The Issue The issue is whether to approve an application by Respondent, Dan R. Hughes Company, L.P. (applicant or Hughes), for an oil well drilling permit authorizing the drilling of an exploratory oil well in Collier County, Florida.
Findings Of Fact The Parties Mosher resides on a three-acre lot at 4695 26th Avenue Southeast, Naples, Florida. His residence is around 2,500 feet west of the proposed wellsite, but Mosher says that the eastern edge of his lot "might be 2,000 feet" from the drilling site. He has not, however, measured the actual distance to confirm this assertion. Preserve is a Florida non-profit corporation whose purpose is to educate the public on issues affecting the preservation and protection of the environment, particularly the environment of south and southwest Florida. It was formed in response to Hughes' intention to drill for oil in the area. The corporation is not a membership organization; rather, it has around 25 non-member, active volunteers, six member directors, and an unknown number of donors. Excluding Mosher, the other member directors live between three and ten miles away from the proposed wellsite. The record does not show where the 25 volunteers reside. The corporate representative testified that four directors, including Mosher, regularly use the Florida Panther National Wildlife Refuge (Refuge) to observe wildlife and habitat. However, the public access point to the Refuge appears to be at least several miles from the wellsite. Based upon an email survey, he stated that a "substantial number [around 36] of donors and volunteers utilize the panther refuge," but he was unaware of when, or how often, this occurred. About every six weeks, meetings are conducted at Mosher's home, which are attended by some, but not all, of the directors and volunteers. Schwartz's primary residence is in Lake Worth (Palm Beach County) where he serves as the unpaid executive director of the South Florida Wildlands Association.3 He sometimes provides paid tours in the Everglades and Big Cypress Swamp and has led "numerous" free hikes into panther habitat to look for signs of panthers. These hikes are limited to the hiking trails in the southeast corner of the Refuge, which is the only area that can be accessed by the public. He represented himself as an advocate for the protection of wildlife habitat in the greater Everglades, with a particular interest in the Florida panther. Hughes is a Texas limited partnership engaged in the business of oil and gas exploration, which is registered to do business in the State of Florida. Hughes has applied for a permit to drill an exploratory well for oil in Collier County. If the well is commercially viable, Hughes must apply for an operating permit at a later time. The Department has jurisdiction to issue permits for the drilling and exploring for, or production of, oil under part I, chapter 377. Pursuant to that authority, the Department reviewed the oil and gas well drilling permit application. The Application and Project After the application was deemed complete by the Department, it was distributed for comment to a number of local, state, and federal agencies. While some commented on the application, no agency had any unresolved concerns at the end of the application process. Hughes met all rule requirements for performance bonds or securities, and it provided all information required by rule. The proposed site is located on the southeast corner of an active farm field in the Big Cypress Swamp watershed, just north of a speedway now used as a test track. Surface holes for oil wells are commonly located on farm land, and farm fields are compatible with oil wells. Based upon a mineral lease between Hughes and the owner of the land, Collier Land Holdings, Ltd., Hughes has the right to locate and drill the well at the proposed surface hole location. The Refuge was established by Congress in 1989 to protect the Florida panther and its habitat and is located approximately 20 miles east of Naples. Around 98 percent of the Refuge is closed to any public activity. The project is consistent with the comprehensive conservation plan for the Refuge prepared by the United States Fish and Wildlife Service (USFWS), in that the plan recommends "slant drilling" off of the Refuge. Although Mosher and Preserve argue that the drill hole should be moved further east into wetlands, and Schwartz contends that it should be moved further west away from the Refuge, the proposed location of the drilling pad and project site is reasonable with respect to the nature, appearance, and location of the proposed drilling site. Likewise, the location is reasonable with respect to the type, nature, and extent of Hughes' ownership. The proposed activity can best be characterized as a "resource play," where an operator drills toward a known resource. This is distinguished from a wildcat operation, where the operator is drilling in an unproven area. Hughes proposes to target the rubble zone (i.e., the lower zone) within the lower Sunniland formation, a geologic formation thousands of feet below the ground surface that runs through southwest Florida. Hughes will first drill a vertical pilot hole and then drill horizontally from the hole bottom in a southeast direction toward a formerly drilled oil well known as the Tribal Well. In order to increase the probability of locating commercially available petroleum, Hughes plans to proceed from west to east in order to arrive at a perpendicular direction of existing limestone fractures as the drilling approaches the Tribal Well. When that well was drilled vertically into the rubble zone in the 1970s, oil rose to the ground surface. Thus, the indicated presence of oil is sufficient to warrant and justify the exploration for oil at this location. The proposed depth of the pilot hole is 13,900 feet measured depth (MD/13,900 feet true vertical depth (TVD)), which will allow assessment of the upper Sunniland, lower Sunniland, and Pumpkin Bay Formations. If the evaluation determines that the well will likely be commercially productive, Hughes will complete a 4,100-foot horizontal leg in the lower Sunniland rubble zone with a landing depth at 12,500 feet MD/12,064 TVD and a total depth of 16,600 feet MD/12,064 feet TVD. The footprint for the drilling pad will be 225 feet by 295 feet, or 2.6 acres, with a two-foot earthen berm around the perimeter of the operating area to contain all water on the site. A secondary containment area within the perimeter of the site will be covered by high-density polyethylene to contain and collect any accidental spills. A drilling rig, generators, and other drilling equipment will be on the pad during drilling operations. A maximum of 20 persons will be at the site, and then only for one day of operations. At all other times, Hughes anticipates there will be a five-person drill crew plus support personnel on site. After drilling, Hughes will remove its equipment. Once the access road is built and the equipment put in place, the drilling activities will take place 24 hours per day, seven days per week, and will be completed in approximately 60 to 70 days. The on-site diesel generators will run simultaneously 24 hours per day while drilling is taking place. The pad will be illuminated at night with lights on the drilling derrick and throughout the pad. Construction of the drilling pad will require trucking around 12,000 to 14,000 cubic yards of fill to the drilling location. Additional traffic for bringing in fill, piping, and related equipment will occur, but the exact amount of traffic is unknown. The South Florida Water Management District (SFWMD) previously approved an environmental resource permit (ERP) to allow the construction and operation of a surface water management system on Camp Keais. The United States Army Corps of Engineers (USACE) also permitted the same system under the Clean Water Act. The latter permit requires mitigation for wetlands and Florida panther habitat compensation. Based on the proposed wellsite, the SFWMD modified the ERP to allow a culvert and access to the proposed wellsite. In addition to the oil drilling permit application, Hughes has applied for two water well drilling permits from the SFWMD, and an injection well drilling permit. Petitioners and Intervenor's Objections The challengers have raised a number of objections that they assert require denial of the application. Conflicting testimony was presented on these issues, which has been resolved in Respondents' favor as being the more credible and persuasive testimony. Mosher and Preserve Mosher and Preserve raise two broad objections. First, they contend that hydrogen sulfide gas (H2S) is likely to be encountered in the drilling of the proposed well. They further contend that the H2S contingency plan submitted by Hughes is not sufficient to evacuate the public in the event of an incident where H2S is uncontrollably released under pressure. Second, they contend that the Committee did not review the application under the process contemplated by section 377.42(2). Except for these two objections, they agree that no other issues remain. See TR., Vol. I, p. 33. Within the petroleum industry, drilling operators create H2S plans when there is reason to believe that the operator may encounter H2S while drilling. This practice is codified in Florida Administrative Code Rule 62C-27.001(7), which requires a contingency plan only when H2S is "likely" to be encountered while drilling. The plan must "meet generally accepted industry standards and practices," and it must contain measures "for notifying authorities and evacuating civilians in the event of an accident." Id. See also rule 62C-26.003(3), which requires a contingency plan "if appropriate." The plan is prepared for two main users: the personnel working at the drilling site; and local emergency management officials, who must plan and train for the implementation of emergency activities. The parties agree that the "generally accepted industry standards and practices" for the oil and natural gas industry are found in the operating standards and recommended practices adopted by The American Petroleum Institute (API), a trade association for the oil and natural gas industry. Recommended Practice 49 (API 49) is the generally accepted industry standard for oil and gas drilling operations likely to encounter H2S and was relied upon by all parties throughout the hearing. The standard includes guidance on personnel protection measures, personnel training, personnel protection equipment, and community contingency planning. API 49 recommends the use of a community warning and protection plan when atmospheric H2S exposures beyond the well site could exceed potentially harmful exposure levels and could affect the general public. Mosher/Preserve's expert opined that H2S might be encountered at levels as high as 21 percent (210,000 parts per million (ppm)) in southwest Florida, and that "it's quite likely" H2S would be encountered at the proposed wellsite. At the same time, however, he agreed with the assessment of Respondents' experts that the likelihood of encountering H2S at this site was merely "possible," "sporadic," and "unlikely," and that there was "zero" potential of a severe H2S release under high pressure. Florida has two major oil producing areas: the Sunniland Trend in southwest Florida and the Smackover formation near Jay, Florida, in the northwest part of the state. Unlike the Smackover formation which has higher temperatures and pressures and a high concentration of H2S, the Sunniland Trend has normal temperatures and pressures and a sporadic presence of H2S. Less than two percent of wells in southwest Florida have been reported to contain H2S, and those reports relate to production wells where bacteria (biological contamination) was likely introduced into the formation during production. Of over 300 oil wells drilled in southwest Florida, only six were reported to have encountered H2S. Notably, the Tribal Well, located 1.5 miles to the southeast of the proposed site, encountered relatively low pressure during drilling and had no H2S, and another well located 12 miles to the north likewise had no high pressure or H2S. It is unlikely that Hughes will encounter high pressure or H2S if it drills at the proposed site. Even though it is unlikely that high pressure or H2S will be encountered during the drilling of this proposed well, Hughes still submitted an H2S contingency plan as part of the drilling application. The Department determined the plan provided an effective design to detect, evaluate, and control any hazardous release of H2S. In response to public concerns, in January 2014 Hughes revised its plan to provide more protections. The revised plan exceeds the guidance provided in API 49. The revised plan clarifies and adds multiple protections, including implementing the plan at a vertical depth of 9,000 feet, which is 2,700 feet before the zone that Mosher claims could contain H2S; clarifying that an H2S alarm notification at 15 ppm would result in an instant well shut-in (i.e., closure of the well) to prevent the escape of H2S; instituting a reverse 911 call system to allow local officials to notify the public by telephone of any incident; creating an air dispersion model to understand the likelihood of public exposure; and adding H2S scavengers to the drilling mud. Adding H2S scavengers in the mud is a protective measure. Specifically, the zinc oxide scavengers will react with H2S to create benign zinc sulfide and water. Even if H2S is present in the formation, the H2S scavengers will neutralize the H2S before it could reach the surface. The H2S scavengers will effectively eliminate the likelihood of H2S escaping from the well during drilling operations. The drilling plan requires the Trinity C formation (which Hughes estimated will begin at a depth of around 11,850 feet) to be cemented off and sealed once drilled. This formation will not be encountered in the first 15 or 20 days of drilling. Once encountered, the formation will be exposed for only four to six days. Even if H2S were encountered during this short exposed duration, all of the protections included in the revised plan would be in place, including overbalanced drilling mud, H2S scavengers, blowout preventers, H2S monitors, and alarms. When wells are drilled, there are numerous personnel monitoring the drilling fluid, or mud, which is designed not only to carry cuttings to the surface, but more importantly to act as a barrier to keep fluids or gasses in the geologic formation. The mud is weighted with additives to combat reservoir pressures. Drill operators want the same amount of mud pumped into the hole as the amount flowing back up. If more fluid is flowing back up, then the mud is not heavy enough to hold back the fluids or gasses encountered. If this imbalance occurs, the well is shut- in immediately and the mud weight is adjusted. A shut-in can be accomplished in just a few seconds. Anything in a shut-in well will stay in the well. Hughes' normal drilling plan is to slightly overbalance the mud weight. This ensures that nothing unintentionally escapes from the reservoir. Mosher and Preserve contend that if H2S is encountered, dangerous concentrations of H2S would leave the wellsite. In response to this type of concern, as part of the revised plan, Hughes conducted an air dispersion model using the methodology provided by API 49. The API 49 model is a Gaussian model with default values reflecting the worst-case exposures. The peer- reviewed and conservative model calculated by Dr. Walker looked at H2S concentrations of 10, 15, and 100 ppm. At the extreme case, a 100-ppm release at the well would be reduced below 10 ppm within about 20 feet from the well and further reduced to one ppm within 60 feet from the well. Although H2S is unlikely to escape the well, 100 ppm was selected as a precautionary level because this level is an immediate danger to human life and health. Reaching 100 ppm is highly unlikely because at an instantaneous reading of 15 ppm, the well is immediately shut-in. The air dispersion model results demonstrate that atmospheric H2S exposures beyond the wellsite could not exceed potentially harmful exposure levels nor could exposures affect the general public. Thus, even though the plan includes a community warning and protection provision, it is not required under API 49. In an abundance of caution, however, the plan provides for a public notification zone of 2,000 feet in case of an H2S release. This zone is two orders of magnitude beyond the 20- foot, 10 ppm distance dispersion of H2S based on the modeled worse case release and exceeds any required notification zones in other states. The notification boundary is conservative, as compared with industry standards. While Mosher's expert recommended more stringent standards than API 49, he knew of no contingency plan for an oil drilling permit in the United States that included his recommended standards. Mosher's expert testified that based on his review of literature, the lowest observable adverse effect from H2S was at concentrations of 2.1 ppm. Based on a worst case scenario release of 100 ppm of H2S, the gas would disperse to a concentration of 2.1 ppm in less than 40 feet from the well. The property boundary abutting the neighborhood to the west is over 800 feet from the well. API 49 expressly provides that wellsite personnel should be provided protection devices if concentrations of H2S exceed 10 ppm for an eight-hour time-weighted average. The revised plan requires wellsite personnel to don a self-contained breathing apparatus if the monitors encounter an instantaneous reading of 10 ppm H2S. Instantaneous readings are more protective of human health than the time-weighted averages proposed by Mosher's expert. Using an instantaneous trigger is another area where the revised plan exceeds the recommendation of API 49. The greater weight of evidence demonstrates that the H2S contingency plan meets or exceeds guidance of API 49. The revised plan requires hands-on training for public officials and fire/rescue staff before reaching the depth of 9,000 feet. The revised plan further requires hands-on training and drills related to the procedures for use, and location of, all self- contained breathing apparatus and evacuation procedures. The plan is a complete and accurate contingency plan that will assist operators and local emergency management in the unlikely event of an H2S escape. It exceeds the degree of caution typically employed in industry standards. Mosher and Preserve contend that the plan fails to include specific instructions and training for nearby residents in the event of an emergency. However, emergency plans are designed for use by operators at the facility and the local emergency management officials rather than nearby residents. Thus, the Department did not require the applicant to provide specific instructions for those residents. Mosher and Preserve also contend that the plan fails to adequately describe the evacuation routes in the event of an emergency. However, evacuation routes and the potential closure of roads are normally in the domain of local governments, as the operator and Department have no control over this action. Mosher and Preserve contend that the plan does not include complete and accurate information for all property owners in the area. This is understandable since some property owners either failed to respond to inquiries by Hughes when it assembled the information for the plan or were reluctant to provide any personal information. Recognizing this problem, the Department reviewed the website of the Collier County property appraiser to complete the information. To the extent information on certain parcels may not be complete, Hughes can update that aspect of the plan on an on-going basis before operations begin. If a permit is issued, the Department will continue to coordinate with Collier County and other local emergency management officials for the purpose of planning to implement the contingency plan. Based on the foregoing, the evidence establishes that the probability of a dangerous release of H2S beyond the wellsite is highly remote and speculative in nature. The revised contingency plan is consistent with industry standards and satisfies the requirements of the rule. Schwartz Like Mosher and Preserve, Schwartz agreed that except for the concerns expressed in his amended pleading, no other issues remain. Schwartz first contends that Hughes did not demonstrate sufficient efforts to select a proposed location for drilling to minimize impacts as required by rule 62C-30.005. Subparagraph (2)(b)1. requires that drilling sites be located "to minimize impacts on the vegetation and wildlife, including rare and endangered species, and the surface water resources." In particular, Schwartz is concerned about the potential impact on the Florida panther, an endangered species. Hughes selected the proposed site primarily because of its proximity to the Tribal Well, which had a significant show of oil. In order to increase the chances for commercial production, the horizontal segment of the well needs to be perpendicular to the natural fractures in the limestone. In this location, Hughes must drill horizontally from west to east in the direction of the Tribal Well. Hughes was unable to locate the well on the automotive test track directly south of the agricultural field and west of the Tribal Well because of objections by Harley-Davidson, then the owner of the track. A second proposed location just east of the test track was considered but Harley-Davidson would not grant access from the track to the upland sites on the adjacent location. A third option was to construct a lengthy access road from the north to one of the upland sites just east of the test track. However, this alternative would have resulted in significant impacts to wetlands and native vegetation. The proposed site offers the least amount of environmental impact. It is 1.5 miles from the Tribal Well. It has no federal or jurisdictional wetlands on the site, and groundwater modeling submitted with an application for a water use permit demonstrated that the proposed use of water will not adversely affect surrounding wetlands. The proposed access road and drilling pad will not impact any cypress-mixed forest swamps, hardwood hammocks, mangrove forests, archeological sites, or native ceremonial grounds. Nor will they adversely affect known red-cockaded woodpecker colonies, rookeries, alligator holes, research sites, or pine uplands. The evidence establishes that Hughes chose a site that minimized environmental impacts. Schwartz also contends that the wellsite activities will directly decrease the recovery chances of the Florida panther. According to Schwartz, this decrease will occur because the activities involve creating an access road, truck traffic, noise, lights, and vibrations. He also asserts that the proposed wellsite will result in a small amount of direct habitat loss when the cattle field is converted to a drilling pad. The USFWS has developed a panther scientific habitat assessment methodology. It relies upon peer-reviewed studies that found that panthers will select land cover types while avoiding others. The methodology ranks the value of land cover types from zero to ten based on the potential for panther selection. Applying the USFWS' scoring to the proposed wellsite, an improved pasture area has a value of 5.2, which means the land cover is neither actively selected nor avoided by panthers. The areas to the south and east of the proposed wellsite are forested wetlands and forested uplands, which have substantially higher values that range from 9.2 to 9.5. If converted to an open water reservoir under the Camp Keais ERP, the site value would be zero, the land cover type most avoided by panthers. The underlying USACE permit specifically required panther habitat compensation. Hughes' expert established that the proposed site minimizes impacts on wildlife by avoiding habitat selected by panthers such as wetlands, forested uplands, saw palmetto thickets, fresh water marshes, prairies, and native habitats. Based on a dozen visits to the site for the purpose of conducting vegetation mapping and wildlife surveys, the expert concluded there are no panthers currently known to be living, breeding, or denning on the site. A home range for a panther is the area providing shelter, water, food, and the chance for breeding. The typical home range for a male panther is 209 square miles, and female home ranges average around 113 square miles. The evidence establishes the proposed drilling activity will not interfere with the panthers' use of the site. Approval of the permit will not remove or push any panthers out of their home range. Hughes' expert opined that the four male panthers, which historically traversed the area within a mile of the proposed wellsite, would only likely move through the area every 15 or 20 months or longer. The temporary nature of the drilling activities means the panthers may not even be near the location during that time. If a panther is near the location and frightened by any activities, it will avoid the area, but will eventually return. Based on the large home range of the panther, the temporary activities will not increase the likelihood of intraspecies aggression or decrease panther survivability. The more persuasive evidence is that panthers are adaptable. They are habituated to the drilling operations in southwest Florida based on over a hundred thousand telemetry data points taken near 93 oil wells in the primary zone. Panthers are not threatened by the presence of humans. In fact, they live and den in and around residential communities and active agricultural operations. Panthers need prey, water, and shelter. The drilling activities will not adversely affect prey availability or impact water resources. The proposed wellsite's location within a disturbed agricultural field will not impact the panther's ability to shelter. During the permit review process, the Department requested input from the USFWS, the Florida Fish and Wildlife Conservation Commission (FFWCC), and other interested parties regarding the proposed drilling permit. No formal comments were offered by the USFWS, and its biologist for conservation planning indicated informally that the surface impacts from an oil well are "very minor." Likewise, the FFWCC offered no formal comments on the application. The evidence supports a finding that the proposed permit activities will not affect the panther's use of, or travel to and from, the Refuge. The activities will not affect the panthers' availability of prey or increase panther competition for food or home range territory. The drilling will not adversely affect the panther's breeding, survivability, or the recovery of the species. The only other threatened or endangered species found in the vicinity of the proposed site was an eastern indigo snake, which was located two and one-half miles away and would not travel to the proposed wellsite, as its home range is up to a maximum of 450 acres. Schwartz further contends that section 377.242 requires that the permit be denied because the proposed wellsite is within one mile from the seaward (western) boundary of the Refuge. The Refuge is located entirely inland and does not have a seaward boundary, as contemplated by section 377.242(1)(a)3. Therefore, no drilling will be located within one mile of the seaward boundary of any state, local, or federal park, aquatic preserve, or wildlife preserve. This is consistent with the Department's routine and long-standing interpretation of the statute. Big Cypress Swamp Advisory Committee Petitioners and Intervenor initially contended that the permit should be denied because a meeting of the Committee was never convened pursuant to section 377.42. The Committee, however, met on March 11 and 31, 2014. Although a majority of the Committee voted to recommend that the Department deny the permit on various grounds, the recommendation of the Committee is not binding on the Department, and after consideration, was rejected. In their Proposed Recommended Orders, the opponents now contend that the permit should be denied because the Committee did not meet before the Department issued its proposed agency action. For the reasons stated in the Conclusions of Law, this contention is rejected.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order issuing Permit No. 1353H, without further modifications. DONE AND ENTERED this 3rd day of June, 2014, in Tallahassee, Leon County, Florida. S D. R. ALEXANDER 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 3rd day of June, 2014.
Findings Of Fact At all times pertinent to the charges, respondents have been licensed real estate salesmen and brokers. Respondent Ed Wasdin holds real estate salesman's license number 0341534. Respondent Betty L. Green 2/ held real estate salesman's license number 0341467 at the time of the alleged misconduct. She now is a licensed broker. Respondent Ester L. Turner holds broker's license number 0090375. At the time of the alleged misconduct, she was the qualifying broker for Ed Wasdin Realty, Inc., a registered corporate real estate broker. (Pretrial Stipulation; Testimony of Vann.) During the time in question, Mr. Wasdin also owned and operated Ed Wasdin and Son, Inc., a licensed construction company, where Ms. Green served as his full-time secretary and office manager. She worked as a real estate salesman for Ed Wasdin Realty, Inc., on a part-time basis. (Testimony of Vann; Pretrial Stipulation.) II. On November 11, 1980, Hank V. Mannheimer and his wife, Barbara, saw an Ed Wasdin Realty, Inc., "For Sale" sign in front of a house located at 721 West Crossway Road, Tallahassee, Florida. They called the telephone number listed on the "For Sale" sign and made an appointment for respondent Wasdin to show them the house. (Testimony of H. Mannheimer, B. Mannheimer.) Later that day, Mr. Wasdin took the Mannheimers on a tour of the house. They then returned to Mr. Wasdin's office where respondent Green, as his secretary, prepared a standard real estate contract on a form published by the Florida Association of Realtors. The Mannheimers signed the contract as purchasers, and Ed Wasdin signed on behalf of Ed Wasdin and Son, Inc., the seller. The Mannheimers also delivered a $1,000 earnest money deposit check made payable to the seller, Ed Wasdin and Son, Inc. (Testimony of H. Mannheimer, B. Mannheimer; P-10, R-5.) III. The real estate sales contract contained a "Termite Clause" granting the buyers the right to have the property inspected "to determine whether there is any active termite or wood destroying organisms in any improvement on said property, or any damage from prior termite or wood destroying organism to said improvements". (P-10.) During the morning of January 15, 1981, respondent Green, on behalf of the seller, Ed Wasdin and Son, Inc., telephoned Helms Exterminating, Inc., and ordered a termite inspection of the house. David Baker, a termite inspection, was sent to the house to conduct the inspection that same morning. (Testimony of Vann, Baker.) On inspecting the house, Mr. Baker found termite infestation and termite damage to the left front corner of the house. He then telephoned Ms. Green and told her that he had seen evidence of termites. He did not, however, tell her of any termite damage. She told him that she needed a "clear" termite report by that afternoon (since closing was scheduled for that afternoon or the next day) and authorized him to treat the house for termites. She did not speak to respondent Wasdin before authorizing the treatment. (Testimony of Vann.) Mr. Baker testified that he told Ms. Green of termite damage to the house and that she promised to repair the damage in order to get him to issue a "clear" termite report that day. Ms. Green denied that Mr. Baker told of the damage and denied that she promised to make repairs. The testimony of Ms. Green is more credible and worthy of belief than that of Mr. Baker, whose previous statements about this incident have been incomplete, 3/ untrue or contradictory. In his termite inspection report of January 15, 1981, Mr. Baker indicated that no active termite infestation or visible termite damage was observed--the first statement was, at best, incomplete, the second was false. After discovering the termite damage, Mrs. Mannheimer questioned him twice. The first time, he told her that he had only found ter-mites on January 15, 1981, and mentioned nothing of termite damage. Later, when questioned again, he stated that he had also found termite damage. Further, Ms. Green was not authorized to promise structural repairs to a residence, and it is unlikely that she would have made such a promise when she did not know the extent of the damage and had no way of knowing the cost of repair. The conflict in testimony is therefore resolved in Ms. Green's favor. (Testimony of Vann, Baker.) On January 15, 1981 after treating the residence for termites, Mr. Baker issued a termite inspection report indicating that he had observed no active termite infestation or visible damage. The report, on its face, indicated that it was to be mailed to Ed Wasdin Realty at 4432 Kensington Road, Tallahassee, Florida. The Mannheimers did not see the report until after the closing. (Testimony of Baker, Green; P-7.) IV. In negotiating for and purchasing the house from Ed Wasdin and Son, Inc., the Mannheimers believed, and had reasonable grounds to believe, that they were dealing with realtors associated with Ed Wasdin Realty, Inc. The house was advertised by an Ed Wasdin Realty, Inc., "For Sale" sign; they called the number listed on the sign, and Mr. Wasdin showed them the property; a contract identified with the Florida Association of Realtors was executed which contained an Employment of [Real Estate] Agent clause; 4/ both Ms. Green and Mr. Wasdin worked for both companies; and the offices of the Wasdin realty and construction companies were located in the same model home. Although the offices in the model home were separately marked as construction or realty company offices, the conference room (where the closing took place) was not marked as belonging to either. In actuality, the sale of the residence was not a transaction on the account of Ed Wasdin Realty, Inc. The house was not listed with the realty company; a commission was not promised or paid to the realty company; and the deposit was not placed in the realty company escrow account. (Testimony of Vann, H. Mannheimer, B. Mannheimer.) No evidence was presented to show that respondent Wasdin knew, or should have known, that the house in question had a termite infestation or termite damage. There is not a sufficient factual basis to impute such knowledge to him. Neither was any evidence presented to show that respondent Turner, qualifying broker for Ed Wasdin Realty, Inc., knew, or should have known, about the real estate transaction in question, including the termite infestation and damage. The evidence is insufficient to support a factual inference that Ms. Turner was negligent or derelict in her duty to supervise the realty company's operations. Although, in this case, a realty company's sign was used to advertise a property which was not listed with the company, the evidence does not show that this had ever happened before, that this was anything but an isolated mistake. The evidence is insufficient to support a finding that either Mr. Wasdin or Ms. Green saw the termite inspection report prior to closing, or affirmatively represented to the Mannheimers that no termites had been discovered during the January 15, 1981, termite inspection. 5/
Recommendation Based on the foregoing, it is RECOMMENDED: That the administrative complaint against the respondents be dismissed. DONE and RECOMMENDED this 15th day of October, 1982, in Tallahassee, Leon County, Florida. R. L. CALEEN, JR. 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 15th day of October, 1982.
The Issue There are three legal issues which remain for determination: (1) Whether Florida Petroleum has standing in this case; (2) Whether proposed rule 62-770.220(3)(b), requiring constructive notice to residents or business tenants of real property into which the temporary point of compliance is allowed to extend is an invalid exercise of delegated legislative authority within the meaning of Section 120.52(8)(c), Florida Statutes; and (3) Whether proposed rule 62-770.220(4), requiring additional constructive notice of the status of site rehabilitation is an invalid exercise of delegated legislative authority within the meaning of Section 120.52(8)(c), Florida Statutes.i
Findings Of Fact On December 23, 2004, the Department published a Notice of Proposed Rulemaking regarding amendments to Florida Administrative Code Chapter 62-770. In particular, proposed rule 62-770.220(3)(b) and (4), provides: Subsequent Notice of Contamination Beyond Source Property Boundaries for Establishment of a Temporary Point of Compliance (TPOC) - Prior to the Department authorizing a temporary extension of the point of compliance beyond the boundary of the source property (i.e., the location from which the contamination originates) in conjunction with Natural Attenuation Monitoring pursuant to Rule 62-770.690, F.A.C., or Active Remediation pursuant to Rule 62-770.700, F.A.C., the PRSP shall provide the following notices: * * * (b) Constructive notice to residents [if different from the real property owner(s) notified pursuant to paragraph 62- 770.220(3)(a), F.A.C.] and business tenants of any real property into which the point of compliance is allowed to extend. Such constructive notice, which shall include the same information as required in the actual notice, shall be provided by complying with the following: * * * Status Update 5-Year Notice - When utilizing a TPOC beyond the boundary of the source property to facilitate natural attenuation monitoring or active remediation, an additional notice concerning the status of the site rehabilitation shall be similarly provided every five years to [the classes of] those persons who received notice pursuant to subsection 62-770.220(3), F.A.C., unless in the intervening time, such persons have been informed that the contamination no longer affects the property into which the point of compliance was allowed to extend. * * * (The language in brackets was added pursuant to the Department's Notice of Change and "those" was deleted.) The proposed rule implements Section 376.3071, Florida Statutes. The specific authority for the proposed rule is Sections 376.303 and 376.3071, Florida Statutes. On February 2, 2005, the Environmental Regulation Commission held a public hearing on the proposed rules and approved the proposed rules with certain amendments. On February 14, 2005, Florida Petroleum filed a Petition for Determination of Invalidity of Proposed Rule (Petition) challenging the validity of proposed amendments to proposed rule 62-770.220(3)(b) and (4). The Petition was filed pursuant to Section 120.56(1) and (2), Florida Statutes, and in each instance, Florida Petroleum alleges that the proposed rule violates Section 120.52(8)(c), Florida Statutes. On March 4, 2005, the Department published a Notice of Change regarding the above-referenced Notice of Proposed Rulemaking. With respect to the pending proceeding, the Notice of Change reflects revisions to language of proposed rule 62- 770.220(4), which are not subject to challenge. See Finding of Fact 1. On May 16, 2005, without objection, official recognition was taken of the Department's Notice of Proposed Rulemaking and Notice of Change. Florida Petroleum is a Florida voluntary, non-profit trade association, which comprise, in part, approximately 194 Marketer Members who own and/or operate petroleum storage system facilities in Florida. Florida Petroleum’s purposes include providing representation on behalf of its members in legislative and regulatory matters before the Florida legislature and agencies. Florida Petroleum routinely represents its members in rule development proceeding and other regulatory matters before the Department of Environmental Protection, Department of Revenue, and Department of Agriculture and Consumer Services. Florida Petroleum’s By-Laws state that its purposes include advancing the business concerns of its members, pooling the energy and resources of its members, and communicating with elected officials at the national, state, and local levels of government. Towards those ends, Florida Petroleum has represented it members before the Florida Legislature in matters relating to the regulation of petroleum facilities under Chapter 376, Florida Statutes, and has appeared before the Department in rulemaking proceedings involving the regulation of petroleum cleanups, and the various state restoration funding assistance programs. The subject matter of the rule at issue is within the general scope of interest and activity of Florida Petroleum, in particular, its marketer members, who own or operate facilities that store petroleum products for consumption, use, or sale. Florida Petroleum submitted oral and written comments, recommendations, objections, and proposed amendments to the Department and the Environmental Regulation Commission in connection with the rules at issue in this case. A substantial number of Florida Petroleum marketer members are "persons responsible" for assessment and remediation of one or more petroleum-contaminated sites. Florida Administrative Code Chapter 62-770, governs the remediation of petroleum-contaminated sites. A substantial number of Florida Petroleum’s marketer members are "persons responsible" for assessment and remediation of sites identified by the Department as "confirmed" or "suspected" sources of contamination beyond the boundary of the facility (i.e., "off-site contamination"). In certain instances, the Department's rules allow for the use of No Further Action with Conditions procedures in cases of petroleum contamination where applicable regulatory requirements are met because the use of conditions, such as institutional and engineering controls, may be more cost- effective than active remediation. As of February 2005, the Department estimated that it had reports of approximately 23,000 petroleum-contaminated sites. In 2004, the Department received an estimated 539 Discharge Report Forms in connection with petroleum storage facilities. As of March 2005, the Department had information indicating that approximately 2,000 "off-site" properties have been affected by contamination. Assessment Reports filed with the Department indicate that a substantial number of these sites may have been affected by discharges of petroleum or petroleum products. Petroleum discharges will in all likelihood continue to occur in the future at petroleum facilities. Petroleum discharges will in all likelihood continue to affect off-site properties in the future.
The Issue This is a license discipline case in which the Petitioner seeks to take disciplinary action against the Respondent on the basis of allegations of misconduct set forth in a four-count Administrative Complaint. The Administrative Complaint charges the Respondent with violation of the following statutory provisions: Sections 489.129(1)(g), 489.129(1)(h)2, 489.129(1)(k), and 489.129(1)(n), Florida Statutes (1996 Supp.).
Findings Of Fact The Respondent, Allen Fader, is, and has been at all times material, a licensed Certified General Contractor, having been issued license number CG C007504 by the State of Florida. At all times material, the Respondent was licensed to contract as an individual. The Respondent, by virtue of his license, advertised construction services for Gold Coast Construction Services, Inc., during 1997. The Respondent presented a business card, with the name of Gold Coast Construction Services, Inc., to Ruby M. Shepherd, a customer, in April of 1997. On April 14, 1997, the Respondent, doing business as Gold Coast Construction Services, Inc., contracted with Ruby M. Shepherd to enclose a patio and to install hurricane shutters at Ms. Shepherd's residence located at 12325 Northwest 19th Avenue, Miami, Florida. The contract was conditioned on Ms. Shepherd being able to obtain financing to pay for the construction described in the contract. The exact amount Ms. Shepherd was required to pay under the original April 14, 1997, contract cannot be determined from the evidence in this case.4 The Respondent assisted Ms. Shepherd in obtaining a loan for the financing of the construction work described in the contract. It took several months to obtain a loan. Ultimately, through the efforts of the Respondent, and of a person engaged by the Respondent to help obtain a loan, Ms. Shepherd received a loan through Town and Country Title Guaranty and Escrow. The check from Town and Country Title Guaranty and Escrow was in the amount of twelve thousand nine hundred seventy-nine dollars and fifteen cents ($12,979.15). The check was made payable to Ms. Shepherd and to Gold Coast Construction Services, Inc. At the request of the man who helped obtain the loan, Ms. Shepherd endorsed the loan check and agreed for the check to be delivered to the Respondent. The Respondent, doing business as Gold Coast Construction Services, Inc., negotiated the loan check and received all of the proceeds in the amount of twelve thousand nine hundred seventy-nine dollars and fifteen cents ($12,979.15). The Respondent received the proceeds of the loan on or about September 12, 1997. The Respondent did not take any action on Ms. Shepherd's construction project until November 14, 1997. On that day, the Respondent placed an order for the material for the hurricane shutters on Ms. Shepherd's project. Nothing more was done on Ms. Shepherd's project for quite some time. Towards the end of February of 1998, the Respondent had some health problems, which caused him to be unable to work for several weeks. Eventually, the Respondent attempted to pick up the shutter materials he had ordered for Ms. Shepherd's project. As a result of the delay, those materials had been returned to stock and had been sold to someone else. The Respondent ordered the materials again. Eventually, in June of 1998, the Respondent had the shutter materials delivered to Ms. Shepherd's residence, and began the process of installing the hurricane shutters. In the meantime, from September of 1997 until January of 1998, the Respondent did not contact Ms. Shepherd. During this period of time, Ms. Shepherd called the Respondent's office numerous times and left numerous messages asking the Respondent to return her calls. From September of 1997 until January of 1998, the Respondent did not return any of Ms. Shepherd's calls. In January of 1998, Ms. Shepherd was finally able to speak with the Respondent. From January of 1998 until the installation work began in June of 1998, Ms. Shepherd spoke to the Respondent on numerous occasions in an effort to find out when the Respondent was going to begin work or return the money he had been paid. During this period of time, the Respondent repeatedly made false assurances to Ms. Shepherd that the work would be performed within two weeks. On or about June 12, 1998, the Respondent obtained a building permit for Ms. Shepherd's project from the Miami-Dade Department of Planning, Development, and Regulation. Installation of the hurricane shutters began that same week. The installation process was delayed because some of the materials did not fit and had to be returned to the manufacturer for modifications. Following the modifications, the installation process resumed. After a few more days, the Respondent told Ms. Shepherd the hurricane shutter work was finished and that he was not going to do the patio construction work, because the loan Ms. Shepherd had received was not enough money to pay for both projects. After the Respondent told Ms. Shepherd that the installation of the hurricane shutters was complete, the Respondent never did any further work on Ms. Shepherd's construction project. The hurricane shutters installed at Ms. Shepherd's property by the Respondent were not installed correctly. Several of the hurricane shutters will not open and close properly. Several of the hurricane shutters are insufficiently fastened. A necessary shutter over the storage room door was never installed. The problems with the subject hurricane shutters can be corrected. The cost of the corrections necessary to make the shutters operate properly and to fasten them securely is approximately one thousand dollars ($1,000). The Respondent never called for an inspection of the installation of the hurricane shutters at Ms. Shepherd's residence. In their present condition, those hurricane shutters will not pass inspection, because they were installed improperly. If corrections are made, those hurricane shutters will pass inspection. By reason of the facts stated in paragraphs 12 and 13 above, the Respondent failed to properly and fully complete the hurricane shutter portion of the contracted work. The Respondent never did any work on the patio portion of the contracted work. At some point in time between September of 1997 and June of 1998, Ms. Shepherd and the Respondent agreed to a modification of their original contract due to the fact that the proceeds of the loan obtained by Ms. Shepherd were insufficient to pay for both the hurricane shutters and the enclosure of the patio. The essence of their modified agreement (which was never reduced to writing) was that the Respondent would not do the patio enclosure portion of the contracted work; the Respondent would do the hurricane shutter portion of the contracted work; the Respondent would be paid for the hurricane shutter portion of the contracted work; and any remaining balance of the loan proceeds that had been paid to the Respondent would be paid back to Ms. Shepherd. Implicit, but apparently unstated, in this modified agreement, was the notion that the Respondent would charge a fair price for the hurricane shutter portion of the contracted work. A fair price for the hurricane shutter portion of the contracted work at Ms. Shepherd's residence, including all materials, labor, overhead, and profit, would be approximately four thousand dollars ($4,000).5 The price of four thousand dollars presupposes properly installed hurricane shutters that will pass inspection. As previously mentioned, it will cost approximately one thousand dollars ($1,000) to make the corrections to the subject hurricane shutters which are necessary for the shutters to function properly and pass inspection. Accordingly, the fair value of the work performed by the Respondent at Ms. Shepherd's residence is three thousand dollars ($3,000). Ms. Shepherd has paid $12,979.15 to the Respondent, doing business as Gold Coast Construction Services, Inc. The fair value of the work performed by the Respondent at Ms. Shepherd's residence is $3,000. Therefore, the Respondent has been paid $9,979.15 more than he is entitled to keep. As of the date of the final hearing, the Respondent has not paid back any money to Ms. Shepherd.
Recommendation On the basis of the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be issued in this case concluding that the Respondent is guilty of the violations charged in each of the four counts of the Administrative Complaint, and imposing the following penalties: For the violation of Section 489.129(1)(g), Florida Statutes (1996 Supp.), an administrative fine in the amount of $100.00. For the violation of Section 489.129(1)(k), Florida Statutes (1996 Supp.), an administrative fine in the amount of $2,000.00. For the violation of Section 489.129(1)(n), Florida Statutes (1996 Supp.), an administrative fine in the amount of $1,000.00. For the violation of Section 489.129(1)(h), Florida Statutes (1996 Supp.), an administrative fine in the amount of $1,500.00, and placement of the Respondent on probation for a period of one year. It is further RECOMMENDED that the final order require the Respondent to pay restitution to Ms. Shepherd in the amount of $9,979.15, and to pay costs of investigation and prosecution in the amount of $266.55. DONE AND ENTERED this 9th day of September, 1999, in Tallahassee, Leon County, Florida. MICHAEL M. 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 September, 1999.
The Issue The issue to be determined is whether the applicant, Kanter Real Estate, LLC (Kanter), is entitled to issuance of an Oil and Gas Drilling Permit, No. OG 1366 (the Permit).
Findings Of Fact The Parties Kanter is a foreign limited liability company registered to do business in the State of Florida. Kanter owns 20,000 acres of property in western Broward County, on which it seeks authorization for the drilling of a vertical exploratory well. The exploratory well is to be located on a five-acre site that is subject to an ERP (the Well Site). The Department is the state agency with the power and duty to regulate activities related to the management and storage of surface waters pursuant to chapter 373, Florida Statutes, and to regulate oil and gas resources, including the permitting of activities related to the exploration for and extraction of such resources, pursuant to chapter 377, Florida Statutes. Miramar is a Florida municipal corporation located in Broward County, Florida. Broward County is a political subdivision of the State of Florida with jurisdiction extending to the Kanter property and the Well Site. The Application On July 2, 2015, Kanter submitted its Application for Permit to Drill (Application) to the Department. The proposed Well Site is on land to which Kanter owns the surface rights and subsurface mineral rights. The Application contemplates the drilling of an exploratory well to a depth of approximately 11,800 feet. The Application is not for a production well. The well is to be drilled, and ancillary activities are to be performed on a fill pad of approximately five acres, surrounded by a three-foot high perimeter berm on three sides and the L67-A levee on the fourth. The pad is the subject of an ERP which, as set forth in the Preliminary Statement, is not being challenged. The pad is designed to contain the 100-year, three-day storm. The engineering design incorporates a graded area, berm, and containment with a water control structure and a gated culvert to manipulate the water if necessary. The entire pad is to be covered by a 20 mil PVC liner, is sloped to the center, and includes a steel and concrete sump for the collection of any incidental spills. The pad was designed to contain the full volume of all liquids, including drilling fluid, fuel, and lubricating oil, that are in tanks and containers on the facility. The Application includes technical reports, seismic data, and information regarding the geology and existing producing oil wells of the Upper Sunniland Formation, which Kanter filed for the purpose of demonstrating an indicated likelihood of the presence of oil at the proposed site. The third Request for Additional Information (RAI) did not request additional information regarding the indicated likelihood of the presence of oil at the proposed site. After it submitted its response to the third RAI, Kanter notified the Department of its belief that additional requests were not authorized by law. As a result, the Department completed the processing of the Application without additional RAI’s. On November 16, 2016, the Department entered its Notice of Denial of the Oil and Gas Drilling Permit. The sole basis for denial was that Kanter failed to provide information showing a balance of considerations in favor of issuance pursuant to section 377.241.1/ There was no assertion that the Application failed to meet any standard established by applicable Department rules, Florida Administrative Code Chapters 62C-25 through 62C-30. In particular, the parties included the following stipulations of fact in the Joint Prehearing Stipulation which are, for purposes of this proceeding, deemed as established: The structure intended for the drilling or production of Kanter’s exploratory oil well is not located in any of the following: a municipality; in tidal waters within 3 miles of a municipality; on an improved beach; on any submerged land within a bay, estuary, or offshore waters; within one mile seaward of the coastline of the state; within one mile seaward of the boundary of a local, state or federal park or an aquatic or wildlife preserve; on the surface of a freshwater lake, river or stream; within one mile inland from the shoreline of the Gulf of Mexico, the Atlantic Ocean or any bay or estuary; or within one mile of any freshwater lake, river or stream. The location of Kanter’s proposed oil well is not: within the corporate limits of any municipality; in the tidal waters of the state, abutting or immediately adjacent to the corporate limits of a municipality or within 3 miles of such corporate limits extending from the line of mean high tide into such waters; on any improved beach, located outside of an incorporated town or municipality, or at a location in the tidal waters of the state abutting or immediately adjacent to an improved beach, or within 3 miles of an improved beach extending from the line of mean high tide into such tidal waters; south of 26°00'00? north latitude off Florida’s west coast and south of 27°00'00? north latitude off Florida’s east coast, within the boundaries of Florida’s territorial seas as defined in 43 U.S.C. 1301; north of 26°00'00? north latitude off Florida’s west coast to the western boundary of the state bordering Alabama as set forth in s. 1, Art. II of the State Constitution; or north of 27°00'00? north latitude off Florida’s east coast to the northern boundary of the state bordering Georgia as set forth in s. 1, Art. II of the State Constitution, within the boundaries of Florida’s territorial seas as defined in 43 U.S.C. 1301. 19. The proposed oil well site does not contain Florida panther habitat and is located outside of the primary and secondary habitat zones for the Florida panther. 21. There are no recorded archaeological sites or other historic resources recorded within the area of the proposed oil well site. Kanter submitted a payment of $8,972.00 for its oil and gas permit application on June 30, 2016 pursuant to Rule 62C- 26.002(5)(c), F.A.C. Kanter’s application includes sufficient information and commitments for performance bonds and securities. DEP and Intervenors do not claim that the application lacks the information required in rule 62C-26.002, F.A.C. Kanter’s application includes an organization report that satisfies the requirements of rule 62C-26.003(3), F.A.C. Kanter’s engineering aspects of the site plan for the proposed project site, are appropriate. Kanter’s survey submitted to DEP in support of its application includes a suitable location plat which meets the minimum technical standards for land surveys. Kanter’s application includes an appropriate description of the planned well completion. DEP and Intervenors do not claim that the drilling application lacks the information required by rule 62C-26.003, F.A.C. Kanter’s Application proposes using existing levees to provide access to the proposed Kanter well site. Kanter did not propose to construct additional roads for access. Kanter’s proposed well site is located 332 feet from the L67-A levee, which serves as a roadway for trucks used to perform operations and maintenance on the levees and canals in the area. Kanter’s application does not lack any information required by DEP with respect to the location of roads, pads, or other facilities; nor does it lack any information regarding the minimization of impacts with respect to the location of roads. DEP and Intervenors do not contend that the permit should be denied based upon the proposed “spacing” of the well, or drilling unit, as that term is used in rule 62C-26.004, F.A.C. Kanter’s application includes appropriate plans for the construction of mud tanks, reserve pits, and dikes. Kanter agrees to a reasonable permit condition requiring that if water is to be transported on-site, that it will add additional tanks for the purpose of meeting water needs that would arise during the drilling process. Kanter’s design of the integrated casing, cementing, drilling mud, and blowout prevention programs is based upon sound engineering principles, and takes into account all relevant geologic and engineering data and information. Kanter’s proposed casing plan includes an additional casing string proposed in its response to DEP’s Third Request for Additional Information. This casing plan meets or exceeds the requirements of 62C-27.005, F.A.C. Kanter’s proposed casing and cementing program, as modified, meets or exceeds all applicable statutory and rule criteria.[2/] Kanter’s response and documents provided in response to DEP’s 3rd RAI satisfactorily resolved DEP’s concern regarding the risk of passage of water between different confining layers and aquifers resulting from the physical act of drilling through the layers of water and the intervening soil or earth. Kanter’s application includes a sufficient lost circulation plan. Kanter’s application is not deficient with respect to specific construction requirements which are intended to prevent subsurface discharges. Kanter’s drilling fluids plan is appropriate and is not deficient. Kanter’s blowout prevention equipment and procedures are appropriate and are not deficient. Kanter’s plans for blowout prevention are not insufficient. Kanter’s proposed oil pad is above the 100 year flood elevation and under normally expected circumstances would not be inundated by water if constructed as proposed in Kanter’s application. Kanter’s application includes a Hydrogen Sulfide Safety Plan that includes standards which are consistent with the onshore oil and gas industry standards set forth in the American Petroleum Institutes’ Recommended Practice. DEP and Intervenors do not claim any insufficiencies with respect to Kanter’s Hydrogen Sulfide Gas Contingency Plan, the sufficiency of secondary containment, its construction plans for a protective berm around the drilling site and storage tank areas of sufficient height and impermeability to prevent the escape of pad fluid, its pollution prevention plan, its safety manual, or its spill prevention and cleanup plan. DEP and Intervenors do not contend that the permitting of the well would violate section 377.242(1), F.S., regarding permits for the drilling for, exploring for, or production of oil, gas, or other petroleum products which are to be extracted from below the surface of the land only through the well hole(s). DEP and Intervenors do not contend that Kanter’s application violates the applicable rule criteria for oil and gas permitting set forth in Chapters 62C-25 through 62C-30, Florida Administrative Code. In addition to the foregoing, Kanter is not seeking or requesting authorization to perform “fracking,” and has agreed to a permit condition that would prohibit fracking. As a result of the foregoing, the parties have agreed that the Application meets or exceeds all criteria for an exploratory oil well permit under chapters 62C-25 through 62C-30. The Property Kanter owns two parcels of land totaling 20,000 acres in the area of the proposed Well Site: a northern parcel consisting of approximately 11,000 acres and a southern parcel consisting of approximately 9,000 acres. Kanter assembled its holdings through a series of acquisitions by deeds from 1975 to 1996. The Well Site is to be located within the southern parcel. On August 7, 1944, Kanter’s predecessor in title, Dallas Investment Co., acquired by tax deed all interests in a parcel within the 9,000-acre southern parcel described as “All Section 23 Township 51 South, Range 38 East, 640 Acres,” including, without reservation, the oil, gas, minerals, and phosphate. The evidence of title submitted as part of the Application indicates that a “Kanter” entity first became possessed of rights in Section 23 in 1975. By virtue of a series of transactions extending into 1996, Kanter currently holds fee title to all surface rights, and title to all mineral rights, including rights to oil, gas, and other mineral interests, within Section 23 Township 51 South, Range 38 East. The Well Site specified in the Application is within Section 23, Township 51 South, Range 38 East. Kanter’s property is encumbered by a Flowage Easement that was granted to the Central and Southern Flood Control District in 1950, and is presently held by the South Florida Water Management District (SFWMD). The Flowage Easement guarantees Kanter access to the entire easement property “for the exploration or drilling for, or the developing, producing, storing or removing of oil, gas or other . . . in accordance with sound engineering principles.” Kanter has the legal property right to locate and drill the well, and the exploratory well is consistent with Kanter’s ownership interest. The Well Site is located in a 160-acre (quarter section) portion of the 640-acre tract described above, and is within a “routine drilling unit,” which is the block of land surrounding and assigned to a well. Fla. Admin. Code R. 62C-25.002(20) and 62C-25.002(40). The Kanter property, including the Well Site, is in the historic Everglades. Before efforts to drain portions of the Everglades for development and agricultural uses, water flowed naturally in a southerly direction through land dominated by sawgrass and scattered tree islands. The tree islands were generally shaped by the direction of the water flow. Beginning as early as the late 1800s, dramatically increasing after the hurricane of 1947, and extending well into the 1960s, canals, levees, dikes, and channels were constructed to drain, impound, or reroute the historic flows. Those efforts have led to the vast system of water control structures and features that presently exist in south Florida. The Well Site, and the Kanter property as a whole, is located in Water Conservation Area (WCA)-3. WCA-3 is located in western Broward County and northwestern Miami-Dade County. It was constructed as part of the Central and Southern Florida Flood Control project authorized by Congress in 1948, and was created primarily for flood control and water supply. In the early 1960s, two levees, L67-A and L67-C, were constructed on a line running in a northeast to southwest direction. When constructed, the levees separated WCA-3 into WCA-3A to the west and WCA-3B to the southeast. The Well Site is in WCA-3A.3/ The area between L67-A and L67-C, along with a levee along the Miami Canal, is known as the “Pocket.” There is no water control in the Pocket. Although there is a structure at the south end of the Pocket, it is in disrepair, is rarely -- if ever -- operated, and may, in fact, be inoperable. The Well Site is located within the Pocket, on the southern side of L67-A. L67-A and L67-C, and their associated internal and external canals, have dramatically disrupted sheet flow, altered hydrology, and degraded the natural habitat in the Pocket. Water inputs and outputs are entirely driven by rainfall into the Pocket, and evaporation and transpiration from the Pocket. From a hydrologic perspective, the Pocket is entirely isolated from WCA-3A and WCA-3B. The Pocket is impacted by invasive species, which have overrun the native species endemic to the area and transformed the area into a monoculture of cattails. Vegetation that grows in the Pocket dies in the Pocket. Therefore, there is a layer of decomposing vegetative muck, ooze, and sediment from knee deep to waist deep in the Pocket, which is atypical of a functioning Everglades system. L67-A and L67-C, and their associated internal and external canals, impede wildlife movement, interfering with or preventing life functions of many native wildlife species. The proposed Well Site, and the surrounding Kanter property, is in a rural area where future residential or business development is highly unlikely. The property is removed from urban and industrial areas and is not known to have been used for agriculture. The Department has previously permitted oil wells within the greater Everglades, in areas of a more pristine environmental nature, character, and location than the Pocket. The Raccoon Point wellfield is located 24 miles west of the Proposed Project Site within the Big Cypress National Preserve. It is within a more natural system and has not undergone significant hydrologic changes such as the construction of canals, levees, ditches, and dikes and, therefore, continues to experience a normal hydrologic flow. Mr. Gottfried testified that at Raccoon Point, “you can see the vegetation is maintaining itself because the fact that we don’t have levees, ditches canals, dikes, impacting the area. So you have a diversity of plant life. You have tree islands still. You have the normal flow going down.” The greater weight of evidence shows that the Kanter Well Site is far less ecologically sensitive than property at Raccoon Point on which the Department has previously permitted both exploration and production wells. The Biscayne Aquifer The Biscayne Aquifer exists in almost all of Miami- Dade County, most of Broward County and a portion of the southern end of Palm Beach County. It is thickest along the coast, and thinnest and shallowest on the west side of those counties. The western limit of the Biscayne Aquifer lies beneath the Well Site. The Biscayne Aquifer is a sole-source aquifer and primary drinking water source for southeast Florida. A network of drainage canals, including the L-30, L-31, L-33, and Miami Canals, lie to the east of WCA-3B, and east of the Well Site. Those canals penetrate into the substratum and form a hydrologic buffer for wellfields east of the Well Site, including that operated by Miramar, and isolate the portions of the Biscayne Aquifer near public wellfields from potential impacts originating from areas to their west. The canals provide a “much more hydraulically available source” of water for public wellfields than water from western zones of the Biscayne Aquifer, and in that way create a buffer between areas on either side of the canals. The Pocket is not a significant recharge zone for the Biscayne Aquifer. There is a confining unit comprised of organic soils, muck, and Lake Flint Marl separating the Pocket and the Well Site from the Fort Thompson formation of the Biscayne Aquifer. There is a layer of at least five feet of confining muck under the L67-A levee in the area of the Well Site, a layer that is thicker in the Pocket. The Well Site is not within any 30-day or 120-day protection zones in place for local water supply wells. The fact that the proposed well will penetrate the Biscayne Aquifer does not create a significant risk of contamination of the Biscayne Aquifer. The drilling itself is no different than that done for municipal disposal wells that penetrate through the aquifer much closer to areas of water production than is the Well Site. The extensive casing and cementing program to be undertaken by Kanter provides greater protection for the well, and thus for the aquifer, than is required by the Department’s rules. A question as to the “possibility” that oil could get into the groundwater was answered truthfully in the affirmative “in the definition of possible.” However, given the nature of the aquifer at the Well Site, the hydrological separation of the Well Site and well from the Biscayne Aquifer, both due to the on-site confining layer and to the intervening canals, the degree of casing and cementing, and the full containment provided by the pad, the testimony of Mr. Howard that “it would be very difficult to put even a fairly small amount of risk to the likelihood that oil leaking at that site might possibly actually end up in a well at Miramar” is accepted. The Sunniland Formation The Sunniland Formation is a geologic formation which exists in a region of South Florida known as the South Florida Basin. It is characterized by alternating series of hydrocarbon-containing source rock, dolomite, and limestone of varying porosity and permeability and evaporite anhydrite or mudstone seal deposits. It has Upper Sunniland and Lower Sunniland strata, and generally exists at a depth of up to 12,000 feet below land surface (bls) in the area of the Well Site. Underlying the Sunniland Formation is a formation generally referred to as the “basement.” The basement exists at a depth of 17,000-18,000 feet bls. Oil is produced from organic rich carbonate units within the Lower Cretaceous Sunniland Formation, also known as the Dark Shale Unit of the Sunniland Formation. The oil produced in the Sunniland Formation is generally a product of prehistoric deposits of algae. Over millennia, and under the right conditions of time and pressure, organic material is converted to hydrocarbon oil. The preponderance of the evidence demonstrates that active generating source rock capable of producing hydrocarbons exists in the Sunniland Formation beneath the Kanter property. The preponderance of the evidence also indicates that the oil generated in the Sunniland Formation is at a sufficient depth that it is preserved from microbial degradation, which generally occurs in shallower reservoirs. The Upper Sunniland Formation was formed in the Cretaceous geological period, between 106 and 100 million years ago. Over that period, sea levels rose and fell dramatically, allowing colonies of rudists (a now extinct reef-building clam) and oysters to repeatedly form and die off. Over time, the colonies formed bioherms, which are reef-like buildups of shell elevated off of the base of the sea floor. Over millennia, the bioherms were exposed to conditions, including wave action and exposure to air and rainwater, that enhanced the porosity of the component rudist and oyster shell. Those “patch reefs” were subsequently buried by other materials that formed an impermeable layer over the porous rudist and oyster mounds, and allowed those mounds to become “traps” for oil migrating up from lower layers. A trap is a geological feature that consists of a porous layer overlain by an impervious layer of rock that forms a seal. A trap was described, simplistically, as an upside down bowl. Oil, being lighter than water, floats. As oil is generated in source rock, it migrates up through subterranean water until it encounters a trapping formation with the ability to create a reservoir, and with an impervious layer above the porous layer to seal the trap and prevent further migration, thus allowing the “bowl” to fill. The reservoir is the layer or structure with sufficient porosity and permeability to allow oil to accumulate with its pores. The thickness of the layer determines the volume of oil that the reservoir is capable of retaining. Although rudist mounds are generally considered to be more favorable as traps due to typically higher porosity, oyster mound traps are correlated to producing wells in the Sunniland Formation and are primary producers in the Felda field and the Seminole field. The Lower Sunniland Formation is a fractured carbonate stratum, described by Mr. Aldrich as a rubble zone. It is not a traditional structural trap. Rather, it consists of fractured and crumbling rock thought to be created by basement shear zones or deep-seated fault zones. It has the same source rock as the Upper Sunniland. There is little information on traps in the Lower Sunniland, though there are two fields that produce from that formation. A “play” is a group of prospects or potential prospects that have the same source rock, the same reservoir rock, the same trap style, and the same seal rock to hold in the hydrocarbons. The producing oil fields in the Sunniland Formation, including Raccoon Point, Sunniland, Felda, West Felda, and Lake Trafford are part of a common play known as the Sunniland Trend. The Sunniland Trend is an area of limestone of greater porosity within the Sunniland Formation, and provides a reasonable extrapolation of areas that may be conducive to oil traps. The Sunniland Trend extends generally from Manatee County on the west coast of Florida southeasterly into Broward County and the northwestern portion of Miami-Dade County on the east coast of Florida. The trend corresponds to the ancient Cretaceous shoreline where rudist and oyster bioherms formed as described above. In 2003, the “Mitchell-Tapping” report, named after the husband and wife team, identified two separate trends within the Sunniland Trend, the rudist-dominant West Felda Trend, and the more oyster-based Felda Trend. Both are oil-producing strata. The Felda Trend is more applicable to the Kanter property. Throughout the Sunniland Trend, hydrocarbon reservoirs exist within brown dolomite deposits and rudist and oyster mounds. Dolomite is a porous limestone, and is the reservoir rock found at the productive Raccoon Point oil wellfield. The evidence indicates that a brown dolomite layer of approximately 20 feet underlies the Well Site, and extends in all directions from the Well Site. A preponderance of the evidence indicates that the Kanter property, including the Well Site, is within the Sunniland Trend and its Felda Trend subset.4/ Oil produced from wells in the Sunniland Trend is typically thick, and is not under pressure. The oil does not rise through a bore hole to the surface, but must be pumped. The Raccoon Point Field, which is the closest productive and producing wellfield to the proposed Well Site, is located approximately 24 miles to the west of the Well Site, within the Sunniland Trend. Raccoon Point contains numerous well sites, of which four or five are currently producing, and has produced in the range of 20 million barrels of oil since it began operation in the late 1970s. Cumulative production of oil from proven fields in the South Florida Basin, including fields in the Sunniland Formation, is estimated to be in excess of 160 million barrels. Estimates from the U.S. Geological Service (USGS) indicate that 25 new fields capable of producing five million barrels of oil each are expected to be found within the Lower Cretaceous Shoal Reef Oil Assessment Unit, which extends into the Kanter property. Estimates of the potential reserves reach as high as an additional 200 million barrels of oil. The Dollar Bay Formation Another formation that has potential for oil production is the Lower Cretaceous Dollar Bay Formation, also in the South Florida Basin. The Dollar Bay Formation exists beneath the Kanter property at a shallower depth than the Sunniland Formation, generally at a depth of 10,000 feet in the vicinity of the Well Site. Most of the Dollar Bay prospects are on the east side of the South Florida Basin. Most of the wells in the South Florida Basin are on the west side. Thus, there has not been much in the way of exploration in the Dollar Bay Formation, so there is a lack of data on traps. Dollar Bay has been identified as a known oil-bearing play by the USGS. It is a self-source play, so the source comes from the Dollar Bay Formation itself. Dollar Bay exists both as potential and mature rock. It has known areas of very high total organic content (TOC) source rock; logged reservoir in the formation; and seal rock. There have been three oil finds in the Dollar Bay formation, with at least one commercial production well. Kanter will have to drill through the Dollar Bay Formation to get to the Upper Sunniland formation, thus allowing for the collection of information as to the production potential of the prospect. Although Dollar Bay is not generally the main “target” of the Permit, its potential is not zero. Thus, consideration of the Dollar Bay Formation as a factor in the calculation of risk/success that goes into the decision to drill an exploratory well is appropriate. Initial Exploratory Activities In 1989, Shell Western E&P, Inc. (Shell), conducted extensive seismic exploration in south Florida. Among the areas subject to seismic mapping were two lines -- one line of 36,000 feet mapped along the L67-A levee, directly alongside the Well Site, and the other of approximately 10 miles in length along the Miami Canal levee. The lines intersect on the Kanter property just north of the Well Site. The proposed exploration well is proposed to extend less than 12,000 feet deep. The seismic mapping performed by Shell was capable of producing useful data to that depth. The seismic methodology utilized by Shell produced data with a high degree of vertical and spatial resolution. Given its quality, the Shell data is very reliable. Shell did not use the seismic data generated in the 1980s, and ultimately abandoned activity in the area in favor of larger prospects, leaving the smaller fields typical of south Florida for smaller independent oil companies. The Shell seismic data was purchased by Seismic Exchange, a data brokerage company. In 2014, Kanter purchased the seismic data from Seismic Exchange for the lines that ran through its property. With the purchase, Kanter received the original field tapes, the support data, including surveyors’ notes and observer sheets which describe how the data was acquired, and the recorded data. As a result of advances in computer analysis since the data was collected, the seismic data can be more easily and accurately evaluated. It is not unusual for companies to make decisions on whether to proceed with exploration wells with two lines of seismic data. Mr. Lakin reviewed the data, and concluded that it showed a very promising area in the vicinity of the L67-A levee that was, in his opinion, sufficient to continue with permitting an exploratory oil well. Mr. Lakin described the seismic information in support of the Application as “excellent data,” an assessment that is well-supported and accepted. Mr. Pollister reviewed the two lines of seismic data and opined that the information supports a conclusion that the site is a “great prospect” for producing oil in such quantities as to warrant the exploration and extraction of such products on a commercially profitable basis. Seismic Data Analysis The seismic lines purchased by Kanter consist of line 970, which runs southwest to northeast along the L67-A levee, and a portion of line 998, which runs from northwest to southeast along the Miami Canal levee. The lines intersect at the intersection of the two levees. The data depicts, among others, the seismic reflection from the strata of the Sunniland Trend, and the seismic reflection from the basement. The depiction of the Sunniland Trend shows a discernable rise in the level of the strata, underlain by a corresponding rise in the basement strata. This rise is known as an anticline. An anticline is a location along a geologic strata at which there is an upheaval that tends to form one of the simplest oil traps that one can find using seismic data. In the South Florida Basin, anticlines are typically associated with mounded bioherms. A “closed structure” is an anticline, or structural high, with a syncline, or dip, in every direction. A closed structure, though preferable, is not required in order for there to be an effective trap. Most of the Sunniland oil fields do not have complete closure. They are, instead, stratigraphic traps, in which the formation continues to dip up and does not “roll over.” Where the rock type changes from nonporous to porous and back to nonporous, oil can become trapped in the porous portion of the interval even without “closure.” Thus, even if the “bowl” is tilted, it can still act as a trap. Complete closure is not necessary in much of the Sunniland Trend given the presence of an effective anhydrite layer to form an effective seal.5/ The seismic data of the Kanter property depicts an anticline in the Sunniland Formation that is centered beneath the Well Site at a depth in the range of 12,000 feet bls. Coming off of the anticline is a discernable syncline, or dip in the underlying rock. Applying the analogies used by various witnesses, the anticline would represent the top of the inverted bowl, and the syncline would represent the lip of the bowl. The evidence of the syncline appears in both seismic lines. The Shell seismic data also shows an anhydrite layer above the Sunniland Formation anticline. The same anticline exists at the basement level at a depth of 17,000 to 18,000 feet bls. The existence of the Sunniland formation anticline supported by the basement anticline, along with a thinning of the interval between those formations at the center point, provides support for the data reliably depicting the existence of a valid anticline. A basement-supported anticline is a key indicator of an oil trap, and is a feature commonly relied upon by geophysicists as being indicative of a structure that is favorable for oil production. The seismic data shows approximately 65 feet of total relief from the bottom to the top of the anticline structure, with 50 feet being closed on the back side. The 50 feet of closed anticline appears to extend over approximately 900 acres. There is evidence of other anticlines as one moves northeast along line 970. However, that data is not as strong as that for the structure beneath the Well Site. Though it would constitute a “lead,” that more incomplete data would generally not itself support a current recommendation to drill and, in any event, those other areas are not the subject of the permit at issue. The anticline beneath the well site is a “prospect,” which is an area with geological characteristics that are reasonably predicted to be commercially profitable. In the opinion of Mr. Lakin, the prospect at the location of the proposed Well Site has “everything that I would want to have to recommend drilling the well,” without a need for additional seismic data. His opinion is supported by a preponderance of the evidence, and is credited. Confirmation of the geology and thickness of the reservoir is the purpose of the exploratory well, with the expectation that well logs will provide such confirmation. Risk Analysis Beginning in the 1970s, the oil and gas industry began to develop a business technique for assessing the risk, i.e., the chance of failure, to apply to decisions being made on drilling exploration wells. Since the seminal work by Bob McGill, a systematic science has developed. In 1992, a manual was published with works from several authors. The 1992 manual included a methodology developed by Rose & Associates for assessing risk on prospects. The original author, Pete Rose,6/ is one of the foremost authorities on exploration risk. The Rose assessment method is a very strong mathematical methodology to fairly evaluate a prospect. The Rose method takes aspects that could contribute to finding an oil prospect, evaluates each element, and places it in its perspective. The Rose prospect analysis has been refined over the years, and is generally accepted as an industry standard. The 1992 manual also included a methodology for assessing both plays and prospects developed by David White. The following year, Mr. White published a separate manual on play and prospect analysis. The play and prospect analysis is similar to the Rose method in that both apply mathematical formulas to factors shown to be indicative of the presence of oil. Play and prospect analysis has been applied by much of the oil and gas industry, is used by the USGS in combining play and prospect analysis, and is being incorporated by Rose & Associates in its classes. The evidence is convincing that the White play and prospect analysis taught by Mr. Aldrich is a reasonable and accepted methodology capable of assessing the risk inherent in exploratory drilling. Risk analysis for plays and prospects consists of four primary factors: the trap; the reservoir; the source; and preservation and recovery. Each of the four factors has three separate characteristics. Numeric scores are assigned to each of the factors based on seismic data; published maps and materials; well data, subsurface data, and evidence from other plays and prospects; and other available information. Chance of success is calculated based on the quantity and quality of the data supporting the various factors to determine the likelihood that the prospect will produce flowable hydrocarbons. The analysis and scoring performed by Mr. Aldrich is found to be a reasonable and factually supported assessment of the risk associated with each of the prospects that exist beneath the proposed Well Site and that are the subject of the Application.7/ However, Mr. Aldrich included in his calculation an assessment of the Lower Sunniland Formation. The proposed well is to terminate at a depth of 11,800 feet bls, which is within the Upper Sunniland, but above the Lower Sunniland. Thus, although the Lower Sunniland would share the same source rock, the exploration well will not provide confirmation of the presence of oil. Therefore, it is more appropriate to perform the mathematical calculation to determine the likelihood of success without consideration of the Lower Sunniland prospect. To summarize Mr. Aldrich’s calculation, he assigned a four-percent chance of success at the Well Site for the Dollar Bay prospect. The assignment of the numeric scores for the Dollar Bay factors was reasonable and supported by the evidence. Mr. Aldrich assigned a 20-percent chance of success at the Well Site for the Upper Sunniland play. The assignment of the numeric scores for the Upper Sunniland factors was reasonable and supported by the evidence. In order to calculate the overall chance of success for the proposed Kanter exploratory well, the assessment method requires consideration of the “flip side” of the calculated chances of success, i.e., the chance of failure for each of the prospects. A four-percent chance of success for Dollar Bay means there is a 96-percent (0.96) chance of failure, i.e., that a commercial zone will not be discovered; and with a 20-percent chance of success for the Upper Sunniland, there is an 80-percent (0.80) chance of failure. Multiplying those factors, i.e., .96 x .80, results in a product of .77, or 77 percent, which is the chance that the well will be completely dry in all three zones. Thus, under the industry-accepted means of risk assessment, the 77-percent chance of failure means that there is a 23-percent chance of success, i.e., that at least one zone will be productive. A 23-percent chance that an exploratory well will be productive, though lower than the figure calculated by Mr. Aldrich,8/ is, in the field of oil exploration and production, a very high chance of success, well above the seven-percent average for prospecting wells previously permitted by the Department (as testified to by Mr. Linero) and exceeding the 10- to 15-percent chance of success that most large oil companies are looking for in order to proceed with an exploratory well drilling project (as testified to by Mr. Preston). Thus, the data for the Kanter Well Site demonstrates that there is a strong indication of a likelihood of the presence of oil at the Well Site. Commercial Profitability Commercial profitability takes into account all of the costs involved in a project, including transportation and development costs. Mr. Aldrich testified that the Kanter project would be commercially self-supporting if it produced 100,000 barrels at $50.00 per barrel. His testimony was unrebutted, and is accepted. The evidence in this case supports a finding that reserves could range from an optimistic estimate of 3 to 10 million barrels, to a very (perhaps unreasonably) conservative estimate of 200 barrels per acre over 900 acres, or 180,000 barrels. In either event, the preponderance of the evidence adduced at the hearing establishes an indicated likelihood of the presence of oil in such quantities as to warrant its exploration and extraction on a commercially profitable basis.9/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Environmental Protection enter a final order: Approving the Application for Oil and Gas Drilling Permit No. OG 1366 with the conditions agreed upon and stipulated to by Petitioner, including a condition requiring that if water is to be transported on-site, it will add additional tanks for the purpose of meeting water needs that would arise during the drilling process, and a condition prohibiting fracking; and Approving the application for Environmental Resource Permit No. 06-0336409-001. DONE AND ENTERED this 10th day of October, 2017, in Tallahassee, Leon County, Florida. S E. GARY EARLY 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 10th day of October, 2017.
The Issue At issue in this proceeding is whether Respondent, a tool company, should be required to repay funds that the Department of Labor and Employment Security, Division of Workforce and Employment Opportunity (the "Department") alleges were erroneously paid under a North American Free Trade Agreement- Transitional Adjustment Assistance ("NAFTA" or "NAFTA-TAA") job training program for equipment that Respondent provided to two NAFTA-TAA trainees.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing, the following findings of fact are made: The Department administers NAFTA-TAA, a job training program established under the provisions of the North American Free Trade Agreement and funded by the federal government. The program provides vocational training for employees adversely affected by trade agreements made by the United States with Canada and Latin America. Once a business is certified as "NAFTA eligible" based upon diminished employment opportunities attributable to international trade, the affected employees are referred to the Department for evaluation by a local NAFTA coordinator. In consultation with the Department's local NAFTA coordinator, a participant chooses from training programs taught at various public and private educational institutions and vocational training facilities. The student is provided a training allowance that includes the cost of tuition, books and fees. The Department arranges to pay training costs directly, and to pay vendors for the required books, tools and supplies. In this case, the Department alleges that two students participating in the NAFTA program purchased tools from Respondent that were not required for their training as automotive technicians. The Department alleges that, by providing tools not required for training and obtaining reimbursement therefor from the Department, Respondent acted in violation of the "rules and practices" of the NAFTA program. The Department offered no evidence that it has promulgated rules related to its administration of the NAFTA- TAA program, and offered no evidence of a Florida statute or of federal statutes, rules or policies governing the Department's administration of the program. The Department produced no documentation to indicate that it has developed official written policies regarding its administration of the NAFTA-TAA program. Henry Broomfield, the Department's statewide TAA coordinator, testified as to the actual operation of the program. Mr. Broomfield stated that the program pays for tuition, books and supplies for up to 104 weeks. He testified that the participating schools are required to present a list of the books, tools and supplies that the student will need during training, and that reimbursement is limited to the items on that list. Mr. Broomfield testified that the list is limited to items required for training, and does not include tools that students may need in the field after they complete their training. The student and the Department's local TAA coordinator are provided with copies of the list. Charles Thackrah, an instructor at P-Tech, testified as to the development of the approved book, tool and supply list at his institution. The list was developed over time by Mr. Thackrah and his fellow instructors, and includes the minimum basic hand tools required to complete the objectives of the program. The list was not developed specifically for the NAFTA program, but is the minimum tool list for all students enrolled in the automotive service technology course. Mr. Thackrah stated that P-Tech does not require the purchase of tools outside the list. Mr. Broomfield testified that when a student needs particular items on the list, the student must contact the local TAA coordinator, who authorizes the purchase from a third party vendor. When the student receives the tools, the third party vendor sends the bill to the local TAA coordinator, who then forwards the invoice to the state office for final approval. Mr. Broomfield testified that a request for an unlisted tool must be made in writing by the student's instructor. The student brings the written request to the local TAA coordinator, who forwards it to Mr. Broomfield's office for final approval. The instructor must verify that the requested tool is necessary for training. The evidence established that, aside from one incident in which a student obtained approval for a special pair of welding shoes, neither of the students in question followed the approval procedure for unlisted tools set forth by Mr. Broomfield. On February 13, 1998, Howard Spangler of Largo was enrolled in the NAFTA-TAA program by the Department's local coordinator for the Clearwater area, Margaret Brewer. Mr. Spangler was enrolled for training as an automotive technician. Also on that date, Mr. Spangler received a letter approving his request for training. The letter stated that his training would be provided by P-Tech "at a cost not to exceed $4,400.00." The letter stated that this amount "includes tuition, books, supplies and fees." Also on February 13, 1998, Ms. Brewer provided Mr. Spangler with an "Applicant Acknowledgement Form" stating that $2,400 would be allotted for "books, equipment, supplies and/or tools. This is the total amount allowed for the entire length of your training, be it a one-week, or a two-year course." The form stated that "books, special equipment, tools and uniforms will be limited to those items required by the school for every student." The form also stated that when the amount allotted for training materials has been exhausted, any additional costs must be borne by the student. Mr. Spangler signed the form, acknowledging that its contents had been "fully discussed" with him. The evidence established that Mr. Spangler obtained from Respondent tools that were not on the approved list at a total price of $4,336.92, and that the Department paid Respondent for those purchases. Mr. Spangler testified that he was aware of the limits set forth in the letter and acknowledgement form, and of the approved list of tools, but also testified that Ms. Brewer told him that he could purchase items not on the list with his instructor's approval. He stated that Ms. Brewer never told him that her approval was required for purchases of tools not on the list. Mr. Spangler testified that he approached Ms. Brewer about a pair of special shoes for his welding course. Although the welding shoes were on the approved list, Mr. Spangler wanted Ms. Brewer's approval for his purchase because he paid more for them than the price shown on the list. Mr. Spangler testified that during this conversation he also asked Ms. Brewer about purchasing tools not on the list, and that Ms. Brewer told him that he needed only his instructor's signature to obtain tools he would need in the field. Mr. Spangler understood the $4,400 limit on tuition, books, supplies and fees. Notwithstanding the limit, he purchased over $4,000 in tools alone from Respondent. He stated that he relied on Ms. Brewer's advice in making these purchases. Mr. Spangler testified that it would be difficult to hold a job in the field with only the tools included on the approved list, and that Ms. Brewer clearly imparted the understanding to him that he would be allowed to purchase whatever he needed for the field, if his instructor approved. Ms. Brewer testified that she always told the students that the state would not pay for tools outside of those on the list. She told the student that if he needed something special that the instructor believed was necessary to complete the course, then the student would have to bring her a letter from the instructor. She would then send the letter to Mr. Broomfield in Tallahassee for approval. Ms. Brewer recalled Mr. Spangler approaching her about approval for the welding shoes, but did not recall telling him that he could get approval for items outside the approved list. She testified that she would not have approved purchases of items not on the list without writing a letter of explanation to Mr. Broomfield and obtaining his final approval. The facts that Mr. Spangler approached Ms. Brewer for approval of the welding shoes, and that Ms. Brewer submitted this request to Tallahassee for final approval, tend to support Ms. Brewer's testimony as to what transpired between her and Mr. Spangler regarding the necessity of Department approval for items not on the approved list. Ms. Brewer testified that, as far as she knew, she had no independent authority to approve purchases outside the list. She stated that it was her understanding that the NAFTA program dealt strictly with the tools needed to complete the coursework, not with tools that students might need in the field after completing the courses. Ms. Brewer had no direct contact with the vendors, but relied on the students to convey the information regarding the NAFTA program to the vendors and to their instructors. Mr. Thackrah was Mr. Spangler's instructor, and testified that he did not tell Mr. Spangler that the NAFTA program would pay for tools that he would need in the field after completing his coursework. Mr. Thackrah stated that he did not have the responsibility to track the various programs that provided funding to his students, and that he did not know what the NAFTA program would provide. Mr. Thackrah testified that he was provided no written guidelines as what the NAFTA program would or would not pay for. He stated that anything he knew about the NAFTA program was conveyed to him by his students, who told him that NAFTA would cover anything they would need in the field. Mr. Thackrah recalled helping the students put together lists of tools they would need in the field. He assumed that NAFTA would pay for these tools, based on his students' explanation of the program. Mr. Thackrah testified that he might have passed along this understanding of the NAFTA program information to Keith Williams, Respondent's employee in charge of the P-Tech account. Mr. Thackrah did not believe he told Mr. Williams that the students were allowed to buy anything they wanted, but that Mr. Williams may have heard that from the students. Mr. Williams testified that he had an informal meeting with instructors at P-Tech, and that they told him that the NAFTA students were entitled to any tools that they would need in the field to perform an automotive technician's job. The instructors gave him no dollar limit on those purchases, and told him that the students needed only the instructors' approval to purchase the tools. Mr. Williams testified that these students must have "thought it was Christmas." Mr. Williams recalled that Mr. Thackrah was "probably" the person who gave him the information about NAFTA reimbursements. Mr. Williams testified that he took the P- Tech instructors at their word, because he had been dealing with them over the course of five years and never had a problem with reimbursements. On September 1, 1998, Robert Dennison of Pinellas Park was enrolled in the NAFTA-TAA program by the Department's local coordinator for the St. Petersburg area, Sylvia Wells- Moore. Mr. Dennison was enrolled for training as an automotive technician. Also on that date, Mr. Dennison received a letter approving his request for training. The letter stated that his training would be provided by P-Tech "at a cost not to exceed $3,950." The letter stated that this amount "includes tuition, books, supplies and fees." Also on September 1, 1998, Ms. Wells-Moore provided Mr. Dennison with an "Applicant Acknowledgement Form" stating that $450 would be allotted for "books, equipment, supplies and/or tools. This is the total amount allowed for the entire length of your training, be it a one-week, or a two year course." The form stated that "books, special equipment, tools and uniforms will be limited to those items required by the school for every student." The form also stated that when the amount allotted for training materials has been exhausted, any additional costs must be borne by the student. Mr. Dennison signed the form, acknowledging that its contents had been "fully discussed" with him. The evidence established that Mr. Dennison obtained from Respondent tools that were not on the approved list at a total price of $8,046.79, and that the Department paid Respondent for those purchases. Mr. Dennison testified that he looked at the list of approved tools and concluded that no one could do a mechanic's job with those tools. He asked Ms. Wells-Moore if other tools would be provided, and she said they would. Mr. Dennison did not recall whether Ms. Wells-Moore told him that he would need her approval for purchases outside the list. He testified that, as he understood the NAFTA program, he believed all the tools he purchased were authorized. Ms. Wells-Moore testified that her practice was to tell students that all their tools and supplies had to come from the approved list. She stated that students were required to come to the Department and obtain a voucher before making any purchases. The student would then take the voucher to the merchant and obtain the approved tools. The merchant is then responsible for sending the invoice to the Department of Labor for reimbursement. Documents entered into evidence at the hearing indicate that Ms. Wells-Moore provided written instructions to Jason Hoch, a salesman working for Respondent on the P-Tech account. These instructions were consistent with her description of the vouchering process. She sent these instructions by facsimile transmission on October 2, 1998, prior to the purchase of any of the unlisted tools by either Mr. Spangler or Mr. Dennison. Ms. Wells-Moore testified that she never told Mr. Dennison that he could purchase items that he would need in the field after completing his coursework. She stated that she was not authorized to approve such purchases. Ms. Wells-Moore testified that if a student approached her about a tool not on the list, her first step would be to contact the instructor to ask whether the student really needed the tool to complete the coursework. She recalled such a conversation with one of Mr. Dennison's instructors, and the instructor telling her that the unlisted tools in question were not required for the course. Richard Knight was Mr. Dennison's instructor at P- Tech. Mr. Knight provided Mr. Dennison with a copy of the approved list and told him that these were the minimum tools. Mr. Knight testified that he had no direct knowledge of the NAFTA program and was unaware of any authority he had to approve the purchase of tools not on the list. He never told Mr. Dennison that NAFTA would provide tools for use in the field. Mr. Knight stated that he never "approved" any tool purchases, but he did recall signing a list of tools that Mr. Dennison brought to him. He understood that his signature was to verify that these were tools that the student would find useful in the field. Mr. Knight never received any written guidelines from the Department as to allowable purchases under the NAFTA program. He recalled a former student in the NAFTA program who said that NAFTA would pay the students for anything they needed in the field. Mr. Knight testified that both Mr. Dennison and Mr. Spangler appeared to assume that NAFTA would pay for tools they would need in the field. Mr. Knight also conceded that he may have relayed the students' understanding to the Respondent's salespeople. Mr. Broomfield testified that he became aware of problems when a representative of Respondent called to complain that some of its invoices were not being paid. Mr. Broomfield could find no record of the invoices at issue. He investigated and discovered that Respondent was bypassing the local TAA coordinators and sending its invoices directly to Tallahassee, some to the wrong division within the Department. Mr. Broomfield testified that this explained why so many unauthorized purchases were reimbursed by the Department. When an invoice arrives at the Tallahassee office, it is assumed that the local TAA coordinator has investigated and approved the purchase. Under ordinary circumstances, the Tallahassee office does not conduct an item-by-item review; it merely processes the invoices and writes the checks. In summary, the evidence established that Mr. Spangler and Mr. Dennison purchased tools not on the approved P-Tech list valued at a total of $12,383.71. The evidence established that these students were provided written notice of the firm limits on the allotted costs for their training. The evidence established that Ms. Wells-Moore gave Respondent written notice of the proper procedure for processing its invoices, prior to any of the unauthorized purchases. The evidence established that Respondent bypassed this procedure, and was reimbursed for purchases that had not been approved at the local level. The evidence established that the Department was remiss in its administration of the NAFTA program. It has promulgated no written rules or policies setting forth the reimbursement limits of the NAFTA program. It provided no written guidelines to either the schools or the vendors regarding allowable purchases. Ms. Brewer frankly stated that she relied on the students to inform their schools and vendors as to the purchasing limits. Whether Messrs. Spangler and Dennison honestly believed their purchases were allowed, or whether they were manipulating the system, they might not have obtained the unauthorized items had the Department directly informed P-Tech of its reimbursement practices. The evidence supports the finding that Respondent at the least was aware that the NAFTA program appeared to be unusually liberal, and that Respondent should have made further inquiry. Mr. Williams likened the program to "Christmas" for its participants. He testified that the instructors explained that the students were entitled to tools they would need in the field. However, the instructors credibly testified that, if they told Mr. Williams such a thing, they were merely relaying what the students told them. At best, Respondent was content to rely on the information provided by the students rather than contacting the Department to seek confirmation. The fact that Respondent bypassed the local TAA coordinators, and offered no explanation for this breach of the billing procedure, supports an inference that Respondent's failure to inquire was not entirely innocent. The evidence established that Respondent knew or should have known that the purchases in question were not covered by the NAFTA program, absent prior approval from the local TAA coordinators and the central office in Tallahassee. The Department's failure to establish a system of informing schools and vendors of the program's requirements was sufficiently obviated in this case by Ms. Wells-Moore's contacts with Respondent's representative. Ms. Wells-Moore directly placed Respondent on notice of the Department's reimbursement practices, prior to the purchases by Messrs. Spangler and Dennison. At the hearing, Respondent asserted a claim that the Department still owes Respondent $14,119.59 for tools provided to Messrs. Spangler and Dennison. Given the findings of fact above, it is unnecessary to address this claim.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: The Department enter a final order providing that Respondent is indebted to the Department for NAFTA-TAA program overpayments in the amount of $12,383.71, and that Respondent shall repay the aforesaid amount within six months following entry of the final order. DONE AND ENTERED this 2nd day of February, 2001, in Tallahassee, Leon County, Florida. ___________________________________ LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of February, 2001. COPIES FURNISHED: Jacqueline Corbett, Credit Manager Nestor Sales Company, Inc. 7337 Bryan Dairy Road Largo, Florida 34647 Sonja P. Mathews, Esquire Department of Labor and Employment Security 2012 Capital Circle, Southeast Hartman Building, Suite 307 Tallahassee, Florida 32399-2189 Mary B. Hooks, Secretary Department of Labor and Employment Security The Hartman Building, Suite 303 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Sherri Wilkes-Cape, General Counsel Department of Labor and Employment Security 2012 Capital Circle, Southeast The Hartman Building, Suite 307 Tallahassee, Florida 32399-2189
Findings Of Fact Since 1984, the Department has been the state agency charged with the responsibility to establish rules and regulate underground pollutant storage facilities in Florida. In 1988, the Legislature added the administration of the newly enacted Florida Petroleum Liability and Restoration Program to the Department's duties. The program was to be established on or before January 1, 1989. The Applicant is the owner of a petroleum storage system in Jacksonville, Florida. Since 1984, it has been subject to the rules regarding underground pollutant storage facilities promulgated by the Department. On September 18, 1989, an odor indicative of possible petroleum contamination was discovered at the site during the installation of monitoring wells. A Discharge Notification Form was sent to the Department by the Applicant on October 23, 1989. The form advised that there were no leaks in the system. It was suggested that the odor may have resulted from surface spill at the site over a number of years. In response to the notification, an inspection of the site was completed by the Department on December 5, 1989. The inspection revealed the following on-site violations: Registration requirements were not being met. The forms had not been updated to include the presence of monitoring wells and overfill protection at the facility. Two underground tanks had not been properly abandoned. Inventory and reconciliation records had not been properly maintained, as required by rule since 1987. This violation was reviewed, and discussed in detail with on-site representatives of the Applicant. The monitoring wells were not installed by the time deadlines set forth in the Department's rules regarding stationary tanks. Since the wells were installed in September 1989, samples had not been taken for visual signs of petroleum contamination. The purpose of the system is to allow the owner of the storage tanks to learn if there is a leak in the tanks that can be quickly controlled to limit contamination. The day after the inspection, the Applicant applied for a determination of eligibility for participation in the restoration coverage portion of the new Florida Petroleum Liability Insurance and Liability Program. An affidavit was signed stating that all of the Department's rules regarding stationary tanks were being complied with by the Applicant. Six days after the inspection, the Department sent the Applicant written notice of the results of the inspection. The Applicant was given time frames and instructions for correcting the listed violations that could be corrected. A contamination assessment and clean up were also required in the letter. This letter did not address the issue of eligibility for the restoration funding program because that was a matter unrelated to the inspection results. On March 7, 1990, the Department determined the facility was ineligible for participation in the restoration funding provided by the Florida Petroleum Liability and Coverage Program. The following reasons were given: Failure to properly abandon underground storage tanks, pursuant to Section 17-61.050(3)(c), Florida Administrative Code. Failure to maintain inventory records, reconciliations, and significant loss/gain investigation as per Section 17-61.050(4)(c), Florida Administrative Code. Failure to install monitoring system and overfill protection by the dates set forth in Section 17-61.06(2)(c)2, Florida Administrative Code. Failure to properly monitor leak detection system, pursuant to Section 17-61.050(5)(c), Florida Administrative Code. The 10,000 gallon fuel oil tank and the 3,000 gallon waste oil tank present at the facility were abandoned in March 1990. The notice issued by the Department after its inspection in December 1989, gave the Applicant sixty days after receipt of the notice to properly abandon the tanks. The Applicant substantially complied with this requirement after the written notice was received. Although the Applicant failed to maintain the inventory records, reconciliations, and significant loss/gain investigations required by the Department rules, some of these violations had been corrected prior to the Department's inspection in December 1989. Correct inventory recordkeeping was discussed during the inspection, and the need to immediately implement the proper recordkeeping practices was emphasized in the post-inspection notice of violations. All of the recordkeeping violations were not cured until August 1990. The records kept by the Applicant during the noncompliance period from 1984 to August 1990, did not provide a substantially equivalent degree of information regarding possible leak detection or prohibited discharges as the required recordkeeping procedures. Two underground stationary storage tanks on the site have been part of the Applicant's petroleum storage system since 1970 and 1975, respectively. The monitoring wells and overfill protection for these tanks should have been in place by December 31, 1987. Neither monitoring system was installed until September 1989. The Applicant began the contract negotiations for installation in September 1988. The Applicant did not demonstrate that the facility contained an alternative procedure between December 31, 1987 and September 1989, that provided a substantially equivalent degree of protection for the lands, surface waters, or groundwaters of the state as the established requirement for monitoring wells and overfill protection. In December 1989, the Department's notice advised the Applicant that the monitoring wells should be sampled monthly for visual signs of petroleum contamination. Since April 1990, the Applicant has been completing the monthly sampling in the monitoring wells as part of its leak detection system, as required by the Department's rule regarding underground stationary tanks.
Recommendation Accordingly, it is RECOMMENDED: That the Department enter a Final Order denying Petitioner's application for restoration coverage in the Florida Petroleum Liability and Restoration Program at the Jacksonville location. DONE and ENTERED this 28 day of December, 1990, in Tallahassee, Leon County, Florida. VERONICA E. DONNELLY 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 _28_ day of December, 1990. APPENDIX TO RECOMMENDED ORDER The proposed findings of fact submitted by Petitioner are addressed as follows: Rejected. Improper interpretation of law. As for the facts in the first sentence, they are accepted. See HO #8. Rejected. Irrelevant. See HO #9. Rejected. Contrary to fact. See HO #9 and #11. Rejected. Contract to fact. See HO #11. Rejected. Contrary to fact. See HO #12 and #13. Rejected. Contrary to fact. Improper shifting of duty ad legal responsibility. Rejected . Improper application of law. The Respondent's proposed findings of fact are addressed as follows: Accepted. Accepted. Accepted. Accepted. See HO #8. Accepted. See HO #8. Accepted. See HO #3. Accepted. See HO #3. Accepted. See HO #3. Accepted. See HO #5. Accepted. Accepted. See HO #4. Accepted. See HO #4. Accepted. Accepted. See HO #6. Accepted. See HO #4 and #6. Accepted. See HO #4 and #6. Accepted. Accepted. Accepted. See HO #4 and #9. Accepted. Accepted. See HO #4 and #9. Accepted. Accepted. See HO #9. Accepted. See HO #4 and #10. Accepted. Rejected. Contrary to fact. See HO #10. Accepted. Accepted. Accepted. See HO #10. Accepted. See HO #3 and #12. Accepted. Accepted. See HO #13. Accepted. Accepted. See HO #6. Accepted. See HO #4 and #6. Accepted. See HO #6. Accepted. Rejected. Not established by evidence. See HO #6. Accepted. Accepted. Accepted. Accepted. See HO #7. Accepted. Accepted. COPIES FURNISHED: William Chadeayne, Qualified Representative 8933 Western Way, Suite 16 Jacksonville, Florida 32256 Janet E. Bowman, Esquire Assistant General Counsel Department of Environmental Regulation 2600 Blairstone Road Tallahassee, Florida 32399-2400 Dale H. Twachtmann, Secretary Department of Environmental Regulation 2600 Blairstone Road Tallahassee, Florida 32399-2400 Daniel H. Thompson, Esquire General Counsel Department of Environmental Regulation 2600 Blairstone Road Tallahassee, Florida 32399-2400
The Issue The issues presented are whether damages resulted to Petitioner's home as a result of Respondent's use of explosives in connection with construction materials mining activities, and, if so, what is the appropriate remedy.
Findings Of Fact By Notice of Hearing entered March 10, 2016, this cause was scheduled for final hearing on May 18, 2016. An Amended Notice of Hearing dated April 20, 2016, re- noticed the hearing for May 18, 2016, changing the location to Lauderdale Lakes, Florida. On May 12, 2016, a second Amended Notice of Hearing also scheduled the hearing to start on May 18, 2016. On May 17, 2016, Petitioner filed a Notice of Filing Her Power of Attorney. At 9:30 a.m., on May 18, 2016, the date and time scheduled for the final hearing in this cause, Respondent's attorney and its witnesses, the court reporter and the undersigned were present. Petitioner did not appear. Petitioner's husband appeared at hearing indicating that he was there to represent Petitioner by Power of Attorney. In administrative proceedings, pro se parties may either be represented by an attorney or a qualified representative. On May 2, 2016, Petitioner's request that her husband represent her as a qualified representative was denied by Order Denying Motion/Request for Leave to be Represented by a Qualified Representative in this Case ("Order"). The Order held Petitioner's husband does not have the "knowledge and experience identified in Florida Administrative Code Rule 28-106.106 to serve as a qualified representative." Petitioner's Renewed Motion/Request for Leave to be Represented by Qualified Representative in this Case was also denied by Order on Petitioner's Renewed Motion, dated May 16, 2016. While addressing preliminary matters prior to starting the hearing, the undersigned held that the Power of Attorney could not substitute for rule 28-106.106. Therefore, Petitioner's husband was prohibited from representing Petitioner at the hearing due to Petitioner's husband not meeting the qualified representative standards. After waiting for Petitioner to appear, the undersigned convened the hearing. At 10:13 a.m., Petitioner still had not appeared. The final hearing was adjourned.
Findings Of Fact Mr. Jewell was employed as a life insurance agent from February, 1977 until June 12, 1978, with Gulf Life Insurance Company. During his employment as a "debit agent" with Gulf Life, Mr. Jewell misappropriated $1,363.77 of premiums from the company policyholders for his own use. His defalcation was discovered by the company in May of 1978, and as a result his employment was terminated. Part of his job as a debit agent included collecting premiums from the company's policyholders on a periodic basis. He was then to forward these premiums to Gulf Life. An audit of his books by Gulf Life in May of 1978 revealed that he was in fact misappropriating the funds. When confronted with the facts he was cooperative in establishing the amount of the defalcation. He made however, no attempt at restitution. On October, 1979 Gulf Life wrote a letter to him stating that he had a deficiency in his accounts and demanded payment therefor. The letter did not state the amount owed. Mr. Jewell still made no attempt to pay the amount due even though as early as June, 1979, he knew from a partial audit that his accounts were at least $700.00 short. Thereafter Mr. Jewell was sued by Gulf Life in Circuit Court for the misappropriated funds and a default judgement was obtained against him in May, 1979 for more than $1,300.00. There is still approximately $600.00 owing on the judgement. In the last nine months prior to the hearing Mr. Jewell has been employed by Reserve Life Insurance Company. He was hired as a manager-trainee and then promoted to be the district manager for the company's Merritt Island Office. It is the policy of Reserve Life that its district managers must spend at least 30 percent of their time in direct insurance sales while devoting the balance of their time to managerial duties. If Mr. Jewell's insurance license is suspended or revoked, he could possibly lose his position with Reserve Life because of the 30 percent sales rule. Since he has worked for Reserve Life his employer has been well pleased with his performance. His office has produced a remarkable amount of new business. His present supervisor, Mr. Patrick Anthony, thinks very highly of Mr. Jewell's integrity and character. He appeared on Respondent's behalf at the instant final hearing. While he may have mentioned having had some kind of a problem at Gulf Life, it does not appear that Mr. Jewell was completely candid about the nature or the extent of his defalcation at the time he was hired by Mr. Anthony for Reserve Life.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That a final order be entered by the State of Florida, Department of Insurance, suspending the license of Gary Thomas Jewell to represent an insurance company as an agent for the period of three (3) months beginning from the date of the final order DONE and ENTERED this 8th day of July, 1980, in Tallahassee, Florida. MICHAEL PEARCE DODSON Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904)488-9675 COPIES FURNISHED: L. Terry Coggin, Esquire Department of Insurance Larson Building Room 428-A Tallahassee, Florida 32301 Fred D. Leone, Esquire 3017 Riveredge Boulevard Suite 108, Riveredge Plaza Post Office Box 1536 Cocoa, Florida 32922
