certifies that he does not have any motor vehicles which use special fuel for propulsion. This certificate is to continue in force until revoked by written notice to MIAMI TIRESOLES, INC. Purchaser Trade Name A ACME SANDBLASTING, INC. Street Address 9521 W. Oakmont Dr. ,Hialeah,Fla. 33015 BY /s/ The industrial customers of MTS (those who have filed an exemption certificate) are engaged in the construction business. They use the diesel fuel to operate bulldozers, front-end loaders, back hoes, sandblasters and similar equipment. None of the fuel is used for the operation of motor vehicles on the public highways of Florida. All the fuel in question is sold on the premises of MTS. At the time of sale it is placed either in the fuel tank of a particular piece of equipment such as a back hoe, or it is placed in a fuel storage tank mounted on the back of a truck. The storage tanks are not connected so they can provide fuel for the propulsion of the truck. They are used to transport fuel to the purchaser's particular job site. The storage tanks have a capacity of between 100 to 300 gallons. MTS does not have delivery trucks of its own and has no facilities for taking fuel to its customers' job sites. A single invoice of MTS which indicates a sale of 110 gallons of special fuel to an individual customer is frequently the result of a sale where multiple fuel tanks are filled at one time. For Instance, the customer may have a back hoe sitting on the rear of a flat-bed truck. He will fill the fuel tank in his back hoe and then perhaps fill an additional 55 gallon drum or two which would be on the truck. This would occur all in one transaction. The reason why the Department seeks to tax special fuel sold by MTS to its industrial customers in an amount exceeding 110 gallons is because the fuel was placed in the customers' own fuel tanks on the premises of MTS and not on the premises of the customer or at the customer's job site.
Recommendation Based on the foregoing Findings of Fact and the Conclusions of Law it is recommended that the Department of Revenue enter a final order affirming its assessment for a special fuel tax against the Petitioner in the amount of $4,554.88 plus penalty and interest computed pursuant to Section 206.44, Florida Statutes (1979). DONE and RECOMMENDED this 25th day of March 1981, in Tallahassee, Florida. MICHAEL PEARCE DODSON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 25th day of March 1981.
