09-003011EF Department Of Environmental Protection vs. Jacqueline S. Freeman Family Trust And John K. Freeman Status: Closed DOAH Final Order on Wednesday, September 30, 2009.

Summary: Petitioner is entitled to $1500 from trustee and trust, each, for failure to obtain an individual ERP before constructing seawall & failure to comply with noticed general permit for adding a roof to a dock. No costs or economic benefit is allowed to DEP.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF ENVIRONMENTAL )

PROTECTION, )

)

Petitioner, )

)

vs. ) Case No. 09-3011EF

)

JACQUELINE S. FREEMAN FAMILY )

TRUST and JOHN K. FREEMAN, )

)

Respondents. )

________________________________)

FINAL ORDER

Robert E. Meale, Administrative Law Judge of the Division

of Administrative Hearings, conducted the final hearing in

Tavares, Florida, on September 1, 2009.

APPEARANCES

For Petitioner: Christopher T. Byrd

Department of Environmental Protection

3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399-3000

For Respondent: John Freeman, individually and as trustee

of the Jacqueline S. Freeman

Family Trust

18950 U.S. Highway 441, Number 212

Mount Dora, Florida 32757

STATEMENT OF THE ISSUES

The issues are whether Respondents dredged and filled

within wetlands and surface waters without a permit and, if so,

what penalty and corrective action should be imposed.

PRELIMINARY STATEMENT

By Notice of Violation, Orders for Corrective Action and

Administrative Penalty Assessment dated February 25, 2009 (NOV),

Petitioner alleged that Respondent Jacqueline S. Freeman Family

Trust (Trust) is the owner of real property with the address of

1505 East Crooked Lake Drive, Eustis, Lake County, Florida

(Property). The NOV alleges that the Property abuts Lake

Nettie, a Class III water.

The NOV alleges that Respondent John K. Freeman (Freeman)

dredged and filled wetlands on the Property without a permit.

Specifically, the NOV alleges that Freeman constructed an

unauthorized seawall, placing about 500 "square" feet of sand

fill within the wetlands and surface waters on the property

(Seawall Project), and adding a roof to an existing dock,

expanding the total dock area over wetlands and surface waters

to about 1216 square feet (Dock Project). These allegations are

stated in two separate counts.

The NOV alleges that the processing fee for the Seawall

Project is $600, and Trust and Freeman (Respondents) received an

economic benefit by not applying for and obtaining the required

permit.

The NOV alleges that Petitioner has incurred investigative

expenses to date of at least $500. This expense forms the basis

of the third count, and the NOV states that these costs are

recoverable under Section 403.141(1), Florida Statutes.

The NOV states that Petitioner is imposing an

administrative penalty of no more than $10,000 against each

Respondent, as calculated in accordance with Section 403.121,

Florida Statutes. The NOV states that the Seawall Project and

Dock Project each constitutes a violation of Florida

Administrative Code Rule 62-343.050 and Section 403.161, Florida

Statutes. Pursuant to Section 403.121(3)(c), Florida Statutes,

the NOV states that Petitioner is imposing a $1000 penalty for

the Dock Project, a $1000 penalty for the Seawall Project, and a

$600 claim for the economic benefit that Respondents obtained by

not applying for and obtaining a permit prior to construction.

The NOV concludes with Orders for Corrective Action. The

conditions of the corrective actions are set forth below in

number seven of the Findings of Fact.

At the hearing, Petitioner called two witnesses and offered

into evidence 13 exhibits. Respondent called one witness,

himself, and offered into evidence one exhibit. All exhibits

were admitted.

The parties did not order a transcript. Petitioner filed a

Proposed Final Order on September 11, 2009.

FINDINGS OF FACT

1. The Trust owns the Property, and Freeman is the sole

trustee of Trust and its sole beneficiary. The Property, which

is located in Lake County, abuts Lake Nettie, a 45-acre lake

with no outlet, under ordinary water conditions. A portion of

the Property occupies wetlands and surface waters of Lake

Nettie. Much of the upland abutting the lake in the vicinity of

the Property is developed, although no other seawalls are

visible. The shoreline in the vicinity of the Property is not

heavily developed, but it bears clear signs of maintenance to

control the growth of vegetation in the sandy beach.

2. Sometime after October 29, 2003, Freeman's late mother

purchased the Property, on which is located a single-family

home. At the time, the Property did not have a dock or seawall.

Shortly after Ms. Freeman acquired the Property, Freeman, an

accountant, or his mother hired a contractor to build a dock.

The dock was constructed in early 2004. Because it did not

exceed 1000 square feet over water, this activity qualified for

a noticed general permit, under Florida Administrative Code Rule

62-341.475(1)(a), although the record does not reveal whether

Ms. Freeman provided the notice required for this activity.

3. Nothing in the record suggests that the construction of

the dock altered the pattern of limited vegetation of the

Property waterward of the wetlands line. However, nothing in

the record suggests that erosion, siltation, or turbidity has

been a problem at the waterward end of the Property. The only

evidence touching on the issue of drainage into the lake is

that, in the vicinity of the Property, runoff enters the lake by

sheetflow.

4. In 2007, by which time title to the Property had passed

to the Trust, Freeman sought to add a roof to the dock that his

mother had had constructed. Finding that the contractor who had

built the dock was no longer in business, Freeman obtained the

required local building permit and did the work himself.

Shortly after completing this job, Freeman constructed the

seawall, obtaining the fill from a neighbor who was excavating a

basement.

5. In connection with this dispute, Petitioner has

established a wetlands line on the Property. The wetlands line

is amply supported by the evidence, including careful analysis

by Petitioner's representatives of the vegetation and soils, as

well as hydrologic indicators, such as algal mats, that are

present on the Property within the area of the Seawall Project.

Based on this wetlands line, the Seawall Project is in the

wetlands, so that the construction of the project constituted

dredging and filling of wetlands. The waterward face of the

seawall is entirely in wetlands, as are the return walls that

run upland from the seawall face and the fill placed upland of

the seawall face. DEP Exhibit 11, which is incorporated by

reference herein, accurately depicts the wetlands line on the

Property.

6. There is some confusion in Petitioner's pleadings

between the surface area of wetlands that Freeman filled and the

amount of fill. The surface area of disturbed wetlands is about

500 square feet. According to Freeman, whose testimony is

credited, the amount of fill was about what would be contained

in a small dump truck, so it might be in the neighborhood of

five cubic yards.

7. In the NOV, Petitioner describes the corrective action

that it is imposing on Respondents. Within 45 days of the NOV,

"Respondent" would be required to conduct certain preliminary

activities and then: 1) remove the seawall and all associated

fill waterward of the wetland line; 2) place the removed fill in

a contained upland location where it will not discharge into

wetlands or surface waters; 3) during and after regrading,

stabilize with vegetation all slopes adjacent to the restored

area as soon as possible (not more than 72 hours after attaining

final grade) to prevent erosion, siltation, or turbid runoff

into the wetlands and surface waters; remove nuisance and exotic

vegetation prior to planting; replant the restoration area with

listed wetland species on three-foot centers within elevation-

based zones depicted on an attached drawing; plant healthy,

nursery-grown stock from a state-licensed nursery; provide

receipts for all plants used in the restoration area; monitor

the restoration area at four-month intervals until the

restoration area contains less than ten percent coverage of

nuisance and exotic species and 80 percent of the plantings have

survived for at least one year and are viable, reproducing

plants; submit monitoring reports to Petitioner; and allow

Petitioner's representatives access to the Property at

reasonable times to determine compliance with the NOV

conditions.

8. Petitioner does not seek corrective action for the

addition of the roof to the dock, which resulted in the addition

of about 216 square feet to the original, 1000 square-foot dock.

Presumably, this decision acknowledges the relative ease of

obtaining a standard general permit for a dock of no more than

2000 square feet serving a single-family home under Florida

Administrative Code Rule 62-341.427(1)(a)2. For this reason,

the violation arising out of the Dock Project is relatively

minor.

9. The corrective actions focus on the seawall because the

violation arising out of the Seawall Project is more

significant. Under Florida Administrative Code Rule

62-341.475(1)(c), this activity involved 400 square feet more

than the 100 square feet of dredging and filling that is allowed

as a "minor system" under a noticed general permit. An

individual environmental resource permit would be required for

this project, and there is no reason to assume that Respondents

would be able to obtain such a permit. Corrective action is

therefore necessary in the form of the removal of the entire

Seawall Project, including all of the fill, and the restoration

of the pre-project grade.

10. The question concerning corrective action is the

extent of Respondents' liability for undertaking the planting

scheme outlined above in the NOV. The record fails to establish

the restorative nature of this activity because, immediately

before the commencement of the Seawall Project, the shoreline in

the impacted area was unvegetated.

11. If Respondents had applied for permits for these two

activities, Petitioner would have charged the fee for the

proposed activity that carried the higher fee, which is the

Seawall Project. The application fee would have been $600. By

not applying for and obtaining this permit, Respondents wrongly

obtained an economic benefit of $600. The fact that Respondents

will only be allowed to keep the product of the Dock Project

suggests that the final economic benefit should be based on the

reduced fee associated with this activity, but, for reasons

stated in the Conclusions of Law, this point is irrelevant

because Petitioner is not authorized to recover either

application fee in this case.

12. Two of Petitioner's representatives testified as to

the cost of their investigatory services in this case. Based on

the total hours expended, at their respective hourly rates,

without regard to any fringe benefits, the cost of the

investigation is about $1700, but, for the reasons stated in the

Conclusions of Law, this fact is also irrelevant because

Petitioner is not authorized to recover these costs in this

case.

CONCLUSIONS OF LAW

13. The Division of Administrative Hearings has

jurisdiction over the subject matter. §§ 120.569, 120.57(1),

and 403.121(2)(d), Fla. Stat. (2009).

14. Section 403.121(2), Florida Statutes, authorizes

Petitioner to pursue administrative relief for a violation of

Chapter 403, Florida Statutes, as specified in Section

403.161(1), Florida Statutes.

15. Section 403.121(2)(b), Florida Statutes, provides that

Petitioner may proceed administratively "to order the

prevention, abatement, or control of the conditions creating the

violation or other appropriate corrective action." Except for

certain violations not involved in this case, Section

403.121(2)(b) provides that Petitioner must proceed

administratively in all cases in which it seeks administrative

penalties of less than $10,000 per assessment.

16. Section 403.161(1)(b), Florida Statutes, provides that

it is a violation of Chapter 403 for "any person" to " fail to

obtain any permit required by this chapter or by rule or

regulation, or to violate or fail to comply with any rule,

regulation, order, permit, or certification adopted or issued by

the department pursuant to its lawful authority."

17. As relevant to this case, under Section 403.031(5),

Florida Statutes, a "person" is

. . . any . . . public or private

corporation, individual, partnership,

association, or other entity and includes

any officer or governing or managing body of

the state, the United States, any agency,

any municipality, political subdivision, or

public or private corporation.

18. Implementing Section 373.414, Florida Statutes,

Florida Administrative Code Rule 62-343.050 requires a noticed

general permit, standard general permit, or individual

environmental resource permit prior to dredging or filling

wetlands or surface waters.

19. Section 403.121(2)(d), Florida Statutes, provides that

Petitioner has the burden of proving by a preponderance of the

evidence that Respondents are responsible for the alleged

violations. This section also requires the Division of

Administrative Hearings to issue a final order on all matters,

including the administrative penalty.

20. For dredge and fill violations, Section 403.121(3)(c),

Florida Statutes, authorizes Petitioner to assess a penalty of

$1000 for unpermitted dredging or filling "against the person or

persons responsible for the illegal dredging or filling." This

section authorizes a penalty of $5000 per violation "against the

contractor or agent of the owner" that conducts unauthorized

dredging or filling.

21. Section 403.121(8), Florida Statutes, requires the

addition to the penalty of the "direct economic benefit" gained

by the violator by the violation, provided consideration of

economic benefit is provided by Florida law or required by

federal law.

22. Section 403.121(2)(f), Florida Statutes, states that

the prevailing party shall recover its costs, as provided in

Sections 57.041 and 57.071, Florida Statutes. Section 57.041

authorizes the party recovering a judgment to recover all of its

"legal costs and charges," and Section 57.071 includes within

costs all bond premiums, court reporter expenses, and sales tax

imposed on legal services, as well as expert witness fees under

certain circumstances. Neither of these provisions expressly

allows the recovery of the cost of an investigation.

23. Section 403.121(10), Florida Statutes, allows

mitigation of the penalties identified in Section 403.121(3),

Florida Statutes. Mitigation of up to 50 percent is allowed for

"mitigating circumstances," which include a good faith effort to

comply before or after Petitioner's discovery of the violations,

but mitigation in excess of 50 percent is allowed only if the

violations were outside the control of the respondent.

24. Section 403.121(11), Florida Statutes, provides that

the penalties shall be paid to the Ecosystem Management and

Restoration Trust Fund.

25. The first legal issue is to identify the party or

parties that may be liable. The statutory definition of a

"person" includes other entities, such as trusts. As the owner

of the Property, the Trust is the person responsible for the

illegal dredging and filling, as it necessarily consented to the

unpermitted work and has benefited from the illegal

improvements.

26. The closer question concerns the liability of Freeman.

Although he performed the unpermitted work, Freeman is not a

contractor, nor an agent of the owner; he is the natural

person--in this case, the trustee--through whom the Trust acts.

To some extent, extending liability to Freeman seems to double

the penalties when the violator is not a natural person, so that

the same penalties may be imposed against the entity and the

natural person through whom it must act. However, at least in

the case of trusts, this double liability seems to be condoned

by Section 736.1013(2), Florida Statutes, which states:

A trustee is personally liable for torts

committed in the course of administering a

trust or for obligations arising from

ownership or control of trust property only

if the trustee is personally at fault.

27. This statutory limitation upon the personal liability

of a trustee implicit in this statute applies to trustees of

inter vivos and testamentary trusts, not land trusts, for which

there is no limitation of liability for trustees. Taylor v.

Richmond's New Approach Association, Inc. , 351 So. 2d 1094 (Fla.

2d DCA 1977). The circumstances of this case suggest that the

Trust is a testamentary or inter vivos trust covered by the

statute, but the distinction in the kinds of trusts is

irrelevant in this case because Freeman was personally at fault.

Because of his acts and omissions in connection with the

ownership or control of the Trust Property, the Trust is liable

for penalties and corrective actions. Thus, he is personally

liable, even if the Trust is testamentary or inter vivos in

nature.

28. The next issue is to identify the amount of the

penalty for the two violations. The Seawall Project is a major

violation and should carry the full $1000 penalty. The

construction of the Seawall Project required an individual

environmental resource permit, and there is no assurance that

the Trust could have met the requirements for this permit.

However, the Dock Project is a minor violation and should be

mitigated by the full 50 percent. The addition of the dock roof

required only a standard general permit, and there is little

chance that the Trust would have had any difficulty in obtaining

such a permit. There are no other mitigating factors to

consider. The ignorance of the law by Freeman is not a

mitigating factor, and the financial impact of these penalties

on the Trust or Freeman is impossible to determine on this

record.

29. The costs of the investigation are not authorized by

Sections 57.041 or 57.071, Florida Statutes, so they are not

included under Section 403.121(2)(f), Florida Statutes. The

investigative costs incurred by the services of two of

Petitioner's employees are, under Sections 57.041 and 57.071,

Florida Statutes, general overhead, which is not recoverable

under these statutes. Cf. Wood v. Panton & Co. Realty, Inc. ,

950 So. 2d 534 (Fla. 4th DCA 2007) (attorney's computerized

research costs not taxable under Section 57.041 because they are

merely overhead). This is not a case of a specific statutory

authorization for the recovery of investigative costs, such as

in Section 403.141(1), Florida Statutes, which authorizes

"reasonable costs and expenses . . . in tracing the source of

the discharge" because, among other things, there was no need to

trace the source of a discharge.

30. Nor is the economic benefit of not paying a permit

application fee properly assessed against Respondents in this

case. Section 403.121(8) is not a substantive statute

authorizing the assessment of such a benefit within the penalty.

This statute requires the existence of other statutory

provisions that authorize (Florida) or mandate (federal)

consideration of economic benefit in particular types of cases.

Petitioner has cited no such statute, nor has the Administrative

Law Judge found one.

31. The corrective actions of removing the seawall,

including the fill and return walls, and restoring the

pre-project grade are clearly authorized by Section

403.121(2)(b), Florida Statutes. The products of unpermitted

activities, these improvements remain unauthorized impacts to

the water resources of Florida, for which there is no assurance

that the required permit would be granted upon the filing of an

application.

32. The portion of the corrective action requiring an

elaborate vegetative plan is not authorized by Section

403.121(2)(b), Florida Statutes. The relevant language of this

statute is limited to restorative actions to eliminate the

products of the unpermitted activities. No vegetation existed

waterward of the wetlands line immediately before the

construction of the Seawall Project, and Petitioner may not

affirmatively require Respondents to provide this net gain to

the shoreline ecosystem, at least in an administrative

proceeding in which injunctive relief is obviously unavailable.

For obvious reasons involving separation of powers, see , e.g. ,

Biltmore Construction Company v. Department of General Services ,

363 So. 2d 851, 853-54 (Fla. 1st DCA 1978), Section

403.121(2)(g), Florida Statutes, acknowledges that injunctive

relief lies within the judicial branch and provides further that

Petitioner waives its right to pursue broad injunctive relief

when it files administratively.

33. Notwithstanding the provisions in the NOV addressing

nuisance and exotic plants colonizing the restored area, the

evidentiary record does not establish any reason, such as soil

disturbance, that might intensify the establishment of nuisance

and exotic plants in the project area. In any event, it is

likely that the same anthropogenic factors, besides the

construction of the Seawall Project itself, that have

discouraged the recruitment of native vegetation to this small

portion of the shoreline ecosystem will also discourage the

establishment of nuisance or exotic vegetation in this area

after the removal of the Seawall Project.

ORDER

Based on the foregoing,

It is

ORDERED that:

1. Within 30 days from the date of this Order, the Trust

shall pay an administrative penalty of $1500 and Freeman shall

pay an administrative penalty of $1500. Each party's payment

shall be by cashier's check or money order payable to the

Florida Department of Environmental Protection and shall bear

the notations, "OGC Case No. 08-2378" and "Ecosystem Management

and Restoration Trust Fund." The payments shall be sent to the

Department of Environmental Protection

Attn: Terry Riordan

3319 Maguire Boulevard, Suite 232

Orlando, Florida 32803

2. Within 30 days from the date of this Order, Freeman

shall attend an onsite prerestoration meeting with Petitioner's

representatives to review the work that is required by this

Order. At this meeting, the representatives will flag the area

from which the Trust and Freeman are to remove all Seawall

Project improvements, including the seawall, return walls, and

fill.

3. Within 60 days from the date of this Order, the Trust

and Freeman, jointly and severally, will complete all work

required to remove all Seawall Project improvements. Prior to

commencing any earthmoving, the Trust and Freeman, jointly and

severally, will properly install and maintain erosion,

sedimentation, and turbidity control devices around the work

areas. The Trust and Freeman may relocate the Seawall Project

improvements to a location landward of the wetlands line on the

Property, but, jointly and severally, will ensure that the

relocated fill will be placed in a contained upland location so

that it cannot discharge to wetlands or surface waters of the

State.

4. Within 75 days of the date of this Order, the Trust and

Freeman, jointly and severally, will regrade the area disturbed

by the Seawall Project to pre-disturbance elevations. During

regrading, the Trust and Freeman, jointly and severally, will

maintain the turbidity and erosion control measures to ensure

that Florida Administrative Code Chapter 62-302 is not violated.

Further, the Trust and Freeman, jointly and severally, will

undertake the regrading so as not to impact wetlands or surface

waters outside of the area already disturbed by the Seawall

Project.

5. Within 10 days after the completion of all restorative

work, the Trust and Freeman will inform the Florida Department

of Environmental Protection in writing, to a person to be

designated at the prerestoration meeting, that the affected

portion of the Property is ready for inspection to confirm that

the Trust and Freeman have properly removed the Seawall Project

improvements and regraded the affected area, both in accordance

with the conditions set forth in this Order.

6. This Order constitutes the required permission of the

Florida Department of Environmental Protection for the above-

described restorative work within the time limits stated above,

which the Florida Department of Environmental Protection may

extend, in its sole discretion. Additionally, this Order

constitutes the required permission of the Florida Department of

Environmental Protection for the Dock Work described in the

Order, but only in the configuration and area that existed on

the date of the last site visit by Petitioner's representatives

prior to the final hearing in this case. The Trust, Freeman,

and the successors or assigns of either party will not make any

additions or alterations to the docking facility without first

obtaining the necessary permit from the Florida Department of

Environmental Protection.

7. If, within one year after the inspection by

Petitioner's representative certifying satisfactory completion

of the work described above, erosion, siltation, or turbidity

exists at levels or rates in excess of those that existed

immediately prior to the commencement of the Seawall Project,

nothing in this Order prevents Petitioner from pursuing

additional administrative or judicial relief, such as to require

the addition and maintenance of native vegetation in order to

restore pre-project conditions in terms of erosion, siltation,

and turbidity.

8. The Trust and Freeman will allow Petitioner's

representatives reasonable access to the Property to inspect or

reinspect the work described above and to inspect for post-work

erosion, siltation, or turbidity.

9. If the Trust conveys the Property prior to the

completion of the work described above and the expiration of the

one-year, post-work period to determine if erosion, siltation,

or turbidity needs to be addressed--and, if so, pending

completion of the additional work to correct the excess erosion,

siltation, or turbidity--the Trust and Freeman, jointly and

severally, shall remain liable under this Order. Additionally,

if Petitioner records a copy of this Order in the public records

of Lake County, Florida (together with a legal description of

the Property), prior to the recordation of a deed of conveyance

or other instrument of encumbrance, such as a lien, the grantee

and its grantees will also be liable for, and the lienholder's

interest will be subordinate to, the above-described work,

including the additional work identified in this paragraph, but

not the monetary penalties. Regardless whether a copy of this

Order has been recorded, the Trust and Freeman, jointly and

severally, shall provide a purchaser with a copy of this Order

prior to closing of the sale of the Property to the purchaser.

10. The remaining relief sought by Petitioner is denied.

DONE AND ORDERED this 30th day of September, 2009, in

Tallahassee, Leon County, Florida.

___________________________________

ROBERT E. MEALE

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 30th day of September, 2009.

COPIES FURNISHED:

Lea Crandall, Agency Clerk

Department of Environmental Protection

Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399-3000

Tom Beason, General Counsel

Department of Environmental Protection

Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399-3000

Michael W. Sole, Secretary

Department of Environmental Protection

Douglas Building

3900 Commonwealth Boulevard

Tallahassee, Florida 32399-3000

Christopher Thomas Byrd

Department of Environmental Protection

3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399-3000

John K. Freeman

Jacqueline S. Freeman Family Trust

18950 US Highway 441, No. 212

Mount Dora, Florida 32757

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.