95-001941 The Beach And Tennis Club Condominium vs. Department Of Environmental Protection
 Status: Closed
Recommended Order on Monday, July 24, 1995.


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Summary: Condominium association not entitled to participate in Florida petroleum liability and restoration insurance program due to lack of financial responsibility.

1STATE OF FLORIDA

4DIVISION OF ADMINISTRATIVE HEARINGS

8BEACH AND TENNIS CLUB )

13CONDOMINIUM, )

15)

16Petitioner, )

18)

19vs. ) CASE NO. 95-1941

24)

25DEPARTMENT OF ENVIRONMENTAL )

29PROTECTION, )

31)

32Respondent. )

34______________________________)

35RECOMMENDED ORDER

37Final hearing in the above-styled case was held on June 16, 1995. Robert

50E. Meale, Hearing Officer of the Division of Administrative Hearings,

60participated by videoconference from Tallahassee, as did Respondent's counsel

69Douglas Beason and representative William Euman. Petitioner's counsel and

78representative, as well as the court reporter, attended the hearing in Ft.

90Myers.

91APPEARANCES

92The parties were represented at the hearing as follows:

101For Petitioner: Thomas B. Hart

106Humphrey & Knott, P.A.

110Post OFfice Box 2449

114Ft. Myers, Florida 33902-2449

118For Respondent: W. Douglas Beason

123Assistant General Counsel

126Department of Environmental Protection

1302600 Blair Stone Road

134Tallahassee, Floirda 32399-2400

137STATEMENT OF THE ISSUE

141The issue in this case is whether Petitioner is entitled to participate in

154the Florida Petroleum Liability and Restoration Insurance Program, pursuant to

164the provisions of Section 376.3072(2)(a)3, Florida Statutes (Supp. 1994).

173PRELIMINARY STATEMENT

175At the hearing, the parties agree to present a stipulation to the hearing

188officer. The facts below are derived from the stipulation. Neither party

199called any witnesses. The parties agreed to admission of Hearing Officer

210Exhibit 1 as the sole exhibit.

216The record was left open to allow Petitioner to review certain materials

228and indicate whether it wished to attempt to show that it satisfied the

241requirement of financial responsibility, as of December 31, 1993, by one or more

254of the means listed in 40 C.F.R. 280, Subpart H. By letter dated June 29, 1995,

270Petitioner advised that it would not seek to make such a showing.

282The transcript was filed July 10, 1995. The numbered proposed findings of

294fact of both parties are adopted or adopted in substance.

304FINDINGS OF FACT

3071. Petitioner is a residential condominium association.

3142. Petitioner owned or operated a 1000-gallon tank to store diesel oil to

327operate an emergency power generator. Following the discovery of an underground

338discharge, Petitioner closed the tank and reported the discharge to Respondent

349on July 12, 1994.

3533. Following the receipt of an application, Respondent, by

362letter dated March 22, 1995, determined that Petitioner was ineligible to

373participate in the Florida Petroleum Liability and Restoration Insurance Program

383(Program). The reason cited for the determination is:

391Pursuant to Section 376.3072(2)(a)3.a, F.S.

396the facility was required to be in compliance

404with the Department rules at the time of the

413discharge. Pursuant to Section 62-761.480,

418F.A.C. owners or operators of storage tank

425systems containing petroleum products should

430have demonstrated to the Department the ability

437to pay for facility cleanup and third-party

444liability resulting from a discharge at the

451facility. The compliance deadline for financial

457responsibility for this facility was December

46331, 1993. At the time of discovery of the

472discharge, there was no documentation to

478demonstrate financial responsibility for this

483facility. Therefore, this site is not eligible

490for restoration coverage.

4934. Petitioner did not make any showing of financial responsibility prior

504to December 31, 1993. The significance of the June 29 letter from Petitioner's

517counsel is that, even ignoring Petitioner's failure to demonstrate financial

527responsibility to Respondent by December 31, 1993, Petitioner cannot prove that

538it met the financial responsibility requirements as of such date.

5485. Petitioner is a small business under Section 288.703(1).

5576. Upon discovery of the discharge, Petitioner promptly reported the

567discharge to Respondent and drained and removed the system from service.

5787. Petitioner did not intentionally cause or conceal a discharge or

589disable leak detection equipment.

5938. Petitioner proceeded to complete initial remedial action as defined by

604the rules.

6069. Petitioner never received an eligibility order from Respondent, so

616Petitioner was excused from applying for third- party liability coverage.

626CONCLUSIONS OF LAW

62910. The Division of Administrative Hearings has jurisdiction over the

639subject matter. Section 120.57(1), Florida Statutes. (All references to

648Sections are to Florida Statutes (Supp. 1994). All references to Rules are to

661the Florida Administrative Code.)

66511. Petitioner has the burden of showing that it is eligible to

677participate in the Program. Department of Transportation v. J. W. C. Company,

689Inc., 396 So. 2d 778 (Fla. 1st DCA 1981).

69812. The Legislature created the Program to "provide restoration funding

708assistance to facilities regulated by and in compliance with the department's

719petroleum storage tank rules." Section 376.3072(1).

72513. Section 376.3072(2)(a) provides in relevant part:

732Any owner or operator of a petroleum storage

740system may become an insured in the restoration

748insurance program at a facility provided:

7541. A site at which an incident has occurred

763shall be eligible for restoration if the insured

771is a participant in the third-party liability

778insurance program or otherwise meets applicable

784financial responsibility requirements. After

788July 1, 1993, the insured must also provide the

797required excess insurance coverage or self-

803insurance for restoration to achieve the financial

810responsibility requirements of 40 C.F.R. s.

816280.97, subpart H, not covered by paragraph (e).

824* * *

8273. A site where a discharge is reported to

836the department prior to January 1, 1995, where

844the owner is a small business under s. 288.703(1),

853. . . shall be eligible for [specified] eligible

862restoration costs ..., provided that:

867a. The facility was in compliance with depart-

875ment rules at the time of the discharge.

883b. The owner or operator has, upon discovery

891of a discharge, promptly reported the discharge

898to the department, and drained and removed the

906system from service, if necessary.

911c. The owner or operator has not intentionally

919caused or concealed a discharge or disabled leak

927detection equipment.

929d. The owner or operator proceeds to complete

937initial remedial action as defined by department

944rules.

945e. The owner or operator, if required and if

954it has not already done so, applies for third-party

963liability coverage for the facility within 30 days

971of receipt of an eligibility order issued by the

980department pursuant to this provision.

98514. Section 376.3072(2)(b) provides in relevant part:

9921. To be eligible to be certified as an insured

1002facility, for discharges reported after January 1,

10091989, the owner or operator shall file an affidavit

1018upon enrollment in the program and must file an

1027affidavit each year upon the scheduled date of

1035payment of the annual registration fee assessed

1042pursuant to s. 376.303, or, upon the date of

1051installation of the facility or enrollment in the

1059program and each year thereafter, if the

1066facility is a petroleum storage system that is

1074not subject to the registration fee. ...

10812. Except as provided in paragraph (a), to be

1090eligible, the insured must demonstrate to the

1097department that at the time the discharge was

1105reported, the insured had financial responsibility

1111for third-party claims and excess coverage, as

1118required by this section and 40 C.F.R. s. 280.97(h)

11273. To be eligible, the facility shall be in

1136compliance with department rules as demonstrated

1142at the most recent inspection conducted by the

1150department or the insured demonstrates that any

1157necessary corrective actions identified at the

1163most recent inspection have been corrected as

1170ordered by the department. Should a reinspection

1177of the facility be necessary to demonstrate

1184compliance, the insured shall pay an inspection

1191fee not to exceed $500 per facility . . ..

12014. The department shall issue an order stating

1209that the site is eligible for restoration coverage

1217if the criteria listed in subparagraphs 1-3 are met.

12265. Upon the filing of a discharge notification

1234with the department, the department may inspect

1241the facility. The department shall provide

1247restoration coverage for the facility when a

1254claim requesting such coverage is filed, unless

1261a. The insured has failed to abate the known

1270source of a discharge;

1274b. The insured has failed to take corrective action

1283as required by the department; or

1289c. The insured has intentionally caused or concealed

1297a discharge or disabled leak detection equipment.

1304. . .

130715. Petitioner makes several arguments as to why it is eligible to

1319participate in the Program. None of these arguments is persuasive.

132916. Petitioner argues that Section 376.3072(2)(b)2 removes the requirement

1338of financial responsibility for small businesses seeking to participate in the

1349Program under Section 376.3072(2)(a)3. Petitioner relies on the introductory

1358clause of Section 376.3072(2)(b)2, "Except as provided in paragraph (a)."

136817. Petitioner misreads the Section 376.3072. The purpose of the

1378introductory clause is to avoid conflict between two subsections of Section

1389376.3072(2). Section 376.3072(2)(a)1 contains two financial-responsibility

1395requirements. The first requirement, applicable to incidents occurring on or

1405before July 1, 1993, requires a certain extent of financial responsibility. This

1417is the first sentence of Section 376.3072(2)(a)1. The second requirement,

1427applicable to incidents occurring after July 1, 1993, requires the "required

1438excess insurance coverage or self-insurance . . . to achieve the financial

1450responsibility requirements of 40 C.F.R. 280.97, subpart H . . .." This is the

1464second sentence of Section 376.3072(2)(a)1.

146918. The portion of Section 376.3072(2)(b)2 after the introductory clause

1479restates the more onerous financial- responsibility requirement of the second

1489sentence of Section 376.3072(2)(a)1. Without the introductory clause, Section

1498376.3072(2)(b)2 would thus conflict with the first sentence of Section

1508376.3072(2)(a)1 for incidents occurring on or before July 1, 1993.

151819. Petitioner argues that the small-business provisions of Section

1527376.3072(2)(a)3 do not require financial responsibility for additional reasons.

153620. Petitioner argues that its underground storage tank was in compliance

1547with the rules because it was not subject to the rules. Petitioner relies on

1561Rule 62-761.300(2)(h) and (p), which exempt from the requirements of Chapter 62-

1573761:

1574(h) Any storage tank system used for storing

1582heating oil for consumptive use on the premises

1590where stored [and]

1593(p) Any residential storage tank system[.]

159921. It is unnecessary to determine whether tank was subject to the rules.

1612If Petitioner's tank fell within either or both of these exemptions, then it

1625would not be subject to the rules. This does not mean that the tank would comply

1641with the rules and thus be eligible for coverage under the Program. To the

1655contrary, the Program is reserved for facilities "regulated by and in compliance

1667with" the rules. If Petitioner's argument were correct, its tank would not be

1680regulated by the rules and would not be eligible for coverage under the Program.

169422. In the alternative, Petitioner argues that, if financial

1703responsibility is a requirement of the small-business provisions of Section

1713376.3072(2)(a)3, then Petitioner's tank is not in violation of the rules until

1725Petitioner is given a chance to correct the violation. Petitioner relies on

1737Section 376.3072(2)(b)3, which addresses the compliance of facilities and

1746provides that a participant may show compliance by showing that any violations

1758cited in the most recent inspection have been corrected.

176723. This argument confuses the facility with the owner or operator. The

1779financial-responsibility requirements are imposed on owners or operators, not

1788facilities. DEP inspects facilities. Section 376.3072(2)(a)3 provides only

1796that, when a facility is cited, the participant has a chance to correct the

1810deficiency. Other provisions make it clear that if an owner or operator lacks

1823financial responsibility at the relevant time, it is ineligible to participate

1834in the Program. The inspections and corrective actions described in Section

1845376.3072(2)(a)3 apply to facilities, not owners or operators.

185324. Petitioner argues that it was not subject to the financial-

1864responsibility requirements due to provisions of 40 C.F.R. 280. Either these

1875provisions do not apply to Petitioner's tank or, if they do, they are covered in

1890the discussion of similar provisions contained in Chapter 62-761.

1899RECOMMENDATION

1900It is

1902RECOMMENDED that the Department of Environmental Protection enter a final

1912order determining that Petitioner is ineligible to participate in the Program.

1923ENTERED on July 24, 1995, in Tallahassee, Florida.

1931___________________________________

1932ROBERT E. MEALE

1935Hearing Officer

1937Division of Administrative Hearings

1941The DeSoto Building

19441230 Apalachee Parkway

1947Tallahassee, Florida 32399-1550

1950(904) 488-9675

1952Filed with the Clerk of the

1958Division of Administrative Hearings

1962on July 24, 1995.

1966COPIES FURNISHED:

1968Virginia B. Wetherell, Secretary

1972Department of Environmental Protection

1976Twin Towers Office Building

19802600 Blair Stone Road

1984Tallahassee, FL 32399-2400

1987Kenneth Plante, General Counsel

1991Department of Environmental Protection

1995Twin Towers Office Building

19992600 Blair Stone Road

2003Tallahassee, FL 32399-2400

2006Thomas B. Hart

2009Humphrey & Knott, P.A.

2013P.O. Box 2449

2016Ft. Myers, FL 33902-2449

2020W. Douglas Beason

2023Assistant General Counsel

2026Department of Environmental Protection

20302600 Blair Stone Road

2034Tallahassee, FL 32399-2400

2037NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

2043All parties have the right to submit written exceptions to this Recommended

2055Order. All agencies allow each party at least 10 days in which to submit

2069written exceptions. Some agencies allow a larger period within which to submit

2081written exceptions. You should contact the agency that will issue the final

2093order in this case concerning agency rules on the deadline for filing exceptions

2106to this Recommended Order. Any exceptions to this Recommended Order should be

2118filed with the agency that will issue the final order in this case.

Select the PDF icon to view the document.
PDF
Date
Proceedings
PDF:
Date: 09/07/1995
Proceedings: Agency Final Order
PDF:
Date: 09/07/1995
Proceedings: Recommended Order
Date: 09/07/1995
Proceedings: Final Order filed.
PDF:
Date: 07/24/1995
Proceedings: Recommended Order sent out. CASE CLOSED. Hearing held 06/16/95.
Date: 07/20/1995
Proceedings: Department of Environmental Protection`s Proposed Recommended Order filed.
Date: 07/10/1995
Proceedings: Transcript of Video Proceedings w/cover letter filed.
Date: 06/30/1995
Proceedings: Letter to REM from T. Hart (RE: Petitioner eligibility for restoration program) filed.
Date: 06/16/1995
Proceedings: CASE STATUS: Hearing Held.
Date: 05/26/1995
Proceedings: Notice of Video Hearing sent out. (Video Hearing set for 6/16/95; 9:00am; Ft. Myers)
Date: 04/26/1995
Proceedings: Initial Order issued.
Date: 04/21/1995
Proceedings: Request for Assignment of Hearing Officer and Notice of Preservation of Record; Agency Action Letter; Petition filed.

Case Information

Judge:
ROBERT E. MEALE
Date Filed:
04/21/1995
Date Assignment:
04/26/1995
Last Docket Entry:
09/07/1995
Location:
Fort Myers, Florida
District:
Middle
Agency:
ADOPTED IN TOTO
 

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