The Issue The issues in this case are whether Respondent, L.B. King, Jr., violated certain rules relating to petroleum contamination site cleanup criteria promulgated by Petitioner, Department of Environmental Protection (Department), whether he should be required to pay an administrative fine and investigative costs and expenses incurred by the Department, and whether he should take corrective action, as described in the Department's Notice of Violation, Orders for Corrective Action, and Administrative Penalty Assessment (Notice of Violation) issued on June 15, 2007.
Findings Of Fact Based upon the record presented by the parties, and those allegations in the Notice of Violation which are undisputed, the following findings of fact are determined: Respondent is the owner and operator of non-residential property (doing business as King Oil and Tire) located at 16776 Southeast U.S. Highway 19 (at Main Street and Ward Street) in Cross City, Florida. He has owned the property since June 30, 1982. Since July 1978, eight regulated petroleum storage tanks were situated on the property. See Fla. Admin. Code R. 62- 761.200(20), (45), (53), and (65). The Department has assigned facility identification number 15/8839661 to the site. During the intervening time period since Respondent assumed ownership, six of the tanks and their associated piping have been closed or removed, including tank 4 in August 1997 and tanks 5 and 6 in March 2004. Tank 4 was a 1,000 gallon diesel underground storage tank system (UST) originally installed in July 1982, tank 5 was a kerosene UST installed in July 1978, while tank 6 was a waste oil UST installed in July 1978. Only tanks 7 and 8 still remain in service. After tank 4 and the associated piping were closed in August 1997, Respondent conducted a closure assessment in the area of tank 4 and performed soil and groundwater analytical sampling in the area of its former piping run. He then filed a Tank Closure Assessment Report (TCAR) with the Department on August 19, 2003. The TCAR revealed groundwater contaminants above the Department's Cleanup Target Levels (CTLs) for Methylnapthalene in two respects and for Naphthalene. See Fla. Admin. Code R. 62-777.170(1)(a), Table I. Because of the presence of contamination on the site, on September 3, 2003, the Department sent Respondent a letter requesting that he submit a Discharge Report Form (DRF) and initiate a site assessment, as required by Florida Administrative Code Rule 62-770.600, and that he file a completed site assessment report by July 10, 2004.3 Subsection (1) of that rule requires that "[w]ithin 30 days of discovery of contamination, the responsible party shall initiate a site assessment." On September 29, 2003, the Department received the requested DRF. During a tank closure inspection of tanks 5 and 6 performed on March 4, 2004, the Levy County Health Department, acting on behalf of the Department, discovered stained soils in the fill area of tank 6. On May 18, 2004, the Department received a TCAR dated May 7, 2004, for the closure of tanks 5 and 6. The TCAR documented the results of laboratory analytical tests on groundwater samples, which revealed groundwater contaminants above the Department's CTLs for Methylnapthalene in two respects. On May 24, 2004, the Department received from Respondent a copy of a DRF (dated March 9, 2004, as amended on April 9, 2004) for the contamination related to tanks 5 and 6. The DRF was the last report filed by Respondent concerning tanks 5 and 6. On the same date, the Department sent Respondent a letter requesting that he initiate site assessment activities for the discharge related to tanks 5 and 6, as required by Florida Administrative Code Rule 62-770.600(1). On July 14, 2004, the Department sent Respondent another letter requesting (a) completion of a site assessment and (b) the submission of a Site Assessment Report (SAR) for the discharge from tank 4 (SAR-97), which complied with the requirements of Florida Administrative Code Rule 62-770.600(8). (The SAR-97 was originally due on July 10, 2004, but had not yet been filed.) In order to be deemed complete, a SAR must contain all of the information detailed in subsection (8). Also, the letter requested that a SAR for the 2004 discharge (SAR-04) be completed no later than August 1, 2004, as required by Florida Administrative Code Rule 62-770.600(7). That subsection requires in relevant part that "[w]ithin 270 days of discovery of contamination, the responsible party shall submit to the Department or to the FDEP local program for review two copies of a [SAR] " On July 15, 2004, or the day after the above letter was mailed, the Department received a copy of the SAR-97 from Respondent. The report was then referred to the Department's Petroleum Cleanup Section for its review. By letter dated August 27, 2004, the Department advised Respondent that SAR-97 was under review. The letter also changed the due date for the SAR-04 from August 1, 2004, to November 9, 2004. On September 15, 2004, the Department received correspondence from Respondent requesting an extension of time in which to submit his SAR-04. On December 10, 2004, the Department approved the request and authorized Respondent to file a SAR-04 no later than March 1, 2005. On April 12, 2005, Respondent filed with the Department a Site Assessment Report Addendum (SARA) for the 1997 discharge (SARA-97). The report was dated March 1, 2005. On May 25, 2005, the Department sent Respondent a letter requesting that he file two copies of a supplement to the SARA-97 no later than July 5, 2005, to address certain deficiencies noted in that report, as required by Florida Administrative Code Rule 62-770-600(11). That subsection provides that "[i]f the [SAR] is incomplete in any respect, or is insufficient to satisfy the objectives of subsection 62- 770.600(3), F.A.C., the Department or the FDEP local program shall inform the responsible party pursuant to paragraph 62- 770.600(9)(b), F.A.C., and the responsible party shall submit to the Department or to the FDEP local program for review two copies of a [SARA] that addresses the deficiencies within 60 days after receipt of the notice." The same letter also requested that a disposal manifest be provided for the tank and piping closures. On July 11, 2005, the Department received a second SARA-97 from Respondent's consultant. On July 14, 2005, it also received the disposal manifest documentation for the closure of tank 4 and its piping. These were the last reports filed by Respondent. On October 4, 2005, the Department sent Respondent a letter requesting that he provide two copies of a third SARA for the 1997 discharge to address deficiencies noted by the Department in the second SARA. The letter indicated that the third SARA was to be filed no later than November 23, 2005. The Department also requested that he provide a completed financial affidavit to justify Respondent's claim that he was financially unable to complete the remaining required cleanup corrective actions at his property. On November 29, 2005, Respondent requested an extension of time to complete the third SARA-97. (The reason for the requested extension was that Respondent's insurance carrier would not give authorization for the work.) On January 12, 2006, the Department advised Respondent by letter that his request had been denied and that he must submit either the third SARA or a financial affidavit, as previously requested, no later than February 15, 2006. In its response, the Department indicated that it did not "consider generic delays by contractors or insurance carriers as good cause for an extension." To date, neither filing has been made. By failing to file the requested third SARA for the 1997 discharge, Respondent has contravened the requirements of Florida Administrative Code Rules 62-770.600(11) and 62- 770.800(3), which require that within 60 days after notice, a responsible party submit a SARA to address deficiencies noted in a SAR. Respondent's conduct also implicates Florida Administrative Code Rule 62-770.800(5), which makes it a violation of two Florida Statutes for a responsible party to not submit requested information within the time frame specified. Since March 1, 2005, which was the due date on which a report was to be filed, Respondent has failed to submit an approved SAR for the 2004 discharge, as required by Florida Administrative Code Rule 62-770.600(7), which in turn contravenes Florida Administrative Code Rule 62-770.800(3) and (5). To date, Respondent has failed to complete site assessment activities for both the 1997 and 2004 discharges, as required by Florida Administrative Code Rule 62-770.600(10). That provision states that "[s]ite assessment activities shall not be deemed complete until such time as a [SAR] is approved." To date, Respondent has failed to timely and completely assess and remediate the contamination at his property, as required by Florida Administrative Code Rule Chapter 62-770. That chapter contains the criteria which apply to the cleanup of a site contaminated with petroleum products. During the course of its investigation of this matter, the Department has incurred expenses "in the amount of not less than $500.00." As mitigating evidence, Respondent offered into evidence Respondent's Exhibits 2-15, the majority of which pertain to his insurance policy and the pending litigation with his carrier, Mid-Continent Casualty Company (MCC), or the priority score funding process, which is the process by which contaminated properties are scored or rated for purposes of determining eligibility to receive state cleanup funds when the responsible party is financially unable to do so. Although evidence regarding the insurance policy and pending litigation was deemed to be immaterial to the issues of establishing Respondent's liability for the violations and responsibility for undertaking the corrective actions necessary to satisfy the violations, the undersigned ruled that it could be used by Respondent as mitigating evidence, if relevant, for the purpose of seeking to reduce the administrative penalty. Respondent's Exhibits 8, 9, and 11 indicate that after he reported the 2003 discharge to MCC, in 2003 the carrier denied coverage for that discharge (on the ground "any 'confirmed release' must commence after the retroactive date of the policy (4/3/98)"). However, MCC initially accepted coverage for the 2004 discharge and authorized Respondent's environmental consultants to conduct a site assessment. The documents further show that in December 2005, or before the 2004 site assessment had been completed and a SAR prepared, MCC reversed its position and denied coverage for the 2004 discharge on the ground there was no "Confirmed Release," as defined by the policy. Respondent then filed his lawsuit seeking a determination that the carrier was responsible for cleanup costs. Respondent asserts that he has expended more than $50,000.00 in pursuing the lawsuit, which is much more than the administrative penalty being assessed by the Department. Respondent points out that prior to the time MCC reversed its position as to coverage for the 2004 discharge in December 2005, he had filed a DFR, TCAR, disposal manifest, SAR- 97, and two SARAs for the 1997 discharge, and a TCAR and DFR for the 2004 discharge, all of which indicate a good faith effort on his part to comply with the assessment requirements. As noted above, the final reports prepared by Respondent's consultant were a second SARA-97 and a disposal manifest for the 1997 discharge, which were filed with the Department in July 2005, and a TCAR and DRF for the 2004 discharge filed in May 2004. Respondent's Exhibit 10A recites language in Coverage B of the insurance policy, which provides in part that MCC "will pay Clean-up Costs by an Insured for environmental damage that an Insured is legally obligated to pay . . . ." Respondent argues that if he acknowledges by affidavit or other proof that he does not have the ability to pay for cleanup costs, he fears that under the above language, MCC would not be "legally obligated to pay." This is because Section 376.3071(7)(c), Florida Statutes, provides that when a responsible party does not have the ability to pay for all of the cleanup costs, the Department "may" enter into an agreement with the responsible party to undertake all or part of the site rehabilitation after "taking into consideration the party's net worth and the economic impact on the party." Respondent contends that if he files an affidavit under this statute, MCC would then be relieved of any responsibility under the policy, and his rights in the lawsuit would be jeopardized. Respondent further points out that several other provisions in the insurance policy prohibit him from completing the assessment until the litigation is concluded. For example, one provision (Section II.B) provides that "No Clean-up Costs, charges, and expenses shall be incurred without the Company's consent," while another (Section II.C) provides that "An Insured shall not admit or assume any liabilities or settle any Claim(s) without the Company's consent." Respondent asserts that these provisions prevent his consultant from conducting any further work on the site without MCC's consent, and if he does so, he will lose the right to reimbursement under the policy. Finally, Exhibits 3 through 6 show that Respondent's property has been assigned a site ranking score of ten points, and that the Department is currently funding sites that are eligible for state restoration funding only if they have scores of 37 points and higher. Thus, Respondent argues that a delay in remediation of the site is not unreasonable. Except for the two discharges at issue in this case, there is no evidence that Respondent has a history of non- compliance or that he gained any direct economic benefit by virtue of the discharges. Although no reports have been filed since July 2005, through counsel, Respondent has kept the Department abreast of his efforts to establish liability on the part of MCC so that the site assessments can resume.
Findings Of Fact The parties stipulated to findings of fact set forth in paragraphs 1.- 8.,below. Stipulated Facts Respondent has documented contamination from the abandoned petroleum storage system. The abandoned petroleum storage system has been properly closed. Petitioner submitted an application to Respondent on Respondent's forms 17-769.900(3) and (4), F.A.C., which was postmarked on or before June 30, 1992. The site is not eligible for cleanup pursuant to Section 376.3071(9) and (12), Florida Statutes, the Early Detection Incentive Program, or the Florida Petroleum Liability and Restoration Insurance Program pursuant to Section 376.3072, Florida Statutes. This site is not owned or operated by the federal government. This site did not have leaking tanks that stored pollutants that are not petroleum products as defined in Section 376.301, Florida Statutes. Respondent was not denied access to this site. Petroleum contamination was not discovered after the application deadline of June 30, 1992. Additional Facts Petitioner, a Florida corporation with its principal place of business in Leon County, Florida, is in the business of owning and leasing property. Petitioner is the fee simple owner of property located at 2022 Wahnish Way in Tallahassee, Florida. The property located on Wahnish Way was leased to James T. "Pete" Thomas by Petitioner's predecessor in title. Thomas operated a gasoline station and automobile repair garage on the property. The lease with Thomas was continued by Petitioner without change upon Petitioner's assumption of the legal title to the property in 1985. Prior to Petitioner's assumption of title to the property, Thomas had installed four petroleum storage systems in a four tank pit on the property in the early 1970's. Each tank and its integral piping is a petroleum storage system, as defined by Section 376.301(15), Florida Statutes (1991). In the early 1980's, Thomas and his wholesale gasoline distributor determined that one of the four underground tanks was losing petroleum product. In 1982, Thomas ceased using the southernmost tank in the pit for the storage of petroleum products for subsequent consumption, use or sale. The distributor ceased placing gasoline in the southernmost tank. Later, in compliance with subsequent statutory enactments, Thomas registered all of the tanks, including the abandoned southernmost tank with Respondent by the statutory deadline of December 31, 1984. Although Thomas signed the registration documents as an agent of Petitioner, he was not such an authorized agent and the registration occurred without the knowledge or approval of Petitioner. As a result, Petitioner cannot be viewed as having filed the registration. Petitioner, unaware that Thomas had experienced any product loss problems or that the tanks on the property had been registered by Thomas with Respondent, became aware of both matters following receipt of a letter from government officials of Leon County, Florida, on November 20, 1990. As set forth in that letter, Petitioner was apprised that the tanks were not in compliance with State of Florida standards and would have to be closed or retrofitted to bring the tanks into compliance. Following receipt of the letter, Petitioner informed Thomas that selling of gasoline at the site was to be discontinued immediately. Closure of the tanks, performed in early 1991 by contractors retained by Petitioner, consisted of excavation and removal of the petroleum storage systems from the property. All four tanks were in the tank pit side by side, from the northernmost end of the pit to the southern end of the pit fronting on Osceola Street in Tallahassee, Florida. When the removal was completed, a Closure Assessment form was prepared by one of the contractors, Jim Stidham and Associates, in accordance with requirements of Florida law. During that process, excessive contamination from petroleum product of the soils in the extreme south end of the tank pit was discovered. Excessive contamination, defined as anything more than 500 parts per million, was located beneath the southernmost pump on the southern end of the pump island and in the southern end of the pit. Both soil sample seven in the southernmost end of the pit and soil sample 11 under the southernmost pump document these unacceptable high levels of contamination. A 20 foot soil boring as near as possible to the southernmost tank on the site revealed the unacceptable levels of contamination extended to that depth. As supported by the testimony of James A. Stidham, Petitioner's expert in the assessment of contamination caused by underground petroleum storage tanks, the location of contamination in the pit area establishes that the tank causing the contamination was the southernmost tank. In view of the location of the contamination in the pit area, the tank discovered to have a hole in it at the time of removal was the southernmost tank. The excessive contamination located at the shallow depth of two feet under the southernmost pump resulted from the improper disconnection of piping attached to the pump and is not attributable to the leak in the tank. Each tank was connected by piping on the eastern end of each tank to the corresponding pump. The southernmost pump was not used after 1982 and was missing integral parts by the time the tanks were closed. In the course of exploring options for clean up of the property, Petitioner filed for assistance from Respondent in the form of participation in the ATRP. Unaware of the true date of the cessation of use of the southernmost tank, Petitioner gave the date of last use for all tanks in the pit by stating that the "tanks were taken out of service between December 15, 1990 and January 15, 1991." Petitioner provided this response to Respondent's July 30, 1991 request for further information on August 6, 1991. Although Respondent made an initial determination to deny Petitioner's application in the middle of August, 1991, that action was not communicated to Petitioner. Instead, Petitioner's application was held by Respondent, pending possible amendment to Section 376.305(7), Florida Statutes (1991), the law controlling admission to the ATRP. Respondent held Petitioner's application for a total of 19 months before issuance of a formal decision to deny the application on February 26, 1993. Such delay by Respondent is unreasonable. Respondent's denial of Petitioner's application was based upon the eligibility requirement restricting ATRP participants to those situations where the petroleum storage system has not stored petroleum products for consumption, use or sale after March 1, 1990, and the belief of Respondent's personnel that all storage systems on Petitioner's property had stored products beyond that date. Specifically, Respondent eventually gave notice that it intended to deny Petitioner's application for participation in the ATRP for the following reason: Eligibility in the Abandoned Tank Restoration Program is restricted to those petroleum storage systems that have not stored petroleum products for consumption, use or sale after March 1, 1990, pursuant to Section 17-769.800(3)(a), Florida Administrative Code. Respondent utilized provisions of Subsection 376.305(7)(f), Florida Statutes (1991), to permit entry of some applicants into the ATRP, demonstrating that Respondent did not consider the March 1, 1990 deadline contained in provisions of Subsection 376.305(7)(b), Florida Statutes (1991), to be absolute. As attested at the final hearing by Respondent's employee, Respondent considered "variables" when determining whether to enforce the March 1, 1990, deadline. Those variables comprise the criteria listed in Subsection 376.305(7)(f), Florida Statutes (1991). By use of those variables, Respondent effectively applied provisions of Subsection 376.305(7)(f), Florida Statutes (1991), to some program applicants other than Petitioner and permitted their participation while choosing to refrain from final agency action under that same criteria with regard to Petitioner's application pending subsequent legislative enactment. Petitioner's southernmost tank is an abandoned petroleum storage system that was not required to be registered with Respondent when it was in service; the system came into the possession of Petitioner following its abandonment; was never returned to service; and is not otherwise eligible for cleanup pursuant to Subsection 376.3071(9), Florida Statutes, or Section 376.3072, Florida Statutes.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a final order be entered granting Petitioner's application for participation in the ATRP with regard to contamination resulting from Petitioner's southernmost petroleum storage system. DONE AND ENTERED this 1st day of February, 1994, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of February, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-2658 The following constitutes my rulings, pursuant to Section 120.59, Florida Statutes, upon proposed findings of fact submitted by the parties: Petitioner's Proposed Findings. 1.-23. Adopted, though not verbatim. Respondent's Proposed Findings. 1.-2. Rejected, not supported by weight of the evidence. 3.-4. Rejected, subordinate to HO findings on this point. 5.-11. Accepted. Rejected, relevance. A mischaracterization of the evidence in that the testimony establishes that an existing lease agreement was continued. Accepted to the extent that the evidence establishes that there were four tanks in the pit. Rejected, credibility, weight of the evidence as to the accuracy of the registration form in the face of conflicting evidence. 16.-18. Rejected, weight of the evidence. 19.-20. Accepted. 21.-22. Rejected, subordinate. Accepted. Rejected, relevance. 25.-26. Accepted. 27.-29. Rejected, subordinate. Rejected, relevance. Rejected, argumentative. Accepted. Rejected, legal conclusion, argumentative. COPIES FURNISHED: Melissa Fletcher Allaman Attorney at Law Post Office Drawer 1170 Tallahassee, Florida 32302 Jefferson M. Braswell Lisa M. Duchene W. Douglas Beason Assistant General Counsels Department of Environmental Protection 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Kenneth Plante General Counsel Department of Environmental Protection 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Virginia B. Wetherell Secretary Department of Environmental Protection Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400
Findings Of Fact Based upon the prehearing statement, the testimony of the witnesses, and the documentary evidence received at the hearing, the following findings of fact are made: The Petitioner is a Florida corporation in good standing, authorized to do business in this state. The Petitioner owns and controls the site which is the subject matter of these proceedings. Such site is located in Brevard County, Florida. The Department has identified the subject site as DER facility no. 05- 8500985 (the facility). At all times material to this case, the facility consisted of: three underground storage tanks (UST), one 3000 gallon UST used for storing diesel fuel, one 1000 gallon UST used for storing diesel fuel, and one 1000 gallon UST used for storing gasoline; five monitoring wells; and pipes and pumps related to the foregoing system. The facility constituted a storage tank system as defined in Section 376.301, Florida Statutes, and Rule 17-761.200(38), Florida Administrative Code. The Petitioner holds, and is named insured for, third party pollution liability insurance applicable to the facility. Such insurance was issued pursuant to Section 376.3072, Florida Statutes. The policy for the foregoing insurance, policy no. FPL7622040, was in force from March 22, 1991 through March 22, 1992. The Department issued a notice of eligibility for restoration insurance to Petitioner for the above-described facility. Based upon the foregoing, the Petitioner is a participating owner or operator as defined in Chapter 17-769, Florida Administrative Code. Pursuant to Section 376.3073, Florida Statutes, Brevard County operates a local program that has been approved by the Department. Such local program is managed by the Brevard County Office of Natural Resources Management (County). In July, 1990, a discharge of diesel fuel occurred at the Petitioner's facility. Petitioner's employees estimated that approximately twenty gallons of diesel fuel filled the pump box overflowed from the pump box across the seawall into the adjacent waters. Upon discovering the discharge, Petitioner shut down diesel fuel dispensing until repairs could be made to the apparent cause of the leak. Additionally, the diesel fuel remaining in the pump box and on top of the tank area was removed. Contaminated soil in the pump box was also removed. The apparent cause of the discharge described above was attributed to cracked pipe fittings which were repaired by Glover Oil Co. within a few days of the discharge. No detailed inspection was made to the system to determine if additional sources of discharge existed. Petitioner did not complete a discharge reporting form (DRF) for the above-described incident until April 18, 1991. The April DRF was completed after Petitioner was directed to do so by Ms. DiStasio, an inspector employed by the County. From August, 1990 until May, 1991, at least one monitoring well at the Petitioner's facility showed free product accumulating in the well pipe. The exact amounts of the free product found are unknown, but reports estimated the level at 100 centimeters. From August, 1990 until September, 1991, the Petitioner did not undertake any measure to explore the origin of the free product found in the monitoring well. Further, the Petitioner did not report the monitoring well testing results as a suspected or confirmed discharge. In April, 1991, an inspection of the Petitioner's facility was performed by Ms. DiStasio. That inspection resulted in a letter to the Petitioner that outlined several violations at the facility. Among those violations listed was the Petitioner's failure to report a suspected or confirmed discharge. At the time of the April, 1991 inspection, Petitioner had reported neither the July, 1990 discharge (a known discharge) nor the monitoring well test results (at the minimum a suspected discharge). In connection with the July, 1990 discharge, following the repairs made by Glover Oil, Petitioner did not have the system pressure tested. Only the area visible from the pump box was checked for leakage. In July, 1991, when Ms. DiStasio performed a re-inspection of the facility, she found Petitioner had not (in the interim period, April through July, 1991) taken any steps to test the system or to remove the fuels from the suspect tanks. Since the free product continued to appear in the monitoring well, a pressure test of the system would have definitively answered the discharge question. Alternatively, the removal of the fuels would have prevented further seepage until the system could be pressure tested. On August 6, 1991, the Petitioner issued a letter that advised the County that it had stopped dispensing fuel at the facility. The tanks were not drained, however, until on or about September 11, 1991. Further, the August, 1991, letter acknowledged that the Petitioner "had proposals for initial remedial cleanup related to diesel contamination in the tank field area." Obviously, the Petitioner must have contemplated a need for such cleanup. On September 11, 1991, at the Petitioner's request, Petroleum Equipment Contractors, Inc. attempted to pressure test the 3000 gallon diesel tank. The purpose of the pressure test was to determine if the diesel system had a leak. The company could not even run the test on the tank because of the defective system. A similar test on the Petitioner's gasoline tank passed without incident. Once the Petitioner learned the results of the test, it initiated Initial Remedial Action (IRA) as described on the IRA report filed by Universal Engineering Sciences. The IRA consisted of the removal of the excessively contaminated soil, approximately 74 cubic yards, and the removal of the USTs. The foregoing work was completed on or about September 15, 1991. On October 4, 1991, the Petitioner filed a discharge reporting form dated October 2, 1991, that identified September 11, 1991, as the date of discovery for the discharge. This discharge discovery was allegedly made incidental to the diesel tank pressure testing failure. No reference was made to the months of monitoring well reports showing a free product. On October 8, 1991, Ms. DiStasio prepared a Florida Petroleum Liability Insurance and Restoration Program Compliance Checklist that reported the Petitioner was not in compliance with applicable statutes and rules. When Petitioner applied for restoration coverage under the statute on January 31, 1992, such request was denied by the Department on March 6, 1992. The basis for the denial was as follows: Failure to notify the Department of a positive response to sampling within three working days of testing, pursuant to the rule in effect at the time of the initial response (17-61.050(1), Florida Administrative Code). An inspection by Brevard County on April 17, 1991, revealed that free product had been detected in one monitoring well since July 1990. The discharge reporting form was not submitted until October 2, 1991.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Department of Environmental Regulation enter a final order denying Petitioner's claim for restoration coverage under the Florida Petroleum Liability Insurance and Restoration Program. DONE and ENTERED this 31st day of December, 1992, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH 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 31st day of December, 1992. APPENDIX TO CASE NO. 92-2121 RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE PETITIONER: Paragraphs 1, 2, 8, 12, 15, 16, 17, and 18 are accepted. Except as found above, paragraph 3 is rejected as not supported by the record cited. It is accepted that Brevard County acted as the local agent in this case. Paragraph 4 is rejected as not supported by the record. With regard to paragraph 5, substituting "A" for "The" and "confirmed" for "discovered" the paragraph can be accepted; otherwise rejected as contrary to the record. Similarly, with the substitution of the word "confirmation" for "discovery" in Paragraph 6, the paragraph can be accepted; otherwise rejected as contrary to the record. No suitable explanation was offered by the Petitioner for why, if a discharge were not reasonably suspected, it retained the company to immediately remove the USTs upon the failed pressure testing. Clearly, the Club had a notion the tanks were a discharge problem. Paragraph 7 is rejected as contrary to the weight of the evidence. While there was some confusion as to the exact volume of free product in the monitoring well, there was clear evidence that such was reported for many months prior to the confirmation in September, 1991. Further, the main confusion regarding the product found in the well was not as to its existence, but as to the individual's knowledge of the metric measurement of it. One hundred centimeters of product in a two or three inch pipe would not be a minute amount. Except as addressed in the foregoing findings, paragraph 9 is rejected as contrary to the weight of the evidence. Petitioner did not undertake all repairs necessary to abate a discharge problem. Paragraph 10 is rejected as not supported by the weight of credible evidence or irrelevant. Clearly, as early as August, 1990, Petitioner knew or should have known of a discharge problem based upon the monitoring well report; that all of the discharge did not necessarily flow from the fittings that had been repaired is irrelevant. Further, Petitioner did no testing to verify that the replaced fittings had solved the discharge problem (especially in light of the well reports). Paragraph 11 is rejected as an inaccurate restatement of the exhibit. Paragraph 13 is rejected as contrary to the weight of the evidence. Incidentally, the hearing in this case was in the year 1992. Paragraph 14 is rejected as contrary to the weight of credible evidence. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT: Paragraphs 1 through 11 are accepted. Paragraph 12 is rejected as a misstatement of the exhibit cited. Paragraphs 13 through 27 are accepted. COPIES FURNISHED: Brigette A. Ffolkes Assistant General Counsel Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Scott E. Wilt MAGUIRE, VOORHIS & WELLS, P.A. 2 South Orange Plaza P.O. Box 633 Orlando, Florida 32802 Carol Browner, Secretary Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Daniel H. Thompson, General Counsel Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400
The Issue The issues are: (a) whether the accident on December 12, 1995, involving a shrimp trawler, the Atlantic Sun, resulted in a discharge of pollutants into the Atlantic Ocean and caused natural resource damages; and, if so, (b) what amount does Petitioner William A. Harden owe the Department of Environmental Protection for investigation costs incurred in investigating the break up of the Atlantic Sun and for natural resource damages resulting from the accident.
Findings Of Fact On December 12, 1995, the commercial fishing vessel, the Atlantic Sun, went aground on the south jetties in the Atlantic Ocean at the entrance to the channel of St. Mary's River. The shrimp trawler broke apart on the jetties near Fernandina Beach, Florida. Debris from the wrecked ship washed onto the beaches near the jetties. The United States Coast Guard (USCG) arrived at the scene of the accident and removed Roger Cummings, Captain of the Atlantic Sun, and Daniel Boone, an owner of the vessel, from the scene of the wreck. The USCG informed the Florida Marine Patrol (FMP) about the accident on December 12, 1995. Michael Lehman, FMP officer, met the USCG officers investigating the accident when they brought Captain Cummings and Mr. Boone to shore. Captain Cummings stated that the ship had 1200 to 1300 gallons of diesel fuel in its tanks when it hit the jetties. The water was too rough for Officer Lehman to investigate the accident scene that night. Officer Lehman and another FMP officer went to the site of the wreck on the morning of December 13, 1997. On his way to the accident scene, Officer Lehman's boat ran through a sheen of diesel fuel from Eagan's Creek to the end of the jetties. Officer Lehman found the Atlantic Sun upside down at the end of the rock jetties. There was a strong smell of diesel fuel at the site of the wreck. Diesel fuel ran down both sides of the jetties. The fuel was bubbling up on both sides of the wrecked ship. On December 14, 1995, the flow of fuel from the capsized vessel was still not contained. Officer Lehman estimated that approximately 500 gallons of fuel had been discharged into the ocean. He based this estimate on his personal observation at the accident scene, personal experience as an investigator of pollutant discharges, and witness statements. USCG officers estimated that the Atlantic Sun discharged 1,000 gallons of diesel fuel. The diesel fuel sheen on the water surface eventually affected a large area. It covered the entrance to St. Mary's River Channel from bank to bank. The fuel flowed west and inland from the ship wreck. It covered much of Cumberland Sound. It affected coastal waters from the accident site to Ft. Clinch State Park Beach and south approximately two miles. Special management areas which were affected are: Ft. Clinch State Park, Cumberland National Seashore, and Ft. Clinch Aquatic Preserve. By December 16, 1995, Officer Lehman could no longer see fuel coming from the area of the wreckage. By that time, the spilled fuel had dissipated. The accident occurred within one statute mile seaward of the coastline of the state of Florida. The two FMP officers worked a total of 18 hours during the course of their investigation. The cost to Respondent for the two officers' time was $244.80. The FMP officers used a single engine boat in their investigation for five hours. The single engine boat cost Respondent $100.00. They used a twin engine boat for six hours to conduct the investigation. The twin engine boat cost Respondent $240.00. The FMP officers drove a total of 76 miles in patrol vehicles. At $0.20 per mile, the total cost for mileage was $15.20. The FMP officer spent $5.00 developing pictures which were taken during their investigation. Respondent incurred clerical expenses during the investigation in the amount of $33.60. Respondent's total cost for the investigation was $638.60. Respondent assessed Petitioner with damages to natural resources. The damages were based on the total amount of pollutants discharged into Florida's coastal waters as a result of the Atlantic Sun going aground on the jetties. The amount of pollutants was 500 gallons of diesel fuel. Impact to special management areas was also taken into consideration in determining the natural resource damages. Respondent utilized a statutory formula to assess Petitioner with natural resource damages in the amount of $8,008.47. Respondent sent Petitioner a final agency action letter advising him of the total assessment in the amount of $8,647.07.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that Respondent enter a Final Order assessing Petitioner $638.60 in investigative costs and $8,008.47 in natural resource damages. DONE AND ENTERED this 5th day of February, 1998, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD 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 5th day of February, 1998. COPIES FURNISHED: Kisha R. Pruitt, Esquire Kathelyn M. Jacques, Esquire Department of Environmental Protection Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Daniel Boone Boone and Harden Atlantic Sun Post Office Box 438 Darien, Georgia 31305 William A. Harden Boone and Harden Atlantic Sun Route 3, Box 3158 Townsend, Georgia 31337 Kathy Carter, Agency Clerk Department of Environmental Protection Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 F. Perry Odom, Esquire Department of Environmental Protection Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Virginia B. Wetherell, Secretary Department of Environmental Protection Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000
The Issue The issue to be determined is whether the applicant, Kanter Real Estate, LLC (Kanter), is entitled to issuance of an Oil and Gas Drilling Permit, No. OG 1366 (the Permit).
Findings Of Fact The Parties Kanter is a foreign limited liability company registered to do business in the State of Florida. Kanter owns 20,000 acres of property in western Broward County, on which it seeks authorization for the drilling of a vertical exploratory well. The exploratory well is to be located on a five-acre site that is subject to an ERP (the Well Site). The Department is the state agency with the power and duty to regulate activities related to the management and storage of surface waters pursuant to chapter 373, Florida Statutes, and to regulate oil and gas resources, including the permitting of activities related to the exploration for and extraction of such resources, pursuant to chapter 377, Florida Statutes. Miramar is a Florida municipal corporation located in Broward County, Florida. Broward County is a political subdivision of the State of Florida with jurisdiction extending to the Kanter property and the Well Site. The Application On July 2, 2015, Kanter submitted its Application for Permit to Drill (Application) to the Department. The proposed Well Site is on land to which Kanter owns the surface rights and subsurface mineral rights. The Application contemplates the drilling of an exploratory well to a depth of approximately 11,800 feet. The Application is not for a production well. The well is to be drilled, and ancillary activities are to be performed on a fill pad of approximately five acres, surrounded by a three-foot high perimeter berm on three sides and the L67-A levee on the fourth. The pad is the subject of an ERP which, as set forth in the Preliminary Statement, is not being challenged. The pad is designed to contain the 100-year, three-day storm. The engineering design incorporates a graded area, berm, and containment with a water control structure and a gated culvert to manipulate the water if necessary. The entire pad is to be covered by a 20 mil PVC liner, is sloped to the center, and includes a steel and concrete sump for the collection of any incidental spills. The pad was designed to contain the full volume of all liquids, including drilling fluid, fuel, and lubricating oil, that are in tanks and containers on the facility. The Application includes technical reports, seismic data, and information regarding the geology and existing producing oil wells of the Upper Sunniland Formation, which Kanter filed for the purpose of demonstrating an indicated likelihood of the presence of oil at the proposed site. The third Request for Additional Information (RAI) did not request additional information regarding the indicated likelihood of the presence of oil at the proposed site. After it submitted its response to the third RAI, Kanter notified the Department of its belief that additional requests were not authorized by law. As a result, the Department completed the processing of the Application without additional RAI’s. On November 16, 2016, the Department entered its Notice of Denial of the Oil and Gas Drilling Permit. The sole basis for denial was that Kanter failed to provide information showing a balance of considerations in favor of issuance pursuant to section 377.241.1/ There was no assertion that the Application failed to meet any standard established by applicable Department rules, Florida Administrative Code Chapters 62C-25 through 62C-30. In particular, the parties included the following stipulations of fact in the Joint Prehearing Stipulation which are, for purposes of this proceeding, deemed as established: The structure intended for the drilling or production of Kanter’s exploratory oil well is not located in any of the following: a municipality; in tidal waters within 3 miles of a municipality; on an improved beach; on any submerged land within a bay, estuary, or offshore waters; within one mile seaward of the coastline of the state; within one mile seaward of the boundary of a local, state or federal park or an aquatic or wildlife preserve; on the surface of a freshwater lake, river or stream; within one mile inland from the shoreline of the Gulf of Mexico, the Atlantic Ocean or any bay or estuary; or within one mile of any freshwater lake, river or stream. The location of Kanter’s proposed oil well is not: within the corporate limits of any municipality; in the tidal waters of the state, abutting or immediately adjacent to the corporate limits of a municipality or within 3 miles of such corporate limits extending from the line of mean high tide into such waters; on any improved beach, located outside of an incorporated town or municipality, or at a location in the tidal waters of the state abutting or immediately adjacent to an improved beach, or within 3 miles of an improved beach extending from the line of mean high tide into such tidal waters; south of 26°00'00? north latitude off Florida’s west coast and south of 27°00'00? north latitude off Florida’s east coast, within the boundaries of Florida’s territorial seas as defined in 43 U.S.C. 1301; north of 26°00'00? north latitude off Florida’s west coast to the western boundary of the state bordering Alabama as set forth in s. 1, Art. II of the State Constitution; or north of 27°00'00? north latitude off Florida’s east coast to the northern boundary of the state bordering Georgia as set forth in s. 1, Art. II of the State Constitution, within the boundaries of Florida’s territorial seas as defined in 43 U.S.C. 1301. 19. The proposed oil well site does not contain Florida panther habitat and is located outside of the primary and secondary habitat zones for the Florida panther. 21. There are no recorded archaeological sites or other historic resources recorded within the area of the proposed oil well site. Kanter submitted a payment of $8,972.00 for its oil and gas permit application on June 30, 2016 pursuant to Rule 62C- 26.002(5)(c), F.A.C. Kanter’s application includes sufficient information and commitments for performance bonds and securities. DEP and Intervenors do not claim that the application lacks the information required in rule 62C-26.002, F.A.C. Kanter’s application includes an organization report that satisfies the requirements of rule 62C-26.003(3), F.A.C. Kanter’s engineering aspects of the site plan for the proposed project site, are appropriate. Kanter’s survey submitted to DEP in support of its application includes a suitable location plat which meets the minimum technical standards for land surveys. Kanter’s application includes an appropriate description of the planned well completion. DEP and Intervenors do not claim that the drilling application lacks the information required by rule 62C-26.003, F.A.C. Kanter’s Application proposes using existing levees to provide access to the proposed Kanter well site. Kanter did not propose to construct additional roads for access. Kanter’s proposed well site is located 332 feet from the L67-A levee, which serves as a roadway for trucks used to perform operations and maintenance on the levees and canals in the area. Kanter’s application does not lack any information required by DEP with respect to the location of roads, pads, or other facilities; nor does it lack any information regarding the minimization of impacts with respect to the location of roads. DEP and Intervenors do not contend that the permit should be denied based upon the proposed “spacing” of the well, or drilling unit, as that term is used in rule 62C-26.004, F.A.C. Kanter’s application includes appropriate plans for the construction of mud tanks, reserve pits, and dikes. Kanter agrees to a reasonable permit condition requiring that if water is to be transported on-site, that it will add additional tanks for the purpose of meeting water needs that would arise during the drilling process. Kanter’s design of the integrated casing, cementing, drilling mud, and blowout prevention programs is based upon sound engineering principles, and takes into account all relevant geologic and engineering data and information. Kanter’s proposed casing plan includes an additional casing string proposed in its response to DEP’s Third Request for Additional Information. This casing plan meets or exceeds the requirements of 62C-27.005, F.A.C. Kanter’s proposed casing and cementing program, as modified, meets or exceeds all applicable statutory and rule criteria.[2/] Kanter’s response and documents provided in response to DEP’s 3rd RAI satisfactorily resolved DEP’s concern regarding the risk of passage of water between different confining layers and aquifers resulting from the physical act of drilling through the layers of water and the intervening soil or earth. Kanter’s application includes a sufficient lost circulation plan. Kanter’s application is not deficient with respect to specific construction requirements which are intended to prevent subsurface discharges. Kanter’s drilling fluids plan is appropriate and is not deficient. Kanter’s blowout prevention equipment and procedures are appropriate and are not deficient. Kanter’s plans for blowout prevention are not insufficient. Kanter’s proposed oil pad is above the 100 year flood elevation and under normally expected circumstances would not be inundated by water if constructed as proposed in Kanter’s application. Kanter’s application includes a Hydrogen Sulfide Safety Plan that includes standards which are consistent with the onshore oil and gas industry standards set forth in the American Petroleum Institutes’ Recommended Practice. DEP and Intervenors do not claim any insufficiencies with respect to Kanter’s Hydrogen Sulfide Gas Contingency Plan, the sufficiency of secondary containment, its construction plans for a protective berm around the drilling site and storage tank areas of sufficient height and impermeability to prevent the escape of pad fluid, its pollution prevention plan, its safety manual, or its spill prevention and cleanup plan. DEP and Intervenors do not contend that the permitting of the well would violate section 377.242(1), F.S., regarding permits for the drilling for, exploring for, or production of oil, gas, or other petroleum products which are to be extracted from below the surface of the land only through the well hole(s). DEP and Intervenors do not contend that Kanter’s application violates the applicable rule criteria for oil and gas permitting set forth in Chapters 62C-25 through 62C-30, Florida Administrative Code. In addition to the foregoing, Kanter is not seeking or requesting authorization to perform “fracking,” and has agreed to a permit condition that would prohibit fracking. As a result of the foregoing, the parties have agreed that the Application meets or exceeds all criteria for an exploratory oil well permit under chapters 62C-25 through 62C-30. The Property Kanter owns two parcels of land totaling 20,000 acres in the area of the proposed Well Site: a northern parcel consisting of approximately 11,000 acres and a southern parcel consisting of approximately 9,000 acres. Kanter assembled its holdings through a series of acquisitions by deeds from 1975 to 1996. The Well Site is to be located within the southern parcel. On August 7, 1944, Kanter’s predecessor in title, Dallas Investment Co., acquired by tax deed all interests in a parcel within the 9,000-acre southern parcel described as “All Section 23 Township 51 South, Range 38 East, 640 Acres,” including, without reservation, the oil, gas, minerals, and phosphate. The evidence of title submitted as part of the Application indicates that a “Kanter” entity first became possessed of rights in Section 23 in 1975. By virtue of a series of transactions extending into 1996, Kanter currently holds fee title to all surface rights, and title to all mineral rights, including rights to oil, gas, and other mineral interests, within Section 23 Township 51 South, Range 38 East. The Well Site specified in the Application is within Section 23, Township 51 South, Range 38 East. Kanter’s property is encumbered by a Flowage Easement that was granted to the Central and Southern Flood Control District in 1950, and is presently held by the South Florida Water Management District (SFWMD). The Flowage Easement guarantees Kanter access to the entire easement property “for the exploration or drilling for, or the developing, producing, storing or removing of oil, gas or other . . . in accordance with sound engineering principles.” Kanter has the legal property right to locate and drill the well, and the exploratory well is consistent with Kanter’s ownership interest. The Well Site is located in a 160-acre (quarter section) portion of the 640-acre tract described above, and is within a “routine drilling unit,” which is the block of land surrounding and assigned to a well. Fla. Admin. Code R. 62C-25.002(20) and 62C-25.002(40). The Kanter property, including the Well Site, is in the historic Everglades. Before efforts to drain portions of the Everglades for development and agricultural uses, water flowed naturally in a southerly direction through land dominated by sawgrass and scattered tree islands. The tree islands were generally shaped by the direction of the water flow. Beginning as early as the late 1800s, dramatically increasing after the hurricane of 1947, and extending well into the 1960s, canals, levees, dikes, and channels were constructed to drain, impound, or reroute the historic flows. Those efforts have led to the vast system of water control structures and features that presently exist in south Florida. The Well Site, and the Kanter property as a whole, is located in Water Conservation Area (WCA)-3. WCA-3 is located in western Broward County and northwestern Miami-Dade County. It was constructed as part of the Central and Southern Florida Flood Control project authorized by Congress in 1948, and was created primarily for flood control and water supply. In the early 1960s, two levees, L67-A and L67-C, were constructed on a line running in a northeast to southwest direction. When constructed, the levees separated WCA-3 into WCA-3A to the west and WCA-3B to the southeast. The Well Site is in WCA-3A.3/ The area between L67-A and L67-C, along with a levee along the Miami Canal, is known as the “Pocket.” There is no water control in the Pocket. Although there is a structure at the south end of the Pocket, it is in disrepair, is rarely -- if ever -- operated, and may, in fact, be inoperable. The Well Site is located within the Pocket, on the southern side of L67-A. L67-A and L67-C, and their associated internal and external canals, have dramatically disrupted sheet flow, altered hydrology, and degraded the natural habitat in the Pocket. Water inputs and outputs are entirely driven by rainfall into the Pocket, and evaporation and transpiration from the Pocket. From a hydrologic perspective, the Pocket is entirely isolated from WCA-3A and WCA-3B. The Pocket is impacted by invasive species, which have overrun the native species endemic to the area and transformed the area into a monoculture of cattails. Vegetation that grows in the Pocket dies in the Pocket. Therefore, there is a layer of decomposing vegetative muck, ooze, and sediment from knee deep to waist deep in the Pocket, which is atypical of a functioning Everglades system. L67-A and L67-C, and their associated internal and external canals, impede wildlife movement, interfering with or preventing life functions of many native wildlife species. The proposed Well Site, and the surrounding Kanter property, is in a rural area where future residential or business development is highly unlikely. The property is removed from urban and industrial areas and is not known to have been used for agriculture. The Department has previously permitted oil wells within the greater Everglades, in areas of a more pristine environmental nature, character, and location than the Pocket. The Raccoon Point wellfield is located 24 miles west of the Proposed Project Site within the Big Cypress National Preserve. It is within a more natural system and has not undergone significant hydrologic changes such as the construction of canals, levees, ditches, and dikes and, therefore, continues to experience a normal hydrologic flow. Mr. Gottfried testified that at Raccoon Point, “you can see the vegetation is maintaining itself because the fact that we don’t have levees, ditches canals, dikes, impacting the area. So you have a diversity of plant life. You have tree islands still. You have the normal flow going down.” The greater weight of evidence shows that the Kanter Well Site is far less ecologically sensitive than property at Raccoon Point on which the Department has previously permitted both exploration and production wells. The Biscayne Aquifer The Biscayne Aquifer exists in almost all of Miami- Dade County, most of Broward County and a portion of the southern end of Palm Beach County. It is thickest along the coast, and thinnest and shallowest on the west side of those counties. The western limit of the Biscayne Aquifer lies beneath the Well Site. The Biscayne Aquifer is a sole-source aquifer and primary drinking water source for southeast Florida. A network of drainage canals, including the L-30, L-31, L-33, and Miami Canals, lie to the east of WCA-3B, and east of the Well Site. Those canals penetrate into the substratum and form a hydrologic buffer for wellfields east of the Well Site, including that operated by Miramar, and isolate the portions of the Biscayne Aquifer near public wellfields from potential impacts originating from areas to their west. The canals provide a “much more hydraulically available source” of water for public wellfields than water from western zones of the Biscayne Aquifer, and in that way create a buffer between areas on either side of the canals. The Pocket is not a significant recharge zone for the Biscayne Aquifer. There is a confining unit comprised of organic soils, muck, and Lake Flint Marl separating the Pocket and the Well Site from the Fort Thompson formation of the Biscayne Aquifer. There is a layer of at least five feet of confining muck under the L67-A levee in the area of the Well Site, a layer that is thicker in the Pocket. The Well Site is not within any 30-day or 120-day protection zones in place for local water supply wells. The fact that the proposed well will penetrate the Biscayne Aquifer does not create a significant risk of contamination of the Biscayne Aquifer. The drilling itself is no different than that done for municipal disposal wells that penetrate through the aquifer much closer to areas of water production than is the Well Site. The extensive casing and cementing program to be undertaken by Kanter provides greater protection for the well, and thus for the aquifer, than is required by the Department’s rules. A question as to the “possibility” that oil could get into the groundwater was answered truthfully in the affirmative “in the definition of possible.” However, given the nature of the aquifer at the Well Site, the hydrological separation of the Well Site and well from the Biscayne Aquifer, both due to the on-site confining layer and to the intervening canals, the degree of casing and cementing, and the full containment provided by the pad, the testimony of Mr. Howard that “it would be very difficult to put even a fairly small amount of risk to the likelihood that oil leaking at that site might possibly actually end up in a well at Miramar” is accepted. The Sunniland Formation The Sunniland Formation is a geologic formation which exists in a region of South Florida known as the South Florida Basin. It is characterized by alternating series of hydrocarbon-containing source rock, dolomite, and limestone of varying porosity and permeability and evaporite anhydrite or mudstone seal deposits. It has Upper Sunniland and Lower Sunniland strata, and generally exists at a depth of up to 12,000 feet below land surface (bls) in the area of the Well Site. Underlying the Sunniland Formation is a formation generally referred to as the “basement.” The basement exists at a depth of 17,000-18,000 feet bls. Oil is produced from organic rich carbonate units within the Lower Cretaceous Sunniland Formation, also known as the Dark Shale Unit of the Sunniland Formation. The oil produced in the Sunniland Formation is generally a product of prehistoric deposits of algae. Over millennia, and under the right conditions of time and pressure, organic material is converted to hydrocarbon oil. The preponderance of the evidence demonstrates that active generating source rock capable of producing hydrocarbons exists in the Sunniland Formation beneath the Kanter property. The preponderance of the evidence also indicates that the oil generated in the Sunniland Formation is at a sufficient depth that it is preserved from microbial degradation, which generally occurs in shallower reservoirs. The Upper Sunniland Formation was formed in the Cretaceous geological period, between 106 and 100 million years ago. Over that period, sea levels rose and fell dramatically, allowing colonies of rudists (a now extinct reef-building clam) and oysters to repeatedly form and die off. Over time, the colonies formed bioherms, which are reef-like buildups of shell elevated off of the base of the sea floor. Over millennia, the bioherms were exposed to conditions, including wave action and exposure to air and rainwater, that enhanced the porosity of the component rudist and oyster shell. Those “patch reefs” were subsequently buried by other materials that formed an impermeable layer over the porous rudist and oyster mounds, and allowed those mounds to become “traps” for oil migrating up from lower layers. A trap is a geological feature that consists of a porous layer overlain by an impervious layer of rock that forms a seal. A trap was described, simplistically, as an upside down bowl. Oil, being lighter than water, floats. As oil is generated in source rock, it migrates up through subterranean water until it encounters a trapping formation with the ability to create a reservoir, and with an impervious layer above the porous layer to seal the trap and prevent further migration, thus allowing the “bowl” to fill. The reservoir is the layer or structure with sufficient porosity and permeability to allow oil to accumulate with its pores. The thickness of the layer determines the volume of oil that the reservoir is capable of retaining. Although rudist mounds are generally considered to be more favorable as traps due to typically higher porosity, oyster mound traps are correlated to producing wells in the Sunniland Formation and are primary producers in the Felda field and the Seminole field. The Lower Sunniland Formation is a fractured carbonate stratum, described by Mr. Aldrich as a rubble zone. It is not a traditional structural trap. Rather, it consists of fractured and crumbling rock thought to be created by basement shear zones or deep-seated fault zones. It has the same source rock as the Upper Sunniland. There is little information on traps in the Lower Sunniland, though there are two fields that produce from that formation. A “play” is a group of prospects or potential prospects that have the same source rock, the same reservoir rock, the same trap style, and the same seal rock to hold in the hydrocarbons. The producing oil fields in the Sunniland Formation, including Raccoon Point, Sunniland, Felda, West Felda, and Lake Trafford are part of a common play known as the Sunniland Trend. The Sunniland Trend is an area of limestone of greater porosity within the Sunniland Formation, and provides a reasonable extrapolation of areas that may be conducive to oil traps. The Sunniland Trend extends generally from Manatee County on the west coast of Florida southeasterly into Broward County and the northwestern portion of Miami-Dade County on the east coast of Florida. The trend corresponds to the ancient Cretaceous shoreline where rudist and oyster bioherms formed as described above. In 2003, the “Mitchell-Tapping” report, named after the husband and wife team, identified two separate trends within the Sunniland Trend, the rudist-dominant West Felda Trend, and the more oyster-based Felda Trend. Both are oil-producing strata. The Felda Trend is more applicable to the Kanter property. Throughout the Sunniland Trend, hydrocarbon reservoirs exist within brown dolomite deposits and rudist and oyster mounds. Dolomite is a porous limestone, and is the reservoir rock found at the productive Raccoon Point oil wellfield. The evidence indicates that a brown dolomite layer of approximately 20 feet underlies the Well Site, and extends in all directions from the Well Site. A preponderance of the evidence indicates that the Kanter property, including the Well Site, is within the Sunniland Trend and its Felda Trend subset.4/ Oil produced from wells in the Sunniland Trend is typically thick, and is not under pressure. The oil does not rise through a bore hole to the surface, but must be pumped. The Raccoon Point Field, which is the closest productive and producing wellfield to the proposed Well Site, is located approximately 24 miles to the west of the Well Site, within the Sunniland Trend. Raccoon Point contains numerous well sites, of which four or five are currently producing, and has produced in the range of 20 million barrels of oil since it began operation in the late 1970s. Cumulative production of oil from proven fields in the South Florida Basin, including fields in the Sunniland Formation, is estimated to be in excess of 160 million barrels. Estimates from the U.S. Geological Service (USGS) indicate that 25 new fields capable of producing five million barrels of oil each are expected to be found within the Lower Cretaceous Shoal Reef Oil Assessment Unit, which extends into the Kanter property. Estimates of the potential reserves reach as high as an additional 200 million barrels of oil. The Dollar Bay Formation Another formation that has potential for oil production is the Lower Cretaceous Dollar Bay Formation, also in the South Florida Basin. The Dollar Bay Formation exists beneath the Kanter property at a shallower depth than the Sunniland Formation, generally at a depth of 10,000 feet in the vicinity of the Well Site. Most of the Dollar Bay prospects are on the east side of the South Florida Basin. Most of the wells in the South Florida Basin are on the west side. Thus, there has not been much in the way of exploration in the Dollar Bay Formation, so there is a lack of data on traps. Dollar Bay has been identified as a known oil-bearing play by the USGS. It is a self-source play, so the source comes from the Dollar Bay Formation itself. Dollar Bay exists both as potential and mature rock. It has known areas of very high total organic content (TOC) source rock; logged reservoir in the formation; and seal rock. There have been three oil finds in the Dollar Bay formation, with at least one commercial production well. Kanter will have to drill through the Dollar Bay Formation to get to the Upper Sunniland formation, thus allowing for the collection of information as to the production potential of the prospect. Although Dollar Bay is not generally the main “target” of the Permit, its potential is not zero. Thus, consideration of the Dollar Bay Formation as a factor in the calculation of risk/success that goes into the decision to drill an exploratory well is appropriate. Initial Exploratory Activities In 1989, Shell Western E&P, Inc. (Shell), conducted extensive seismic exploration in south Florida. Among the areas subject to seismic mapping were two lines -- one line of 36,000 feet mapped along the L67-A levee, directly alongside the Well Site, and the other of approximately 10 miles in length along the Miami Canal levee. The lines intersect on the Kanter property just north of the Well Site. The proposed exploration well is proposed to extend less than 12,000 feet deep. The seismic mapping performed by Shell was capable of producing useful data to that depth. The seismic methodology utilized by Shell produced data with a high degree of vertical and spatial resolution. Given its quality, the Shell data is very reliable. Shell did not use the seismic data generated in the 1980s, and ultimately abandoned activity in the area in favor of larger prospects, leaving the smaller fields typical of south Florida for smaller independent oil companies. The Shell seismic data was purchased by Seismic Exchange, a data brokerage company. In 2014, Kanter purchased the seismic data from Seismic Exchange for the lines that ran through its property. With the purchase, Kanter received the original field tapes, the support data, including surveyors’ notes and observer sheets which describe how the data was acquired, and the recorded data. As a result of advances in computer analysis since the data was collected, the seismic data can be more easily and accurately evaluated. It is not unusual for companies to make decisions on whether to proceed with exploration wells with two lines of seismic data. Mr. Lakin reviewed the data, and concluded that it showed a very promising area in the vicinity of the L67-A levee that was, in his opinion, sufficient to continue with permitting an exploratory oil well. Mr. Lakin described the seismic information in support of the Application as “excellent data,” an assessment that is well-supported and accepted. Mr. Pollister reviewed the two lines of seismic data and opined that the information supports a conclusion that the site is a “great prospect” for producing oil in such quantities as to warrant the exploration and extraction of such products on a commercially profitable basis. Seismic Data Analysis The seismic lines purchased by Kanter consist of line 970, which runs southwest to northeast along the L67-A levee, and a portion of line 998, which runs from northwest to southeast along the Miami Canal levee. The lines intersect at the intersection of the two levees. The data depicts, among others, the seismic reflection from the strata of the Sunniland Trend, and the seismic reflection from the basement. The depiction of the Sunniland Trend shows a discernable rise in the level of the strata, underlain by a corresponding rise in the basement strata. This rise is known as an anticline. An anticline is a location along a geologic strata at which there is an upheaval that tends to form one of the simplest oil traps that one can find using seismic data. In the South Florida Basin, anticlines are typically associated with mounded bioherms. A “closed structure” is an anticline, or structural high, with a syncline, or dip, in every direction. A closed structure, though preferable, is not required in order for there to be an effective trap. Most of the Sunniland oil fields do not have complete closure. They are, instead, stratigraphic traps, in which the formation continues to dip up and does not “roll over.” Where the rock type changes from nonporous to porous and back to nonporous, oil can become trapped in the porous portion of the interval even without “closure.” Thus, even if the “bowl” is tilted, it can still act as a trap. Complete closure is not necessary in much of the Sunniland Trend given the presence of an effective anhydrite layer to form an effective seal.5/ The seismic data of the Kanter property depicts an anticline in the Sunniland Formation that is centered beneath the Well Site at a depth in the range of 12,000 feet bls. Coming off of the anticline is a discernable syncline, or dip in the underlying rock. Applying the analogies used by various witnesses, the anticline would represent the top of the inverted bowl, and the syncline would represent the lip of the bowl. The evidence of the syncline appears in both seismic lines. The Shell seismic data also shows an anhydrite layer above the Sunniland Formation anticline. The same anticline exists at the basement level at a depth of 17,000 to 18,000 feet bls. The existence of the Sunniland formation anticline supported by the basement anticline, along with a thinning of the interval between those formations at the center point, provides support for the data reliably depicting the existence of a valid anticline. A basement-supported anticline is a key indicator of an oil trap, and is a feature commonly relied upon by geophysicists as being indicative of a structure that is favorable for oil production. The seismic data shows approximately 65 feet of total relief from the bottom to the top of the anticline structure, with 50 feet being closed on the back side. The 50 feet of closed anticline appears to extend over approximately 900 acres. There is evidence of other anticlines as one moves northeast along line 970. However, that data is not as strong as that for the structure beneath the Well Site. Though it would constitute a “lead,” that more incomplete data would generally not itself support a current recommendation to drill and, in any event, those other areas are not the subject of the permit at issue. The anticline beneath the well site is a “prospect,” which is an area with geological characteristics that are reasonably predicted to be commercially profitable. In the opinion of Mr. Lakin, the prospect at the location of the proposed Well Site has “everything that I would want to have to recommend drilling the well,” without a need for additional seismic data. His opinion is supported by a preponderance of the evidence, and is credited. Confirmation of the geology and thickness of the reservoir is the purpose of the exploratory well, with the expectation that well logs will provide such confirmation. Risk Analysis Beginning in the 1970s, the oil and gas industry began to develop a business technique for assessing the risk, i.e., the chance of failure, to apply to decisions being made on drilling exploration wells. Since the seminal work by Bob McGill, a systematic science has developed. In 1992, a manual was published with works from several authors. The 1992 manual included a methodology developed by Rose & Associates for assessing risk on prospects. The original author, Pete Rose,6/ is one of the foremost authorities on exploration risk. The Rose assessment method is a very strong mathematical methodology to fairly evaluate a prospect. The Rose method takes aspects that could contribute to finding an oil prospect, evaluates each element, and places it in its perspective. The Rose prospect analysis has been refined over the years, and is generally accepted as an industry standard. The 1992 manual also included a methodology for assessing both plays and prospects developed by David White. The following year, Mr. White published a separate manual on play and prospect analysis. The play and prospect analysis is similar to the Rose method in that both apply mathematical formulas to factors shown to be indicative of the presence of oil. Play and prospect analysis has been applied by much of the oil and gas industry, is used by the USGS in combining play and prospect analysis, and is being incorporated by Rose & Associates in its classes. The evidence is convincing that the White play and prospect analysis taught by Mr. Aldrich is a reasonable and accepted methodology capable of assessing the risk inherent in exploratory drilling. Risk analysis for plays and prospects consists of four primary factors: the trap; the reservoir; the source; and preservation and recovery. Each of the four factors has three separate characteristics. Numeric scores are assigned to each of the factors based on seismic data; published maps and materials; well data, subsurface data, and evidence from other plays and prospects; and other available information. Chance of success is calculated based on the quantity and quality of the data supporting the various factors to determine the likelihood that the prospect will produce flowable hydrocarbons. The analysis and scoring performed by Mr. Aldrich is found to be a reasonable and factually supported assessment of the risk associated with each of the prospects that exist beneath the proposed Well Site and that are the subject of the Application.7/ However, Mr. Aldrich included in his calculation an assessment of the Lower Sunniland Formation. The proposed well is to terminate at a depth of 11,800 feet bls, which is within the Upper Sunniland, but above the Lower Sunniland. Thus, although the Lower Sunniland would share the same source rock, the exploration well will not provide confirmation of the presence of oil. Therefore, it is more appropriate to perform the mathematical calculation to determine the likelihood of success without consideration of the Lower Sunniland prospect. To summarize Mr. Aldrich’s calculation, he assigned a four-percent chance of success at the Well Site for the Dollar Bay prospect. The assignment of the numeric scores for the Dollar Bay factors was reasonable and supported by the evidence. Mr. Aldrich assigned a 20-percent chance of success at the Well Site for the Upper Sunniland play. The assignment of the numeric scores for the Upper Sunniland factors was reasonable and supported by the evidence. In order to calculate the overall chance of success for the proposed Kanter exploratory well, the assessment method requires consideration of the “flip side” of the calculated chances of success, i.e., the chance of failure for each of the prospects. A four-percent chance of success for Dollar Bay means there is a 96-percent (0.96) chance of failure, i.e., that a commercial zone will not be discovered; and with a 20-percent chance of success for the Upper Sunniland, there is an 80-percent (0.80) chance of failure. Multiplying those factors, i.e., .96 x .80, results in a product of .77, or 77 percent, which is the chance that the well will be completely dry in all three zones. Thus, under the industry-accepted means of risk assessment, the 77-percent chance of failure means that there is a 23-percent chance of success, i.e., that at least one zone will be productive. A 23-percent chance that an exploratory well will be productive, though lower than the figure calculated by Mr. Aldrich,8/ is, in the field of oil exploration and production, a very high chance of success, well above the seven-percent average for prospecting wells previously permitted by the Department (as testified to by Mr. Linero) and exceeding the 10- to 15-percent chance of success that most large oil companies are looking for in order to proceed with an exploratory well drilling project (as testified to by Mr. Preston). Thus, the data for the Kanter Well Site demonstrates that there is a strong indication of a likelihood of the presence of oil at the Well Site. Commercial Profitability Commercial profitability takes into account all of the costs involved in a project, including transportation and development costs. Mr. Aldrich testified that the Kanter project would be commercially self-supporting if it produced 100,000 barrels at $50.00 per barrel. His testimony was unrebutted, and is accepted. The evidence in this case supports a finding that reserves could range from an optimistic estimate of 3 to 10 million barrels, to a very (perhaps unreasonably) conservative estimate of 200 barrels per acre over 900 acres, or 180,000 barrels. In either event, the preponderance of the evidence adduced at the hearing establishes an indicated likelihood of the presence of oil in such quantities as to warrant its exploration and extraction on a commercially profitable basis.9/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Environmental Protection enter a final order: Approving the Application for Oil and Gas Drilling Permit No. OG 1366 with the conditions agreed upon and stipulated to by Petitioner, including a condition requiring that if water is to be transported on-site, it will add additional tanks for the purpose of meeting water needs that would arise during the drilling process, and a condition prohibiting fracking; and Approving the application for Environmental Resource Permit No. 06-0336409-001. DONE AND ENTERED this 10th day of October, 2017, in Tallahassee, Leon County, Florida. S E. GARY EARLY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 10th day of October, 2017.
The Issue The issues in this case concern the question of whether implementation of the consent agreement threatens the substantial interests of Petitioners in the surface waters and ground water resources at and around Seaboard's used oil facility located off Route 314A in Oklawaha, Marion County, Florida. Petitioner, State of Florida, Department of Environmental Regulation, gave public notice of its intent to implement a consent agreement with Respondent. The other Petitioners opposed the agreement asserting that the waters of the State were threatened by the agreement and requested a final hearing.
Findings Of Fact On March 7, 1988, Seaboard's used oil facility located off Route 314A in Oklawaha, Marion County, Florida, on Little Lake Bryant was inspected by a DER representative. At the time of the inspection pools of used oil were observed on the ground. Four 4,000 gallon above-ground tanks were being used to store used oil. Additionally, several old tank-truck bodies were used to store petroleum produces. These tanks did not have an impervious containment area to prevent used oil from spilling directly onto the ground and to prevent free runoff of precipitation. An underground tank (made from a septic tank) was being used to temporarily store water contaminated with used oil, which was gravity drained from the bottom of the used oil transport trucks. No impervious containment existed around the opening of the underground tank to prevent any spillage during transfer from directly reaching the ground. The underground tank was plugged and has no connection to a drain field. This tank is located in a flood plain. A 2,000 gallon above-ground tank and a 3,000 gallon above-ground tank were used to store water contaminated with used oil from the pumped underground tank. DER, in response to the March 7, 1988 inspection and subsequent site visits, negotiated a consent agreement with Seaboard. The consent agreement was executed on March 30, 1989 by Seaboard and filed with DER's Clerk on April 12, 1989. A copy of the consent agreement may be found as DER's Exhibit 1 admitted into evidence. The consent agreement specifies corrective actions to be taken by Seaboard, subject to DER approval, in order to address the problems identified at Seaboard's used oil facility. Paragraph 10 of the consent agreement addresses protection against spills directly reaching the ground. Impervious containment is required by the agreement for all above-ground used oil storage tanks but not the old truck bodies. Impervious containment is required for product transfer areas where transport trucks, pumps and hoses would operate, but not in the vicinity of the old truck bodies. A concrete containment dike surrounding the above-ground tanks is required to control drainage of rain, snow, sleet, fog, etc., but not around the truck bodies. (DER's Exhibit 1). The concrete pads already poured by Respondent are not impervious and the sides of these containment areas are not high enough to contain a major tank failure. Paragraph 11 of the consent agreement addresses operation of the underground tank in order to prevent leaks. Seaboard is required to provide protection against spillage during product transfer between transport trucks and the underground tank and provide for cleanup of spilled material. Nothing addresses the problems of the tank lying in a flood plain. (DER's Exhibit 1). Paragraph 12 of the consent agreement requires Seaboard to implement "Preliminary Contamination Assessment Actions". These actions provide the framework for determining if the problems identified at Seaboard's used oil facility have resulted in contamination of the soil, surface waters and ground water. The actions required are subject to prior DER approval. The actions represent standard conduct in these and similar types of cases. (DER's Exhibit 1). If the surveys and tests required by the agreement indicate soil, sediment, surface water or ground water contamination, DER can pursue any or all of the following: (1) institute an administrative proceeding requiring further assessment and cleanup; (2) institute a civil action in circuit court; or (3) perform the necessary corrective actions at the facility and recover the costs of such actions from Respondent, Seaboard. (DER's Exhibit 1). Notice was given of DER's proposed consent agreement with Seaboard by publication in the Ocala Star Banner of August 10, 1989. The Petitioners live around Little Lake Bryant, Oklawaha, Florida, where Seaboard's used oil facility is located. The Petitioners timely filed the petitions leading to the present hearing. The Petitioners are Helen V. Pierce, Mr. and Mrs. Marvin Pierce, Mr. and Mrs. Maurice Warner, Mr. and Mrs. Robert J. Painter, Sr., Mr. and Mrs. William E. Hartman, Mr. and Mrs. Bruce Hallman, Mr. Robert J. Painter, Jr., Mr. and Mrs. Elmer Weinheimer, Mr. and Mrs. Henry Allan Gwin, Mr. and Mrs. Edwin Jones, and Mr. and Mrs. Daryl N. Driscoll. Mr. and Mrs. Elmer Weinheimer and Mr. and Mrs. Marvin Pierce, Petitioners in this case, did not attend the hearing. The other Petitioners attended the hearing. Introduction of waste oil into the waters of Little Lake Bryant would endanger the waters of the lake around which all of the Petitioners live. They use this lake for recreational purposes.
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 DER enter a Final Order approving a consent agreement incorporating the following four recommendations: installation of impervious areas with high enough walls to retard a spill under all tanks; removal of the underground tank from the flood plain; installation of monitoring wells in sufficient quantity in new and old areas; and frequent inspection. DONE AND ORDERED this 24th day of January, 1990, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of January, 1990. COPIES FURNISHED: Mr. Dale H. Twachtmann Secretary Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, FL 32399-2400 Daniel H. Thompson, Esq. General Counsel Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, FL 32399-2400 Otis Ted Holly Route 4, Box 851 Silver Springs, FL 32688 Francine M. Ffolkes, Esq. Assistant General Counsel Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, FL 32399-2400 Elbert Gray Route 1, Box 1293A Oklawaha, FL 32679 =================================================================
The Issue Whether Alachua County Environmental Protection Department discriminated against Tilak B. Shrestha based upon his race or national origin, in violation of Title VII of the Federal Civil Rights Act of 1964 and the Florida Civil Rights Act of 1992, by releasing Mr. Shrestha from his temporary assignment through Temp Force with the Alachua County Environmental Protection Department and by not hiring Mr. Shrestha for the position of Senior Environmental Specialist within the Alachua County Environmental Protection Department.
Findings Of Fact The State of Florida funds the Petroleum Cleanup Program (Petroleum Program) which is focused on removing petroleum contaminants from various sites within the State of Florida. The Department of Environmental Protection (DEP) administers the Petroleum Program, also known as the Underground Storage Cleanup Program. In 12 counties, including Alachua, Florida contracts with the county to manage the Petroleum Program. The Alachua County Environmental Protection Department (Alachua DEP) manages the Petroleum Cleanup sites in Alachua County. Mr. Chris Bird has been the director of the Petroleum Program since 1993. He has worked with Alachua County since 1986. In the 1994-1995 fiscal year, the Florida Legislature was facing a deficit; therefore, the Legislature significantly reduced the funding for the Petroleum Program. As a result, DEP froze the Petroleum Program, and dropped several active sites. The lack of funding resulted in downsizing at both the county and state levels at the beginning of 1995. At the beginning of 1995, the Alachua DEP had three funded positions in the Petroleum Program. Mr. Alex Vieira occupied the position of full-time Professional Engineer. The Alachua DEP also had funding for an administrative position and a full-time Environmental Engineer/Geologist. The Environmental Engineer/Geologist position was vacant at the beginning of 1995. The Alachua DEP originally advertised for the position. However, when the State reduced funding for the Petroleum Program, the Alachua DEP decided not to fill the position with a permanent employee and ultimately froze this permanent position. In order for the Petroleum Program to continue at a minimum level of operation, the Alachua DEP hired temporary employees through Temp Force, a temporary employment agency. Temp Force served as an independent contractor for the Alachua DEP. Temp Force provided Mr. Tilak Shrestha and Mr. Mike Shuler to the Alachua DEP Petroleum Cleanup Program. Mr. Shuler began working at the Alachua DEP through Temp Force two months prior to Mr. Shrestha's Temp Force assignment to the Petroleum Program. At the time of the assignment through Temp Force, Shrestha was not credentialed as a Ph.D. Mr. Shrestha and Mr. Shuler were employees of Temp Force, received their paychecks from Temp Force and acquired no benefits from Alachua County. Mr. Shrestha worked as a Temp Force employee for six months at Alachua DEP and was assigned to various projects at the Alachua DEP. As supervisor for the Petroleum Program, Mr. Vieira assigned projects to both Mr. Shrestha and Mr. Shuler. Mr. Shrestha described his working conditions during his assignment through Temp Force with the Alachua DEP as "good, no complaints," and "good on average." In 1995, the Florida legislature ultimately reduced funding for the Petroleum Program from $1.2 million to approximately $250,000. When the Alachua DEP received notice of these funding cuts, Mr. Bird advised Mr. Vieira that he needed to release one of the Temp Force employees from his assignment with the Alachua DEP. Mr. Vieira retained Mr. Shuler and informed Mr. Shrestha that he would no longer be working on the Petroleum Cleanup assignment through Temp Force. Mr. Shrestha's assignment through Temp Force with the Alachua DEP was terminated on August 10, 1995. During Fall 1995, the legislature substantially changed the law and administration pertaining to the Petroleum Program, both at the county and state levels. In October 1995, Ms. Pegeen Hanrahan became the Petroleum Program supervisor following Mr. Vieira's resignation. Ms. Hanrahan earned a Bachelor's degree in Environmental Engineering and Sociology and a Master's degree in Environmental Engineering. She is a registered Professional Engineer and a certified Hazardous Materials Manager. She began working for Alachua County in 1992 as an Environmental Engineer and later served for three years as Hazardous Materials Program Supervisor for Alachua County. When Ms. Hanrahan became supervisor of the Petroleum Program in Fall 1995, the Petroleum Program had essentially entered a "stand-by" mode. The Alachua DEP declined to send any additional work to its sub-contractors. Therefore, the technical duties involved in the Petroleum Program were reduced and the administrative duties became more important. During the Fall of 1995, there were no permanent employees on staff. Mr. Shuler remained as the only temporary employee in the Petroleum Program and according to Ms. Hanrahan was doing a "perfectly adequate job." Based on the new and reduced Petroleum Program budget for the 1995-1996 fiscal year, the Alachua DEP acted in October 1995 to establish the position of Senior Environmental Specialist in lieu of the Environmental Engineer/Geologist position. The position was advertised in December 1995. The main role of the Senior Environmental Specialist was to assist the Professional Engineer in the area of the administration involved in the Petroleum Program. The duties included filing reports, tracking sites, and submitting task orders and invoices to the office in Tallahassee. Due to the increasing changes in the Petroleum Program, the Alachua DEP required a Senior Environmental Specialist who understood the Petroleum Program's administrative tasks, as well as the State policies pertaining to the Petroleum Program. The Senior Environmental Specialist candidate was required to have a technical background in fields including, but not limited to, engineering, biology or geology. The Professional Engineer, not the Specialist, was assigned the technical review of the Petroleum Program. An applicant's understanding of the technical and administrative duties was necessary. In 1995, the Alachua DEP advertised the position of Senior Environmental Specialist, which included printing an advertisement in the local newspaper, per the County regulations. The Alachua DEP described the administrative tasks of Senior Environmental Specialist to include: preparing reports; making recommendations; receiving and investigating complaints; conducting performance evaluations; counseling, hiring and terminating employees. The Alachua DEP described the knowledge, skills, and abilities of the Senior Environmental Specialist to include: thorough knowledge of the technical methods and procedures involved in the administration of environmental regulations, programs, and policies; knowledge of local, state, and federal rules, regulations, and ordinances related to environmental protection; ability to create concise, clear, and succinct technical reports; and ability to research technical problems, formulate recommendations, and compile related reports. The Alachua DEP described the minimum qualifications for the position of Senior Environmental Specialist as: Bachelor's degree in environmental or natural science, civil or environmental engineering, geology, or hydrology, or related field, and two years' professional level environmental-related experience; or any equivalent combination of related training and experience. The County received 14 applications for the position as Senior Environmental Specialist from applicants, which included Mr. Shrestha and Mr. Shuler. Ms. Hanrahan was supervisor of the Petroleum Program in January 1996 and responsible for the hiring of the Senior Environmental Specialist. She received an Application Referral Document from personnel, stating that each of the applicants met the County's minimum requirements for the position of Senior Environmental Specialist. Upon receipt of the re?sume's and applications, Ms. Hanrahan initially screened the applicants for those who had petroleum-related experience. She narrowed the applicants to four individuals, who included Mr. Shrestha, Mr. Shuler, and two others. On January 22, 1996, Ms. Hanrahan conducted a telephone interview of each of the four applicants who passed the initial screening. The telephone interview was customary hiring practice within the Alachua DEP. During the telephone interview, Ms. Hanrahan asked each applicant the same series of ten questions, designed to test the applicant's level of knowledge regarding technical and administrative aspects of the position of Senior Environmental Specialist. Mr. Shrestha answered five out of a possible eleven answers correctly. This was the second highest score out of the four applicants. Shuler achieved the highest score, answering eight-and-one-half out of eleven answers correctly. Three interview questions specifically addressed administrative issues. Question six asked, "What does RBCA stand for?" Question seven stated, "This year the Florida Petroleum Cleanup Program has adopted a new mechanism for review and approval of work on petroleum contaminated sites. Can you tell me what that program is called?" Question nine stated, "Give two examples of policy decisions under RBCA." Mr. Shrestha failed to answer question six, seven or nine correctly. Mr. Shrestha's failure to correctly answer each of the administrative questions indicated to Ms. Hanrahan that he was unaware of the changes within the Petroleum Program. Another purpose of the telephone interview was to assess the applicants under pressure. Ms. Hanrahan also sought to evaluate how the applicants responded to her authority. During the telephone interview, Mr. Shrestha challenged Ms. Hanrahan regarding the relevance of the questions to the position of Senior Environmental Specialist and she noted his argumentative attitude during the interview. He conceded at the hearing that he did ask her about the relevancy of the questions. Based upon his argumentative tone, Ms. Hanrahan questioned Mr. Shrestha about his ability to accept her supervisory decisions. She decided not to hire Mr. Shrestha for the position of Senior Environmental Specialist based on his limited knowledge of the administration of the Petroleum Program, a factor essential to the position of Senior Environmental Specialist, and his inability to accept her authority as supervisor. Ms. Hanrahan was also aware of critical statements that Mr. Shrestha allegedly had made to female co-workers during his assignment through Temp Force at the Alachua DEP. Ms. Robin Hallbourg is currently employed as Senior Environmental Specialist with the Alachua DEP. Ms. Hallbourg has been with the Alachua County DEP for 15 years. Ms. Hallbourg worked with Mr. Shrestha at the Alachua DEP during Mr. Shrestha's assignment through Temp Force. Ms. Hallbourg testified that Mr. Shrestha told her that "she should be home with her child" and that she "should allow a man to have her job." After this conversation, Ms. Hallbourg discussed his statements with others in the Alachua DEP, including Ms. Hanrahan. Ms. Hanrahan recalled the discussion with her. Ms. Hanrahan hired Mr. Shuler for the position of Senior Environmental Specialist because he proved himself to be the most qualified candidate during the interview process. Ms. Hanrahan kept an interview log on which she noted Mr. Shuler's strong qualifications for the position of Senior Environmental Specialist. She noted his "excellent experience in the Petroleum Cleanup Program and his significant applicable training and experience in program administration." Ms. Hanrahan also noted that his "application and interview showed strong computer skills." Mr. Shuler's Bachelor's degree in Microbiology met the education requirements for the position of Senior Environmental Specialist. Moreover, at the time of Shuler's application, there had been a growing emphasis placed on bi-remediation, which is currently a regularly used process. Given Ms. Hanrahan's education, training,and experience as a Professional Engineer, she determined that a Bachelor's degree in Microbiology was an appropriate background for the position. In addition, Mr. Shuler had the technical knowledge of processes, performance of groundwater sampling, and drilling, as well as other relevant technical knowledge pertaining to the position of Senior Environmental Specialist. Additionally, due to his continued assignment in the Alachua DEP, he was aware of the new administrative duties required of a Senior Environmental Specialist. Ms. Hanrahan had personally observed Mr. Shuler from October 1995 until January 1996, and was extremely satisfied with his performance. As part of the usual hiring process, Ms. Hanrahan submitted her interview log, personnel action form, and applications to the personnel department to support her hiring decision. Mr. Bird approved the hiring decision in his capacity as director, and the personnel department, budget department, and Equal Employment Office then approved the decision. Since his hire, Mr. Shuler has been commended by the Alachua DEP and his supervisors. Ms. Hanrahan informed Mr. Shrestha that he had not been hired for the position during a telephone conversation on January 23, 1996. She did not base her decision to hire Mr. Shuler over Mr. Shrestha on the basis of race or national origin. Ms. Hanrahan is fully aware of Alachua County's Equal Employment Opportunity policy through her position as advisor on the Equal Opportunity Advisory Committee. There is no evidence of any discriminatory hiring decision. In fact, on the same day that Ms. Hanrahan hired Mr. Shuler for the position of Senior Environmental Specialist, she also hired Mr. Gus Olmos for the position of Environmental Engineering Supervisor. Mr. Olmos is from Panama and is Hispanic. Moreover, Dr. Prasad Kuchibhotla is a Professional Engineer with a Bachelor's, Master's and Ph.D. in Chemical Engineering. He is from India and is Asian. Alachua County hired Dr. Kuchibhotla in 1997 and is the current Petroleum Cleanup Program Manager for Alachua DEP. Dr. Kuchibhotla currently has a Senior Environmental Specialist working for him within the Petroleum Program. As was the case in December 1995, the current Specialist's primary duty is to assist him with the detailed administrative tasks involved with the Petroleum Program. On January 27, 1997, Mr. Shrestha filed a formal Charge of Discrimination. The charge was date stamped as received by the Florida Commission on Human Relations on January 30, 1997. Mr. Shrestha is currently employed with Bell South in Atlanta, Georgia. He earns $47,000 per year and receives health benefits.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order finding that Petitioner, Tilak B. Shrestha is not entitled to any relief relating to his charge of discrimination under Title VII of the Federal Civil Rights Act of 1964 and the Florida Civil Rights Act of 1992. DONE AND ENTERED this 2nd day of August, 2000, in Tallahassee, Leon County, Florida. WILLIAM R. PFEIFFER 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 2nd day of August, 2000. COPIES FURNISHED: Tilak B. Shrestha 3579-C Meadowglen Village Lane Doraville, Georgia 30340 Robert M. Ott, Esquire County Litigation Attorney Post Office Box 2877 Gainesville, Florida 32602 Sharon Moultry, Clerk Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32303-4149 Dana A. Baird, General Counsel Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32303-4149
Findings Of Fact Hurricane Andrew and its Aftermath Hurricane Andrew struck Dade County on August 24, 1992. It was a Category 4 hurricane, packing sustained winds of between 131 and 155 miles per hour with higher gusts particularly in vertical swirls along the eye wall and microbursts, which are downbursts associated with thunderstorms imbedded within the hurricane. Andrew's eye crossed Elliott Key and made landfall on the Florida peninsula near the Homestead Air Force Base. Andrew tracked in an approximately westerly direction across Dade County, its eye passing north of Homestead. Property damage from Andrew caused approximately $18 billion of insurance claims. Several personal lines residential property and casualty insurance companies went bankrupt. The Legislature authorized the Florida Insurance Guaranty Association (FIGA) to float almost $500 million of bonds to finance payment of claims to insureds whose insurers could not pay. In addition to the companies that were forced out of business, several others took steps to reduce their exposure in Florida. In order to secure coverage for Floridians, the Legislature created the Florida Property and Casualty Joint Underwriting Assocation (the JUA). Eight insurers service the JUA, and the JUA's losses are underwritten by all of the approximately 185 insurance companies writing personal lines residential property and casualty insurance in Florida. Each company underwrites a share of the losses in proportion to their share of the business written in the voluntary market in Florida. In the aggregate, these companies have between $30 billion and $40 billion of policyholder surplus for the payment of claims against the JUA. Insurers continued to notify the Department of their intention to reduce their risks in Florida. By May 19, 1993, the Department had in its possession notifications from insurers of intent to cancel or nonrenew approximately 800,000 policies. The Department was concerned that, since each company writing business in the voluntary market underwrites a share of JUA losses in proportion to the company's share of the voluntary market, a vicious cycle was in operation: as more policies in the voluntary market were cancelled or nonrenewed, and assigned to the the JUA, the share of a company's exposure to JUA risk increased to the extent that the company did not also cancel or nonrenew, creating an incentive to cancel or nonrenew policies on the voluntary market that was difficult to control. On May 19, 1993, the Department of Insurance promulgated emergency rule 4 ER93-18 (ER 18). ER 18 recited as some of the Department's specific reasons for finding an immediate danger to the public health, safety or welfare: 4. No change has occurred in the risk characteristics of Florida policyholders. Although Hurricane Andrew was devastating to all parties involved, major hurricanes are random events and the risk of another major hurricane making landfall in a heavily populated area of Florida is no greater now than all of the years in which premiums were charged and no hurricanse occurred. According to insurance industry data, there have been 10 hurricanes in Florida with maximum wind speeds over 135 miles per hour [Andrew intensity or greater] from 1871 to 1992, with an additional 13 hurricanes making land fall in Florida during this period with maximum wind speeds of 116 to 135 miles per hour [approximately Category 3]. Thus, it is clear that the claims arising from Hurricane Andrew are in reality the impetus for proposed action by insurers. * * * 7. . . .. Furthermore, the FRPCJUA was designedto insure people whose insurer became insolvent or who are new homeowners seeking coverage. It was not designed to additionally process and insure hundreds of thousands of people arbitrarily abandoned by their insurers purely due to fear of hurricane exposure. In other words, the FRPCJUA was not designed as a "dumping ground" for insurers. * * * 9. Until empirical and scientifically verifiable hurricane projections are demonstrated which proves an insurer's solvency is jeopardized, the burden should be borne by insurers through cancellation or nonrenewal. Hurricane season begins June 1. There is immediate need to maintain the status quo to assure consumer protection from unlawful behavior. ER 18(3) imposed a 90-day moratorium on cancellations and non-renewals of personal lines residential property insurance on the basis of risk of hurricane claims. ER 18(4) provided: "This rule shall not apply if the insurer can affirmatively demonstrate to the Department that the proposed cancellation or nonrenewal is necessary for the insurer to avoid an unreasonable risk of insolvency." The PRUPAC Application The Prudential Property and Casualty Insurance Company of Indiana (PRUPAC) was one of the companies that had notified the Department that it wanted to initiate a plan to reduce its risks in Florida. It had a relatively high concentration of risk in Dade County at the time Andrew struck and was hard hit financially. It incurred approximately $1.3 billion of gross covered losses as a result of Andrew. Even after PRUPAC utilized all of its available reinsurance benefits, the losses far exceeded PRUPAC's entire policyholder surplus of approximately $578 million. In order to pay the remaining claims and restore the company's surplus to approximately $671 million at the end of 1992, PRUPAC's parent companies infused $900 million of capital into PRUPAC. The day after ER 18 went into effect, PRUPAC applied for an exemption from the moratorium under ER 18(4). PRUPAC's application asserted that, if another storm of approximately Andrew's intensity made landfall just north of Andrew's landfall and followed a slightly more northerly track, the company's gross losses would be approximately $1.5 billion. It called this its "probable maximum loss" from such an occurrence. The application requested an exemption from the moratorium in order to proceed with a plan to reduce its losses from such a storm event to approximately $400 million by nonrenewing policies, primarily in Dade and Broward counties but also to a lesser extent in some other parts of the state. PRUPAC proposed to initiate its plan immediately so that, by the end of 1993, it would have nonrenewed approximately 25,000 policies in Dade and Broward counties and approximately 5,000 policies elsewhere in the state. Essentially these nonrenewals would effect a reduction in the company's alleged PML in Dade and Broward counties from $1.3 billion to $400 million. (Other features of PRUPAC's plan are not relevant to this case.) Under the plan proposed its application, PRUPAC would nonrenew approximately $3 million of exposure per day. PRUPAC based its application on a policyholder surplus of $700 million, rounded up from the 1992 year end figure of $671 million. As of June 30, 1993, PRUPAC's surplus stood at approximately $657 million. The Denial Letter The Department's August 10, 1993, denial letter concluded that "the proposed cancellations and nonrenewals are not necessary to avoid an unreasonable risk of insolvency." It also invited PRUPAC to resubmit a proposal in which the planned cancellations and nonrenewals are designed to reduce your exposure to that amount which, after calculating the effects of reinsurance, would reduce Prupac's probable maximum loss to an amount not in excess of its total surplus. In making any such subsequent proposal the following shall be considered: A plan for cancellation and nonrenewal that minimizes the market disruption and difficulty for Prupac's insureds; Availability of capital from the Prudential Insurance Company of America (the Prudential). If your proposal limits Prupac's ability to pay claims to its own resources, with no contribution from the Prudential, then Prupac shall provide verification that all sales, solicitation and advertising for Prupac in this state distinguish, in clear and unambiguous terms, between Prupac and the Prudential, and that none of the foregoing contains any suggestion that the Prudential's capital backs up Prupac's policies. The denial letter did not specifically mention that PRUPAC did not prove the likelihood of occurrence of the storm event on which its "probable maximum loss" was predicated. The Department contends that this concern was "inherent" in its consideration of PRUPAC's and all applications for exemptions from the moratorium. See Finding 25. Its ER 20(2)(b) certainly is strong evidence that the Department's position in this regard is not of recent vintage. Indeed, at least from the promulgation ER 20 on June 4, 1993, the Department consistently has contended that this issue should be considered in all exemption applications. The Department persuasively explained that it did not specifically mention PRUPAC's failure to prove the likelihood of occurrence of the storm event on which PRUPAC's application was based because the Department considered the general denial, coupled with the specifically-mentioned grounds for denial, to be sufficient. It denied having any intention to waive consideration of the likelihood of occurrence of the storm event on which PRUPAC's application was based. Similarly, the denial letter did not mention anything about the tax consequences of hurricane losses. However, the tax consequences of hurricane losses was discussed during the June 3, 1993, public hearing. (Pet. Ex. 8, p. 103). Again, the Department explained that the general denial, coupled with the specifically-mentioned grounds for denial, was considered to be sufficient. The Department denied having any intention to waive consideration of the the tax consequences of hurricane losses. "Probable Maximum Loss" and Related Concepts The concept of "probable maximum loss" is widely, though not universally, known in the property and casualty insurance business nationwide. It is a concept utilized to evaluate an insurer's concentration of risk. Generally, concentration of risk is evaluated by reference to the "probable maximum loss" a company should expect to incur if a natural catastrophe--such as a hurricane, earthquake or flood--of a given magnitude occurs in the area under consideration. In such an evaluation, the industry commonly assumes an event that approximates the most costly catastrophe that has occurred in the area. When it comes to evaluating concentration of risk, the industry has a general understanding of what is usually considered to be an "unreasonable risk of insolvency." It is when the "probable maximum loss" is more than 10-15 percent of the insurance company's surplus. This concept takes into account (1) that the risk being assessed is only one of many catastrophic risks to which an insurer is exposed and (2) that the company's surplus will be called to respond to all of its losses, no matter where in the nation they arise or how. PRUPAC's share of the personal lines residential property and casualty market in Dade and Broward counties is higher than its share anywhere else in Florida or anywhere in the country. It has approximately 8 percent of the market in those counties. Its overall share of the market in Florida is only 3 percent, and its share of the market nationwide is less. Given PRUPAC's current concentration of risk, if another storm of approximately Andrew's intensity made landfall just north of Andrew's landfall and followed a slightly more northerly track, PRUPAC's losses would be approximately $1.4 billion. Using computer modeling, the Natural Hazards Research Service projected that PRUPAC's losses from such an occurrence would total approximately $1.28 billion. (This is not surprising since the actual losses from Andrew were approximately $1.3 billion.) PRUPAC reasonably added a factor of ten percent for escalation of building costs, bringing the figure to approximately $1.4 billion. But the eight percent factor it added for an increased number of policies, bringing the figure to approximately $1.5 billion, was unreasonable since PRUPAC had no intention of increasing its policies in Florida. In utilizing the concept "probable maximum loss" in the context of evaluating concentration of risk, the likelihood of occurrence of the assumed catastrophic event clearly is not considered. In certain insurance contexts other than evaluation of concentration of risk, the concept "probable maximum loss" equates to "maximum probable loss" or "the worst loss that is likely to occur." These concepts come into play in rate-making and usually are not applied to catastrophic risks. Another related concept is "probability of ruin." This concept is similar to the rate-making concept of "maximum probable loss" in that the likelihood of the actual occurrence of the risk is considered. The related concepts of "maximum probable loss" and "probability of ruin" also are used by risk managers in evaluating how to fund retained risk or how much insurance to purchase. The Department takes the position "probable maximum loss," as used in the moratorium statute, means "maximum probable loss" and that it contemplates an evaluation of the likelihood of the actual occurrence of the risk being considered. The Department also contends that, like its concept of "probable maximum loss," in the context of the moratorium statute, "unreasonable risk of insolvency" means that insolvency is not just a possible outcome, but is in fact the probable outcome, of a denial of exemption. As the Department would apply the term to the moratorium statute, loss scenarios that depend for their fulfillment upon the occurrence of statistically unlikely events would not constitute an "unreasonable risk of insolvency." It is clear that "insolvency" generally is known to mean an excess of liabilities over assets. Accordingly, the Department's position is that, to prove an "unreasonable risk of insolvency," an insurer not only would have to prove the likelihood of the occurrence of the event that would result in the "probable maximum loss," but also would have to prove that the losses would approximate the company's total surplus. The Department granted five of the 30 applications for exemption that it considered. Only one of the five included evidence on the probability of the occurrence of the storm event that allegedly would result in an unreasonable risk of insolvency, and that company alleged that there probably would not be another "Andrew" in another thousand years. But all five applications were filed by financially weak applicants. The Department concluded that, in the case of those five, "virtually any hurricane loss would have rendered the company unable to pay claims." Four of the five are now in receivership or are being seriously evaluated for a possible receivership action. Storm Probabilities The southeast Florida coast is the Florida (and United States) coastline most vulnerable to hurricanes. Yet the evidence was that, during the 122 years of recorded history, from 1871 through 1992, only seven hurricanes of Category 4 intensity (Andrew-like intensity) or greater have made "direct hits" on or "near misses" of Dade or Broward counties. (There were six Category 4 storms to do so, and one Category 5 storm to do so. There were 14 storms of unknown intensity to do so, but it is unlikely that they were Category 4 or Category 5 storms.) It is very unlikely that a Category 4 or 5 storm will make a direct hit on, or a near miss of, Dade or Broward county during any two consecutive hurricane seasons. Although there have been very few hurricanes of Andrew-like intensity to hit or nearly miss Dade and Broward counties, there were a total of 46 hurricanes, of all intensity levels, to do so from 1871 through 1992. It can be said that, given those odds, it is likely that one will do so during any two consecutive hurricane seasons. (In addition, there have been 35 tropical storms to hit or nearly miss Dade and Broward counties during the past 122 years.) PRUPAC's Reinsurance PRUPAC has reinsurance that would be payable in the event of another hurricane like Andrew. Since Andrew, reinsurance has become more difficult to obtain. PRUPAC has been able to obtain approximately $155 million of reinsurance coverage. None of the reinsurance coverage is payable until after PRUPAC pays approximately $35 million of retained risk. Then, only approximately 88 percent of the $155 million, or $136.4 million, is payable as reinsurance benefits to PRUPAC; the rest of the risk retained by PRUPAC. It is reasonable to round the reinsurance benefit to $140 million for purposes of comparing it to PRUPAC's losses in the event of another hurricane. In addition, PRUPAC is obligated to reinstate the coverage for the rest of the coverage year by repayment of a premium. The reinstatement premium would cost PRUPAC approximately $10 million. PRUPAC also has approximately $200 million of what is known as "funded reinsurance" or "funded cover." Under such a contract, PRUPAC pays a premium of approximately 20 percent of the face amount of the "cover." Approximately 20 percent of the premium represents the margin retained by the "reinsurer." The rest goes into an "experience fund." If a claim is made, PRUPAC would have to pay another premium to reinstate the coverage. The "reinsurer" would then be obligated to pay the claim. But, under the terms of the "funded cover," PRUPAC would have to contract to repay the "reinsurer" over the next four years. "Funded reinsurance" or "funded cover" does not shift any risk away from PRUPAC; it just extends PRUPAC a line of credit to pay claims. The Financial Accounting Standards Board recently ruled that "funded cover" does not qualify as reinsurance for purposes of evaluating an insurer's financial condition and solvency. A "Piece of the Rock"--The Prudential PRUPAC is owned by Pruco, a "downstream" holding company of The Prudential Life Insurance Company (the Prudential). The Prudential is a mutual life insurance company that is owned by its policyholders. It has approximately $10 billion of policyholder surplus, making it one of the largest insurance companies in the world. It makes investments on behalf of its policyholders, including its investment in PRUPAC, through Pruco. At PRUPAC's inception approximately 20 years ago, the Prudential capitalized PRUPAC with an initial investment of approximately $450 million. Until the aftermath of Andrew, relatively little in the way of money has been exchanged between the companies. The Prudential is a New Jersey company. The laws of New Jersey control the amount of money The Prudential can invest in a subsidiary such as PRUPAC. PRUPAC is domiciled in Indiana, and capital infusions from The Prudential to PRUPAC also would be subject to the Indiana insurance code and to the regulation of the Indiana insurance commissioner. Assuming The Prudential chose to do so, the evidence did not establish how much additional capital it could infuse into PRUPAC within the bounds of those constraints. Tax Consequences of Losses PRUPAC apparently got a federal income tax credit of approximately $300 million as a result of its $1.3 billion of losses to Andrew. (Pet. Ex. 8, p. 103). However, there also was evidence that PRUPAC was entitled to a credit in the amount of one-third of its $1.3 billion of hurricane losses. (Pet. Ex. 8, p. 102.) It is not clear why PRUPAC's actual credit was less than one-third of PRUPAC's actual losses from Andrew, and there was no further evidence on how the tax credit is calculated.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Insurance enter a final order granting PRUPAC's application, subject to the impact of the new legislation on the subject. RECOMMENDED this 12th day of November, 1993, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 12th day of November, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-5262 To comply with the requirements of Section 120.59(2), Fla. Stat. (1991), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. Accepted and incorporated. "1.5" is rejected; it was 1.4. and incorporated. Accepted and incorporated. "Much" is rejected as not proven. Otherwise, accepted but not necessary. "260" is rejected as not proven. (It does not account for tax credits.) Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. 6.-10. Accepted and incorporated to the extent not subordinate or unnecessary. Rejected as not proven that the Department's General Counsel "instructed" PRUPAC as to what its application should be or contain. Accepted that the Department's General Counsel offered procedural guidance on how to apply and accepted as to the contents of the application; those items are incorporated to the extent not subordinate or unnecessary. Accepted and incorporated to the extent not subordinate or unnecessary. (All five were in dire financial straits. Virtually any hurricane losses would lead to financial ruin.) 13.-14. Accepted and incorporated. First three sentences, accepted and incorporated to the extent not subordinate or unnecessary. Last sentence, rejected as to (2) and (3); accepted as to the rest. Incorporated to the extent not subordinate or unnecessary. Accepted but subordinate and unnecessary. First two sentences, accepted and incorporated to the extent not subordinate or unnecessary. Third sentence, rejected as to (2) and (3); accepted as to the rest. Incorporated to the extent not subordinate or unnecessary. Last sentence, rejected as not proven and as contrary to the findings of fact and the greater weight of the evidence. Accepted and incorporated to the extent not subordinate or unnecessary. Rejected as not proven and as contrary to the findings of fact and the greater weight of the evidence. There are probabilities based on historical fact. 20.-22. Accepted and incorporated to the extent not subordinate or unnecessary. Rejected as not proven as to "III"; otherwise, accepted and incorporated. "More than double" is rejected as not proven. (Accepted that the Department has stated that it would be more, but subordinate and unnecessary.) "Mere brush" is rejected as not proven. (Reference was being made to a storm that tracked north to south just off the Atlantic coast, thereby ravaging the entire coastline.) 26.-27. Accepted and incorporated. (This is done for purposes of evaluating concentration of catastrophic risk.) 28. Accepted but subordinate and unnecessary. 29.-30. Rejected as irrelevant. Regardless of how "extraordinary" they actually were, the "extraordinary circumstances" are the same ones that led the Legislature to enact the moratorium statute. PRUPAC's argument actually is that the facts were different than the Legislature thought. This may have been an argument to make in lobbying against the enactment of legislation, but it is not a good argument for PRUPAC's interpretation of the statute that has been enacted. Rejected. As to the first sentence, such evidence was offered. Besides, the burden of proof was on PRUPAC. The rest is rejected as being conclusion of law. Rejected. As to the first two sentences, such inquiries were made and such evidence was offered. Besides, the burden of proof was on PRUPAC. As for "considering" those matters, this is a de novo proceeding. See Conclusion of Law 48. The Department will not complete its "consideration" of them until it reviews this Recommended Order and enters and Final Order. Last sentence, accepted and incorporated. Penultimate sentence, rejected as being conclusion of law. The rest is rejected as contrary to the evidence. Also, the burden of proof was on PRUPAC. 34.-35. Accepted and incorporated. 36. Accepted but subordinate and unnecessary. Respondent's Proposed Findings of Fact. 1.-2. Accepted and incorporated. 3. "Compelled by a virtual tide" is rejected as argument. Also rejected that the legislative intent was "that such policies not be terminated." 4.-10. Accepted and incorporated. Rejected as contrary to facts found. Except for the amount, accepted and incorporated. Accepted but subordinate and unnecessary. Accepted and incorporated. 15.-17. Accepted but subordinate and unnecessary. Accepted and incorporated. Rejected that the reinsurance actually was $300 million. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. 20.-21. Accepted as accurately reciting his testimony. Rejected as to being the legislative intent. 22.-24. Accepted. Subordinate to facts found. Accepted but subordinate and unnecessary. Accepted and incorporated. Accepted and incorporated. However, subject to applicable laws. 28.-30. Accepted. Subordinate to some of the facts found. Otherwise, unnecessary. 31.-32. Accepted and incorporated. Accepted but subordinate and unnecessary. Accepted and incorporated. 35.-38. Accepted and incorporated to the extent not subordinate or unnecessary. 39.-41. Accepted to the extent subordinate to facts found. Rejected as not supported by the evidence. Rejected as contrary to facts found and contrary to the greater weight of the evidence. Rejected as contrary to facts found. Rejected as generally subordinate to facts contrary to those found and as being argument. Accepted and incorporated that Bernstein's testimony did not "take into account" the Legislature's perceptions. It was from the standpoint of evaluation concentration of catastrophic risk. But it was concluded that the Legislature meant for the words it chose to have the same meaning. Accepted to the extent facts and not conclusions of law. Rejected as to the truth of those matters. They were not proven in this proceeding. However, accepted and incorporated that both the Department and the Legislature had the perceptions that the JUA was not designed to handle all of the cancellations and nonrenewals that seemed to be coming and that a vicious cycle was in operation. First sentence, rejected as not proven; second sentence, accepted. Both irrelevant to this proceeding, subordinate and unnecessary. COPIES FURNISHED: Daniel C. Brown, Esquire Mitchell B. Haigler, Esquire Brian M. Nugent, Esquire Katz, Kutter, Haigler, Alderman, Davis, Marks & Bryant, P.A. Post Office Box 1877 Tallahassee, Florida 32302-1877 Nancy J. Aliff, Esquire Dennis Silverman, Esquire Department of Insurance and Treasurer Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0300 Honorable Tom Gallagher Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Bill O'Neil, Esquire General Counsel Department of Insurance and Treasurer The Capitol, PL-11 Tallahassee, Florida 32399-0300
The Issue The issue for determination is whether Petitioner is liable for the costs and expenses incurred by Respondent in responding to a pollutant discharge, occurring on November 6, 1992, at the waters off John Lloyd State Park, Dania, Florida, and for damages to natural resources resulting from the pollutant discharge.
Findings Of Fact On November 6, 1992, a DC-7 airplane crashed off the Atlantic Coast of Florida, more particularly, 100 yards from John Lloyd State Park, and one quarter of a mile north of Dania Pier in Dania, Florida. The DC-7 was a chartered cargo airplane and had departed from Miami International Airport. The DC-7 was chartered from Claudio Castillo by Miguel Delpino, United States General Manager of Aerochago Airlines, to carry cargo for Aerochago Airlines. Even though Aerochago Airlines owned aircraft, its aircraft was unavailable due to maintenance work being performed. During the flight from Miami International Airport, the DC-7 developed engine trouble, i.e., two of its engines failed. The aircraft began to lose altitude. In an attempt to regain altitude, the captain of the aircraft dumped 3,000 gallons of aviation fuel. However, the DC-7 failed to regain altitude and crashed. Remaining on the crashed aircraft were 3,000 gallons of aviation fuel and 150 gallons of motor oil. When the DC-7 crashed, only the crew and two passengers were on board. One of the passengers was Mr. Castillo. On the same day of the crash, the Florida Marine Patrol (FMP) of the Department of Natural Resources, now the Department of Environmental Protection (DEP), arrived at the crash scene at 3:20 a.m. and investigated the crash. The DEP had four employees investigating the crash: three FMP officers and one employee from the Office of Coastal Protection. The remaining aviation fuel and motor oil in the crashed DC-7 was discharging into the coastal waters. The DEP employees attempted to abate the discharge. The equipment necessary for the employees' investigation of the crash and abatement of the discharge and the cost for the equipment were the following: (a) a DEP vehicle at a cost of $7.00; (b) a twin engine vessel at a cost of $120.00; (c) an underwater sealant kit at a cost of $16.66; (d) scuba tanks at a cost of $9.00; and (e) photographs at a cost of $24.00. The total hours expended by DEP's four employees were 36 hours, at a cost of $685.84. Due to the DC-7 leaking aviation fuel and motor oil into Florida's coastal waters, removal of the aircraft from the Atlantic Ocean was necessary. DEP contracted with Resolve Towing and Salvage (RTS) to remove the DC-7. RTS is a discharge cleanup organization approved by DEP. RTS' contractual responsibilities included removal of the entire DC-7 aircraft and all debris within 100 yards of the center of the aircraft; disposal of the aircraft; plugging the engines to help stop the leakage; and removal and delivery of the engines which failed to the National Transportation Safety Board (NTSB) and the Federal Aviation Authority (FAA). Because the submerged DC-7 was located in an environmentally sensitive coral and sea-plant area, RTS was required to use extreme care in removing the aircraft. The contractual cost was fixed at $34,000.00 A DEP employee, Kent Reetz, was at the scene of the crash during RTS' cleanup. His responsibility was to monitor the removal of the DC-7 by RTS and to ensure that the aircraft's removal was in compliance with DEP's standards. During the removal of the DC-7 from the water, the fuselage ruptured, scattering debris which was dangerous to the public and to the coral and sea-plants. DEP determined that RTS was not responsible for the fuselage rupturing, but that the rupture was caused by several storms, prior to the aircraft's removal, and by the aircraft being submerged for an extended period in salt water. DEP contracted with RTS to remove the dangerous debris emitted when the fuselage ruptured. The contractual cost was fixed at $9,050.00 The total contractual cost between DEP and RTS was $43,050.00. DEP paid RTS from the Coastal Protection Trust Fund. In responding to the pollutant discharge, DEP incurred a total cost of $43,912.50. DEP assessed damages to the natural resources based upon the amount of pollutants discharged which were 3,000 gallons of aviation fuel and 150 gallons of motor oil. Using the statutory formula, DEP assessed damages to the natural resources in the amount of $57,898.72. Based upon the costs incurred by DEP in responding to the pollutant discharge in the amount of $43,912.50 and the damages to the natural resources in the amount of $57,898.72, DEP sought reimbursement and compensation from Mr. Castillo in the total amount of $101,811.22. DEP invoiced Mr. Castillo for reimbursement of the costs and for compensation for the damages. DEP provided Mr. Castillo with detailed and itemized expense documents for the costs that it had incurred in responding to the pollutant discharge. The documents showed the expenses incurred, what each expense represented, and the formula for computing each expense. Further, DEP provided Mr. Castillo with a document showing the amount of the damages to the natural resources, the formula for computing the damages, and how the damages were computed. The charter of November 6, 1992, was not the first time that Mr. Delpino had chartered the same DC-7 from Mr. Castillo. Prior to and, again, at the previous charter, Mr. Castillo represented to Mr. Delpino that he, Mr. Castillo, was the owner of the DC-7. The owner of a chartered aircraft is responsible for obtaining the aircraft's crew and insurance and for maintaining the aircraft. For the previous charter, Mr. Castillo was responsible for obtaining the DC-7's crew and the insurance and for maintaining the aircraft. Mr. Delpino had no reason to expect the charter for November 6, 1992, to be any different. Furthermore, Mr. Castillo did not inform Mr. Delpino that the responsibilities would be different. For the present charter, as before, Mr. Castillo handled all matters relating to the crew, insurance, and maintenance. Regarding the insurance, Mr. Castillo presented to Mr. Delpino an insurance certificate which, after the crash, was discovered to be false. Also, regarding maintenance, prior to the crash, the two engines which failed were to be removed and repaired, but, although they were removed, they were returned without being repaired. Mr. Castillo was the owner of the DC-7. Also, the crash of the DC-7 was investigated by several federal governmental agencies, including the FAA, the U.S. Coast Guard, and the NTSB. Both the Coast Guard and the NTSB issued reports on the crash, which identified Mr. Castillo as the owner of the DC-7. Mr. Castillo was responsible for the discharge of the 3,000 gallons of aviation fuel and 150 gallons of motor oil from the DC-7 into Florida's coastal waters.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Environmental Protection (DEP) enter a final order assessing Claudio Castillo $43,912.50 for costs related to DEP responding to the pollutant discharge on November 6, 1992, at Florida's coastal waters off John Lloyd State Park, Dania, Florida, and $57,898.72 for damages to natural resources resulting from the pollutant discharge--all totaling $101,811.22. DONE AND ENTERED this 26th day of August, 1997, in Tallahassee, Leon County, Florida. ERROL H. POWELL Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 26th day of August, 1997.
The Issue The issue in this case is the amount of reimbursement to which Petitioners are entitled under the Petroleum Cleanup Reimbursement Program. Petitioners--supported by the Intervenor, Environmental Corporation of America (ECA)--seek reimbursement of contractor markups; Respondent, the Department of Environmental Protection (Respondent, DEP, or the Department), seeks to recover alleged overpayments related to interest payments.
Findings Of Fact Petitioners funded efforts to rehabilitate (clean-up) petroleum and petroleum product contamination at the Joy Food Store (some, former Coastal Mart) facilities involved in these cases. As such, they were the persons responsible for conducting site rehabilitation (PRFCSR) at those sites. Cloyd Toney, Case No. 98-2021, funded a contamination assessment report (CAR) at former Coastal Mart #688 in Fort Lauderdale, Florida. James Scelfo, Case No. 98-4535, funded a CAR at former Coastal Mart #430 in Gainesville, Florida. Leo Cohen and Mark Grosby, Case No. 98-4537, funded a remedial action report (RAP) at Joy Food Store #669 in Kissimmee, Florida. Leo Cohen and John H. Roth, Case No. 98-4538, funded a CAR at Joy Food Store #667 in Kissimmee, Florida; Cloyd Toney, Case No. 98-4540, funded a CAR at Joy Food Store #662 in Eaton Park, Florida. Luella R. Ceaser, Case No. 98-4541, funded a CAR at former Coastal Mart #684 in Pompano Beach, Florida. Peter D. Kleist, Case No. 98-4543, funded a RAP and Remediation Action (RA) at Joy Food Store #704 in Cocoa, Florida. As PRFCSR's, Petitioners filed applications with the Department of Environmental Protection (DEP, Department, or Respondent) for reimbursement under an amnesty program created by Section 376.3071, Florida Statutes, for owners who notified the Department that their property was contaminated by petroleum or petroleum products. Under the statutory reimbursement program someone (usually the site owner) typically would hire a contractor to rehabilitate petroleum-contaminated sites. All contractors performing site rehabilitation tasks would have to file a Comprehensive Quality Assurance Plan ("CompQAPP") with the Department. Field work not performed under and in accordance with the CompQAPP would not be accepted by the Department. The contractor would then perform up to four rehabilitation program tasks, often through subcontractors and suppliers. The first potential program task would be an Initial Remedial Action (IRA). In an IRA, site-contaminated soil at the site would be identified by taking soil samples (soil borings), the contaminated soil would be removed, and the excavation would be backfilled with uncontaminated soil. The next step would be preparation of a Contamination Assessment Report (CAR). The purpose of the CAR would be to define the vertical and horizontal extent of groundwater contamination. Definition of groundwater contamination would require installation and sampling of groundwater wells. Additional soil samples sometimes would be necessary. The third step would be the Remedial Action Plan (RAP). In a RAP, a system to remediate the groundwater at a site is designed and approved. The final program task would be the Remedial Action (RA), which would implement the system designed in the RAP. Upon completion of a program task, the site owner, operator, or his designee would submit a reimbursement application to the Department for payment for the costs of the rehabilitation activities. Petitioners each claimed a 15% "second-tier" markup on the amount they funded (i.e., paid) the Intervenor, Environmental Corporation of America (ECA), a company owned and operated by Jack Ceccarelli. The amount each paid to ECA included ECA's 15% "first-tier" markup on amounts it said it paid subcontractors for site rehabilitation work. Ceccarelli's Initial Involvement in Clean-up Projects Ceccarelli worked for Joy Food Stores from December 1980 until August 1992. Joy, which sold gasoline at its stores, was owned and operated by Mike Hughey. Hughey hired Ceccarelli, who worked his way up from lower-echelon positions to eventually become responsible for overall operations of Joy Food Stores (Joy). In 1986, Joy leased some of its retail facilities to a competitor doing business under the name Coastal Mart. After petroleum contamination was discovered at these and numerous other Joy locations, Coastal Mart sued Joy in early 1992. Meanwhile, Joy began to rehabilitate (assess and clean-up) its sites under the amnesty program created by Section 376.3071, Florida Statutes. Joy initiated its clean-up projects under the so-called "state-lead" program. Under this program, the Department would contract directly with a private contractor to perform the rehabilitation work at an eligible site and pay the contractor monthly for work performed. However, the Department only had ten approved contractors doing work under the "state-lead" program. As a result, clean-up progressed slowly state-wide, and a large backlog of work developed. Clean-up of the Joy sites was at a standstill. When Ceccarelli left Joy in August 1992, he formed a petroleum clean-up company called Environmental Directions Incorporated ("EDI"). Subsequently, he approached Hughey with a proposal to clean-up the Joy and Coastal sites, using the reimbursement program, third-party financing, and multiple subcontractors. Hughey agreed with Ceccarelli that Ceccarelli's proposal could be a way to settle the Coastal Mart lawsuit. In February 1993, Ceccarelli secured a financing agreement from Clean America Corporation (CAMCOR) and environmental consulting services from Environmental Solutions and Services, Inc. (ESSI) based in Longwood, Florida. Under the arrangements made by EDI, ESSI contracted directly with Joy and agreed to compensate EDI as "Project Coordinator." EDI was to be compensated at an hourly rate of $100 for project coordination (described as "client/funder coordination), with a minimum of 50 hours per week for the Coastal/Hughey (i.e., Joy) sites; EDI also was to receive 2% of ESSI's 15% contractor markup. Joy settled the Coastal Mart lawsuit in February or March 1993 by taking back the Coastal Mart locations. These sites were included in the seven applications at issue in these cases. Clean-up work proceeded on the basis of those contractual agreements, with some amendments, but CAMCOR never provided funding, and ESSI reluctantly made only a partial payment to EDI in August 1993. In October 1993, ESSI was bought by Omega Environmental Services (Omega). Omega confirmed the prior contractual arrangements and continued with the clean-up work begun by ESSI. But since CAMCOR never funded the enterprise, Omega was not paid for its work and did not pay EDI under the prior contractual provisions. In October 1994, Omega bought Gurr and Associates (Gurr), another environmental consulting firm. Initially, Omega operated Gurr as a subsidiary but later dissolved Gurr and operated it as a division of Omega. Gurr/Omega initially continued under Omega's prior contractual arrangements, but Gurr/Omega still was not being paid by CAMCOR, and Gurr/Omega still was not paying EDI. When lack of financing began to threaten the continued viability of the clean-up projects, Ceccarelli sought alternative funding through another company he incorporated under the name Environmental Corporation of America (ECA). An immediate problem confronted by ECA in getting financing was that a prospective funder's anticipated profit was at risk of erosion by passage of time between funding and reimbursement from the Department, which was taking anywhere from eight months to two, even three years. From August 1993 through August 1994, the law allowed the Department to pay interest to claimants pending processing of reimbursement applications. These interest payments compensated funders for the time value of money and protected their anticipated profit from being eroded by passage of time during which reimbursement applications remained pending. After August 1994, interest payments from the Department ceased. See Conclusion 70, infra. The practical effect was to put the funders' rate of profit at risk. As a result, to help entice funders, other contractual means were devised to replace the interest previously paid by the Department. Eventually, ECA entered into contracts with funders to provide funding for the Joy and Coastal Mart sites. Each Agreement to Fund between ECA and the funders of these sites provided: INTEREST "Contractor" agrees to pay "Funder" a rate of interest equal to the published prime interest rate (Nations Bank) fixed at time of funding on such funds advanced by "Funder". Interest shall be payable twelve (12) months in advance. An additional five percent (5%) will be deposited in a reserve account to be paid to the Funder as follows: two and one-half percent (2 1/2%) at the end of month fifteen and two and one-half percent (2 1/2%) at the end of month eighteen. Reimbursement by the State in less than eighteen months may result in an interest adjustment due "Contractor" from "Funder" or reserve account. Any interest paid by the State of Florida under Section 62-773.650 will accrue to "Contractor" on the same basis as it was paid "Contractor" to "Funder" and shall be paid by "Funder" to "Contractor" within five(5) days of funders [sic] receipt of disbursement from the State of Florida to "Funder". Reimbursement by the State which takes more than eighteen (18) months will result in an interest adjustment due "Funder" from "Contractor" at the rate of prime fixed at the time of funding plus three percent (3%) for months 19 and beyond, paid quarterly in advance to the escrow account and paid to the Funder quarterly in arrears. ECA also entered into a series of agreements with Gurr/Omega, each called a Participation Agreement for Rehabilitation of Petroleum Contamination Site. Under these agreements, ECA was said to be acting for "its investors." Gurr/Omega was identified as having "heretofore entered into contracts with reimbursement eligible site owners or operators to fund, manage and rehabilitate specific sites." Gurr/Omega was required to "provide all labor, equipment and materials and [was to have] performed all work needed to complete certain specified sites selected and approved by ECA." Gurr/Omega was to "complete such performance in strict compliance with all applicable statutes rules and regulations and to the satisfaction of FDEP." Gurr-Omega would submit its invoices for remediation work to ECA, which would pay Gurr/Omega with money obtained from third-party investors. ECA would receive an assignment of Gurr/Omega's right to reimbursement from the State of Florida. In effect, Gurr/Omega gave up its contractor markup on invoices submitted by its subcontractors and suppliers; instead, ECA charged a contractor markup on Gurr/Omega's invoices. ECA would then be responsible for preparing reimbursement packages for submission to the Department. Each Participation Agreement for Rehabilitation of Petroleum Contamination Site also contained a provision requiring Gurr/Omega to pay ECA a share of what ECA was required to pay the funders under the corresponding Agreement to Fund. ECA hired Restoration Assistance, Inc., to prepare reimbursement applications for all of the Joy and Coastal sites, including the sites funded by Petitioners in these cases. (In addition to preparing reimbursement applications, Restoration Assistance had a subcontract with Halliburton NUS, which had a contract with the Department to review reimbursement applications filed by others for completeness and entitlement to reimbursement.) ECA would send Restoration Assistance a package of invoices and technical documentation for each application. Restoration Assistance would compare the invoices with the technical documentation to determine whether costs in the invoices were allowable and to categorize the costs and enter the costs and other required information in the appropriate places on the reimbursement applications. In some cases, Restoration Assistance noted costs not believed to be allowable and recommended their deletion. In some cases, ECA required invoices to be adjusted so that they only included allowable costs. In other cases, ECA required Gurr/Omega to pay portions of payments it received from ECA into a retention account for "anticipated denials." The packages sent to Restoration Assistance included invoices from Gurr/Omega and from ECA. ECA's invoices included a 15% contractor markup on Gurr/Omega's invoices. In some cases, Gurr/Omega also marked-up subcontractor and subcontractor invoices it paid for rehabilitation work. Sometimes, after review by Restoration Assistance, the funders paid the invoices, and the application packages were returned to Restoration Assistance with certifications from the funders and an attestation from a certified public accountant (CPA) that the costs reflected in the invoices had been "incurred," i.e., in fact paid. Restoration Assistance would then file the completed application with the Department. After application packages were completed, ECA's "investors" would "fund" (pay) all invoices and markups. At approximately the same time, ECA would pay Gurr/Omega's invoices, and ECA and Gurr/Omega would make the initial interest payments required under the applicable Agreement to Fund and Participation Agreement for Rehabilitation of Petroleum Contamination Site. However, the reimbursement packages did not include any evidence of the interest payments by Gurr/Omega and ECA or their agreements to make interest payments, respectively, to ECA and Petitioners. Nor were the interest payments or agreements to pay interest made a part of the CPA's attestation that all costs were "incurred." ECA began filing reimbursement applications for "its investors" in November 1994. The Scelfo application was filed in February 1995; the Ceaser application was filed in March 1995; the Toney and Grosby applications were filed in March 1996; and the Roth and Kleist applications were filed in May 1996 (among 30 applications filed that month, which were the last filings by ECA, except for a handful filed in September 1996.) At about the time ECA began filing applications for "its investors," the Department was trying to decide how to deal with serious problems that had arisen in the reimbursement program. It had come to the Department's attention that entities known as Environmental Trust, Inc. (ET) and Sarasota Environmental Investors, Inc. (SEI), together with other entities related through interlocking ownership and directorship arrangements, were filing reimbursement applications claiming "first-tier" markups for a so-called contractor called Gator Environmental, Inc. (Gator), who was not involved until after rehabilitation work already had been completed by Tower Environmental, Inc. (Tower). It seemed Gator's primary function actually was to perform a "due diligence" site inspection for the funders. In addition, participants at various levels of the rehabilitation efforts in these applications, including the ultimate funders, ET and SEI, were claiming reimbursement for the full amount of invoices when they only paid a discounted portion of the invoices, which were being factored by a related financing company called American Factors Group (AFG). The Department began to devise a means of addressing problems like these in the context of the applicable statutes and rules. In September 1994, the Department began to require reimbursement applicants to provide documentation showing that entities claiming contractor markups "added value" to the rehabilitation effort. Specifically with respect to Gator, the Department wanted to know the date and duration of its involvement; if Gator came on the scene after the CAR submittal for which reimbursement was being claimed, no markup would be allowed for Gator. In October and November 1994, the Department held meetings to discuss the ET case in general and the "factoring" (discounting) of invoices in particular. It was decided at these meetings that Gator's charge for a CPA's due diligence was not "integral" to site rehabilitation since it was related to financing, not rehabilitation. It also was decided that the Department would not reimburse the difference between invoices and the factored (discounted) amount paid since the difference between the two represented carrying charges (i.e., interest) not reimbursable under applicable rules. In time, the Department denied these portions of approximately 46 reimbursement applications filed by ET and a related entity, Sarasota Environmental Investors, Inc. (SEI). At about the time these decisions were being made on the ET and SEI applications, the Department informed its contract application reviewers (such as Restoration Assistance), orally and later in writing, that additional documentation would be required to support claims for contractor markups to determine whether the contractor's activities were "integral to site rehabilitation associated with active management and oversight of subcontractors and vendors." Reviewers were informed that, in asking for additional information, they should inform applicants: Costs integral to site rehabilitation associated with active management and oversight of subcontractors and vendors may include: negotiation of contracts with subcontractors and vendors; development of specifications and solicitation of quotes for equipment and supplies; scheduling and coordination of subcontractor activities; and on-site supervision of activities performed by subcontractors. The following are examples of activities that are not considered integral to site rehabilitation: . . . activities performed as due diligence on behalf of the funding entities. Reviewers also were advised that they could deny contractor markups for the following reasons: Although the activities performed appear to include some amount of active management and oversight of subcontractors and vendors, they can not be differentiated from non- reimbursable activities and/or activities that appear not to be integral to site rehabilitation. Therefore, these activities do not constitute sufficient responsibility and participation to warrant the 15% markup claimed . . . . The documentation provided does not demonstrate a sufficient level of effort integral to site rehabilitation . . . in actively managing and overseeing subcontractors and vendors to warrant the 15% markup. The activities documented do not show any active management and oversight of subcontractors and vendors and do not constitute sufficient responsibility and participation integral to site rehabilitation to warrant the 15% markup claimed . . . . In December 1994, John M. Ruddell, Director of Waste Management for the Department, submitted a draft revision of Florida Administrative Code Rules Chapter 62-773 (the rules for the reimbursement program), which included elimination of markups entirely. However, the draft revision never went to rulemaking. In January 1995, the Department instructed Restoration Assistance, acting in the role of the Department's contract reviewer, to act in accordance with the decisions made at the Department's staff meetings in September, October, and November 1994. Specifically, Restoration Assistance was instructed not to allow a markup for Gator, not to allow the cost of the CPA's due diligence for funding purposes, and not to pay the difference between invoices and the factored (discounted) amounts actually paid. As reflected in an April 1995 intra-office memorandum, the Department continued to take the positions that factored (discounted) general contractor invoices could not be paid in full and that: II. The next tier entity (e.g., management company) may be allowed claims for actual project management work and value-added services; services provided by the general contractor and duplicated by the management company should not be claimed by the management company. Management company claims (e.g., markups) would be denied if the general contractor's claims simply passed through (e.g., one month time period) the management company to the responsible party without any services provided. However, if the management company only provided cash flow services for a majority of the program task period and no other service was provided, then a markup on the general contractor's claims would be allowable. In August 1995, the Department instructed its reviewers as to an application involving Gator. The reviewers were told not to allow Gator a markup if it did not become involved until after the work was completed. They were told that if Gator was involved in rehabilitation work, not to pay for management costs duplicative of "services provided by the subs or the resp[onsible] party." They also were instructed that Gator's non-duplicative management, if any, "counts towards the total project management percentage of personnel time." ET and SEI filed approximately 46 petitions for formal administrative proceedings on their application denials between September 1995 and February 1996. These cases were referred to DOAH. In October 1995, Charles Williams, the Administrator of the Department's Petroleum Clean-Up Section, e-mailed a memorandum to its contract reviewers reiterating instructions regarding contractor markups. The memorandum also noted a claim for reimbursement of a 15% contractor markup where the work of the so-called general contractor "was limited to a 1 hour meeting with the sub." In January 1996, the Department referred another 37 related cases to DOAH, each having two counts--one challenging reimbursement application denials, and another challenging the Department's alleged use of unadopted rules (the Department's various memoranda regarding factoring and markups) in denying the applications. These and other related cases were consolidated for final hearing in April 1996. In internal correspondence of contract reviewer Halliburton NUS, sent through the Department's contract manager, Grace Rivera, in May 1996, Halliburton's reviewers were instructed to apply an "8-hour" benchmark for gauging contractor participation. Part of the internal correspondence stated: Middle Man Markup: A funders [sic] service is funding, so pay the 15% markup. Also allow a 15% markup to a "middleman" who has done work for the site for at least 8 hours during the time that the work was going on. Do not allow the 15% if the middleman did not do any value added services while the site work was going on, or if their [sic] was no funding. Before you deny a markup because there was no work done by the middleman while site work was going on, call the PR [person responsible] and ask if "any information was not included in the application" to see if they had hours they did earlier but did not claim. In October 1996, a Recommended Order was entered in the ET and SEI cases upholding the application denials. The Department entered a Final Order adopting the ALJ's Recommended Order, and ET and SEI appealed to the District Court of Appeal, First District. In October 1996, Charles Williams sent Sewell, Todd, and Broxton, Inc. (STB), which reviewed reimbursement applications filed by Restoration Assistance, a letter providing "Written Confirmation of Verbal Guidance for Review of Reimbursement Claims with General Contractor Markups." The letter referred to a meeting of September 18, 1996, and Williams' October 1995 e-mail. It also referred to the Department's January 1996 decision to have reviewers request "additional documentation of general contractor activities that may have been performed beyond those billed in the claim prior to denying their markup." It stated: "This was done because several firms had indicated that they did not bill all of their activities due to the management time limitations in the rule." It referred to the Department's guidance in February 1996 as to the wording of such requests for additional documentation. Finally, it noted that the contractor markup issue was discussed at a public workshop in July 1996 on proposed clarifications to Florida Administrative Code Rules Chapter 62-773. Prior to October 1996, the Department only entered a few orders of determination (OOD's) on the reimbursement applications submitted by ECA for "its investors." Out of 29 OOD's, contractor markups were paid on 12 applications and denied on 17. Meanwhile, as to the other applications, the Department requested more documentation and information as to ECA's involvement in these and other projects. ECA responded to this request and provided the Department with a variety of documents, but the Department delayed its determination. After the Recommended Order in the ET and SEI cases in October 1996, the Department entered 41 more OOD's; 45 more OOD's were entered in November 1996. All denied ECA's markups. Subsequently, another 117 OOD's were entered on the applications filed by ECA for "its investors." Of these, ECA's markups were paid on 32 applications; the rest were denied. Petitioners' applications were denied in October 1996 or later. With respect to the Petitioners in these cases, the Department disallowed the following amounts of ECA markup: Toney (Case No. 98-2021), $8,120.80; Scelfo (Case No. 98-4535), $6,495.29; Cohen and Grosby (Case No. 98-4537), $5,302.33; Cohen and Roth (Case No. 98-4538), $10,303.12; Toney (Case No. 98- 4540), $9,293.40; Ceaser (Case No. 98-4541), $4,231.91; and Kleist (Case No. 98-4543), $13,446.66. These amounts included ECA's 15% markups, plus Petitioners' 15% markups on ECA's markups. The Department did not reduce any ECA claims by the interest payments required under the applicable Agreement to Fund and Participation Agreement for Rehabilitation of Petroleum Contamination Site. By the time of the presentation of evidence during the hearing in the ET and SEI cases in April 1996, the Department had information that many rehabilitation efforts were arranging to replace the post-application interest the Department no longer was paying. See Conclusion 75, infra, Findings of Fact 120-121. Certainly, by the summer of 1996, the Department was aware of these kinds of arrangements. But the Department was not looking beyond the contents of the application packages to ascertain whether such arrangements were involved, and the ECA application packages contained no evidence of the interest payments being made in accordance with the applicable Agreement to Fund and Participation Agreement for Rehabilitation of Petroleum Contamination Site. During discovery in these cases, the Department obtained evidence that interest payments were made in accordance with the applicable Agreement to Fund and Participation Agreement for Rehabilitation of Petroleum Contamination Site. At that point, the Department sought to recover those interest payments, together with any markups on them. Subsequently, Petitioners stipulated to receipt of the following interest payments from ECA under the Agreement Petitioner to Fund: DOAH Case Interest Amount Cloyd Toney 98-2021 $6,282.52 James Scelfo 98-4534 $6,670.50 Cohen/Grosby 98-4537 $4,030.68 Cohen/Roth 98-4538 $7,783.00 Cloyd Toney 98-4540 $7,160.79 Luella Ceasar 98-4541 $4,135.42 Peter Kliest 98-4543 $8,469.25 There also was evidence that Gurr/Omega paid ECA : $3,688.56 of interest under the Participation Agreement for Rehabilitation of Petroleum Contamination Site for Cohen and Grosby, Case No. 98- 4537, Joy Food Store #669; and $2,789.72 of interest under the Participation Agreement for Rehabilitation of Petroleum Contamination Site for Luella Ceaser, Case No. 98-4541, Coast Mart #684. (There was no evidence of other interest payments from Gurr/Omega to ECA with respect to these cases.) However, under the Participation Agreement for Rehabilitation of Petroleum Contamination Site, those payments constitute part of the interest payments from ECA to Petitioners. The documentation and evidence establish that, in all the Joy/Coastal clean-up projects, including the seven funded by Petitioners in these cases, ESSI-Omega-Gurr/Omega was a full service contractor employing all the licensed geologists and engineers, draftsman, project coordinators, field technicians, and support staff necessary to rehabilitate theses sites. ESSI- Omega-Gurr/Omega personnel planned, performed, supervised, and supported all field activities performed at these sites--e.g., preparation of field work plan, including locating, scheduling, drilling, installing and sampling of soil borings and monitoring wells; designing monitoring well and remedial action system specifications, disposal of contaminated soil; measuring monitoring well water levels and conductivity. (All field work was performed under the ESSI-Omega-Gurr/Omega CompQAPP.) ESSI-Omega-Gurr/Omega personnel contracted and interacted with laboratories obtaining all soil and water sampling test kits and sampling results. ESSI-Omega-Gurr/Omega personnel analyzed all soil and water sampling test results and re-directed the scope of the rehabilitation of these sites accordingly. ESSI-Omega-Gurr/Omega personnel obtained permission and access from neighboring property owners to install monitoring wells on their property. ESSI-Omega-Gurr/Omega personnel interacted with local state and county officials securing permits, responding to their inquiries, and requesting permission to conduct additional remediation activities. ESSI-Omega-Gurr/Omega owned, rented, or bought all equipment, vehicles, instruments, tools, and materials used to remediate these sites. ESSI-Omega-Gurr/Omega office personnel performed, supervised, reviewed, and supported all activities necessary to produce the CAR's and RAP's for these sites. They wrote, reviewed, edited, and typed the reports; they drafted all figures, maps, tables, and indexes. ESSI-Omega-Gurr/Omega office personnel recorded, tracked, and invoiced all their work, the work of all their subcontractor activities, and their costs. At the outset of rehabilitation work on the Joy/Coastal site, Ceccarelli and Hughey discussed the overall rehabilitation effort on the sites. Hughey wanted the clean-up to proceed as quickly as reasonably possible. He also wanted work at the various sites to be timed and performed so as to disrupt retail operations as little as possible. Hughey expected EDI to communicate his concerns and desires with ESSI and make sure that ESSI's performance of the Joy-ESSI contract would conform with those concerns and desires. At the outset, Ceccarelli met with ESSI's executives in Orlando, Florida, to carry out Hughey's desires. EDI also assembled helpful historical information on the sites, including information Joy developed in connection with the Coastal Mart lawsuit. As ESSI became Omega, and Omega became Gurr/Omega, and EDI became ECA, Ceccarelli continued in his role as liaison between ESSI-Omega-Gurr/Omega and Joy and general overseer of the projects. In addition to meeting with ESSI-Omega-Gurr/Omega's executives, Ceccarelli discussed various aspects of the projects with ESSI-Omega-Gurr/Omega personnel, especially those housed in their Tampa office, which was in the same building as EDI/ECA; Ceccarelli, in turn, discussed these things with Hughey on a regular basis. Ceccarelli also had ESSI-Omega-Gurr/Omega prepare monthly summary progress reports, which Ceccarelli reviewed and went over with Hughey. Ceccarelli also usually visited the sites, including at least six of the seven sites at issue in these cases. (The invoice for Joy Food Store #669 in Kissimmee was missing from Petitioners' Exhibit 4, and no other documentation evidenced a site visit.) Sometimes, Hughey accompanied Ceccarelli on a site visit. ECA's invoice for Joy Food Store #688 in Ft. Lauderdale (Case No. 98-2021) billed for eight hours for travel and a site visit, plus another 6.75 hours of general contractor management and administration time for such things as: review of well installations; review of the scope of work for the CAR with Omega; review with the Broward Natural Resources Department; estimate of the cost to complete and scheduling work; and review the CAR after preparation by ESSI-Omega-Gurr/Omega. Of this time, only 8.75 hours was claimed as management time on the reimbursement application forms prepared by Restoration Assistance. ECA's invoice for Coastal Mart Store #430 in Gainesville (Case No. 98-4535) billed for four hours for travel and a site visit, plus another 7.5 hours of general contractor management and administration time for such things as: reviewing the file for a work plan; reviewing monitor well installations; reviewing a drilling well report (or soil borings); reviewing the CAR after preparation by ESSI-Omega-Gurr/Omega; and reviewing of invoices/billings. Of this time, only 11.5 hours were claimed as management time on the reimbursement application forms prepared by Restoration Assistance. As mentioned in Finding 50, supra, ECA's invoice for Joy Food Store #669 in Kissimmee (Case No. 98-4537) was missing from Petitioners' Exhibit 4. But Restoration Assistance's Personnel Supplementary Form for Management/Project Management time shows 12 hours of general contractor management time. ECA's invoices for Joy Food Store #667 in Kissimmee (Case No. 98-4538) billed for four hours for travel and a site visit, plus another 26.25 hours of general contractor management and administration time for such things as client consultation (probably with Hughey); sorting site data and review of site file; review of wells with client (possibly due to problems with well installation); review with senior project manager; review of well installation; and review of CAR and CAR addendum after preparation by ESSI-Omega-Gurr/Omega. Of this time, 26.25 hours were claimed as management time on the reimbursement application forms prepared by Restoration Assistance. ECA's invoice for Joy Food Store #662 in Eaton Park (Case No. 98-4540) billed for three hours for travel and a site visit, plus another 17.25 hours of general contractor management and administration time for such things as reviewing scope of work and budget; copying and data and setting up files; reviewing hand auger data; coordinating well installation; reviewing additional wells; reviewing groundwater results; reviewing site access requests and data; reviewing the CAR and CAR addendum after preparation by ESSI-Omega-Gurr/Omega. Of this time, only three hours were claimed as management time on the reimbursement application forms prepared by Restoration Assistance. ECA's invoice for Coastal Mart Store #684 in Pompano Beach (Case No. 98-4541) billed for 2.5 hours for pro rata share of travel and a site visit, plus another 11.25 hours general contractor management and administration time for such things as data reviewing and compiling information for CAR; reviewing the CAR; project coordination in Broward County; reviewing billings; and reviewing general project coordination. All of this time was claimed as management time on the reimbursement application forms prepared by Restoration Assistance. ECA's invoice for Joy Food Store #704 in Cocoa (Case No. 98-4543) billed for 6.5 hours for travel and a site visit, plus another 24.5 hours of general contractor management and administration time for such things as client consultations; the sorting and review of file data; review with senior project manager; financial review and tracking; review of RAP with client and sub; review of file and prepare invoice; and review of and response to Brevard County RAP questions with sub. Of this time, only 13.5 hours were claimed as management time on the reimbursement application forms prepared by Restoration Assistance. The Department contends that part of ECA's invoice for Joy Food Store #662 is not legitimate because it records Ceccarelli's review of the CAR addendum on February 10, 1995, the same day the CAR addendum was signed and sealed by the project geologist in Orlando. The Department also contends that another part of ECA's invoice for Joy Food Store #662 is not legitimate because it records the review of a well drilling report on March 7, 1994, the same day the wells were installed. The installation of these wells took eleven hours, and the Department contends that the chances of generating a well-drilling report that day under these circumstances are minimal. The explanation for these discrepancies probably lies in the way in which Ceccarelli prepared his invoices. Ceccarelli admittedly was far from meticulous in keeping track of the time he spent on these projects, in part because of his personal disinclination and in part because of ECA's understanding that meticulous time-keeping was not critical for reimbursement of a markup. To the contrary, it was ECA's understanding that the Department would not reimburse for excessive management time for ECA when ECA was being compensated in the form of the 15% markup on ESSI-Omega-Gurr/Omega's invoices. Indeed, Restoration Assistance reduced ECA's management time in at least five of the seven claims for reimbursement at issue in these cases. (This could not be ascertained for Joy Food Store #669 without the invoice for that store.) For the most part, the activities listed in ECA's invoices were not recorded contemporaneously with the performance of the listed activity. Rather, the invoices were created based on Ceccarelli's review of his personal calendar, telephone bills, and reports generated by ESSI-Omega- Gurr/Omega. The Department contends also that part of ECA's invoice for Joy Food Store #684 is not legitimate because it indicates a total of 4.25 hours for project coordination activities on July 1, 1994, November 14, 1994, and January 31, 1995, while the CAR for this facility was finalized on April 15, 1994. This length of time appears to be erroneous; it probably represents time spent on the RAP phase of rehabilitation at that site, not the CAR phase. The CAR reimbursement claim should be reduced by $488.25 for ECA's time, and by $73.24 for Ceaser's 15% markup. The evidence on Joy Food Store #684 also was that Gurr/Omega paid ECA $649.00 for anticipated denials. These moneys were deposited in an escrow account, and the record is void as to whether these costs were denied by the Department or whether ECA ever returned these moneys to Gurr/Omega. But the disposition of the escrow fund would be a matter for ECA and Gurr/Omega to resolve; it would not affect Ceaser's reimbursement application. The Department criticizes the lack of documentation evidencing what Ceccarelli claims he did on these projects; the lack of such documentation contributed to the Department's doubts as to the veracity of the invoices. But in the numerous cases of Ceccarelli's review of work by ESSI-Omega-Gurr/Omega recorded in the invoices, no EDI/ECA work product was generated, so none could be produced. Documentation supplied to the Department supported ECA's claims that ESSI-Omega-Gurr/Omega sent EDI/ECA reports to review and supported some other claims of time spent on the projects, as well as ECA's claim that a considerable amount of time spent on these projects was not recorded in ECA's invoices. There also came a point in time when ECA stopped responding to Department requests for additional information because ECA came to believe that the Department intended to deny ECA's markups regardless what documentation was produced. ECA came to this belief based in part on learning during a meeting with Department staff that Charles Williams had issued notices of intent to deny ECA's markups in some cases without even looking at documentation produced by ECA. When the parties began to litigate, documents were produced only in response to discovery requests. Ceccarelli testified that his telephone records were not produced because the Department did not ask for them. The Department also criticized Ceccarelli's inability to recall in detail from memory what he did during the time recorded in the invoices for these projects. But, under the circumstances, it was understandable for him not to have such a clear, detailed recollection. It was not proof of dishonesty.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Environmental Protection enter a final order: granting Petitioners' claims for ECA's 15% markups, together with Petitioners' 15% markups on ECA's markups, as follows: Petitioner DOAH Case Amount Cloyd Toney 98-2021 $8,120.80 James Scelfo 98-4534 $6,495.29 Cohen/Grosby 98-4537 $5,302.33 Cohen/Roth 98-4538 $10,303.12 Cloyd Toney 98-4540 $9,293.40 Luella Ceasar 98-4541 $4,231.91 Peter Kliest 98-4543 $13,446.66 requiring recovery of overpayments of interest paid from ECA to Petitioners, plus ECA's 15% markups on the interest payments, plus Petitioners' 15% markups on ECA's markups, as follows: ECA's Interest Overpayments Petitioner DOAH Case Interest Amount Cloyd Toney 98-2021 $6,282.52 James Scelfo 98-4534 $6,670.50 Cohen/Grosby 98-4537 $4,030.68 Cohen/Roth 98-4538 $7,783.00 Cloyd Toney 98-4540 $7,160.79 Luella Ceasar 98-4541 $4,135.42 Peter Kliest 98-4543 $8,469.25 ECA's Markups on ECA's Interest Cloyd Toney 98-2021 $942.38 James Scelfo 98-4534 $1,000.58 Cohen/Grosby 98-4537 $604.60 Cohen/Roth 98-4538 $1,167.45 Cloyd Toney 98-4540 $1,074.12 Luella Ceasar 98-4541 $620.31 Peter Kliest 98-4543 $1,270.39 Petitioners' Markups on ECA's Markups on ECA's Interest Cloyd Toney 98-2021 $141.36 James Scelfo 98-4534 $150.09 Cohen/Grosby 98-4537 $90.69 Cohen/Roth 98-4538 $175.12 Cloyd Toney 98-4540 $161.12 Luella Ceasar 98-4541 $93.05 Peter Kliest 98-4543 $190.56 requiring recovery of the $561.49 overpayment on the Ceasar reimbursement application (Case No. 98-4541) reflected in Finding 61, supra. DONE AND ENTERED this 16th day of December, 1999, in Tallahassee, Leon County, Florida. J. LAWRENCE JOHNSTON 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 16th day of December, 1999. COPIES FURNISHED: J. A. Spejenkowski, Esquire Department of Environmental Protection Douglas Building, Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Bradford C. Vassey, Esquire Environmental Corporation of America 205 South Hoover Street, Suite 101 Tampa, Florida 33609 Carter B. McCain, Esquire MacFarlane, Ferguson & McMullen 400 North Tampa Street, Suite 2300 Tampa, Florida 33601 Kathy Carter, Agency Clerk Department of Environmental Protection Douglas Building, Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Teri Donaldson, General Counsel Department of Environmental Protection Douglas Building, Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000
