07-004175EF Department Of Environmental Protection vs. L. B. King, Jr. Status: Closed DOAH Final Order on Wednesday, February 27, 2008.

Summary: Respondent was found guilty of unlawful petroleum discharge on his property. The mitigating evidence was sufficient to reduce the penalties by 50 percent. Litigation with insurance carrier was not a good cause to delay the administrative case.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF ENVIRONMENTAL )

PROTECTION, )

)

Petitioner, )

)

vs. ) Case No. 07-4175EF

)

L.B. KING, JR., )

)

Respondent. )

________________________________)

FINAL ORDER

Pursuant to notice, this matter was heard before the

Division of Administrative Hearings by its assigned

Administrative Law Judge, Donald R. Alexander, on February 5,

2008, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Jason A. Wiles, Esquire

Department of Environmental Protection

3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399-3000

For Respondent: Robert D. Fingar, Esquire

Gramling & Fingar

1607 Village Square Boulevard, Suite 1

Tallahassee, Florida 32309-2771

STATEMENT OF THE ISSUES

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.

PRELIMINARY STATEMENT

This enforcement action began on June 15, 2007, through the

issuance of a Notice of Violation by the Department alleging that

Respondent owned property in Cross City, Florida, on which eight

regulated petroleum tanks were stored; that when three tanks were

closed or removed, one in 1997 and two in 2004, the Department

discovered contamination in the soil; that Respondent failed to

file certain assessment reports; and that he had failed to timely

assess and remediate the contamination on his property. The

Notice of Violation advised Respondent that because this conduct

violated certain Department rules and related statutes, it

intended to assess a $10,000.00 administrative penalty, recover

investigative expenses and costs in the amount of $500.00, and

require certain corrective actions.

On September 6, 2007, Respondent filed his Petition for

Formal Administrative Hearing (Petition) for the purpose of

contesting the Department's proposed action. 1 The matter was

referred to the Division of Administrative Hearings on

September 17, 2007, with a request that an administrative law

judge be assigned to conduct a formal hearing.

By Notice of Hearing dated October 17, 2007, the matter was

scheduled for final hearing on November 14, 2007, in Tallahassee,

Florida. On October 24, 2007, Respondent filed an unopposed

Motion for Continuance and requested that the case be temporarily

abated on the ground he expected final disposition of a federal

court action with his insurance carrier within the next 45 days.

On December 19, 2007, the Department requested that the matter be

reset for hearing. By Notice of Hearing dated December 21, 2007,

the case was rescheduled to February 5, 2008, at the same

location.

On January 9, 2008, the Department filed a Motion for

Summary Final Order (Motion). On January 14, 2008, Respondent

filed his response in opposition to the Motion. On January 25,

2008, the undersigned issued an Order on Motion for Summary Final

Order granting the requested relief in part and determining that

in the following respects there was no genuine issue as to any

material fact and the Department was entitled to summary

disposition as a matter of law: (a) that Respondent violated the

rules cited in the Notice of Violation and was responsible for

cleaning up the contamination on his property; (b) that

Respondent should reimburse the Department for investigative

expenses and costs in the amount of $500.00; and (c) that

Respondent should perform the corrective actions described in the

Notice of Violation, including the filing of a completed

assessment report for the discharges that occurred in 1997 and

2004 within 180 days of the effective date of this Final Order,

as well as the complete cleanup of the contaminated site. The

Order further noted that the only remaining issue in dispute was

whether the administrative penalty being imposed by the

Department should be reduced due to mitigating circumstances. In

making those determinations, the Order concluded (with more

specificity than here) that Section 376.309(2), Florida Statutes,

(2007), 2 which allows the Department to institute an enforcement

action against the insurance carrier (rather than the responsible

party) for cleanup costs, did not prohibit the Department from

initiating an enforcement action against Respondent since this

choice was a matter within the agency's discretion. The

undersigned also ruled that Section 376.3071(7)(c), Florida

Statutes, did not serve as a bar to an enforcement action against

Respondent. That statute comes into play only after liability

has been established and allows a responsible party to provide

evidence to the Department that he is financially unable to

cleanup the contaminated property. The Department may then agree

to undertake all or part of the cleanup of the site with state

trust funds. The appropriate findings of fact and conclusions of

law relative to the partial summary determinations are set forth

in this Final Order.

By Order dated January 30, 2008, the undersigned granted the

Department's First Amended Motion in Limine, which excluded

evidence concerning or related to Respondent's insurance

claim for petroleum contamination at his property and

concurrent litigation related thereto and evidence concerning

Section 376.309, Florida Statutes, on the ground it was

immaterial to the primary issues (liability and corrective

actions) raised in the enforcement action. 3 However, the Order

allowed Respondent to use this information as mitigating evidence

for the purpose of seeking a reduction in the proposed

administrative penalty.

On January 30, 2008, Respondent filed a Motion to Abate this

matter pending the outcome of a lawsuit with his insurance

carrier in federal court. This filing (together with other

papers) indicates the carrier is denying liability for both

discharges under the policy. The Motion to Abate also indicated

that motions for summary final judgment filed by both Respondent

and the carrier have been pending before the United States

District Court for the Northern District of Florida since

August 2007, and that Respondent may file a motion in the federal

lawsuit seeking to join the Department as an indispensable party.

After hearing argument at the final hearing, the Motion to Abate

was denied.

At the final hearing, which was limited to the issue of

mitigating evidence, the Department did not present any witnesses

or offer any exhibits. Although Respondent did not present any

witnesses, he offered Respondent's Exhibits 2-15, which were

received in evidence. Exhibit 2 is the affidavit of George W.

Hatch, III, Esquire, an attorney representing Respondent in the

federal lawsuit, Exhibit 11 is the deposition testimony of

Patrick W. Elwood, a corporate representative of Respondent's

insurance carrier, and Exhibit 12 is the deposition testimony of

Glenn M. Serrano, an assistant vice-president with Pollution

Insurance Products. Finally, as requested in the parties' Pre-

Hearing Stipulation, the undersigned has taken official

recognition of Sections 403.121(3)(g) and 403.121(6), Florida

Statutes.

A Transcript of the hearing was filed on February 12, 2008.

Proposed Final Orders were filed by Petitioner and Respondent on

February 18 and 19, 2008, respectively, and have been considered

by the undersigned in the preparation of this Final Order.

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:

1. 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.

2. Since July 1978, eight regulated petroleum storage tanks

were situated on the property. See Fla. Admin. Code R. 62-

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.

3. 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.

4. 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.

5. 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.

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.

7. 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).

8. 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] . . . ."

9. 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.

10. 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.

11. 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.

12. 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.

13. 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.

14. 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.

15. 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.

16. 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.

17. 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).

18. 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."

19. 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.

20. During the course of its investigation of this matter,

the Department has incurred expenses "in the amount of not less

than $500.00."

21. 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.

22. 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.

23. 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.

24. 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.

25. 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.

26. 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.

27. 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.

CONCLUSIONS OF LAW

28. The Division of Administrative Hearings has

jurisdiction over the subject matter and the parties hereto

pursuant to Sections 120.569, 120.57(1), and 403.121, Florida

Statutes.

29. Section 376.303(1)(j), Florida Statutes, authorizes the

Department "to bring an action on behalf of the state to enforce

the liabilities imposed by ss. 376.30-376.319." It also provides

that "[t]he provisions of ss. 403.121, 403.131, 403.141, and

403.161 apply to enforcement under ss. 376.30-376.319."

Section 403.121(2)(a), Florida Statutes, authorizes the

Department to "institute an administrative proceeding to

establish liability and to recover damages for any injury to the

air, waters, or property . . . of the state caused by any

violation." The same statute allows the Department to "order the

prevention, abatement, or control of the conditions creating the

violation." § 403.121(2)(b), Fla. Stat. Under this broad

statutory authority, the Department has issued its Notice of

Violation.

30. "The department has the burden of proving with the

preponderance of the evidence that the respondent is responsible

for the violation." § 403.121(2)(d), Fla. Stat.

31. Throughout this case, the thrust of Respondent's

arguments has been two-fold: that it is unfair for the

Department to continue to pursue this enforcement action while

Respondent is engaged in litigation with his insurance carrier

concerning coverage under an insurance policy; and that the

Department should be seeking reimbursement from the insurance

carrier, rather than Respondent. The first argument raises the

issue of whether pending litigation between a responsible party

and its insurance carrier should trump the Department's statutory

responsibility to ensure that site assessment and cleanup

activities are promptly initiated and completed after an unlawful

discharge occurs. In ruling on various preliminary motions

raising this same argument, the undersigned found no statute or

rule which would warrant delaying an enforcement action for an

indefinite period of time while the federal litigation runs its

course, and Respondent has not cited any agency precedent for

doing so. Significantly, if the Legislature had intended that

the Department forego pursuing an enforcement action until this

type of litigation was concluded, it could have written the

regulatory statutes in this manner.

32. As to the second argument, in both the Order on Motion

for Summary Final Order issued on January 25, 2008, and the Order

Granting First Amended Motion in Limine issued on January 30,

2008, the undersigned set forth in detail the reasons why this

argument was not accepted. Those reasons are incorporated into

this Final Order. Here, it is sufficient to say that the statute

reposes in the Department the discretion to file an enforcement

action against the responsible party or the insurance carrier,

and the undersigned will not second guess the exercise of that

discretion by the agency.

33. Count I of the Notice of Violation alleges that

Respondent failed to submit requested information to the

Department within 60 days of written notification, complete site

assessment activities, and timely and completely assess and

remediate the contamination on his property in violation of

Florida Administrative Code Rules 62-770.600(7), (10), and (11)

and 62-770.800(3) and (5). By violating these rules, Count I

alleges that Respondent has also violated Sections 376.302 and

403.161, Florida Statutes, which make it unlawful to violate a

Department rule. Count II alleges that the Department has

"incurred expenses to date while investigating this matter in the

amount of not less than $500.00." Because Respondent has not

disputed these allegations, it is concluded that Respondent has

failed to (a) timely submit an approved SARA-3 for the 1997

discharge, (b) timely submit an approved SAR for the 2004

discharge, (c) timely complete site assessment activities for

both discharges, and (d) timely and completely assess and

remediate the contamination discovered at his property, as

charged in Count I of the Notice of Violation. Likewise,

Respondent has not disputed the fact that the Department has

incurred expenses in the amount of $500.00 while investigating

this matter. Therefore, the Department has also sustained the

charge in Count II.

34. For violating the rules cited in Count I, the

Department has proposed to assess an administrative penalty in

the amount of $10,000.00. In arriving at that amount, the

Department has followed the directive in Section 403.121(3)(g),

Florida Statutes, which provides in relevant part that "[e]xcept

for violations involving hazardous wastes, asbestos, or

underground injection, administrative penalties must be

calculated according to the following schedule:

(g) For storage tank system and petroleum

contamination violations . . . [t]he

department shall assess a penalty of $2,000

for . . . failure to timely assess or

remediate petroleum contamination . . . .

35. In addition, Section 403.121(6), Florida Statutes,

provides that "[f]or each additional day during which a violation

occurs, the administrative penalties in subsection (3) . . . may

be assessed per day violation." (Emphasis added) Exercising its

discretion under this statute, the Department has assessed a

$2,000.00 penalty for four additional days in which the

violations occurred, or an additional $8,000.00. The total

administrative penalty is $10,000.00.

36. The total administrative penalty does not contravene

Section 403.121(2)(b), Florida Statutes, which provides that "the

department shall proceed administratively in all cases in which

the department seeks administrative penalties that do not exceed

$10,000 per assessment as calculated in accordance with

subsections (3), (4), (5), (6), and (7)" and that "[t]he

department shall not impose administrative penalties in excess of

$10,000 in a notice of violation." In assessing the maximum

penalty, it is presumed that the Department did so after taking

into account the length of time and effort expended in seeking to

secure a complete assessment of the site and corrective measures

to cleanup the contaminated property.

37. Section 403.121(10), Florida Statutes, allows a

responsible party to offer "mitigating circumstances" that may

serve as a basis for reducing the administrative penalty. That

statute provides as follows:

(10) The administrative law judge may

receive evidence in mitigation. The

penalties identified in subsection (3),

subsection (4), and subsection (5) may be

reduced up to 50 percent by the

administrative law judge for mitigating

circumstances, including good faith efforts

to comply prior to or after discovery of the

violations by the department. Upon an

affirmative finding that the violation was

caused by circumstances beyond the reasonable

control of the respondent and could not have

been prevented by respondent's due diligence,

the administrative law judge may further

reduce the penalty.

38. Under the foregoing statute, an administrative penalty

"may be reduced up to 50 percent" for "mitigating circumstances,

including good faith efforts to comply prior to or after

discovery of the violations by the department." Also, if a

respondent can demonstrate that "the violation was caused by

circumstances beyond the reasonable control of the respondent and

could not have been prevented by respondent's due diligence," the

penalty may be further reduced.

39. There are only a few reported appellate and

administrative decisions involving mitigation of administrative

penalties, none of which involve circumstances similar to those

presented here. The single appellate decision on this subject

makes clear that to support a claim of mitigation, there must be

"competent, substantial evidence" presented by the respondent.

Florida Department of Environmental Protection v. Holmes Dirt

Service, Inc. et al. , 864 So. 2d 507, 508 (Fla. 1st DCA

2004)(Benton, J., dissenting). Although the majority opinion in

Holmes approved an administrative law judge's reduction in a

penalty due to the respondent's not "hav[ing] enough money to

comply" with Department financial responsibility standards, a

subsequent administrative final order noted that a lack of

financial resources is not a mitigating factor under the statute.

Department of Environmental Protection v. Hethington , DOAH Case

No. 06-3496EF, 2007 Fla. ENV LEXIS 49 at *23 (DOAH April 20,

2007). However, it is unnecessary to reach that issue here since

Respondent has not offered any evidence regarding his inability

to cleanup the contaminated site. Rather, Respondent has simply

asserted that he is unable to demonstrate financial hardship

under Section 376.3071(7)(c), Florida Statutes, because it may

jeopardize the pending lawsuit with his insurance carrier.

40. An administrative penalty has been reduced, for

example, where there was a "long delay" by the Department in

notifying the responsible party that it had failed to file a

required report, and some arguable ambiguity existed in the

language of the notice of violation. Department of Environmental

Protection v. Laniger Enterprises of America, Inc. , DOAH Case No.

06-1245EF, 2006 Fla. ENV LEXIS 150 at * 22 (DOAH Sept. 19, 2006).

However, neither one of these circumstances has been raised here.

In another administrative decision, cited above, "good faith

efforts" by the responsible party "to extinguish [a] fire [on his

property] after its discovery" was sufficient evidence to reduce

an administrative fine. Hethington at *27. On the other hand,

where no factual justification was presented by a respondent for

not timely initiating a site assessment, a reduction in the

amount of the penalty was not warranted. Department of

Environmental Protection v. Elston et al. , DOAH Case Nos. 03-0626

and 03-2284, 2003 Fla. ENV LEXIS 255 at *43 (DOAH Nov. 5, 2003).

Similarly, where no relevant mitigating evidence was presented by

the responsible party for the proven violations, the Department's

proposed administrative penalties were sustained in the final

order. Department of Environmental Protection v. Dajoma, Inc. ,

DOAH Case No. 04-0654EF, 2004 Fla. ENV LEXIS 232 (DOAH June 7,

2004); Department of Environmental Protection v. Leasure , DOAH

Case No. 04-3688EF, 2005 Fla. ENV LEXIS 41 (DOAH Feb. 18, 2005).

41. In terms of mitigation, Respondent admits that he is

liable for completion of the site assessment and for cleanup, but

argues that there are mitigating circumstances for reducing by

fifty percent the administrative penalty of $2,000.00 (down to

$1,000.00) in that he proceeded in good faith in site assessment

until December 2005 when MCC changed its coverage opinion in mid-

assessment and withdrew funding; that multi-day penalties (in the

amount of $8,000.00) are not called for here since he is engaged

in a good faith effort to recoup cleanup costs from his insurance

carrier; and that the remaining $1,000.00 penalty should not be

imposed because the failure to complete site assessment

activities was due to circumstances (a denial of insurance

coverage) beyond his control. In summary, Respondent has agreed

to pay investigative costs and expenses of $500.00 but argues

that no administrative penalties should be imposed.

42. On the other hand, the Department takes the position

that neither filing an insurance claim for coverage nor

litigating with an insurance company constitutes a good faith

effort to comply with Section 403.121, Florida Statutes, so that

the $10,000.00 penalty ($2,000.00 plus $8,000.00 for four more

days in which the violations occurred) may be reduced by up to

fifty percent. Likewise, the Department argues that a further

reduction in the penalty is not warranted, as there is no

evidence that the violation was caused by circumstances beyond

his control or that he could not have been prevented by his due

diligence.

43. The last assessment reports (though still incomplete)

were filed by Respondent in July 2005 for the 1997 discharge, or

two and one-half years ago, and in May 2004 for the 2004

discharge, or almost four years ago. Once the insurance carrier

denied liability in December 2005, all assessment activities

ceased and no required cleanup activities were ever begun.

Admittedly, since July 2006 Respondent has been engaged in

litigation with his insurance carrier seeking recovery of

assessment and cleanup costs. At the same time, the undersigned

recognizes that Respondent has been placed in the difficult

position of defending against a Department enforcement action

while at the same time seeking reimbursement from his insurance

carrier in a federal lawsuit. However, absent some agreement or

understanding with the Department that it may temporarily cease

all assessment and cleanup activities for an unlawful discharge

pending the outcome of litigation, or a change in the existing

statutory scheme, the responsible party must either continue with

assessment and cleanup activities or file an affidavit attesting

to the fact that it is financially unable to complete the

required cleanup of the property. Even so, due to Respondent's

good faith efforts to remediate the discharge during the period

from 2003 until mid-2005, a fifty percent reduction in the

administrative fine (from $10,000.00 to $5,000.00) is warranted.

No further reduction is justified.

44. In his Petition and Proposed Final Order, Respondent

has requested attorney's fees under Section 403.121(2)(f),

Florida Statutes, which allows the recovery of attorney's fees if

there is a determination "that the notice of violation issued by

the department seeking the imposition of administrative penalties

was not substantially justified as defined in s. 57.111(3)(e)."

Because the facts herein establish that Respondent violated the

cited Department rules, and that the issuance of the Notice of

Violation was clearly justified, the request is hereby denied.

45. Finally, Section 403.121(2)(f), Florida Statutes, also

provides that "the prevailing party shall recover all costs as

provided in ss. 57.041 and 57.071. The costs must be included in

the final order." In this case, the Department is the prevailing

party. However, it made no request for the "prevailing party"

costs, and it presented no evidence on their amount. Therefore,

they cannot be included in this Final Order. Elston , supra , at

*48-49.

DISPOSITION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

ORDERED that the charges in the Notice of Violation are

sustained, and that Respondent shall correct and redress all

violations in the time periods required below and comply with all

applicable rules in Florida Administrative Code Rule Chapters 62-

761 and 62-770. Specifically, he shall (1) file a completed site

assessment report within 180 days of the effective date of this

Final Order for the 1997 and 2004 discharges; (2) timely perform

all necessary assessment and cleanup of the contamination on the

property, as required by Florida Administrative Code Rule Chapter

62-770 until the Department issues a No Further Action Order or a

Site Rehabilitation Completion Order; (3) pay the Department

$5,000.00 for the administrative penalties assessed above within

10 days of the effective date of this Final Order; and (4) pay

$500.00 to the Department for investigative costs and expenses

within 10 days of the effective date of this Final Order.

Payment for the administrative penalties and costs shall be made

by cashier's check or money order payable to the "State of

Florida, Department of Environmental Protection" and shall note

"OGC Case No. 06-2199" and "Ecosystem Management and Restoration

Trust Fund" thereon. The payment shall be sent to the State of

Florida Department of Environmental Protection, Northeast

District, 7825 Baymeadows Way, Suite 200-B, Jacksonville, Florida

32256-7590. Finally, Respondent shall remain liable to the

Department for any damages resulting from the violations alleged

herein and for the correction, control, and abatement of any

pollution from his facility.

DONE AND ORDERED this 27th day of February, 2008, in

Tallahassee, Leon County, Florida.

S

DONALD R. ALEXANDER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 27th day of February, 2008.

ENDNOTES

1/ On January 22, 2008, Respondent filed an Amended Petition for

Formal Administrative Hearing, but he withdrew that filing on

January 29, 2008.

2/ All references are to the 2007 version of the Florida

Statutes.

3/ Although the parties have not addressed the reason why the

Department did not request these reports until almost six years

after the discharge occurred, and it is not an issue in this case,

Respondent's Exhibit 2 (a time table of events prepared by

Respondent's federal litigation counsel) suggests that the 1997

discharge was not confirmed until several years later. This

probably explains why a claim with the insurance company was not

filed until sometime in 2003. Exhibit 2 also indicates that the

Department conducted an inspection of the site as early as

September 1997 and noted "No leaks reported" on a Pollutant

Storage Tank System Inspection Report. An inspection of the site

on June 29, 2000, resulted in a Letter of Non-Compliance being

issued, which was followed over the next few years by several non-

compliance and warning letters, and a proposed Notice of Violation

in 2003. Presumably, these warnings related not only to tank 4,

but also to other violations on the property.

COPIES FURNISHED:

Lea Crandall, Agency Clerk

Department of Environmental Protection

3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399-3000

Jason A. Wiles, Esquire

Department of Environmental Protection

3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399-3000

Robert D. Fingar, Esquire

Gramling & Fingar

1607 Village Square Boulevard, Suite 1

Tallahassee, Florida 32309-2771

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is entitled

to judicial review pursuant to Section 120.68, Florida Statutes.

Review proceedings are governed by the Florida Rules of Appellate

Procedure. Such proceedings are commenced by filing the original

notice of appeal with the Clerk of the Division of Administrative

Hearings and a copy, accompanied by filing fees prescribed by law,

with the District Court of Appeal, First District, or with the

District Court of Appeal in the Appellate District where the party

resides. The notice of appeal must be filed within 30 days of

rendition of the order to be reviewed.