09-005068EF Department Of Environmental Protection vs. Polo North Country Club, Inc. Status: Closed DOAH Final Order on Thursday, April 22, 2010.

Summary: Petitioner proved failure to maintain financial responsibility, do closure assessment, and label used oil tank. Final Order: $7,500 fine and corrective action.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF ENVIRONMENTAL )

PROTECTION, )

)

Petitioner, )

)

vs. ) Case No. 09-5068EF

)

POLO NORTH COUNTRY CLUB, INC., )

)

Respondent. )

)

FINAL ORDER

On March 3, 2010, a final administrative hearing was held in

this case by video teleconference at sites in West Palm Beach and

Tallahassee before J. Lawrence Johnston, Administrative Law

Judge, Division of Administrative Hearings (DOAH).

APPEARANCES

For Petitioner: Kellie D. Scott, Esquire

Department of Environmental Protection

3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399-3000

For Respondent: Larry A. Zink, Esquire

Zink, Zink & Zink, Co., L.P.A.

1198 Hillsboro Mile, Suite 244

Hillsboro Beach, Florida 33062-1530

Larry A. Zink, Esquire

Zink, Zink & Zink Co., L.P.A.

3711 Whipple Avenue, Northwest

Canton, Ohio 44718-2933

STATEMENT OF THE ISSUES

The issues in this case are whether Petitioner, Department

of Environmental Protection (DEP), should impose on Respondent,

Polo North Country Club, Inc. (Polo North), an administrative

penalty in the amount of $10,000, require Polo North to take

corrective action, and require payment of DEP's investigative

costs for allegedly violating rules relating to above-ground

storage tank (AST) systems.

PRELIMINARY STATEMENT

On August 24, 2009, DEP issued a Notice of Violation, Orders

for Corrective Action, and Civil Penalty Assessment (NOV)

directed to Polo North. The NOV alleged: Count I, failure to

maintain financial responsibility; Count II, failure to maintain

registration; Count III, failure to maintain records and provide

site access; Count IV, failure to properly store used oil; Count

V, failure to properly close the ASTs; and Count VI,

responsibility for DEP's investigative costs. Polo North denied

the charges and requested a hearing, and the matter was referred

to DOAH.

The matter initially was scheduled for a final hearing on

October 1, 2009, but the hearing was rescheduled several times

before being held on March 3, 2010.

The parties filed a Joint Pre-Hearing Stipulation. At the

hearing, the parties had one Joint Exhibit admitted in evidence.

DEP called two witnesses: Judy Dolan, DEP Environmental

Specialist III; and Serina Jones, a storage tank inspector with

the Martin County Health Department. DEP also had its Exhibits

1-2 and 5-20 admitted in evidence. Polo North called two

witnesses: Ed Gifford, general manager of the Martin Downs

Country Club; and Glenn Straub, president of Polo North. Polo

North also had its Exhibits 1-3 admitted in evidence. The

pertinent statutes and rules were officially recognized. It was

stipulated that Polo North does not own the ASTs in question.

The parties did not request a transcript of the final

hearing but requested and were given until March 23, 2010, to

file proposed final orders, which have been considered.

FINDINGS OF FACT

1. Polo North is an active Florida for-profit corporation

that has owned property at 4300 Southwest Mallard Creek Trail in

Palm City in Martin County (the Property), the home of the Martin

Downs Country Club (the Club), since December 31, 2007.

2. When Polo North purchased the Property and took over

operation of the Club, it had an AST system consisting of two

stationary ASTs, together with their associated piping and

dispensers. The ASTs were fully enclosed and had a capacity in

excess of 550 gallons; they were in a secondary containment area

consisting of a concrete slab and walls. The parties stipulated

that Polo North did not purchase or own the ASTs. However, the

ASTs contained vehicular fuel used by Polo North for lawn

maintenance and associated activities in the operation of the

Club. As such, Polo North was responsible for the ASTs.

3. The previous owner's financial responsibility insurance

policy for the ASTs expired on February 17, 2007. No subsequent

financial responsibility insurance of any kind has been

maintained for the ASTs since that date, either by the previous

owner or by Polo North.

4. DEP regulates ASTs like the two that were at the Club

when Polo North took over. Under contract, Martin County

inspects regulated facilities for DEP. If violations noted

during inspections are not corrected, the County refers the

matter to DEP for enforcement.

5. During an annual compliance inspection of the Facility

(i.e. , the AST System on the Property) on February 21, 2008, the

County noted that there was no method of financial responsibility

in place for the ASTs at the Club and no certification of

financial responsibility available for review. It also was noted

that no updated registration form for the ASTs had been submitted

to DEP. An inspection report was prepared by the County and

given to a representative of Polo North explaining the alleged

violations and the corrective actions to be taken--namely, get

and provide a certificate of financial responsibility, update the

registration form, and have the necessary documentation available

for review at the Facility. On February 21, 2008, the County

mailed a non-compliance letter to Polo North explaining the

alleged violations and the corrective actions to be taken and

documented within 30 days.

6. Not having received a response from Polo North

indicating that corrective action had been taken, the County

referred the matter to DEP for enforcement. On June 16, 2008,

DEP re-inspected the Facility and noted the same violations as

before, no corrective action having been taken. In addition, it

was noted that two additional ASTs had been placed in the

secondary containment area but not connected to piping and a

dispenser. The additional ASTs had a capacity of less than 550

gallons each, which is below the threshold for regulation by DEP.

The placement of the unregulated ASTs in the secondary

containment area was not ideal because they were squeezed between

the regulated ASTs and the containment wall, but this was not

cited as an additional violation.

7. Despite having notice of the inspection on June 16,

2008, no Facility representative was present at the time to

unlock the dispensers for inspection. However, the dispensers

had been inspected during the annual inspection done on

February 21, 2008, and were found to have been new since the

previous annual inspection and in acceptable condition.

8. At some point in time during the summer of 2008,

Glenn Straub, the President of Polo North, discussed the matter

with representatives of the County and DEP. He questioned why

Polo North was being cited and why enforcement action was being

taken. He took the position that Polo North had the financial

ability to put up a bond or self-insure any risk from the

regulated ASTs, which he said Polo North did not own. He

recalled being told by DEP and the County that a closure plan

would be required.

9. Without notifying DEP, Polo North initiated action with

the County to close the regulated ASTs at the Club. On June 27,

2008, Polo North submitted a closure plan to the County Health

Department, Storage Tank Section, which reviewed the plan on

June 30, 2008.

10. On September 15, 2008, DEP issued a warning letter to

Polo North. The warning letter explained the violations,

required corrective action, and stated that the proposed penalty

was $6,500 plus $500 for costs and expenses. Polo North did not

respond to the warning letter. At some point in time not

disclosed by the evidence, Polo North disconnected the regulated

ASTs and connected the two unregulated 550-gallon ASTs.

11. On March 11, 2009, DEP and the County conducted another

inspection. DEP found the Facility still to be in violation

because: there still was no evidence of financial responsibility

for the regulated ASTs; the regulated ASTs still contained

potentially explosive petroleum vapors, indicating that they had

not been thoroughly and properly cleaned out for closure; there

was an additional tank in the secondary containment area

containing used oil; the used oil tank was squeezed between one

of the (disconnected) regulated ASTs and the containment wall so

that it was impossible to inspect the used oil tank or the inside

of the containment wall to assess their integrity; there was

evidence that the pipe connection between an unregulated AST and

the dispenser was weeping product onto the floor of the

containment area; there was water with a petroleum sheen and

sludge in the drain area in the floor of the containment area,

making it impossible to inspect the bottom of the drain to

determine if there was a leak to the ground; there was evidence

of used oil spills or leaks from the used oil tank, which had

some rust and was banged up and out-of-shape; there was evidence

of possible discharges to the ground via cracks in, or possibly

defects in the design of, the secondary containment area; and the

regulated ASTs had not been taken out of service and "permanently

closed" in accordance with DEP's closure requirements, in part

because a closure assessment was required due to the possible

discharges. An inspection report was prepared and given to a

representative of Polo North explaining the alleged continuing

and new violations to be resolved in the pending enforcement

proceeding.

12. Since March 11, 2009, all violations have been

corrected except for the closure assessment, the permanent

closure of the regulated ASTs (which have been cleaned and

removed from the site) in accordance with DEP requirements, and

the provision of evidence of financial responsibility. The owner

registration for the regulated ASTs also has not been updated,

but it now has been stipulated that ownership of those ASTs has

not changed.

13. Mr. Straub testified that Polo North can self-insure or

obtain a bond to insure against the cost of corrective action and

third-party liability that might arise due to a discharge or

discharges from the regulated ASTs. Since the closure assessment

has not been done, and the details of Polo North's financial

condition were not presented during the hearing, the evidence

does not corroborate Mr. Straub's testimony. To the contrary,

there was evidence that Polo North switched to unregulated ASTs

to eliminate the need to demonstrate financial responsibility.

14. It would appear from the evidence that extensive damage

from a discharge or discharges from the regulated ASTs is

unlikely, but this cannot be ascertained without a closure

assessment.

15. DEP presented no evidence of its investigative costs

and, in its Proposed Final Order, withdrew Count VI of its NOV.

CONCLUSIONS OF LAW

16. Section 403.121(2), Florida Statutes, prescribes the

administrative enforcement process for DEP "to establish

liability and to recover damages for any injury to the air,

waters, or property . . . of the state caused by any violation."

Under that process, DEP is authorized to "institute an

administrative proceeding to order the prevention, abatement, or

control of the conditions creating the violation or other

process is initiated by "the department's serving of a written

notice of violation upon the alleged violator by certified mail."

§ 403.121(2)(c), Fla. Stat. If a hearing is requested by the

alleged violator, "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.

After the hearing, "the administrative law judge shall issue a

final order on all matters, including the imposition of an

administrative penalty." Id.

17. Florida Administrative Code Rule 1 62-762.301(1)

provides that the AST "requirements of this chapter, unless

specified otherwise, apply to owners and operators of facilities,

or owner and operators of aboveground storage tank systems with

individual storage capacities greater than 550 gallons, that

contain or contained" vehicular fuel or pollutants.

18. Rule 62-762.201(52) defines "operator" as "any person

operating a facility, whether by lease, contract, or other form

of agreement."

19. Rule 62-762.201(55) defines "owner" as "any person

defined in Section 376.301(23), F.S., owning a facility."

20. Under Rule 62-762.201(28): "'Facility' means a

nonresidential location containing, or that contained, any

stationary tank or tanks containing, or that contained regulated

substances, and that have, or had, individual capacities greater

than 550 gallons for AST systems."

21. Count I of the NOV charges a failure to demonstrate

financial responsibility. Under Rule 62-762.401(3), either the

owner or operator of a facility must demonstrate financial

responsibility, i.e. , the ability to pay for corrective action

and third-party liability resulting from a discharge at the

facility. The financial responsibility demonstration "shall be

made . . . in accordance with C.F.R. Title 40, Part 280, Subpart

H . . . ." Fla. Admin. Code R. 62-762.401(3)(a)2. For the

facility in question, financial responsibility is required for "a

minimum of $500,000.00 per incident and $1 million annual

aggregate." Fla. Admin. Code R. 62-762.401(3)(b)1. The evidence

proved that financial responsibility was not demonstrated as

required by Rule 62-762.401(3). "If the owner and operator of a

tank are separate persons, only one person is required to

demonstrate financial responsibility. However, both persons are

liable in event of noncompliance." Fla. Admin. Code R. 62-

762.401(3)(a)1. Polo North is liable for failing to comply with

Rule 62-762.401(3). Count I of the NOV was proven.

22. Count II of the NOV charges a failure to update the AST

system's registration. Under Rule 62-762.401(1), either the

owner or operator of an AST system must register the system. In

this case, it was not proven that the system was not registered

or that there was a need to update the registration since the

owner of the ASTs had not changed. Count II of the NOV was not

proven.

23. Count III of the NOV charges a failure to keep proper

records for and allow access to the Facility for inspection.

Under Rule 62-762.711(1), it was necessary to maintain records

for the Facility in permanent form and to make them available for

inspection, as well as to allow access to the site for

inspection.

24. The evidence did not prove that records were not

maintained properly but, rather, that some records did not

exist--namely, the subjects of Counts I and II, which are the

appropriate charges. The evidence did not prove a record-keeping

violation.

25. There was evidence that, on one inspection, no

representative of Polo North was present at the appointed time

for the inspection and that the inspectors could not access the

Facility's locked dispensers on that occasion. But that did not

constitute a failure to allow access to "the site," it only

occurred one time, and there was no evidence as to the

circumstances of why it occurred, and the condition of the

dispensers was not the focus of the re-inspection. Count III of

the NOV was not proven.

26. Count IV of the NOV charged a failure to properly store

used oil. Rule 62-762-710.401(6) requires used oil to be stored

in containers that are "clearly labeled with the words 'used oil'

and are in good condition (no severe rusting, apparent structural

defects or deterioration) with no visible oil leakage." The tank

Polo North was using to store used oil may have been banged up

and out-of-shape, and there was some rust, but it was not proven

that the rusting was severe, that the defects were structural, or

that the tank was deteriorated. However, the tank was not

labeled "used oil," which proved Count IV of the NOV.

27. Count V of the NOV charges the failure to properly

close a tank system. Rule 62-762-710.801 addresses out-of-

service and closure requirements for regulated ASTs, and

paragraph (4) states that "an assessment shall be performed to

determine if a discharge from the system or system components has

occurred." The evidence is undisputed that no closure assessment

has been performed.

28. Polo North argued in its Proposed Findings of Fact and

Conclusions of Law that, under Rule 62-762.801(3)[sic], no

closure or closure assessment is required for ten years from

March 2009, when the regulated ASTs were taken out-of-service,

because they were in a secondary containment area. Rule 62-

762.801(2)a.3. states: "Systems with secondary containment

installed and operated in accordance with this chapter may remain

in a continuous out-of-service status for ten years. After this

period, the system shall be returned to service or closed in

accordance with subsection 62-762.801(3), F.A.C." But it is

clear from the evidence that Polo North was not just taking the

regulated ASTs out-of-service, it was closing them in accordance

with the closure plan submitted to the County. In addition, it

is clear that, once the ASTs were replaced and removed from the

secondary containment area, Rule 62-762.801(2)a.3. did not apply

to Polo North's regulated ASTs. 2 To the contrary, Rule 62-

762.801(4)(a) clearly states: "At time of closure, [or]

replacement, . . . an assessment shall be performed to determine

if a discharge from the system or system components has

occurred." For these reasons, Polo North's argument has no

merit.

29. In its Proposed Final Order, DEP withdrew Count VI

seeking its investigative costs.

30. The proven rule violations also constitute violations

of Sections 376.302 and 403.161, Florida Statutes.

31. Under Section 403.121(4)(a), Florida Statutes, the

appropriate penalty for Count I is $5,000. Under Section

403.121(5)(a), Florida Statutes, the appropriate penalty for

Count IV is $500. Under Section 403.121(3)(g), Florida Statutes,

the appropriate penalty for Count V is $1,000. Under paragraph

(6) of the statute, it is appropriate to double the penalty for

Count V for a continuing violation. Neither increasing nor

decreasing these penalties under paragraphs (6), (7), (8), or

(10) of the statute is warranted under the facts of this case.

DISPOSITION

Based upon the foregoing Findings of Fact and Conclusions of

Law, the charges under Counts I, IV, and V of the NOV are

sustained, and Polo North shall:

1. Pay administrative penalties in the total amount of

$7,500, payable within 30 days by check or money order to the

Department of Environmental Protection with the notations "OGC

Case No. 09-0071" and "Ecosystem Management and Restoration Trust

Fund." Payment shall be mailed to DEP's Southeast District, 400

North Congress Avenue, Suite 200, West Palm Beach, Florida 33401.

2. Immediately commence the required closure assessment

and, within 45 days, submit a completed Closure Assessment Report

to DEP, as required by the applicable rules.

3. If the closure assessment reveals contamination at the

facility in question, immediately undertake corrective actions in

accordance with Rule 62-762.821(2) and Rule Chapter 62-770.

4. If the closure report reveals any non-petroleum

contamination, it shall be addressed in accordance with Chapters

376 and 403, Florida Statutes, and applicable DEP rules.

DONE AND ORDERED this 22nd day of April, 2010, in

Tallahassee, Leon County, Florida.

S

J. LAWRENCE JOHNSTON

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 22nd day of April, 2010.

ENDNOTES

1/ All rule references are to the Florida Administrative Code.

2/ See Rule 62-762.201(72): "'Secondary containment' means a

release detection and prevention system that meets the

performance standards of paragraph 62-762.501(1)(e), F.A.C., and

includes dispenser liners, piping sumps, double-walled tanks and

piping systems, or single-walled tanks or piping systems that are

contained within a liner or an impervious containment area. A

Release Prevention Barrier, as specified in API Standard 650,

Appendix I, is considered secondary containment for field-erected

aboveground storage tank bottoms."

COPIES FURNISHED:

Kellie D. Scott, Esquire

Department of Environmental Protection

3900 Commonwealth Boulevard, Mail Station 35

Tallahassee, Florida 32399-3000

Larry A. Zink, Esquire

Zink, Zink & Zink, Co., L.P.A.

1198 Hillsboro Mile, Suite 244

Hillsboro Beach, Florida 33062-1530

Larry A. Zink, Esquire

Zink, Zink & Zink Co., L.P.A.

3711 Whipple Avenue, Northwest

Canton, Ohio 44718-2933

Michael W. Sole, Secretary

Department of Environmental Protection

3900 Commonwealth Boulevard, Mail Station 35

Tallahassee, Florida 32399-3000

Tom Beason, General Counsel

Department of Environmental Protection

3900 Commonwealth Boulevard, Mail Station 35

Tallahassee, Florida 32399-3000

Lea Crandall, Agency Clerk

Department of Environmental Protection

3900 Commonwealth Boulevard, Mail Station 35

Tallahassee, Florida 32399-3000

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 agency 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.