The Issue Whether petitioner should take disciplinary action against respondent for the reasons alleged in the administrative complaint?
Findings Of Fact The parties stipulated that respondent Veterans Gas and Appliance Co., Inc., trading as Veterans Gas Company, now holds and has at all pertinent times has held a license issued by petitioner. Petitioner has licensed respondent as a "[d]ealer in liquefied petroleum [LP] gas, in appliances and in equipment for use of such gas and installation." Petitioner's Exhibit No. 1. Respondent has been in business for 25 years or so, at least. (T.48) On December 8, 1983, Clyde K. "Ken" Wallace, a gas serviceman in respondent's employ, was at the office of the Veterans Gas Company in Fort Walton, when a Mr. Wright telephoned, requesting that LP gas be delivered to the Ships Chandler in Destin, Mr. Wright's place of business. Mr. Wallace set out by himself for Destin in a bulk-fill truck to make the delivery. When he arrived, he found he could not enter the driveway, so he parked on the south side of U.S. Highway 98 about 15 feet from the Ships Chandler tank. He knew where the tank was because he had filled it the previous winter, the last time he had been there. Standing with two young ladies in the doorway of the Ships Chandler, Mr. Wright greeted him, saying something like, "I'm glad to see you. We're freezing." Mr. Wallace set right to work. Initially unable to remove the dome which blocked access to the underground tank, he asked Mr. Wright for a claw hammer. With the hammer he succeeded in removing the dome, and then announced he was going to turn off the service valve, which is the valve that allows gas to enter the building from the tank. Mr. Wright asked him not to turn the valve off, saying he was going to ignite the pilot light in his furnace, and disappeared into the store. Mr. Wallace took the dust cap off and, hooking up the hose to the fill valve, pumped one hundred gallons of LP gas at the rate of 25 to 30 gallons a minute, according to the meter on the truck. Before introducing LP gas into the tank, Mr. Wallace never turned off the service valve or any other valve through which LP gas flowed before passing through the regulator and into the system of pipes. In fact, he never touched the service valve, and did not know for sure whether it was on or off. Furnace apparently lit, Mr. Wright reemerged from his store after a few minutes, a check in hand to pay for the gas. Earlier on, at some point during their conversation, Mr. Wright asked Mr. Wallace whether he knew if nearby shop owners heated with gas or otherwise used gas, or something to that effect. Mr. Wallace said he did not know. The question arose because the complex had been a motel with central gas heat before it had been remodeled into shops and offices; and the conversion had taken place since the preceding winter. Mr. Wright wondered aloud whether or not his neighbors owed him money for gas. Mr. Wallace saw Mr. Wright enter one shop door, leave, enter another, leave, and so forth, presumably inquiring of the people inside whether they used gas. By the time he disengaged the hose and closed the fill valve, Mr. Wright was nowhere to be found. Mr. Wallace indicated on the invoice that it had been paid, dropped it on a desk or counter in the Ships Chandler, and left. After Mr. Wallace had driven off, an explosion occurred causing a fire and injuries to two persons. Explosion, fire and injuries occurred not in the Ships Chandler, but on the premises occupied by Way and Associates, Inc. Whoever did the remodeling cut the gas line and neglected to cap it, so that LP gas pumped into the Ships Chandler tank, ended up in a space between the dry wall and the outside wall in the building Way and Associates, Inc. occupied. Ignition of the LP gas accumulated there caused the explosion. Respondent had nothing to do either with the remodeling or with the initial installation of the gas pipes. If Mr. Wallace had followed standard industry practice, he would have turned off the service valve before pumping LP gas into the fill valve of an empty system. After pumping LP gas into the tank, he would have turned off the pump; he would have asked Mr. Wright to turn off all appliances, and, once the appliances were off, he would have turned the service valve back on to charge the system. Then he would have turned the service valve off again, in order to listen carefully. If he had done that, he would have heard LP gas moving through the regulator, even after the service valve was closed, and he would have realized that gas was leaking. Mr. Wallace, who started working for respondent in July of 1982, is qualified as a gas service man but not as a gas appliance service man. Like other new drivers respondent hires, Mr. Wallace went out with an older driver or the manager to learn the route and safety procedures for at least two weeks before going out on his own, but he was never told to check for leaks when introducing LP gas into an empty system.
Findings Of Fact On February 27, 1980, Respondent converted one of its service station fuel tanks from gasoline to diesel. The tank was cleaned by Garrison Petroleum Equipment Company at Pinellas Park. Respondent paid $67.08 for this service. That same day, Respondent received 5,176 gallons of No. 2 diesel fuel from Jack Russell Oil Company, Inc., of Clearwater, a Union 76 dealer. On March 18, 1980, a standards inspector employed by Petitioner took samples from the Respondent's gasoline and diesel pumps. These samples were delivered to Petitioner's portable laboratory in Clearwater where they were analyzed. The gasoline was found to be satisfactory, but the diesel sample showed fuel contamination. The tests were conducted in accordance with the methods and standards established by Rule 5F-2.01(4)(b), Florida Administrative Code. Specifically, the "flash point" of the diesel sample was 88 degrees F, but must be 125 degrees F or above to meet the established standard. Petitioner's inspector then returned to the Pronto Car Wash station where he issued a stop-sale order to Respondent. Subsequently, the inspector accepted Respondent's cash bond in lieu of fuel confiscation. This procedure, agreed to by both parties, allowed Respondent to pay $865.36 to the State of Florida and retain the contaminated fuel. Respondent originally paid $5,286.25 for 5,176 gallons of diesel fuel. He had sold 736 gallons of this amount at the time of the stop-sale order on March 18, 1980. Total sales of this diesel fuel amounted to $865.36, which was the amount of bond demanded by Petitioner. Respondent paid $200 to Patriot Oil, Inc., to remove the contaminated fuel, but received a $3,225 credit for this fuel. Respondent does not deny that the fuel was contaminated, but seeks to establish that he acted in good faith. Respondent had the tank cleaned prior to the diesel changeover and dealt with established tank cleaning and fuel wholesaling companies. In addition, he kept the tank locked at all times after delivery of the fuel. Respondent does not contest forfeiture of his bond, but seeks refunds of state and federal taxes paid on the unsold fuel. However, Respondent was correctly informed that refund of tax payments will require him to communicate with agencies which are not parties to this proceeding.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That Petitioner enter its order declaring forfeiture of Respondent's $865.36 bond posted in lieu of confiscation of contaminated diesel fuel. RECOMMENDED this 7th day of August, 1980, in Tallahassee, Florida. COPIES FURNISHED: Stephenson Anderson Pronto Car Wash 220 34th Street North St. Petersburg, Florida 33713 Robert A. Chastain, Esquire General Counsel Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 John Whitton, Chief Gasoline and Oil Section Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 R. T. CARPENTER Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-8584
Findings Of Fact Based upon the oral and documentary evidence adduced at the hearing, the following relevant facts are found: Petitioner William Lineberger, doing business as Jet Oil Company, has, since 1950, continuously used the brand name "Jet" for identifying gasoline sold by him in the State of Florida. At one time, petitioner owned or operated some thirteen stations in various locations in Florida. Since 1980, he has operated only three stations, all located in Pinellas County-- two in St. Petersburg and one in Pinellas Park. Pursuant to Chapter 525, Florida Statutes, the respondent Florida Department of Agriculture and Consumer Services first issued petitioner a liquid fuel brand name registration for the name "JET" in 1973. Pursuant to Chapter 495, Florida Statutes, the Florida Secretary of State issued petitioner mark registration number 922,820 on August 11, 1980, for the mark "JET" as a trademark and a service mark to be used in connection with gasoline and oil product convenience store items. Kayo Oil Company (Kayo) is a Delaware corporation and a wholly-owned subsidiary of Conoco, Inc. Kayo operates a chain of retail gasoline and convenience stores in 22 states. It has approximately 465 locations concentrated mainly in the southeast portion of the country, with 38 locations in Florida, including one in Pinellas Park. Kayo currently has plans for further expansion in Florida. It's fixed asset base in Florida is approximately $10 million. The typical Kayo retail gasoline outlet in Florida has four multiple product dispensers, sells 500 to 600 different convenience items inside an 800 to 1600 square foot building, markets fast food products and employs a color scheme of black on yellow on its signage and building facade. Conoco, Inc. first began using the "JET" trade name in Europe in the 1960's when it acquired a large chain of European retail gasoline outlets selling under that brand name. It currently operates about 2,000 units under the brand name "JET" in Europe. In the United States, Kayo has used various trade names in the operation of its outlets, including "Kayo" and "JET". In the early 1980's, Kayo made the decision to standardize the name it traded under throughout the United States, and selected the name "JET". In most instances, it accomplished the conversion of its stations from "Kayo" to "JET", with the black on yellow color scheme, during the period from the early 1980's through 1984. The intervenor initially sought to obtain from the Florida Department of Agriculture and Consumer Services the liquid fuel brand name "JET". That request was denied for the reason that "JET" had been previously registered to the petitioner. Thereafter, the Department issued to the intervenor the liquid fuel brand name registration, "JET +" on April 27, 1981. Kayo is required to display the "JET +" liquid fuel brand name on its dispensers or pumps. 1/ With the exception of two of its Florida locations, Kayo uses the word "JET" on its street and building signage. At its Pinellas Park and Clearwater stations, it has retained the name "Kayo". Being an independent brand marketer, Kayo attempts to dedicate the majority of its signage to display the price of gasoline, as opposed to the gasoline brand name. It is Kayo's marketing philosophy that the consumer is more influenced by low prices and location than by the fuel brand name. In 1984, the physical appearance of petitioner's three stations did not resemble the physical appearance of the typical Kayo station in Florida. Subsequent to 1984, petitioner did some remodeling work at its Pinellas Park station which included yellow and black signage and the name "JET" in black block letters on a yellow background, resembling Kayo's style of lettering on both its pump decals and its signage in areas outside Pinellas County. The yellow pages of the St. Petersburg telephone directory lists both Kayo's Pinellas Park station and petitioner's Pinellas Park station under the heading of Jet Oil Company. In February or March of 1987, a local cigarette supplier attempted to deliver and present an invoice for cigarettes ordered by Kayo to one of petitioner's facilities. This occurred again with the same supplier in March of 1987. In January of 1987, a Motor Fuel Marketing Complaint against the "Jet" business at 7091 Park Boulevard was filed with the Division of Consumer Services, Department of Agriculture and Consumer Services. Although this is the address of the Kayo station in Pinellas Park, the Consumer Services Consultant, Division of Consumer Services, forwarded the complaint to "Jet Oil Company" at 7879 - 49th Street North, the petitioner's station, for a response. Petitioner presented evidence that other instances of confusion between its stations and Kayo stations had occurred with respect to bills, bank inquiries, and a newspaper article. Also, on one occasion, petitioner was ordered by the Pinellas Park police to close its stations because a bomb threat had been made against Jet Oil. Petitioner did not produce any evidence that the source of any of the incidents related was attributable to the liquid fuel brand names utilized by it or the intervenor.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that petitioner's request for a hearing challenging the issuance of the "JET +" registration to the intervenor be DISMISSED. DONE and ORDERED this 16th day of July, 1987, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of July, 1987.
The Issue Whether the Respondent, Florida Public Utilities Company, established the natural gas account for Mother's Kitchen Restaurant in compliance with all applicable statutes, and Florida Public Service Commission (PSC) rules concerning establishment of service and customer deposits, specifically Rule 25-7.083(4)(a), Florida Administrative Code. Whether Petitioner, Mother's Kitchen, Ltd., provided a deposit of $500 to Respondent at any time to establish a new account for Mother's Kitchen Restaurant. Whether Respondent administered the account of Mother's Kitchen Restaurant in compliance with all applicable statutes and PSC rules concerning refusal or discontinuance of service, specifically Rules 25-7.089(2)(g), (3), (5), (6)(a) and (e), Florida Administrative Code. Whether Respondent should be required to provide a refund of all or any part of any deposit made to establish an account for Mother's Kitchen Restaurant or any amounts paid for natural gas usage, service charges, returned check charges, or other fees charged to that account.
Findings Of Fact Petitioner, Mother's Kitchen, Ltd., is a partnership formed to operate a restaurant under the name of Mother's Kitchen Restaurant. The partners consist of Anthony Brooks, II; Daniele M. Dow-Brooks; Eddie Hodges; and Arthur L. Brooks. Mr. Alford Byrd was an original partner, but has since withdrawn from the partnership. At all times in dispute, Mother's Kitchen Restaurant was physically located at 1744 West Airport Boulevard, Sanford, Florida 32772-0134. Respondent, Florida Public Utilities Company, is a natural gas utility regulated by the Florida Public Service Commission (PSC) pursuant to Chapter 366, Florida Statutes, and Chapter 25-7, Florida Administrative Code. On March 21, 1996, Mr. Alfred Byrd (Byrd), a partner in Mother's Kitchen Ltd., signed a Job-Work Contract authorizing Respondent to prepare and connect appliances at Mother's Kitchen Restaurant to receive natural gas service. On March 21, 1996, Byrd provided, in person at Respondent's Sanford Office, a $200 deposit on behalf of the partnership to Respondent in order to establish a gas account for Mother's Kitchen Restaurant. Byrd received a deposit receipt from Respondent dated March 21, 1996, in the amount of $200. On March 21, 1996, Respondent established account number 0131-07252 in the name of "Alfred Byrd, d/b/a Mother's Kitchen" with a mailing address of "P. O. Box 134, Sanford, Florida 32772- 0134." This was based on the information provided by and the instructions of Byrd. On March 22, 1996, Respondent's serviceman prepared and connected a range and a fryer at Mother's Kitchen Restaurant for gas service, pursuant to the March 21, 1996, Job-Work Contract, and turned on the gas supply to Mother's Kitchen Restaurant. On March 31, 1996, Respondent billed Byrd $126.59 for the labor and materials required to prepare and connect the appliances under the March 21, 1996, Job-Work Contract. On April 9, 1996, Respondent billed the "Alfred Byrd d/b/a Mother's Kitchen" account $67.32, consisting of $46.32 for gas usage from March 22, 1996, through April 2, 1996, and a $21.00 turn on charge from March 22, 1996. On April 23, 1996, Respondent credited $126.59 to the "Alfred Byrd d/b/a Mother's Kitchen" account, paid by Mother's Kitchen check No. 1013, dated April 22, 1996. On May 8, 1996, Respondent billed the "Alfred Byrd d/b/a Mother's Kitchen" account $297.07, consisting of $229.75 for gas usage from April 2, 1996, through May 1, 1996, and $67.32 in arrears. On May 23, 1996, Respondent credited $150.00 to the "Alfred Byrd d/b/a Mother's Kitchen" account, paid by Mother's Kitchen check No. 1074, dated May 20, 1996, and signed by Anthony Brooks (Brooks). Respondent issued a receipt in the name of "Mother's Kitchen" for this payment. On June 3, 1996, Byrd signed a Job-Work Contract authorizing Respondent to clean the pilot light on the gas oven at Mother's Kitchen Restaurant. Respondent's serviceman completed this work the same day. On June 7, 1996, Respondent billed the "Alfred Byrd d/b/a Mother's Kitchen" account $391.72, consisting of $244.65 for gas usage from May 1, 1996, through May 31, 1996, and $147.07 in arrears. On June 7, 1996, Mother's Kitchen check No. 1074 was returned for insufficient funds. Respondent imposed a $20.00 service charge on the "Alfred Byrd d/b/a Mother's Kitchen" account for the returned check. On June 11, 1996, Respondent credited $170.00 to the "Alfred Byrd d/b/a Mother's Kitchen" account, paid in cash on June 10, 1996, as reimbursement for the $150.00 returned check No. 1074 and the corresponding $20.00 service charge. Respondent issued a receipt in the name of "A. Byrd" for this payment. On July 9, 1996, Respondent billed the "Alfred Byrd d/b/a Mother's Kitchen" account $657.36, consisting of $265.64 for gas usage from May 31, 1996, through July 1, 1996, and $371.72 in arrears. On July 11, 1996, Respondent credited $160.00 to the "Alfred Byrd d/b/a Mother's Kitchen" account, paid in cash on July 11, 1996. Respondent issued a receipt in the name of "A. Byrd" for this payment. No person paid a $500.00 deposit on behalf of Petitioner to establish a new gas account with Respondent for Mother's Kitchen Restaurant on July 11, 1996. At no time during the month of July did any person pay such a deposit. On July 15, 1996, Respondent added a service charge of $30.00 to the "Alfred Byrd d/b/a Mother's Kitchen" account for service performed pursuant to the June 3, 1996, Job-Work Contract. On July 25, 1996, Respondent credited $211.72 to the "Alfred Byrd d/b/a Mother's Kitchen" account, paid by Mother's Kitchen check No. 1131, dated July 24, 1996, and signed by Alfred Byrd. Respondent issued a receipt in the name of "Mother's Kitchen" for this payment. On August 7, 1996, Respondent billed the "Alfred Byrd d/b/a Mother's Kitchen" account $540.04, consisting of $224.40 for gas usage from July 1, 1996, through July 31, 1996, $285.64 in arrears, and the $30 service charge added on July 15, 1996. On August 8, 1996, Mother's Kitchen check No. 1131 was returned for insufficient funds. Respondent imposed a $20.00 service charge on the "Alfred Byrd d/b/a Mother's Kitchen" account for the returned check. On August 12, 1996, Respondent discontinued gas service to Mother's Kitchen Restaurant for nonpayment of $285.64 in arrears on the "Alfred Byrd d/b/a Mother's Kitchen" account. On August 12, 1996, Brooks hand-delivered a $290.00 cash payment to Respondent's Sanford Office to be applied to the "Alfred Byrd d/b/a Mother's Kitchen" account. Respondent issued a receipt in the name of "Mother's Kitchen" for this payment. This payment was not credited to the account until August 28, 1996. The delayed crediting of this payment had no effect on any notices or bills concerning the account. On August 12, 1996, Brooks, in person at Respondent's Sanford office, requested that the mailing address for the "Alfred Byrd d/b/a Mother's Kitchen" account be changed to the physical address of Mother's Kitchen Restaurant. Respondent made the requested change that same day. On August 13, 1996, Respondent's serviceman reconnected gas service to Mother's Kitchen Restaurant based on the August 12, 1996, cash payment of $290.00. On August 28, 1996, Respondent credited $521.72 to the "Alfred Byrd d/b/a Mother's Kitchen" account. This credit consisted of the $290 cash payment made August 12, 1996, and a $231.72 payment made August 28, 1996. The $231.72 payment was made as reimbursement for the $211.72 returned check No. 1131 and the corresponding $20 service charge. Respondent prepared an in- house receipt for this credit. No person made a $521.72 payment to Respondent for the "Alfred Byrd d/b/a Mother's Kitchen" account on August 28, 1996. On August 30, 1996, Respondent mailed a disconnect notice for the "Alfred Byrd d/b/a Mother's Kitchen" account to the physical address of Mother's Kitchen Restaurant. This notice stated that gas service to the restaurant would be discontinued if payment of $230.04 in arrears on the account was not made by September 10, 1996. On September 9, 1996, Respondent billed the "Alfred Byrd d/b/a Mother's Kitchen" account $471.29, consisting of $221.25 for gas usage from July 31, 1996, through August 29, 1996, and $230.04 in arrears. This bill was mailed to the physical address of Mother's Kitchen Restaurant. On September 12, 1996, Respondent discontinued gas service to Mother's Kitchen Restaurant for nonpayment of $230.04 in arrears on the "Alfred Byrd d/b/a Mother's Kitchen" account. On September 12, 1996, Harry Johnson, an employee of Petitioner, hand-delivered a $261.04 cash payment, consisting of payments for the $230.04 in arrears and a $31 reconnect fee, to Respondent's Sanford office to be applied to the "Alfred Byrd d/b/a Mother's Kitchen" account. Respondent issued a receipt in the name of "Mother's Kitchen" for this payment. On September 13, 1996, Respondent's serviceman was dispatched between 8:30 a.m. and 9:00 a.m. to reconnect gas service to Mother's Kitchen Restaurant. On September 13, 1996, between 8:30 a.m. and 9:00 a.m., Byrd, in person at Respondent's Sanford office, spoke to Diane Keitt (Keitt) and requested that gas service be discontinued on the "Alfred Byrd d/b/a Mother's Kitchen" account. Keitt contacted the serviceman by radio as he was en route to Mother's Kitchen Restaurant and instructed him to tell someone at the restaurant to call Keitt at Respondent's Sanford office. The serviceman arrived at Mother's Kitchen Restaurant at approximately 9:00 a.m. Upon entering the restaurant's kitchen, the serviceman told the occupants that someone needed to call Keitt immediately at the Respondent's Sanford office. Next, he inspected the restaurant's natural gas appliances to make sure there were no open gas lines then exited the building to perform a meter test to check for the possibility of a gas leak on the customer's side of the meter. After natural gas service has been discontinued on any existing account, Respondent performs a meter test before reestablishing service in order to determine if there is a leak on the customer's side of the meter. The serviceman's meter test revealed a gas leak on the customer's side of the meter. He searched for the leak by inspecting the gas appliances and applying a soapy solution used to detect leaks to the gas connections on each appliance. The serviceman located the leak on a worn pilot adjustment screw on the range. The leak could not be repaired without replacing the pilot adjustment screw. Brooks was present at the restaurant and called Keitt while the serviceman was performing the meter test. Keitt informed Brooks that Byrd had requested discontinuance of service to the restaurant. Keitt also told Brooks that Respondent would continue providing service on a temporary basis, in order to provide Petitioner time to pay a $500 deposit to establish a new account. Keitt then called Respondent's Vice President Darryl Troy (Troy) at Respondent's home office in West Palm Beach, Florida, to inform him of the situation. Brooks called Troy, who confirmed Keitt's statements concerning Byrd's desire to have service discontinued and the necessity of providing a new deposit to establish a new account. The serviceman interrupted this phone conversation to tell Brooks that there was a gas leak on the restaurant's range. Brooks was upset that the serviceman had not yet restored gas service. Brooks refused to authorize or pay for repairs to the range. The serviceman prepared a Report of Hazardous Condition or Corrective Action Required to document the gas leak on the range and inform the customer of the necessary repairs. Brooks refused to sign this form. The serviceman capped the gas connection to the range, plugged the range, and placed the Report of Hazardous Condition or Corrective Action Required and a red tag on the range. He determined that the fryer could be operated safely, so he lit its pilot before exiting the restaurant. The serviceman spoke with Keitt by radio and told her that he had located a gas leak and that Brooks refused to authorize its repair. Keitt then called Troy for instructions on how to handle the account. Troy felt that Brooks did not believe a gas leak was present on the range. Troy was concerned that someone at the restaurant may attempt to reconnect the range, so he instructed Keitt to have the meter turned off and locked. The meter was turned off and locked due only to safety concerns; Byrd's request to discontinue service to the restaurant played no part in Troy's decision. Keitt contacted the serviceman by radio and instructed him to turn the meter off and lock it. The serviceman turned off the meter and locked it. He then notified Brooks that he had turned off the meter and locked it upon instructions from Keitt. The serviceman left the restaurant at approximately 10:00 a.m. That afternoon, Brooks, in person at Respondent's Sanford office, requested that Keitt provide him a refund of the $261.04 payment made September 12, 1996. Keitt refused to refund this amount. No record evidence exists to show that Petitioner paid a $500 deposit, or a deposit of any amount, to establish a new account with Respondent after gas service to Mother's Kitchen Restaurant was disconnected on September 12, 1996. On September 16, 1996, a serviceman took a final reading from the gas meter at Mother's Kitchen Restaurant and officially turned off the meter. On September 16, 1996, Respondent charged $100.50 to the "Alfred Byrd d/b/a Mother's Kitchen" account for gas usage from August 29, 1996, through September 16, 1996, to finalize the account. On September 19, 1996, Respondent applied Petitioner's $200.00 deposit from March 21, 1996, to the outstanding, final balance of $310.75 on the "Afred Byrd d/b/a Mother's Kitchen" account. No record evidence exists to show that any person paid a $500 deposit, or a deposit of any amount, on behalf of Petitioner to establish a new account with Respondent for gas service to Mother's Kitchen Restaurant since the "Alfred Byrd d/b/a Mother's Kitchen" account was established on March 21, 1996.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent be found to have acted in compliance with Public Service Commission rules concerning the establishment of new service and management of customer deposits when service was established in the name of Alfred Byrd, d/b/a Mother's Kitchen on March 21, 1996. It is further RECOMMENDED the Respondent be found to have properly administered the account at issue here at all times leading up to its disconnection on September 13, 1996, and that Respondent be found to have acted in compliance with all Commission rules regarding that disconnection and refusal to reconnect. It is further RECOMMENDED that Respondent not be required to provide a refund of any part of the deposit made on this account or any amounts paid for service or fees on the account. DONE AND ENTERED this 11th day of June, 1998, at Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE 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 Filed with the Clerk of the Division of Administrative Hearings this 11th day of June, 1998. COPIES FURNISHED: Anthony Brooks, II Qualified Representative Mother's Kitchen, Ltd. Post Office Box 1363 Sanford, Florida 32772 Kathryn G. W. Cowdery, Esquire Gatlin, Schiefelbein & Cowdery, P.A. 3301 Thomasville Road, Suite 300 Tallahassee, Florida 32312 Wm. Cochran Keating, IV, Esquire Public Service Commission 2540 Shumard Oak Boulevard Tallahassee, Florida 32399 Blanca Bayo, Director of Records Public Service Commission 2540 Shumard Oak Boulevard Tallahassee, Florida 32399 William D. Talbott, Executive Director Public Service Commission 2540 Shumard Oak Boulevard Tallahassee, Florida 32399 Rob Vandiver, General Counsel Public Service Commission 2540 Shumard Oak Boulevard Tallahassee, Florida 32399
The Issue The issue in this case is whether, in connection with Respondent’s employment of Petitioner, Respondent unlawfully discriminated against Petitioner on the basis of his race or national origin.
Findings Of Fact Introductory Facts Petitioner Lincoln Nicholson (“Nicholson”) is a black man who was born in Jamaica. Respondent City of Sunrise, Florida (the “City”), is a municipality located in Broward County. The City operates its own natural gas utility. Nicholson began working for the City in its Gas Department as a Gas Service Person I (“GSP-I”) on August 7, 2000. As of the date of the final hearing, Nicholson was still employed by the City in that capacity. Nicholson contends that not only is he qualified for employment as a Gas Service Person III (“GSP-III”), which is a more senior, higher-paid position in the City’s Gas Department than the one he presently holds, but also that he actually has been performing the functions of a GSP-III. Nicholson claims that but for his race or national origin, the City would have either hired him as a GSP-III or promoted him to that position. He charges that the City has committed acts of intentional employment discrimination by refusing to offer him the higher- ranking position. The City admits that Nicholson meets the minimum qualifications for hire as a GSP-III but denies the allegations of intentional discrimination; it maintains that it filled the position for which Nicholson applied with a better (or at least equally) qualified candidate, namely, the City employee who had previously held the position. The Material Historical Facts On September 13, 1999, the City posted a notice advertising its intention to hire a qualified person to work as a GSP-III in the City’s Gas Department. According to the notice, the job would entail “supervisory and technical work” in the areas of “cathodic protection, corrosion and leak control on a natural gas distribution system.” The notice identified the minimum qualifications for the position, the relevant one, for present purposes, being this: --Must possess a Cert[ificate] of Competency as a Master or Journeyman Gas Fitter from the Central Examining Board of Plumbers of Broward County or equivalent. The position in question had opened up a few weeks earlier, when the incumbent, a longtime employee of the City named Roger Black, took a job as a Utility Operator Trainee in the City’s Utilities Department. Although this move resulted in a reduction in salary for Mr. Black and hence was technically a “demotion,” the evidence shows (and it is found) that Mr. Black transferred voluntarily and that his performance as a GSP-III had always been rated at least satisfactory. On or about October 11, 1999, an individual named Douglas Blau applied for the GSP-III position. Mr. Blau was well qualified for the position——indeed, he was arguably over- qualified1——and via memorandum dated April 14, 2000, Gas Department Director Harry Zehender recommended to Personnel Director James Harris that Mr. Blau be hired. The City then began “processing” Mr. Blau’s application. Meanwhile, on April 17, 2000, Nicholson applied for the job. Nicholson had approximately 25 years’ experience working in the field of natural gas distribution, although, at the time of applying for the GSP-III position, he had been working outside that field for about a year and a half. The evidence leaves no doubt, however——and the City stipulated——that Nicholson met all the minimum qualifications for employment as a GSP-III. Nicholson interviewed for the position with Alistair MacLeod, the Gas Department’s Supervisor. At some point, either during the interview or later, Mr. MacLeod told Nicholson that the GSP-III position had been filled by another applicant, meaning Mr. Blau, who had been recommended for employment but not yet offered the job.2 Because Mr. Blau was the putative successful applicant for the GSP-III post, Nicholson was asked if he were interested in taking a more junior position as a GSP-I. Nicholson responded affirmatively; was offered the job on July 11, 2000; accepted the City’s offer; and, as mentioned, began working for the City as a GSP-I on August 7, 2000. Around the time Nicholson came to work for the City, Mr. Black applied for his old job back.3 The City did not interview Mr. Black because he was known to the personnel responsible for making the decision to hire. He was not offered the position because Mr. Blau was still in line to receive it. On or about September 14, 2000, Mr. Blau informed the City that he was no longer interested in the GSP-III position. The next week, on September 22, 2000, Nicholson submitted a supplement to his application for the GSP-III position.4 The City did not interview Nicholson because he was known to the personnel responsible for making the decision to hire. About ten months later, the City chose Mr. Black, who is white, to fill the vacant GSP-III position——the very position that Mr. Black had vacated nearly two years earlier, in August 1999. He returned to his former position on July 21, 2001.5 Mr. Black’s Qualifications Nicholson argues that Mr. Black should have been disqualified from consideration for the GSP-III position because he did not, Nicholson alleges, possess a valid Certificate of Competency as a Master Gas Fitter. In support of this contention, Nicholson proffered a copy Mr. Black’s certificate numbered 91-CMGF-562-X, which specifies an expiration date of August 31, 1992, together with a letter from the Broward County Records Custodian dated July 14, 2003, which attests that Mr. Black’s Certificate of Competency No. 91-CMGF-562-X is active for the period from August 2, 2002 through August 31, 2004. From these papers Nicholson infers that Mr. Black’s Certificate of Competency as a Master Gas Fitter must have been inactive between August 31, 1992 and August 2, 2002——and hence “invalid” when he returned to his old job as GSP-III in July 2001. The City, however, as part of its Composite Exhibit 1, put into evidence a copy of Mr. Black’s Certificate of Competency No. 91-CMGF-562-X from the mid-1990s, showing an expiration date of August 31, 1996. This, of course, does not prove that Mr. Black’s certificate was active in July 2001, but it does falsify Nicholson’s inference that Mr. Black failed to renew his certificate for ten straight years. As a result, the undersigned declines to infer that Mr. Black’s certificate was, more likely than not, inactive as of July 21, 2001. Further, the notice that the City posted regarding the available GSP-III position stated that a Certificate of Competency as a Master Gas Fitter “or [its] equivalent” was required. The undersigned agrees with the City that an inactive certificate reasonably can be deemed the equivalent of an active certificate for the purpose of meeting this qualification, since, as the City proved, a GSP-III does not need to possess the authority conferred by the Broward County certificate in order to perform the job; rather, the City is interested in employing persons who have the underlying knowledge and experience necessary to obtain such a certificate.6 Thus, the undersigned finds alternatively that the City, as it suggests, reasonably could have determined, without intending to discriminate unlawfully, that Mr. Black at least possessed the equivalent of a Broward County Certificate of Competency as a Master Gas Fitter. In sum, Mr. Black was, in fact, a qualified applicant for the GSP-III position. Is Nicholson Better Qualified Than Mr. Black? Nicholson contends that he was the superior applicant vis-à-vis Mr. Black, for two reasons that the undersigned considers worthy of note. The first is Nicholson’s claim that he is (and at all times material has been) responsible for “cathodic protection,” which is a method of corrosion control, while Mr. Black has been assigned to other duties. Describing cathodic protection as the major function of a GSP-III, Nicholson contends that he is de facto doing the job without the benefits of the title, whereas Mr. Black, who has the title and attendant benefits, is not doing the job. It is found that Nicholson is, in fact, responsible for cathodic protection and that this function historically has been undertaken primarily by a GSP-III rather than a GSP-I such as Nicholson. However, the evidence also persuasively establishes that all Gas Department service personnel are expected to perform a variety of tasks, including cathodic protection. Presently, the fact that Nicholson is qualified and able to perform cathodic protection frees Mr. Black to handle other functions. On this record, the undersigned is not persuaded that Nicholson necessarily does a better job of cathodic protection than Mr. Black would do or that Mr. Black is incapable of doing the work. Instead, the evidence shows that the City is attempting to make the highest and best use of its employees. The second plausible basis for Nicholson’s contention that he is better qualified than Mr. Black is that Nicholson has more years of experience in the field of natural gas distribution——some 25 years versus about 12 for Mr. Black as of the time the decision to hire was made. If all experience-years were necessarily equal, then Nicholson would have a point. But, obviously, all experience-years are not necessarily equal. In this instance, the undersigned finds that the City reasonably viewed Mr. Black’s 12 years’ service in the City’s Gas Department, which included a number of years working as a GSP- III, as more relevant experience than Nicholson’s. The undersigned is ultimately not persuaded that Nicholson was necessarily the better qualified candidate, as compared to Mr. Black, but instead finds that the City, as it suggests, reasonably could have decided, without intending to discriminate, that Mr. Black was at least equally qualified, if not more so. Ultimate Factual Determinations The City’s proffered reasons for hiring Nicholson as a GSP-I rather than a GSP-III, and for later selecting Mr. Black to fill the vacant GSP-III position after Mr. Blau, the putative successful applicant, removed himself from consideration, are legitimate, nondiscriminatory reasons for the decisions in question. By putting forward these legitimate, nondiscriminatory reasons, the City obviated the need to determine whether Nicholson presented a prima facie case of discrimination in connection with either of these decisions. The undersigned is not persuaded, and therefore does not find, that the grounds asserted by the City for its employment decisions are actually a pretext for unlawful discrimination. In sum, Nicholson has not established by the greater weight of the evidence that the City discriminated unlawfully against him when it hired Nicholson as a GSP-I or when it later chose Mr. Black, instead of Nicholson, to fill the GSP-III position for which Nicholson had also applied.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the FCHR enter a final order dismissing Nicholson’s Petition for Relief. DONE AND ENTERED this 19th day of September, 2003, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM 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 19th day of September, 2003.
Findings Of Fact Ware Oil and Supply Company, Inc. (hereafter "Petitioner" or "Ware Oil"), is a wholesale and retail dealer of petroleum products. Ware Oil is a licensed dealer of special and motor fuels. Special fuels are primarily diesel and are used to operate off-highway equipment such as boats, farm tractors and industrial machinery. Beginning March 1980, the Department conducted a special fuels tax audit of the records of the Petitioner for the period January 1, 1977, through January 31, 1980. The special fuels tax audit resulted in a levy of a tax deficiency pursuant to Part II, Chapter 206, Florida Statutes. The taxes assessed together with penalty and interest are $6.868.06, with interest accruing at $1.70 per day from April 14, 1980. The assessment was based in sales of special fuels made by the Petitioner to four customers; Hoxie Brothers Circus, Jackson United Shows, Tommy Lynn and Pace's 66 Marina. The assessment relative to the sales of special fuel to Hoxie Brothers Circus and Jackson United Shows was due to the absence of a purchaser's affidavit of exemption from these customers and the Department's belief that they were dual users of special fuel due to the nature of their businesses. The assessment relative to Tommy Lynn was based on the Department's conclusion that Mr. Lynn was a dual user of special fuel and was an unlicensed dealer at the time the sales were made. The assessment relative to Pace's 66 Marina was based on Pace's resale of special fuels for which a dealer's license is required at the time of purchase. The taxes assessed by the Department are derived from the number of gallons of special fuel which was sold by the Petitioner to Hoxie Brothers Circus, Jackson United Shows, Tommy Lynn and Pace's 66 Marina, on which the $.08 per gallon tax was not collected. During 1977 Petitioner sold 550 gallons of special fuel to Hoxie Brothers Circus for purposes of generating electricity in order to operate circus rides and lights. The Petitioner did not have an exemption certificate from Hoxie relative to this sale although the sale invoice indicated that the fuel was for "off-road use". Sales tax of $.04 per gallon was collected by the Petitioner from Hoxie. No testimony or documentary evidence was produced to demonstrate that Hoxie in fact used the special fuel for an exempt purpose, that the special fuel was not placed into a receptacle connected to the fuel supply system of a motor vehicle and that the special fuel was not purchased for resale or far a dual use. In 1978, the Petitioner sold 300 gallons of special fuel to Jackson United a circus which generates its own electricity for circus rides and lights. The Petitioner has no exemption certificates for this sale; however, like Hoxie, the sales invoice has the term "off-road use" noted on its face. No testimony or documentary evidence was introduced to demonstrate that Jackson in fact used the special fuel for an exempt purpose, that the special fuel was not placed into a receptacle to the fuel supply system of a motor vehicle and that the special fuel was not purchased for resale or for a dual use. In 1977 the Petitioner sold 11,200 gallons of special fuel to Tommy Lynn. At that time Mr. Lynn was an independent logger who used all the special fuel purchased from the Petitioner for his logging equipment in the field and for off-road use. At the time of his purchases from the Petitioner, Mr. Lynn was a dual user of special fuels in that he used special fuel for both on and off road equipment. Mr. Lynn bought his off-road special fuels exclusively from the Petitioner and his on-road special fuel from another dealer. When audited by the Department, Petitioner did not have an exemption certificate for Mr. Lynn on file in its records. The Department in the past accepted exemption certificates obtained after sales were made. Mr. Lynn executed two after the fact exemption certificates. The first certificate was erroneously executed and a second drafted and signed in which Mr. Lynn stated that his purchases were for off-road use. The second certificate corroborates Mr. Lynn's direct testimony that the special fuel purchased from the Petitioner was used solely for off-road use. Neither of these certificates demonstrates that Mr. Lynn was a licensed dealer in special fuels. During 1977, 1978 and 1979 the Petitioner sold 52,484 gallons of special fuel to Pace's 66 Marina. Pace's used this special fuel for resale to users of commercial and pleasure boats and therefore, no sales tax was collected. The location of the special fuel pumps at Pace's make it virtually impossible to use the fuel for purposes other than boating. At the time of the fuel's purchase, Pace's presented an exemption certificate to the Petitioner. At that time, Pace's was not a licensed dealer of special fuels and its dealer's license number did not appear on the exemption certificate furnished to the Petitioner. Petitioner was unaware that Tommy Lynn and Pace's 66 Marina were required to be licensed as dealers and the exemption certificates provided by them should have that contained their dealer's license numbers and therefore, had no knowledge that the exemption certificates of Mr. Lynn and Pace's were incomplete. The sales were made by Petitioner in reliance on the certificates supplied by these two customer. The Department imposed the assessment against Hoxie and Jackson due to the lack of appropriate exemption certificates. The assessment was levied against Tommy Lynn and Pace's due to improperly completed exemption certificates which failed to reflect the dealer's license number. The Department did not consider whether the involved special fuels were in fact used for exempt purposes. The unrebutted testimony and documentary evidence regarding the sales to Tommy Lynn and Pace's 66 Marina supports Petitioner's position that the fuels sold to these two customers were in fact used for exempt purposes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department enter a final order upholding the tax assessment against the Petitioner, Ware Oil and Supply Company. DONE and ENTERED this 31st day of August 1981, in Tallahassee, Florida. SHARYN L. SMITH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 31st day of August 1981. COPIES FURNISHED: Nicholas Yonclas, Esquire Akerman, Senterfitt & Eidson Post Office Box 1794 Tallahassee, Florida 32302 Jeff Kielbasa, Esquire Assistant Attorney General Department of Legal Affairs The Capitol, LLO4 Tallahassee, Florida 32301
Findings Of Fact It was Stipulated by the parties that the Petitioner timely filed a notice of protest and formal written protest (if section 120.53(5), Fla. Stat. (1986) is applicable) and timely filed a petition for formal administrative hearing. The Petitioner did not receive a written notice of the recommended award of the District as intended by paragraph 9 of the General Conditions of the second invitation for bids, and it did file a notice of protest with seventy-two hours of receiving notification of the District's decision to award the contract to Mid America as intended by paragraph 10 of the General Conditions, P. Ex. 3. It was Stipulated by the parties that the substantial interests of the Petitioner are at stake in this proceeding. The Department of Water Resources is involved in groundwater studies throughout the nineteen Florida counties that comprise the District, and is responsible for the District's drilling program. In the past, the District's waterwells have been in the 500 to 800 foot range, and have been constructed of 4, 6, and 8 inch casing. The Water Resources Department is currently constructing a regional groundwater monitoring network in the nineteen counties. The underlying geological formations differ greatly from county to county, and several water tables often have to be Penetrated before the well reaches the Floridan acquifer. To maintain mud circulation, it is often necessary to case off portions of the well from water table to water table. Moreover, wells are often in unconsolidated formations, and casing is needed to provide support for the hole, Particularly in the upper portions of the well. For these reasons, the District plans to construct step or telescoping wells in the regional groundwater monitoring network. The District expects that it will need to set 16 inch casing in the first eighty feet of some of these wells. In about 1984, by competitive bids, the St. Johns River Water Management District (the District) leased a Speedstar 15-III drill rig from Mid America Drilling Equipment, Inc. This rig was a Size larger than the drill rig that is the Subject of this formal administrative hearing, and had been manufactured in 1978. The District was satisfied with the performance of the larger Speedstar drill rig, and had very few problems with it. District staff became familiar with the operation of the rig. As the lease neared the end of its term, the District began to explore the question whether it should continue to lease, or should purchase its own rig. A member of the District Board Suggested that the District consider acquisition of a rig over a period of years by lease-purchase. This suggestion was adopted by the Department of Water Resources of the District. Due to his familiarity with the Speedstar rig, Mr. Munch decided to use that rig as a basis for bid specifications, but to use the next smaller size, a Speedstar SS-135. Mr. Munch copied the specifications from a Speedstar SS-135 specification sheet as the specifications for the first invitation for bids. Mr. Munch has had no education in engineering or in drill rig design. He has a degree and field work experience in geology, and is a licensed water well contractor. He has been a project manager on projects when outside contractors set 16 inch casing in wells as deep as 2,000 feet, but he has not personally set a 16 inch casing. P. Ex. 1 is the first invitation for bids and specifications for the invitation for bids, as well as the bid of the Petitioner, the George F. Failing Company. This invitation for bids was published on or about August 26, 1986. The invitation for bids provided six bid blanks providing six bid alternatives. The bid blanks appeared as follows: One Year Lease $ /month, renewal $ /month Two Year Lease-purchase $ /year, buy-out $ Three Year Lease-purchase $ /year, buy-out $ Four Year Lease/purchase $ /year, buy-out $ Five Year Lease/purchase $ /year, buy-out $ * * * Suggested Purchase Price $ Less 3 percent for payment in 20 days Four bids were received pursuant to this invitation for bids, including the Petitioner's bid and the bid of Mid America Drilling Equipment, Inc., P. Ex. 7. The four bids were opened on September 11, 1986. Mid America was the only bidder that bid a one year lease with an option to renew. Mid America, the Petitioner, and G & R Machine and Welding, Inc., were the only bidders to bid a lease-purchase. The Petitioners bid was $163,565.00 as an outright purchase price for a Failing model CF-15 and, relevant to the second bid, $5,432.00 per month for a three year lease-purchase, with the rig owned at the end of the three year lease period with no further buy-out payment. The Petitioner did not bid a one year lease. P. Ex. 1. Mid America bid $179,823.00 as an outright purchase price on a Speedstar SS135, and $56,340.00 per year for a three year lease-purchase, with a buy-out price of $61,920.00. Mid America also bid a one year lease at $6,125 per month, with a renewal at $5,288.00 per month. P. Ex. 7. Robert Schenk is the District's Director of the Division of General Services, and as such, Mr. Schenk was responsible for District Purchasing and evaluation of the bids received pursuant to the invitation of bids. Mr. Schenk Prepared an analysis of Several of the bids, including G & R Machine, Mid America, and the Petitioner. P. Ex. Mr. Schenk testified that he felt that the Mid America bid was unclear because of the total amount of the bid calculated over the years. He Said that he considered the Mid America bid for a three year lease-purchase to be ridiculous and out of line because it was $50,000 greater than the outright purchase bid. The bid of the Petitioner for a three year lease- purchase was about $32,000 higher than its bid for an outright purchase. P. Ex. 8. G & R Machine also bid a Speedstar SS-15. Mid America's three year lease-purchase bid was about $35,000 higher than the G & R Machine bid for the same three year lease-purchase. ($230,940.00 compared to $195,664.32.) P. Ex. 8. The bid of Mid America was also high compared to the bid of G & R Machine for a four and a five year lease-purchase, but was comparable for a two year lease-purchase and for an outright purchase. The bid of the Petitioner was $16,000 lower than the Mid America or G & R Machine bids for an outright purchase, was $31,000 lower than the G & R Machine bid and $34,000 lower than the Mid America bid for a two year lease-purchase, and was Slightly higher than the G & R Machine bid on all other bids. The bid of the Petitioner was substantially lower than the Mid America bid on all bids analyzed on P. Ex. 8. Although the Mid America bid was high, it was not an unclear bid. The bid of Mid America was clear and unambiguous. P. Ex. 7. Mr. Schenk thought that the Petitioner's bid was the clearest bid received in the first invitation for bids. Apparently on the same day as the bid opening, which was September 11, 1986, Mr. Schenk had one of his assistants telephone Mid America to ask that it clarify its bid. In response, on the same day as the bid opening, September 11, 1986, Mid America sent the District a letter, P. Ex. 9, which effectively lowered its bid for a three year lease-purchase by $36,612.00. This letter was ultimately not considered by the District in the evaluation of the bids. On September 23, 1986, four staff members of the Department of Water Resources, including Mr. Munch and Barbara A. Vergara, Director of that Department, recommended by memorandum to Mr. Schenk that the Mid America bid for a Speedstar SS-135 for an outright purchase price of $179,823.00 be accepted. These staff members were of the opinion that the drill rig bid by the Petitioner "did not meet all of the bid Specifications due to slight manufacturing differences." But they were also of the opinion that "[t]hese differences may not be critical to the performance and capabilities of the equipment." P. Ex. 10. The staff comparison of the Mid America bid and the Petitioner's bid included calculations for rental costs due to the differing delivery times of the equipment, and calculated that the Mid America bid had a net cost of $184,435 compared to the Petitioner's bid having a net cost of $182,013. Attached to the staff recommendation of September 23, 1986, was a comparison of the three drill rigs by specifications. The comparison used the incorrect specification sheet for the Mid America rig, and thus contained the following errors: the rig bid by Mid America had a single sheave, 3 part block, not a double sheave, 4 part block; the rig also had a working hook load of 20,000 pounds, not 32,700 pounds. Two to four days after September 11, 1986, (the date of the letter from Mid America changing its bid for a three year lease-purchase) Robert Auld, the Florida Branch Manager for the Petitioner, learned that such a letter had been requested, written, and received by the District, and called District staff to protest. Mr. Schenk thereafter apparently concluded that solicitation and receipt of the bid change from Mid America had been procedurally erroneous because he testified that as a result of all of the discussion and criticism that surrounded that event, on the second invitation for bids he concluded that he was procedurally unable to contact any of the bidders to request clarification of bids, even though he then thought that the Petitioner's bid was unclear. Mr. Schenk decided to reject all the bids from the first invitation for bids before Mr. Auld's telephone call. P. Ex. 15, p. 10. But he did not communicate this decision to the staff of the Department of Water Resources before they wrote their memorandum that was initiated through the chain of command on September 23, 1986. Mr. Schenk initially decided to reject all of the bids because the bidders had not all bid on all of the requested alternatives. Later, other reasons for rejection of all of the bids became apparent. Another major reason for rejection of all of the bids was because the specifications were drawn from the Speedstar SS-135 specifications, and unfairly eliminated the Petitioner's rig. Mr. Auld admitted that the Failing CF-15 did not meet the specifications of the first invitation for bids because the Failing CF-15 did not have an 8 1/2 inch rotary table, but was of the opinion that it met all other specifications. Mr. Schenk also rejected all of the bids because of the irregularity of having solicited and received the bid change from Mid America. On October 1, 1986, the District informed all bidders that the bids were all rejected and that the purchase would be again advertised for bids. No protest was filed concerning the first invitation for bids, and it was ruled during the formal administrative hearing that the foregoing facts are admissible as explanatory of the basis for the second invitation for bids, and not as a basis for challenge to the first invitation for bids. Mr. Munch then drafted specifications for the second invitation for bids. This time, he Specified "Speedstar SS-135 or equivalent." Mr. Munch had determined from his experience with the rented Speedstar that the Speedstar SS-135 was capable of fulfilling the needs of the District for drilling. His intention was to allow bids for other types of drill rigs that were the equivalent of a Speedstar SS-135. Ms. Vergara defined the term "equivalent" to mean no differences between a Speedstar SS-135 and the alternative drill rig with respect to doing work in the field that needs to be done by the District. At some time before the second invitation for bids was advertised, or at least before the second bids were filed, the District became Primarily (though not exclusively interested in receiving bids on a three year lease-purchase of a drill rig. Both the Petitioner and Mid America knew this before they prepared their second bids. P. Ex. 3 is the second advertisement for bids and was published on November 6, 1986. The advertisement asks for bids on a "lease-purchase of One Rotary Drill Rig." The attached sheet marked "specifications" stated that what was sought was a "[b]id for purchase or one year lease of a new Speedstar 135 rotary drill rig or at least the equivalent equipment with the following options." Following that were eight technical specifications. The second invitation for bids also specified the following: "Bidder must indicate any and all exceptions to specifications. "Bid shall be awarded to the lowest qualified, responsible bidder whose bid meets all specifications in the Invitation to Bid, including delivery, price and other factors most advantageous to the District." All bidders were to bid using the bid blank attached to the invitation for bids. The bid blank was different from the first invitation for bids apparently with the intent to make bid comparisons easier. The bid blank provided the following alternatives for bids: Purchase Price $ Lease Price $ /Month, first year (renewable) $ /Month, second year (renewable) $ /Month, third year One year guarantee non-routine, major maintenance and repair on lease equipment (renewable annually for term of leased $ . Make and Model of Equipment . Manufacturers Warranty . (minimum of 6 months or 1000 hours) Delivery days (from date of order) Delivery Charges $ . Location of Maintenance Services . Since the District was then "primarily" (but not exclusively) "interested in" a three year lease-purchase, the bid blank form was incomplete and unclear. Paragraph A) of the bid blank form clearly provides for a bid for an outright purchase only, not a "lease-purchase." And Paragraph B) provides only for a lease without any mention of purchase; Paragraph B) asks for a price by month for the first year, with the notation that the lease is renewable (apparently at the option of the District, a lease price by month for the second year, with the notation again that the lease is renewable (at the option of the District), and a lease price per month for a third year, with no mention of any further renewability. Paragraph B) says nothing about purchase of the drill rig, ownership at the end of the lease term, or the buy- out price at the end of the lease term. Moreover, the rest of the invitation for bids is similarly incomplete and unclear. Although the first page of the invitation for bids states that bids were requested on a "lease-purchase" of one rotary drill rig, the specification sheet attached to the invitation stated the specification that the bid should be "for purchase or one year lease...." P. Ex. 3 (E.S.). The specification said nothing about a three year lease-purchase. P. Ex. 3, the second invitation for bids, was sent to all entities that had submitted a bid in response to the first invitation for bids. These included five companies that were Speedstar SS-135 dealers and the Petitioner. Only two bids were received in response to the second invitation for bids, one from Mid America and one from the Petitioner. The second Mid America bid is P. Ex. 11. The Petitioner's second bid is P. Ex. 4. The bids were opened on November 20, 1986. The opening was attended by Ron Owens, President of Mid America, and Robert Auld. Mr. Schenk announced that the Petitioner was the apparent low bidder. Mr. Schenk may have only intended his announcement of apparent low bid to have been with relationship to the bid for outright purchase. A bid tabulation sheet was prepared. P. Ex. Mr. Schenk also announced that the recommendation by the staff to the District Board as to which company should be awarded the contract would be made at the next Board meeting. At that time, the next Board meeting was January 14, 1987. The Petitioner's bid, typed on the bid blank required by the District, provided in pertinent part the following: Purchase Price $146,976.00 Lease Price $ NO BID /Month, first year (renewable) (OWNED AT END OF SECOND YEAR) $6,885.00 /Month, second year (renewable) (OWNED AT END OF THIRD YEAR) $4,592.00 /Month, third year One year guaranteed non-routine, major maintenance and repair on lease equipment (renewable annually for term of lease) $NOT AVAILABLE Make and Model of Equipment FAILING MODEL CF-15 Combination Drill GEORGE E. FAILING COMPANY standard Manufacturers Warranty warranty policy will apply, extended for 9 months (minimum of 6 months or 1000 hours) Delivery 120 days (from date of order) Delivery Charges $ NO CHARGE Location of Maintenance Services GEORGE E. FAILING COMPANY 2101 Starkey Road Largo, Florida 33541 Mid America Submitted its bid on the bid blank form as follows: Purchase Price $179,823.00 Lease Price $5,241.00 /Month, first year (renewable) $5,241.00 /Month, Second year (renewable) $5,241.00 /Month, third year (SEE CONDITIONS BELOW) One year guaranteed non-routine, major maintenance and repair on lease equipment (renewable annually for term of lease) $3,000.00 per year Make and Model of Equipment Speedstar SS-135 Manufacturers Warranty 6 months or 1000 hours (minimum of 6 months or 1000 hours) Delivery 21 days (from date of order) Delivery Charges $ Included/No Charge Location of Maintenance Services Ocala, Florida * * * CONDITIONS #1. If the lease is written for a guaranteed 36 month period, there will be a purchase option available at the end for $1.00 #2. If the lease is written as a yearly renewable lease and runs 3 consecutive years there will be a purchase option available after the 36th payment for $8,092.00. The bid of Mid America was for a Speedstar SS-135, and thus complied with the specifications in that respect. The bid of Mid America was clear and enable the District to understand what its annual budgetary obligations might be should the alternatives in the bid be accepted. The Mid America bid provided the following three alternatives: Outright purchase for $179,823, which was $32,847 more than the bid of the petitioner of $146,976. Payment of a total of $188,676 over a three year period plus an additional payment of $8,092 at the end of the lease if the lease were to be written as yearly renewable for 3 consecutive years, for a total cost of $196,768. Payment of a total of $188,676 (plus a $1 buy-out option) over a three year period if the lease were to be written for a guaranteed 36 month period. This is the alternative ultimately accepted by the District. After publication of the second invitation for bids, but before the opening of those bids, Ms. Vergara appeared before the District Board to explain the manner in which the invitation for bids had been drafted. In particular she explained that the invitation used a "brand name or equivalent" specification. She further advised the Board that the staff recommended the Speedstar SS-135 as the equipment most capable of handling the drilling needs of the District, and that any equipment purchased must be at least equivalent to the Speed star SS-135. At some time before the opening of the second set of bids, Mr. Munch and his supervisor, Ms. Vergara, traveled to the offices of Mid America and inspected a Speedstar SS-135. The owner and President of Mid America was Present to explain the design advantages of the Speedstar SS-135. He was a Salesman, and had no background in engineering or drill rig design. None of the District staff visited the Petitioner's place of business to inspect a Failing CF-15. Mr. Munch and Ms. Vergara did not see a Failing CF-15 until preparations began for the formal administrative hearing. In a deposition prior to the formal hearing, Mr. Schenk testified under oath that the staff had already decided that they wanted a Speedstar SS-135 rather than a Failing CF-15 based upon the report of Ms. Vergera to the District Board. In a deposition prior to the formal hearing, Mr. Munch testified that he was never asked which rig he would rather have, that the issue was Strictly a cost decision, that he probably would have had no objection to purchase of the Failing CF-15 had it been cheaper than the Speedstar SS-135, and that the Failing CF-15 would probably have done the job needed by the District to be done. On December 12, 1986, Mr. Schenk sent a memorandum to the District Board concerning the purchase of the rotary drill rig. The memorandum advised the Board that the District had received two bids. It then presented five alternatives for the Board to consider. All of the bid alternatives (alternatives 1 through 4) related to the Mid America bid on the Speedstar SS-135, and presented all of the options bid by Mid America. None of the bid alternatives related to the petitioner's bid. The District Board was not advised as to the comparative purchase prices bid by the two bidders (the Petitioner's price being $32,000 less than Mid America's), it was not advised as to the two interpretations of the three year option in the Petitioner's bid, and it was not advised that under the second interpretation of the Petitioner's three year lease-purchase bid, the Petitioner's bid had a net cost, after accounting for delivery time, that was $9,529 less than the Mid America bid. (See finding of fact 60.) Mr. Schenk thought that paragraph B), as modified by the "CONDITIONS" placed on the bid by Mid America, presented an option to "renew" the lease monthly at $5,241 per month, for an annual cost of $62,892. Evidentially, then, Mr. Schenk thought that the word "renewable" pertained to renewal by month. P. Ex. 15, p. 2, para. 2. With respect to this option, nothing is mentioned about purchase. Mr. Schenk also treated the word "renewable" to be intended to be exercised annually, resulting in a three year lease (renewable annually). The differing use of the word "renewable" came as a result of the modifications placed on the bid form by Mid America. The District Board chose option 3, which was condition number 1 on the bid blank submitted by Mid America, (a guarantee 36 months lease with a purchase option of $1.00) with the addition of the words "Subject to the availability of funds." The Second invitation for bids had Stated in Paragraph 3 of the third page that "all lease-purchase agreements must include a nonappropriation of fund Paragraph as required by Florida Statutes." Thus, the condition that the lease be "guaranteed" was modified by the District consistent with the specification of the invitation for bids relating to the appropriation of funds. On the day of the District Board meeting approving a lease-purchase with Mid America, January 14, 1987, the District entered into a contract with Mid America for the lease-purchase of a Speedstar SS-135. SJRWMD Ex. 3. The lease agreement contains a Paragraph allowing the District to terminate the lease upon nonappropriation of funds, Subject to certain conditions. Id., para. 11. In February, 1987, Mr. Auld learned at a trade show in Orlando that the District had awarded the contract to Mid America. Mr. Auld called Ms. Mildred Horton, the Assistant Executive Director of the District, to ask for the reasons why his bid was not accepted. Ms. Horton wrote a letter to Mr. Auld dated February 17, 1987, Setting forth the reasons for the award to Mid America and attaching two amortization Schedules, one for each bid. The letter and attachments is P. Ex. 6. Ms. Horton stated that the Schedules attached were the only ones in existence, to her knowledge. None of the reasons given by Ms. Horton for the rejection of the Petitioner's bid could have been known prior to the opening of the bids. The amortization schedules attached to Ms. Horton's letter had been prepared by Mr., Schenk. The schedule for the Petitioner's bid showed a total cost over a three year period of $224,344, which resulted in an effective interest rate of 31 percent compared to the outright purchase price on the Petitioner's bid of $146,976. The schedule assumes that the Petitioner's bid was for a monthly payment of $6,885 for two years followed by a monthly payment of $4,592 in the third year. P. Ex. 6. Mr. Schenk testified that he considered the possibility that the Petitioner's bid for a three year lease purchase was $4,592 per month for 36 months, and prepared an alternative amortization table based upon that possible interpretation as well as the amortization table attached to the letter sent to Mr. Auld by Ms. Horton described above. P. Ex. 12. Mr. Schenk concluded, however, that the Petitioner's bid should be interpreted as a bid of $6,885 per month for two years and $4,592 for the third year, for a total cost of $224,344. He testified that it was confusing that the Petitioner's bid did not contain a price for the first year, but he also concluded that the price of $6,885 placed on the second line of paragraph B) of the Petitioner's bid was intended to be a price for both the first year and the second year. He further testified that the Petitioner's bid may have been more understandable had the word "renewable" been stricken on the bid form. Finally, he testified that he disregarded the additions to the Petitioner's bid form because these were "alterations" to the form, but considered the additions to the bid form by Mid America because these were only "additions." As discussed above, after the Second invitation for bids was published, the District was Primarily interested in receiving bids for a three year lease-purchase. The bid blank in the second invitation for bids, however, failed to provide a clear method for bidders to bid that option. Paragraph B) of the bid blank drafted by the District was defective because it did not in any manner state that a purchase (a transfer of ownership) was included in the "lease" for which a price was being asked, because it failed to state whether the District wanted bids on a one year lease- purchase, a two year lease-purchase, a three year lease-purchase, or only a lease for those periods of time, because the word "renewable" was susceptible of being interpreted as renewal from month to month as well as from year to year, as so construed in Mr. Schenk's December 12, 1986 recommendation to the District Board. Paragraph B) was also defective because it failed to provide a place to show the price of the purchase option at the end of the lease, or zero if there were to be none. Without the "CONDITIONS" attached to the Mid America bid, the filled-in blanks of Paragraph B) on the bid form only resulted in a bid on a lease. Mr. Schenk recognized this as he construed Paragraph B) of the form as only asking for a lease bid when he informed the District Board of option number 2 in his memorandum of December 12, 1986. P. Ex. 13. Since the bid form was defective, it was foreseeable that bidders would have to have added additional words to the bid form to make it sensical. It was also foreseeable that different bidders would take different approaches in trying to draft additions to the form to enable them to bid all critical aspects of a lease that included a purchase at the end of the lease. The bid of the Petitioner should have been construed with this foreseeability in mind. In particular, the failure of the Petitioner to place a price on the first line of paragraph B) (relating to the first year) coupled with the placing of a price at the second year line and the third year line, and the addition of the words "owned at end of second year" and "owned at end of third year" should have been construed as the Petitioner's attempt, like the attempt of Mid America, to cure the ambiguities in the bid form. As discussed above, without such words, a price in the first line of paragraph B) of the bid form would have only been a bid for a renewable lease for one year, with no purchase option. The District argues that it did not ask for a bid on a two year lease-purchase, and that the Petitioner's attempt to bid on that as well as on a three year lease-purchase caused confusion. But the problem is that the bid form, as discussed above, did not ask for any purchase associated with a lease, and asked for prices for a lease that could have either a one, two or three year term based upon the option to renew. It was not unreasonable, then, for the Petitioner to have bid a two year lease-purchase. The interpretation of Petitioner's bid as a bid for a total cost of $224,344 over three years is not reasonable. The interpretation of the Petitioner's bid as providing for a total cost of $224,344 over three years results in an interest cost of 31 percent, a rate of interest that is facially unreasonable. But more important if, as assumed in that interpretation, the District were to enter into a contract with the Petitioner at a monthly charge of $6,885 per month for two years, it would own the Failing drill rig at the end of the second year. This is so because the Same line that contains the price ($6,885) also has the added words "owned at end of second year." If it owned the rig after two years, the District Surely would not continue leasing it for the third year at $4,592 per month. Payment of $6,885 for 24 months would cost a total of $165,240, which reasonably compares to Petitioner's outright purchase price of $146,976, plus the cost of paying over a two year period. Since it was more reasonable to construe line two of the Paragraph B) of the Petitioner's bid form as a bid for a two year lease-purchase, the third line should have been given the same construction, that is, to construe the price placed on the line as the price each month for the entire period (here, three years) with ownership automatic at the end of the term. The reasonable interpretation of line 3 of Paragraph B) of the Petitioner's bid is for a lease-purchase for three years at $4,592 per month, for a total cost over three years of $165,312, the rig then being owned by the District at the end of 36 months with no buy-out cost. The reasonableness of this interpretation is further supported by the fact that payment of $165,312 on a machine that cost $146,976 to buy outright results in an interest rate for payment over three years of 7.9 percent, which is a normal and usual interest rate that would be expected in a competitive bid. P. Ex. 12. Mid America's bid offered to deliver in 21 days, while the Petitioner offered to deliver in 120 days. Since the District was then renting drilling equipment at $4,612 per month, it would potentially have incurred about one month extra rental ($4,612) on the Mid America bid, and $18,448 for four months extra rental on the Petitioner's bid, or an additional cost of $13,836 on the Petitioner's bid. Including this cost of rental during the potential delivery period, the net cost of the Petitioner's three year lease-purchase bid was $183,760, and the net cost of the Mid America bid alternative that was accepted by the District was $193,289. Thus, with respect to the bid actually accepted by the District, the Petitioner's bid was $9,529 less than the bid of Mid America. During the formal administrative hearing, it appeared from the evidence that the District relied upon the following additional issues, other than price, as the reasons for selection of the Mid America bid: One year guaranteed non-routine, major maintenance and repair on the lease equipment, renewable annually for the term of the lease. A manufacturers warranty of at least 6 months or 1,000 hours. The delivery date. The location of the maintenance Services. All of the foregoing were bid specifications printed on the bid form. P. Exs. 11 and 4. Of these, only the issue of non-routine maintenance was mentioned in the letter of Ms. Horton to Mr. Auld on February 17, 1987. P. Ex. 6. Mid America bid $3,000 per year for non-routine maintenance. The Petitioner Stated on its bid form that this item was "not available." Non-routine maintenance is needed only at the end of the warranty Period. In the industry, its is well understood that non-routine maintenance normally does not apply and is not Purchased until the end of the warranty period. The District had not purchased the non-routine maintenance at the time of the formal administrative hearing. The prices quoted in the bids, pursuant to the invitation for bids, were to have been fixed only for 90 days. Thus, it is uncertain whether the $3,000 bid of Mid America for non-routine major maintenance would still hold. The term "non-routine, major maintenance and repair" was not further defined by the bid form. Although the Petitioner did not bid on non-routine maintenance, it did offer a one year warranty which was six months beyond the minimum specified by the District. Thus, for this six months period only, the Petitioner effectively provided a free non-routine maintenance offer at least to extent of the warranty. But the Petitioner failed to offer non-routine major maintenance for the 24 month period following the first year of the lease. Both bidders complied with the specifications with respect to the manufacturer's warranty, but the Petitioner offered a warranty that was better by six months. The District Board was incorrectly advised that the Petitioner's warranty was only for 90 days (and thus not in compliance with specifications). P. Ex. 13. The delivery date was considered during the hearing only with respect to the cost of rental of equipment until the new rig would be delivered, and thus was an element of net cost discussed above. The Petitioner's delivery date caused its bid to have an additional rental cost of $13,836 as compared to the Mid America bid, but the Petitioner's total net cost still was lower than the Mid America bid, as discussed above. The Petitioner's location of maintenance services was Largo, Florida, and Mid America's location was Ocala, Florida. Mid America's location is approximately 100 miles closer to Palatka than the Petitioner's location. The difference is a difference of about 4 hours in travel time, roundtrip, or only two hours for delivery of a part. Mr. Schenk testified that this factor carried only "some weight." Mr. Schenk did not know how often maintenance at the seller's location might occur, what percentage of maintenance might be in the field rather than in the seller's shop, or the problems that might occur from lack of a part. From the testimony of Mr. Winchester, who was the only rig expert who testified, and the testimony of Mr. Munch regarding the leased Speedstar rig, it appears that maintenance on the rig for major problems should not occur very often, if at all, and that many problems can be corrected in the field. In most cases, parts will have to come overnight by bus. It is inferred that a part from Ocala will arrive no sooner by overnight bus than a part from Largo by overnight bus. Thus, the closer location of the Mid America shop is of little importance on this record. The February 17, 1987, letter from Ms. Horton to Mr. Auld Stated that the failure of the Petitioner to bid on a one year lease was one of the reasons for not accepting the Petitioner's bid. As discussed above, the District was primarily seeking a three year lease-purchase, not a one year lease, and communicated this to the two bidders. Indeed, it was the existing one year lease that prompted the desire by the Board to explore a purchase over time. The District did not enter into a one year lease with Mid America, either. Thus, a bid on a one year lease was not a material or substantial part of the bid specifications. Specification number 2, listed as a desired option, was that the drill rig have a five speed transmission. The Speedstar SS-135 had a five speed transmission, thus giving it a lower first gear, and the Failing CF-15 did not. There is no evidence that the Petitioner could have have offered a five speed-transmission. On the other hand, there is no evidence that a four speed transmission would not effectively meet the needs of the District. The only evidence was that the five speed transmission would have a lower first gear, but there was not substantial evidence that the District would encounter drilling circumstances needing only the lower gear of the Speedstar SS-135. When the rotary table is retracted on the Speedstar SS- 135, the opening is 18 inches in diameter, thus allowing the Speedstar SS-135 to set 16 inch casing. The Speedstar SS-135 otherwise marginally has the power and related mechanical ability to drill and set 16" casing, particularly lighter PVC casing, to depths of 80 feet in about six hours. Drilling the first 80 feet in six hours is very slow in comparison to the normal operation of either the Speedstar SS-135 or the Failing CF-15, and would be more a matter of use of the mud pump to wear away the soil rather than actually drilling the hole. However, the Speedstar SS-135 is in fact being used in Florida by other owners to drill and set 16 inch casing. When the rotary table is retracted on the Failing CF-15, the opening is 14 1/2 inches in diameter, and thus the Failing CF- 15 does not have any capacity to drill or set 16 inch casing. If the District had chosen the Failing CF-15, in those cases in which it needed to drill and set 16 inch casing, it would have to contract out to a larger drill rig to drill and set such casing. In all other respects the Speedstar SS-135 and the Failing CF-15 are functionally equivalent machines, and are considered to be equivalent in the industry. For the most part, the design differences explained by Mr. Munch with respect to the video tape of views of both machines were not differences causing the machines to be not functional equivalents, except as discussed above. The recommendation of the staff of the District to purchase the Speedstar SS-135 would probably have been the same, based upon factors other than price, had the staff considered the bid of the Petitioner to have been $9,529 less than that of Mid America for a three year lease-purchase, as discussed in finding of fact 60. While the District entered into the process of obtaining bids for the drill rig with a preference for a rig capable of performing like the Speedstar SS-135, it did not intend to favor the Mid America Company over the Petitioner, nor did it act in bad faith. At all times relevant to these invitations for bids and award of the contract, the District did not have rules governing purchasing of commodities or governing the notification to interested persons concerning the procedures for contesting a proposed purchase. It did not have any policy or rule requiring that the lowest bid be accepted without consideration of other factors. It did have written policies, SJRWMD Exs. 1 and 2, providing for the following: Purchases in excess of $5,000 must be advertised in a newspaper of general circulation no less than ten days prior to bid opening. The District Purchasing Director may withdraw the entire proposal, and may reject all bids or parts of bids, if the District's interest will be served by that action. Departments or Divisions of the District submitting requisitions must do so with items described in such terms to allow unrestricted bidding and to afford full opportunity to bid to all qualified bidders. Any purchase order made contrary to the provisions of the purchasing policies shall be of no effect and void.
Recommendation For these reasons, it is recommended that the St. Johns River Water Management District enter its final order that the bid of the George E. Failing Company pursuant to Bid Number 87-01, second call for bids, dated November 6, 1986, was properly rejected because it did not meet all specifications of the invitation to bid. DONE and ENTERED this 28th day of August, 1987. WILLIAM C. SHERRILL Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of August, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-1606BID The following are rulings upon findings of fact proposed by the parties which have been rejected. The numbers correspond to the numbers used by the parties. Findings of fact proposed by the George F. Failing Company: 2. The third sentence is rejected because Mr. Munch chose the Speedstar SS-135 as a basis for the Specifications due to his familiarity with the leased drill rig of the same make. 6. Not relevant. 19 and 20. Mr. Auld's testimony that a manufacturer's warranty on a 1985 truck would be less inclusive that on a 1987 truck was hearsay, and cannot support a finding of fact as to that point. Thus, those portions of these proposed findings concerning a 1985 truck are irrelevant. 36. Ms. Vergara did not testify that the planned monitoring wells would be 2,000 feet deep. 38. Subordinate to finding of fact 71. 45. Rejected by finding of fact 42. Rejected by finding of fact 50. There is no evidence that the Speedstar SS-135 bid by Mid America was a display model. The delivery date of the Speedstar SS-135 is not in evidence. Findings of fact proposed by the St. Johns River Water Management District: 4. There is no evidence as to the depths of the proposed monitoring well network, and thus a finding of fact that the depth will be 1000 feet cannot be made. 8. The existence of a buy-out price in the first Mid America bid did not cause the bid to be unclear. 12. The fourth sentence, as to what the District thought the second bid blank "should" contain, is not supported by the evidence. The last sentence is rejected because it is not clear that the bid blank was a "renewable lease-purchase in one year intervals." See findings of fact 34, 55, and 56. 14. The evidence is that the Speedstar SS-135 can set 16 inch casing, not 17 1/2 inch casing. The findings concerning the failure of the Petitioner's bid to give the District the option of being able to "exit the lease" in one year is rejected because that option was securely provided in the invitation for bids, so securely so that it was construed by the District to be an implicit part of the Mid America bid that ultimately was accepted by the District. See finding of fact 50 concerning the non-appropriation of funds condition. Additionally, the findings concerning the inability of the District to construe the bid of the Petitioner to know its first year fiscal obligations are rejected for the reasons stated in findings of fact 56 through 58. The second sentence is rejected for the reasons stated in findings of fact 34 and 55. The last sentence is rejected by these findings of fact as well; the ambiguity was created by the bid form, not by the bidders. These findings of fact have essentially been rejected by findings of fact 34 and 55. Further, the word "renewable" was not inconsistent with ownership at the end of a two year period because the word "renewable" could be given the construction given it by Mr. Schenk, renewable from month to month. See finding of fact 49. 22 and 23. Rejected for the reasons stated in findings of fact 34 and 55 through 58. These proposed findings of fact are essentially correct as a matter of law, but are not facts. These findings of fact are rejected by findings of fact 34 and 55 through 58. 27. The last sentence of proposed finding of fact (4) is rejected for the reasons stated in finding of fact 66. 29. Subordinate to finding of fact 71. 32. While these Proposed findings are true and have been Substantially adopted, the proposed findings are not relevant in view of the stipulations contained in findings of fact 1 and 2. COPIES FURNISHED: Dale Twachtmann, Secretary Department of Environmental Regulation Twin Towers Office Building 2600 Blairstone Road Tallahassee, Florida 32399-2400 Daniel H. Thompson, Esquire General Counsel Department of Environmental Regulation Twin Towers Office Building 2600 Blairstone Road Tallahassee, Florida 32399-2400 Henry Dean, Executive Director St Johns River Water Management District Post Office Box 1429 Palatka, Florida 32078-1429 Linda M. Hallas, Esquire 9455 Koger Boulevard, Suite 209 St. Petersburg, Florida 33702 Wayne E. Flowers, Esquire Post Office Box 1429 Palatka, Florida 32078-1429
The Issue The issue presented for decision herein is whether or not Petitioner's Antiknock (octane) Index number of its petroleum product was below the Index number displayed on its dispensing pumps.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received, and the entire record compile herein, I make the following relevant factual finding. Rafael Ruiz is the owner/operator of Coral Way Mobil, an automobile gasoline station, situated at 3201 Coral Way in Coral Gables, Florida. Ruiz has operated that station in excess of ten (10) years. On or about May 13, 1987, Respondent, Department of Agriculture and Consumer Services, received a customer complaint alleging that the fuel obtained from Petitioner's station made her automobile engine ping. Respondent dispatched one of its petroleum inspectors to Petitioner's station at 3201 Coral Way on May 14, and obtained a sample of Respondent's unleaded gasoline. Inspector Bill Munoz obtained the sample and an analysis of the sample revealed that the produce had an octane rating of 86.9 octane, whereas the octane rating posted on the dispenser indicated that the octane rating of the product was 89 octane. On that date, May 14, 1987, Respondent issued a "stop sale notice" for all of the unleaded product which was determined to be 213 gallons. Petitioner was advised by Inspector Munoz that the unleaded produce should be held until he received further instructions from the Respondent respecting any proposed penalty. On May 15, 1987, Petitioner was advised by John Whittier, Chief, Bureau of Petroleum Inspection, Florida Department of Agriculture and Consumer Services, that the Antiknock Index number of the sampled product was 2.1 percent below the octane rating displayed on the dispenser and that an administrative fine would be levied in the amount of $200 based on the number of gallons multiplied times by the price at which the product was being sold, i.e., 213 gallons times 93.9 cents per gallon. Petitioner did not dispute Respondent's analysis of the product sample, but instead reported that he had been advised that three of the five tanks at his station were leaking and that this is the first incident that he was aware of wherein the product tested below the octane rating displayed on the dispenser.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is hereby RECOMMENDED: That the Respondent, Department of Agriculture and Consumer Services, enter a Final Order imposing an administrative fine in the amount of $200 payable by Petitioner to Respondent within thirty (30) days after entry of the Respondent's Final Order entered herein. RECOMMENDED this 7th day of October, 1987, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of October, 1987. COPIES FURNISHED: Rafael E. Ruiz c/o Coral Way Mobil 3201 Coral Way Miami, Florida 33145 Clinton H. Coulter, Jr., Esquire Senior Attorney Office of General Counsel Department of Agriculture and Consumer Services Room 514, Mayo Building Tallahassee, Florida 32399-0800 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-0810 Robert Chastain, Esquire General Counsel Department of Agriculture, and Consumer Services Room 513, Mayo Building Tallahassee, Florida 2399-0800
Findings Of Fact On March 22, 1977 during a routine inspection of various service stations in Vero Beach, a sample of No. 2 diesel fuel was taken from the pump at English Brothers Truck Stop. Upon analysis at the mobile laboratory the sample was found to be below the minimum flash point for No. 2 diesel fuel and the inspector returned to the station the same day and issued a stop sale notice. (Exhibit 3). Three additional samples were taken, and when analyzed they too were found to be below minimum flash point for this type fuel. Upon receipt of the stop sale notice the station manager notified Respondent. After the fuel had been analyzed at the state laboratory Respondent was notified that since the retail value of the contaminated fuel exceeded $1,000 it could pay $1,000 in lieu of having the fuel confiscated. Respondent owns the fuel at English Brothers Truck Stop until such time as the fuel is removed through the pump for sale. Upon receipt of the notice of the contaminated fuel, which was in one 4,000 gallon tank, Respondent immediately sent three employees to remove the contaminated fuel and clean the tank. Thereafter Respondent attempted to locate the source of the contamination but without success. Since the flash point was lower than allowed for diesel fuel the most likely source of contamination was gasoline which is a higher priced fuel than diesel. Standards used by the Petitioner in determining the required characteristics of fuels are those prescribed by the ASTM. Respondent distributes some 750,000 gallons of diesel fuel per month and this is the first report of contamination of its fuel in the eight and one half years Respondent has been in business.
Findings Of Fact On June 19, 1990, samples of leaded regular gasoline were taken from Chiefland Oil Company, a/k/a Grandma's Pantry ("Grandma's"), at two different locations in Chiefland, Florida. Analysis of these samples revealed that there was less than .01 percent lead additive in the product. In each instance, the Respondent accepted a $1,000.00 bond in lieu of confiscation of the product. Grandma's subsequently was cited for violation of the product labeling laws and noticed that the Respondent intended to assess a fine on this case for the lesser of the amount of the product sold at retail or $1,000.00. The notice of violation advised Grandma's of its right to a formal hearing on the allegations. Grandma's made a timely request for hearing and these cases resulted. At hearing, the Respondent admitted the allegations but stated in explanation that the offense arose during the changeover by manufacturers from leaded to unleaded regular gasoline. The dealer had attempted to contact the Respondent's local representative without success in an effort to determine how to handle this problem, which was common to all dealers at this time. In locations where it could, the dealer pumped the leaded gasoline out of the storage tanks and consolidated it in one tank at one station where it sold the product as leaded until the tank was almost empty and then added unleaded to the leaded gasoline until it met unleaded standards and then changed the labeling. The dealer was attempting to dilute leaded with unleaded gasoline but had not yet replaced the leaded labels with unleaded labels when the sample was taken. The dealer could not pump these tanks dry because of the nature of their construction. The gasoline tested met the octane requirements but did not contain the lead additives. The lead additives lubricate the valves of older cars designed to burn leaded fuels. Modern unleaded fuels do not provide such additives. The law prohibits the sale of leaded products as unleaded products imposing sizeable fines for this violation.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is therefore, RECOMMENDED that the Respondent exercise discretion as requested by the dealer and return the two bonds in the amount of $1,000.00 each. DONE AND ENTERED this 5th day of December, 1990, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN 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 5th day of December, 1990. COPIES FURNISHED: The Honorable Doyle Conner Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol Tallahassee, FL 32399-0810 Mallory Horne, Esq. General Counsel Department of Agriculture and Consumer Services 515 Mayo Building Tallahassee, FL 32399-0800 Charles E. Lineberger Grandma's Pantry of Florida, Inc. P.O. Box 8189 Lakeland, FL 33802 Clinton H. Coulter, Jr., Esq. Department of Agriculture and Consumer Services 515 Mayo Building Tallahassee, FL 32399-0800
