18-004555EF Department Of Environmental Protection vs. Td Del Rio, Llc, And David Lynn Dearing Status: Closed Recommended Order on Wednesday, July 24, 2019.

Summary: Department proved that Respondent was responsible for cleanup of a contaminated site and should take corrective action.

S TATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF ENVIRONMENTAL

PROTECTION,

Petitioner,

vs. Case No. 18 - 4555EF

TD DEL RIO, LLC,

Respondent.

_______________________________/

RECOMMENDED ORDER

Administrative Law Ju dge D. R. Alexander conducted a hearing

in this case on May 29, 2019, in Sarasota, Florida.

APPEARANCES

For Petitioner: Paul Joseph Polito , Esquire

Department of Environmental Protection

Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

For Respondent: TD McRae , pro se

Matthew Moralejo , pro se

TD Del Rio, LLC

4608 East Columbus Drive

Tampa, Florida 33605 - 3210

STATEMENT OF THE ISSUE

The issue is whether Respondent, TD Del Rio, LLC, should pay

for investigative costs and expenses and undertake corrective

actions that are demanded by the Department of Environmental

Protection (D epartment), as set forth in the Amended Notice of

Violation and Orders for Corrective Action (Amended NOV).

PRELIMINARY STATEMENT

On January 31, 2018, the Department issued a two - count NOV

alleging that TD Del Rio, LLC, and David Lynn Dearing, who

currentl y own or previously owned and operated a business on

certain property in Tampa, Florida, failed to initiate a site

assessment for hazardous substance contamination on the property.

The NOV requires certain corrective action and the payment of

related cost s and investigative expenses. Timely requests for a

hearing were filed, and the matter was referred by the Department

to the Division of Administrative Hearings to conduct a hearing.

On April 13, 2018, the Department issued an Amended NOV

which added a third count alleging that the two parties had

failed to initiate a site assessment for petroleum and petroleum

product contamination on the property . The Amended NOV requires

certain corrective action and the payment of costs and expenses

of not less than $1,000.00 incurred by the Department in

conducting its investigation.

Prior to the hearing, the Department and Mr. Dearing entered

into a settlement agreement to resolve his charges. Therefore,

this Recommended Order is directed only to TD Del Rio, LLC , and

the style of the case has been amended to reflect this change.

At the hearing, the Department presented the testimony of

four witnesses: Mr. McRae, the managing member of the company;

Mr. McRae's grandson - in - law, Matthew Moralejo; and two Departme nt

employees, Justin Chamberlin and John Sego. TD Del Rio, LLC, was

represented by Mr. McRae and Mr. Moralejo. It presented no

witnesses. Joint Exhibits 1 through 11 were accepted in

evidence. The parties also filed an Amended Joint Pre - hearing

Stipula tion , which sets forth certain stipulated facts.

A one - volume Transcript of the hearing was prepared.

Proposed recommended orders (PROs) were filed by the Department

and Respondent, and they have been considered in the preparation

of this Recommended Orde r.

FINDING S OF FACT

A. Background

1. The Department has the authority to institute an

administrative action to abate or correct conditions that may

create harm to the environment. In this case, it filed an

Amended NOV directing the existing and prior ow ner of certain

property to undertake cleanup and cost recovery to redress the

discharge of petroleum products and disposal of hazardous waste.

The property is located at 4810 South 50th Street, Tampa,

Florida, measures approximately 200 by 800 feet, and i s further

identified as Parcel Number U - 03 - 30 - 19 - 1Q3 - 000112 - 00001.0. The

property is located in an industrial area.

2. Mr. Dearing operated a metal recycling facility on the

property during the 1990s. The facility received scrap waste and

passed waste t hrough mechanical shears that shredded the waste

for sorting and recycling. The Amended NOV alleges that all

contamination on the property occurred while Mr. Dearing owned

the property. The charges related to his activities have been

resolved in a settle ment agreement prior to the final hearing in

this matter. The terms of the settlement are not of record.

3. TD Del Rio, LLC, is a limited liability company formed

in April 2012. It serves as a pension fund for a self - directed

Individual Retirement Accou nt for Mr. McRae. The company

acquired ownership of the subject property in September 2012 by

purchasing a tax deed from Hillsborough County.

4. Respondent agrees that there has been a "discharge," as

defined under section 376.301(13), Florida Statutes , of hazardous

substances and pollutants (petroleum or petroleum products) on

the property prior to September 1, 2012. Such discharges have

not been assessed, remediated, or abated.

5. Respondent agrees there has been a "disposal," as

defined under sec tion 403.703(9), of hazardous waste into and

upon the property prior to September 1, 2012.

6. Respondent agrees that the property is a "facility," as

defined under section 376.301(19).

7. Respondent agrees that the property is a "hazardous

waste facili ty," as defined under section 403.703(15).

B. Environmental Testing

8. Pursuant to a contract with the Department, on April 24

through 26, 2012, Ecology & Environmental, Inc. (E & E),

performed a detailed inspection of the property to determine if

for mer recycling activities conducted at the property have

impacted soil and groundwater beneath the property. The

inspection collected samples of soil, sediment, and groundwater.

The inspection was conducted in accordance with guidance

documents set forth by the United States Environmental Protection

Agency regarding sampling locations, sample types, sampling

procedures, use of data, data types, and field quality assurance/

quality control samples.

9 . Just before E & E issued a final report, Respondent

pur chased the property at a Hillsborough County tax deed sale.

1 0 . On November 12, 2012, E & E issued a 532 - page

Comprehensive Environmental Response, Compensation, and Liability

Information System Site Inspection Report (Report) detailing

analytical results of soil, sediment, and groundwater sampling

performed at the property. See Jt. Ex. 1. E & E concluded that

the activities conducted prior to April 2012 impacted the soil,

sediment, and groundwater at the property.

1 1 . The Department has adopted Soil Cl eanup Target Levels

(SCTLs), which are derived based on exposure to the human body.

The SCTLs account for inhalation, ingestion, and absorption of

contamination into people's bodies. The presence of hazardous

substances above these levels presents a thre at to persons who

come into contact with the substances. If a site has no

polychlorinated biphenyls ( PCBs ) or arsenic exceeding the SCTLs,

there is no requirement for the owner to complete an assessment

or manage exposure at the site.

1 2 . The testing rev eals that the following substances are

present in the property's soil from both zero to two feet and two

to four feet below land surface at concentrations above the

Department's SCTLs: arsenic, barium, cadmium, chromium, lead,

carbazole, benzo(a)antracene , benzo(a)pyrene, benzo(a)pyrene

toxic equivalents, and PCBs.

1 3 . The commercial/industrial SCTL for PCBs is 2,600 ug/kg.

This target level is based upon human exposure to PCB

contaminants eight hours per day. The residential SCTL, based on

24 hours o f exposure per day, is 500 ug/kg.

1 4 . PCBs are found across the majority of the site at

concentrations ranging from 940 ug/kg to 38,000 ug/kg, over

14 times higher than the industrial SCTL and 76 times higher than

the residential SCTL for soil of 50 0 ug/kg.

1 5 . The hazardous substances located in the upper two feet

of land surface present the greatest potential for exposure due

to potential inhalation, in g estion, and absorption of the

substances. Some potential exposure pathways include foot

traffi c on the property stirring up dust which people present on

site could then come into skin contact with or inhale.

1 6 . Any work done in or around the site that is intrusive

in nature could present exposure pathways.

1 7 . In addition to soil contamination, the following

hazardous substances are present in sediment on the property:

arsenic, barium, cadmium, chromium, lead, mercury, silver,

volatile organic compounds, semi - volatile organic compounds, and

PCBs.

1 8 . The following hazardous substances and petro leum

products are present in groundwater on the property at

concentrations exceeding the Department's Groundwater Cleanup

Target Levels (GCTLs): arsenic, barium, xylenes, carbon

tetrachloride, isopropylbenzene, methyl tertiary butyl ether,

tetrachloroethe ne, and trichloroethene. For one well sample,

t he 2012 investigation also reported an exceedance of PCBs of

1.2 ug/kg in groundwater.

19 . The presence of tetrachloroethylene and PCBs in

groundwater is a specific concern at the property. PCBs are not

r eadily soluble in water; however, tetrachloroethylene can act as

a carrier for the PCBs and mobilize this contaminant to a greater

extent vertically from the source area. This is a concern for

the area surrounding the property given that the Floridan

aqui fer, which is a source of potable water for Hillsborough

County, is located approximately 300 feet below ground surface in

the surrounding area.

2 0 . Because Respondent has not completed a S ite A ssessment

R eport ( SAR ) , the full extent of PCB s and other c ontamination in

soil, sediment, and groundwater, including the contaminants'

potential threat to the Floridan aquifer, is not known.

2 1 . Respondent did not present any evidence to contradict

the findings and conclusions in the Report. Moreover, Responden t

has stipulated that there has been a discharge of hazardous

substances and petroleum products on the property prior to its

purchase of the property in September 2012.

C. Pre - Purchase Investigation of the Property by Respondent

2 2 . In order to minimiz e liability for petroleum

contamination, Mr. McRae must have undertaken "all appropriate

inquiry into the previous ownership and use of" the property

before he purchased it, as required by section 376.308(1)(c).

Mr. McRae failed to do so.

2 3 . Mr. McRae is the founder, manager, and registered agent

of the company and has acquired at least 20 other properties

through tax deed sales. He also has bought properties

contaminated with petroleum prior to the purchase of the instant

property. In addition, he ha s owned at least 30 gas stations and

has hired environmental contractors to remove petroleum tanks for

previous gas stations that he bought. Mr. McRae's grandson - in -

law, Matthew Moralejo, has no official title with the company,

but he helps in running the business, has communicated with the

Department, and bought property, including the one at issue here,

at Mr. McRae's direction.

2 4 . Mr. McRae and Mr. Moralejo acknowledge that , before the

purchase, they conducted very little research into the property,

s earching only for things "easily accessible or identified with

the property," such as code enforcement issues or liens. They

conducted visual research of the property by driving by it and

looking at its condition. When the property was purchased, "the

pl ace was a wreck" and "just full of overgrowth and junk."

2 5 . Good commercial practice in the purchase of property

upon which potentially contaminating activities have occurred

entails consultation with a person with appropriate knowledge and

experience. Before purchasing the property, Mr. McRae did not

consult with an environmental attorney or environmental

consultant regarding the potential liability associated with

property used as a metal recycling site.

2 6 . If Mr. McRae had hired an environmental c onsultant to

assist him in assessing the likelihood of contamination at the

property, it would have been standard practice to find public

records about the property, including any prior enforcement

actions taken against prior owners and operators of the pr operty,

all of which were public record. A consultant likely would have

recommended that Mr. McRae conduct a site assessment in

accordance with Florida Administrative Code Chapter 62 - 780.

2 7 . Section 376.308(1)(c) requires that in determining

whether all appropriate inquiry was undertaken by a purchaser of

contaminated property, it is necessary to consider the

"specialized knowledge or experience of the defendant, the

relationship of the purchase price to the value of the property

if uncontaminated, commo nly known or reasonably ascertainable

information about the property, the obviousness of the presence

or likely presence of contamination at the property, and the

ability to detect such contamination by appropriate inspection."

2 8 . Mr. McRae has no specia lized knowledge of sites

contaminated with hazardous substances. However, as noted above,

he has extensive experience regarding the regulation, assessment,

and remediation of petroleum - contaminated sites. He has bought

multiple properties through tax dee d sales, and he has owned at

least 30 gas stations. He has hired environmental contractors to

remove petroleum tanks from properties he owned. He also is

familiar with the Early Detection Incentive Program instituted by

the Department, under which the De partment remediates petroleum -

contaminated sites.

29 . The purchase price of the property in 2002 was

$200,000.00, the purchase price in 2012 was $133,100.00, and the

taxable value of the property in 2015 was $408,106.00.

3 0 . Past information about the pr operty was reasonably

ascertainable. Ownership history of the site is available from

the Hillsborough County Property Appraiser's Office, Hillsborough

County Clerk of the Circuit Court, and Hillsborough County

Environmental Protection Commission (EPC).

3 1 . Information regarding regulatory actions taken at the

property also was reasonably ascertainable. There were many

documents in existence at the time Respondent purchased the

property that showed contamination was present on the property.

They included a 1995 warning letter from the EPC to previous

owners of the property detailing petroleum contamination present

on the property, a 1996 EPC request for a previous owner to

submit a plan to address onsite soil contamination, and a field

investigation condu cted by the Department in April 2012, or five

months before Respondent purchased the property.

3 2 . There is no evidence that the documents referenced

above were not "reasonably ascertainable information." Although

a visual inspection by a lay person woul d not disclose the

presence of contamination at the property, Mr. McRae should have

known to seek information regarding past enforcement history and

site investigation performed at the property.

D. Post - Purchase Actions

3 3 . After buying the property, Res pondent dug up debris

including tires that were approximately four feet below the soil

surface. After removing debris from the contaminated soil,

Respondent spread the disturbed soil. To make the property more

attractive to prospective tenants, Responden t then spread up to

four inches of gravel around the property. This amount of gravel

did not cover the entirety of the contaminated area and did not

break the exposure pathway that the contaminants presented to

people on the property. According to a Depa rtment expert, two

feet of clean fill over the contaminated area would have been an

acceptable intermediate step to break the exposure pathway.

3 4 . After spreading the gravel on the property, Respondent

leased the property to three tenants: a landscape b usiness; a

portalet company; and a storage container facility. The portalet

company and storage container tenants both use the property as

storage facilities, including loading and unloading portalets and

storage containers, when needed. The contaminants present in the

soil present a potential for incidental exposure to workers on

the site, especially given that workers are constantly stirring

up dust by loading and unloading equipment on the property.

E. Department Communications with Respondent

3 5 . O n February 14, 2014, the Department sent Mr. McRae a

letter informing him that the Department had information

indicating that contaminants may have been released or discharged

at the property. The letter referenced the 2012 E & E Report,

which documented metals, volatile organic compounds, semi -

volatile organic compounds, and PCBs in site soils, sediments,

and/or groundwater above SCTLs, Sediment Quality Assessment

Guidelines, or GCTLs. The letter stated that failure to submit

a n SAR within 180 days of re ceipt of the letter, or by August 14,

2014, may subject Respondent to enforcement action to compel such

compliance.

3 6 . Matthew Moralejo responded by email on July 17, 2014,

and stated, in part, that "we have never conducted any type of

business that wo uld have led to the contamination of said

property."

3 7 . The same day, the Department responded by email

directing Mr. Moralejo to the Department's public database,

OCULUS, that provides reports and correspondence regarding

facilities regulated by the Dep artment. The Department provided

a link to the 2012 Report and the name of a contact person to

discuss Respondent's liability as the current property owner , as

well as possible cleanup programs that are available when the

current owner is not the one caus ing the contamination.

3 8 . On September 29, 2015, the Department sent another

letter, with attachments, to Mr. McRae. The Department stated

that "[s]ome limited site assessment activities have been

performed [by E & E] at the site historically; however, the work

completed and the documents submitted to date do not constitute a

complete [SAR] as required by Rule 62 - 780.600, F.A.C." The

Department again requested a n SAR, and, in the alternative,

offered a meeting to discuss the issues associated with the

l etter. Again, the letter warned Mr. McRae that if a n SAR was

not filed within the timeframes required by the rule, he may be

subjected to an enforcement action.

39 . In August 2016, Mr. Chamberlain, a Department

geologist, met with Mr. McRae and Mr. Moral ejo at the property.

During the meeting, Mr. Chamberlain took photographs of the site

and explained his concerns with the property. Specifically, he

informed them that the SAR was still outstanding; and he

recommended that Respondent hire an environmenta l consultant to

assist them in the site rehabilitation process.

4 0 . In October 2016, Respondent hired an environmental

consultant, Mr. Doherty. On November 29, 2016, the Department

emailed Mr. Doherty reminding him that a n SAR was due by

December 13, 2 016. Three days later, Mr. Doherty asked that he

be given a six - month extension to file a n SAR; the Department

authorized only a four - month extension, or to April 3, 2017.

4 1 . Mr. Doherty never conducted any sampling at the

property and he did not submit a n SAR. Mr. McRae explained at

hearing that the consultant "never did [any] work, so he didn't

get paid."

4 2 . On May 25, 2017, the Department sent another letter to

Mr. McRae stating that it had not received a n SAR, and, as a

final request prior to init iating enforcement action, requested

that he provide a summary of all site assessments completed since

September 29, 2015, complete installation of groundwater

monitoring wells and conduct sampling within 90 days, and submit

a n SAR by October 23, 2017.

4 3 . Respondent did not comply with any of those requests.

To date, a n SAR has not been submitted and a site assessment h as

not been conducted. The Department then issued an NOV, as

amended.

4 4 . Given the numerous letters and emails sent to

Respondent, a nd various site inspections, the Department has

incurred costs and expenses of at least $500.00 investigating

this matter. Respondent does not dispute this amount.

F. Respondent's Defense

4 5 . Respondent essentially contends it is an innocent

third - party purchaser because it had nothing to do with the

recycling activities conducted on the property during the 1990s.

It argues that the clean - up costs requested by the Department

equal or exceed the value of the property and are cost

prohibitive. In its PRO , Respondent contends that if the

Department reached a settlement with Mr. Dearing, whose company

is responsible for the hazardous waste discharge in the 1990s,

this should relieve Respondent from any responsibility. It asks

that the Department use "compa ssion" in dealing with him .

CONCLUSIONS OF LAW

4 6 . Section 403.121(2)(b) provides that the Department may

institute an administrative proceeding to order the abatement of

conditions creating a violation of the law. Because the

Department is not requestin g the imposition of administrative

penalties, it "retains its final - order authority" in this

proceeding. § 403.121(2)(d), Fla. Stat.

4 7 . The Department has the burden of proving by a

preponderance of the evidence that TD Del Rio, LLC, is

responsible for the violations, as alleged in the Amended NOV.

Id .

4 8 . Regarding the disposal of hazardous substances, Count I

of the Amended NOV charges Respondent with a violation of Florida

Administrative Code Rule 62 - 780.600, which requires persons

responsible for site rehabilitation to initiate a site assessment

within 60 days of discovering a discharge.

49 . The evidence shows that the property is contaminated;

TD Del Rio, LLC, as the owner of the property, is a person

responsible for site rehabilitation; and t he property is a

facility.

5 0 . Section 376.308(1) imposes strict liability on the

owner of the facility contaminated with hazardous substances.

To establish liability, the Department need only plead and prove

that the prohibited discharge or other pollu ting condition has

occurred. See § 376.308(1), Fla. Stat. See also FT Invs., Inc.

v. State Dep't of Envtl. Prot. , 93 So. 3d 369, 370 - 71 (Fla. 1st

DCA 2012).

5 1 . Respondent can avoid liability only if it can prove

that it qualifies for an affirmative d efense set forth in

section 376.308( 2)(d), known as the third - party defense. The

third - party defense allows a defendant to escape liability if it

can show: (1) a third party's act or omission was the sole cause

of the occurrence; (2) the defendant exerc ised due care with

respect to the pollutant concerned, taking into consideration the

characteristics of such pollutant, in light of all relevant facts

and circumstances; and (3) the defendant took precautions against

any for e seeable acts or omission s of an y such third party.

5 2 . The evidence shows that Respondent failed to exercise

due care. Although requested by the Department to do so on

multiple occasions, Respondent did not conduct a site assessment

to delineate the general extent of the contaminati on. By failing

to conduct the assessment, the risk to public health and safety,

as well as possible horizontal migration of the contamination

onto neighboring properties and vertical migration into

groundwater, is not known.

5 3 . Regarding the discharge of petroleum or petroleum

products on the property, Count II alleges that Respondent has

violated rule 62 - 780.600 by failing to initiate a site assessment

within 60 days of discovering a discharge of petroleum products.

5 4 . The evidence shows that the pr operty is contaminated

and Respondent is a person responsible for rehabilitation.

5 5 . To avoid liability for petroleum contamination,

Respondent must satisfy not only the third - party defense in

paragraph (2)(d) of section 376.308, but also the innocent

pu rchaser defense in paragraph (1)(c).

5 6 . The innocent purchaser defense allows a purchaser of

contaminated property to escape liability if the purchaser can

show that it: (1) acquired title to property contaminated by the

activities of a previous owner or other third party; (2) did not

cause or contribute to the discharge; (3) did not know of the

polluting condition at the time the owner acquired title; and

(4) if title was acquired after July 1, 1992, it undertook, at

the time of acquisition, all appr opriate inquiry into the

previous ownership and use of the property consistent with good

commercial or customary practice.

5 7 . As previously found, Respondent failed to conduct all

appropriate inquiry. Here, Mr. McRae failed to obtain the

assistance of a person with specialized knowledge before

purchasing a former metal recycling site located in an industrial

area, and he failed to check Department records before

purchasing. These considerations are fatal to his claim of being

an innocent purchaser.

5 8 . Even if Respondent demonstrated that it has undertaken

all appropriate inquiry before purchasing the property and is an

innocent purchaser, it also must satisfy the third - party defense

and due care standard under paragraph (2)(d).

59 . For the reasons previously found, in light of all

relevant facts and circumstances, Respondent has failed to

exercise due care with respect to pollutants that have

contaminated the property.

6 0 . In Count III, the Department seeks to recover its

reasonable costs and expe nses in tracing the source of the

discharge. § 403.141, Fla. Stat. There is no dispute that the

Department has incurred at least $500.00 in investigative costs.

6 1 . The corrective action ordered in the Amended NOV is

reasonable and should be imposed.

6 2 . In summary, the Department has proven, by a

preponderance of the evidence, that the charges in the Amended

NOV should be sustained. While Respondent contributed nothing to

the contamination on its property, and all contamination likely

occurred durin g the 1990s, under the statutory scheme in place,

absent a demonstration by Respondent that it satisfies the

statutory criteria for avoiding liability, Respondent is

responsible for the cleanup costs .

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 sustaining the charges in Counts I, II, and

III of the Amended NOV. It is further

RECOMMENDED that within 30 days of the final order,

Respondent TD Del Rio, LLC, shall commence a site assessment and

submit a n SAR in accordance with rule 62 - 780.600. Respondent

shall assess and clean up all hazardous substance contamination

and petroleum contamination at the property in accordance with

chapter 62 - 7 80 and the timeframes therein. It is further

RECOMMENDED that within 90 days of the effective date of the

final order, Respondent shall pay $500.00 to the Department for

costs and expenses. Payment shall be made by cashier's check or

money order payable to the "State of Florida Department of

Environmental Protection" and shall include thereon the notations

"OGC Case No. 17 - 1090" and "Ecosystem Management and Restoration

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

Department of Environ mental Protection, Southwest District,

13051 North Telecom Parkway, Suite 101, Temple Terrace, Florida

33637.

DONE AND ENTERED this 24th day of July , 2019 , in

Tallahassee, Leon County, Florida.

S

D. R. ALEXANDER

Adminis trative 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 24th day of July , 2019 .

COPIES FURNISHED:

Paul Joseph Polito, Esquire

Department of Environmental Protection

Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

(eServed)

Lea Crandall, Agency Clerk

Department of Environm ental Protection

Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

(eServed)

TD McRae

TD Del Rio, LLC

4608 East Columbus Drive

Tampa, Florida 33605 - 3210

Noah Valenstein, Secretary

Department of Environment al Protection

Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

(eServed)

Justin G. Wolfe, General Counsel

Department of Environmental Protection

Legal Department, Suite 1051 - J

Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

(eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exce ptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recomme nded Order should be filed with the agency that

will issue the Final Order in this case.