OFFICIAL SHORT CITATION NAME: When referring to 2009 OEA X cite this case as

Objection to the Denial of Excess Liability Trust Fund <= /b>

Claim No. 200707144 / FID No. 19416, Waggoners Fuel Company, Inc., =

South Bend, St. Joseph County, Indiana

2009 OEA 30, (08-F-J-4073)

[2009 OEA 3= 0, page 30 begins]

=

OFFICIAL S= HORT CITATION NAME: When referring to 2009 OEA 30 cite this case as

      = ;      Waggoners Fuel Company, Inc., 2009 OEA 30.

Topics:

de novo

Excess Liability Trust Fund

ELTF

spill

release

report

catchment basins

1998 upgrade

percentage

eligibility

annual fees

combination of tanks

USTs

tanks

compartment

Presiding Environmental Law Judge= :

Catherine Gibbs

Party representatives: <= /o:p>

IDEM:   = ;           Denise Walker, Esq.

Petitioner:  = ;       Daniel McInerny, Esq., Alex Intermill, Esq.; Bose McKinney & Evans LLP

Order issued:

April 2, 2009

Index category:

Land

Further case activity:

[none]

[2009 OEA 3= 0, page 31 begins]

STATE OF INDIANA        &= nbsp;           &nbs= p;           &= nbsp;   )        &= nbsp;           &nbs= p; BEFORE THE INDIANA OFFICE OF

           &n= bsp;            = ;            &n= bsp;            = ;           )        &= nbsp;           &nbs= p; ENVIRONMENTAL ADJUDICATION

COUNTY OF MARION        &= nbsp;           )<= /p>

IN THE MATTER OF:        &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;            &= nbsp; )

           &n= bsp;            = ;            &n= bsp;            = ;            &n= bsp;            = ;            &n= bsp;         )

OBJECTION TO THE DENIAL O= F         &= nbsp;           &nbs= p;            &= nbsp;    )

EXCESS LIABILITY TRUST FU= ND CLAIM        &= nbsp;           &nbs= p;   )        &= nbsp;

ELTF NO. 200707144 / FID = NO. 19416      &n= bsp;            = ;             <= /span>)        &= nbsp; CAUSE NO. 08-F-J-4073

WAGGONERS FUEL COMPANY, I= NC.        &= nbsp;           &nbs= p;         )

SOUTH BEND, ST. JOSEPH COU= NTY, INDIANA )

FINDINGS OF FACT, CONCLUSIONS

OF LAW AND FINAL ORDER

This matter having come b= efore the Court for the final hearing held on December 12, 2008, and the Court, b= eing duly advised and having read the pleadings, record, briefs and supplemental evidence and having heard the testimony and evidence, now enters these find= ings of fact, conclusions of law and final order:

Findings of Fact

<= span style=3D'mso-list:Ignore'>1.&n= bsp;     Waggoners Fuel Co., Inc., (the Petitioner) owns the underground storage tanks (USTs) located at 312 South Mayflower, South Bend, Indiana (the Site). Exhibit B.

= 2.&n= bsp;     On November 5, 2007, the Petitioner submitted a zero dollar claim to the Excess Liability Trust Fund (the ELTF). On February 6, 2008, the commissio= ner of the Indiana Department of Environmental Management (the IDEM)[1] notified the Petitioner that it was not eligible to receive reimbursement f= rom the ELTF.

<= span style=3D'mso-list:Ignore'>3.&n= bsp;     The IDEM determined that the Petitioner was not in substantial compliance with the requirement to communicate a spill report to the IDEM for this reason “Though evidence of contamination was found earlier (samples from August 3, 2005), the release was not reported to IDEM until July 18, 2007.” Exhibit F. On December 12, 2008, the parties stipulated that “no samples were either collected or analyzed in conjunction with IDEM’s August 3, 2005 UST compliance inspection at t= he Waggoner facility.”

<= span style=3D'mso-list:Ignore'>4.&n= bsp;     The IDEM also determined that the Petitioner was no= t in substantial compliance with the requirements for upgrading its underground storage tanks (USTs) for this reason “Per the UST Notification Form d= ated 3/20/1995 and the UST Affidavit of Compliance dated 11/13/1998, the USTs at this Site have not been equipped with catchment basins. Therefore, the tanks have not been upgraded to the 1998 requirements.”&= nbsp; Exhibit F.

[2009 OEA 3= 0, page 32 begins]

=

<= span style=3D'mso-list:Ignore'>5.&n= bsp;     In addition, the IDEM determined that the Petitioner had paid only 67% of the annual underground storage tank fees due for this = Site and was eligible to receive 67% of its eligible corrective action costs if = the Site was otherwise eligible for ELTF reimbursement. The IDEM determined that the Petit= ioner was eligible to receive this amount because “The 12,000-gallon gasoli= ne tank has two compartments (7,000 gallons for premium fuel and 5,000 gallons= for regular fuel). This tank shou= ld have been registered and billed as two separate tanks. Accordingly, one tank fee payment = is missing from 1996 through 2007.”&nbs= p; Exhibit F.

<= span style=3D'mso-list:Ignore'>6.&n= bsp;     The Petitioner timely filed its Petition for Review= on February 25, 2008.

<= span style=3D'mso-list:Ignore'>7.&n= bsp;     This matter was heard on December 12, 2008. Judicial notice was taken of Ind. = Code (I.C.) § 13-23, 329 IAC 9 and 328 IAC.

<= span style=3D'mso-list:Ignore'>8.&n= bsp;     On August 3, 2005, Barbara Humphrey, an UST inspect= or employed by the IDEM, inspected the Site.&= nbsp; During her inspection, she noted that there was “leakage” under the dispensers. She did= not take a sample of it. She also observed that there were 3 fill pipes at the Site indicating the number of USTs. Hearing Transcript, page 50, lines 6 -19. She observed catchment basins at t= he Site. Hearing Transcript, page 58, lines 1-3. However, she did not note that the= re were catchment basins at the Site in the report. Petitioner’s Exhibit 1. After her inspection, she went to the Petitioner’s office and spoke with Gordon Norquist, president of the Petitioner.&nbs= p; A copy of the inspection report (Exhibit 1) was given to him.

<= span style=3D'mso-list:Ignore'>9.&n= bsp;     Humphrey made no determination that the leakage observed was (1) a regulated substance; (2) that the leakage reached the groundwater, surface water, subsurface and/or surface soils; or (3) that it= was in sufficient quantity to be reportable.&n= bsp; She did not inform Norquist that the release must be reported to the IDEM.

<= span style=3D'mso-list:Ignore'>10.&= nbsp; Norquist did not inspect the dispensers immediately upon learning from Humphrey that possible leakage had occurred. In the usual course of business, the Site and dispensers were inspected every = two weeks.

<= span style=3D'mso-list:Ignore'>11.&= nbsp; In 2007, as part of a business transaction, the Petitioner engaged SESCO, an environmental consulting company, to perform an investigation at the Site.<= span style=3D'mso-spacerun:yes'> Carla Gill was the project manager= for SESCO. Initial sampling showe= d no soil contamination, but ground water contamination was above RISC[2] residential levels.   A r= elease was reported to the IDEM and an incident number assigned. A Further Site Investigation (FSI)= was performed. At the IDEM’s suggestion, the method of collecting ground water samples was modified. The FSI revealed no soil or ground= water contamination.

[2009 OEA 3= 0, page 33 begins]

= 12.&= nbsp; The USTs were installed in November of 1994.&n= bsp; IDEM’s Exhibit B. Norquist testified that he supervised the ordering and installation = of the USTs at this Site and observed catchment basins being installed. Photographs taken at the time of t= he installation show the catchment basins in the ground. Petitioner’s Exhibit 5. Rich Molini, an inspector with the IDEM, observed catchment basins at the Site on June 1, 2= 008.

= 13.&= nbsp; Both Molini and Humphrey observed 3 fill pipes at the Site.

= 14.&= nbsp; One 12,000 gallon diesel tank and one 12,000 gallon, two-compartment gasoline t= ank were ordered for this Site.[3] Petitioner’s Exhibit 2. One compartmen= t in the 12,000 gallon, two-compartment tank was used to store diesel fuel and t= he other compartment was used to store gasoline.

15.&= nbsp; The Petitioner paid annual fees for 2 USTs between 1996 and 2007. IDEM’s Exhibit E.        =

Conclusions of Law=

1.&n= bsp;     The Office of Environmental Adjudication (“OEA”) has jurisdiction over the decisions of the Commissioner= of the IDEM and the parties to the controversy pursuant to I.C. § 4-21.5-7-3.<= /p>

2.&n= bsp;     This is a Final Order issued pursuant to I.C. § 4-21.4-3-27.= Findings of Fact that may be const= rued as Conclusions of Law and Conclusions of Law that may be construed as Findi= ngs of Fact are so deemed.

3.&n= bsp;     This office must apply a de novo standard of review to this proceeding when determining the facts at issue. Indiana<= /i> Dept. of Natural Resources v. United Refuse Co., Inc., 615 N.E.2d 100 (= Ind. 1993). Findings of fact must be based exclusively on the evidence presented to the ELJ, and deference to the agency’s initial factual determination is not allowed. Id.; I.C. § 4-21.5-3-27(d). “De = novo review” means that:

      all issues = are to be determined anew, based solely upon the evidence adduced at that hearing = and independent of any previous findings.

      Grisell v. = Consol. City of <= st1:City w:st=3D"on">Indianapolis, 425 N.E.2d 247 (Ind.C= t.App. 1981).

[2009 OEA 3= 0, page 34 begins]

4.&n= bsp;     As a preliminary matter, the IDEM argues that this Court should not consider evidence produced by the Respondent at the hearin= g, which was not available to the IDEM for review when it made its decision. The evidence that the IDEM sought = to exclude was any evidence, either documentary or testimonial, regarding the presence of catchment basins at the Site.&= nbsp; While it may be improper to consider such evidence when the Court is considering whether a permit was properly issued, that is not the ca= se in this situation. An applica= nt to the ELTF must provide certain information as part of the claim. However, the IDEM will commonly re= view other sources of information. In this instance, the IDEM, in its review of the files maintained by the agency about the Site, noticed that the Petitioner had not checked the boxes on a = form indicating that catchment basins had been installed on the Site. The Petitioner’s only opport= unity to disprove IDEM’s conclusions is during the hearing on this matter.<= span style=3D'mso-spacerun:yes'> This Court must apply a de novo review standard. Therefore, the evidence produced a= t the hearing regarding the catchment basins must be considered.

Substantial compliance

5.=       The pertinent portions of I.C. § 13-23-8-4(a) state:

Except as provided under subsection (b),= and subject to section 4.5 of this chapter, an

owner or operator may receive money from= the excess liability trust fund under

section 1 of this chapter only if the ow= ner or operator is in substantial compliance (as

defined in 328 IAC 1-1-9) with the follo= wing requirements:

(1)&= nbsp; The owner or operator has complied with the followi= ng:

(A)&= nbsp; This article or I.C. &sec= t; 13-7-20 (before its repeal)

(B)&= nbsp; Rules adopted under this article or I.C. § 13-7-20 (before its repeal).

A release from an underground petroleum storage tank may not prevent an owner= or operator from establishing compliance with this subdivision to receive money from the excess liability fund.

(2)&= nbsp; The owner or operator has paid all registration fees that are required under rules adopted under I.C. § 13-23-8-4.5.

6.=       Substantial compliance is defined in 328 IAC 1-1-9 as:

<= span style=3D'mso-list:Ignore'>(a)&= nbsp;   "Substantial compliance" means that, at the time a release was first discovered or confirmed:

<= span style=3D'mso-list:Ignore'>(1)&= nbsp; the owner or operator has met the requirements of I.C. § 13-23-8-4(a), with the exception of minor violations of:<= /p>
(= A) stat= utory deadlines;

(= B) regu= latory deadlines; or

(= C) regu= latory requirements; that do not cause harm or threaten to harm human health or the environment; and

<= span style=3D'mso-list:Ignore'>(2)&= nbsp; registration fees have been paid as required under I.C. § 13-= 23-12 and 328 IAC 1-3-3.

<= span style=3D'mso-list:Ignore'>(b)&= nbsp; An owner or operator is not in substant= ial compliance if the release:

[2009 OEA 3= 0, page 35 begins]

<= span style=3D'mso-list:Ignore'>(1)&= nbsp; Has not been reported within seven (7) = days of the date the release was required to be reported under the spill reporti= ng rule in effect at the time of the release.

<= span style=3D'mso-list:Ignore'>(2)&= nbsp; Harms public health or the environment = and was not timely reported under the spill reporting rule applicable at the ti= me of the release.

<= span style=3D'mso-list:Ignore'>7.&n= bsp;     The requirements for reporting a suspec= ted release are found in 329 IAC 9-4-1. The requirements for reporting a spill/overfill are found in 329 IAC 9-4-4. The IDEM has not speci= fied which rule the Petitioner has allegedly failed to substantially comply with= .

<= span style=3D'mso-list:Ignore'>8.&n= bsp;     In examining the rules, however, it is clear that under either rule, the owner/operator has some discretion in determining whether a reportable spill has occurred, that is, whether the operating conditions or monitoring indic= ate a release occurred; whether the substance that was allegedly released was regulated; whether the substance impacted groundwater, surface water, subsurface and/or surface soils; or whether the amount released was sufficient to trigger a requirement to report.

<= /p>
<= span style=3D'mso-list:Ignore'>9.&n= bsp;     No release was reported in 2005. The IDEM inspector could not concl= ude that the leakage she observed was a reportable release of a regulated substance. The rule places the burden on the owner/operator to determine whether it is appropriate to repo= rt a release. The Petitioner prese= nted evidence that the dispensers were inspected on a regular basis. The dispensers were equipped with catchment basins which would catch any leakage before it reached the groundwater, surface water, subsurface and/or surface soils. No contamination was found in 2007 duri= ng a site investigation which might indicate that an earlier release had occurred. The Petitioner pres= ented sufficient evidence that no reportable release of regulated substance occur= red in August 2005. The IDEM pres= ented no evidence to rebut this conclusion other than the inspector’s observation of “leakage” in the dispensers.

<= span style=3D'mso-list:Ignore'>10.&= nbsp; The Petitioner presented sufficient evidence that the Site has catchment basins. In denying the reques= t for reimbursement, the IDEM relied upon the documents submitted by the Petition= er which show that the Site was not equipped with catchment basins. However, the Petitioner presented sufficient evidence, including testimony from both IDEM inspectors and documentation showing the basins were installed, that catchment basins were installed and that the documents upon which the IDEM relied were incorrect. The Site is in substantial compliance with the applicable 1998 regulations regarding the catchment basins.

Amou= nt of reimbursement

<= span style=3D'mso-list:Ignore'>11.&= nbsp; For purposes of reimburseme= nt from the Excess Liability Trust Fund (“ELTF”), underground storage t= ank (“UST”) owners and operators may be reimbursed for eligible cos= ts arising out of releases of petroleum according to the formula provided in 3= 28 IAC 1-3-3(b)[4]<= ![endif]> as follows:

[2009 OEA 3= 0, page 36 begins]

<= span style=3D'mso-list:Ignore'>(b)&= nbsp; Persons listed in section 1 of this rule shall be eligible to apply to the fund for reimbursement from the fund according to the following formula:

<= span style=3D'mso-list:Ignore'>(1)&= nbsp; Determine the number of payments that w= ere owed under I.C. § 13-= 23-12-1 on all regulated tanks at the facility from which a release occurred, begin= ning with the date that the fees for each tank first became due under I.C. § 13-= 23-12 and continuing until the date on which the release occurred.

<= span style=3D'mso-list:Ignore'>(2)&= nbsp; Determine the number of payments actual= ly made under I.C. § 13-23-12-1 on all regulated tanks at the facility from which a release occurred, beginning with the date = each tank became regulated under I.C. § 13-23 and continuing until the date on which the release occurred. Divide the number of payments actually made by the number of paym= ents due as determined in subdivision (1).

<= span style=3D'mso-list:Ignore'>(3)&= nbsp; Determine the amount of money the person would have received from the fund if all payments due on the date the relea= se occurred had been paid when due and multiply the amount by:

<= span style=3D'mso-list:Ignore'>(A)&= nbsp; the percentage determined in subdivision (2), if the percentage is fifty percent (50%) or more; or

<= span style=3D'mso-list:Ignore'>(B)&= nbsp; zero= (0), if the percentage determined in subdivision (2) is less than fifty percent (50%).

<= span style=3D'mso-list:Ignore'>12.&= nbsp; The pertinent portion of the definition (I.C. § 13-11-2-241) of “underground sto= rage tank” is: “for purposes of section 161 of this chapter and I.C. § 13-23, = means one (1) tank or a combination of tanks, including underground pipes connect= ed to the tank or combination of tanks: (1) that is used to contain an accumulation of regulated substances; and (2) the volume of which, including the volume of the underground connected pipes, is at least ten percent (10%) beneath the surface of the ground.

<= /p>
13. I.C. § 13-23-12-1(c) states: “= If an underground storage tank consists of a combination of tanks, a separate fee shall be paid for each tank.”

<= span style=3D'mso-list:Ignore'>14.&= nbsp; “The cardinal rule of statutory construction is to ascertain the intent of the legislature by giving effect to the ordinary and plain meaning of the langu= age used.” Bourbon Mini-= Mart, Inc. v. Commissioner, Indiana Department of Environmental Management, 806 N.E.2d 14, 20 (Ind.Ct.App. 2004).

<= /p>
<= span style=3D'mso-list:Ignore'>15.&= nbsp; I.C. § 13-23-12-1(c) is clear that a separate fee is due for each compartment in a combination of tanks. The IDEM based its initial determination of the number of tanks at the Site on information supplied by the Petitioner in the notifications. Upon a review of the inspection re= ports, the IDEM determined that there were three (3) tanks at this Site based on t= he fact that one of the tanks was in fact a combination of tanks and had two (= 2) compartments. The IDEM presen= ted sufficient evidence that there are three (3) USTs at this Site for which an= nual fees are due. The IDEM was co= rrect in its determination that the Petitioner has paid only 67% of applicable UST fees due and is, thus, eligible to receive reimbursement of 67% of eligible corrective action costs.

[2009 OEA 3= 0, page 37 begins]

Final Order<= /b>

      AND THE COU= RT, being duly advised, hereby ORDERS, ADJUDGES AND DECREES that:

= 1.      The Petitioner was in substantial compliance with the spill reporting requireme= nts in August 2005 for this Site.

<= span style=3D'mso-list:Ignore'>2.&n= bsp;     Catchment basins are present at the Site. The Petitioner is in substantial compliance with this requirement of the 1998 upgrade regulations.

3.&n= bsp;     The Petitioner has paid 67% of annual tank fees due= for this Site.

      Waggoners F= uel Co., Inc., (the Petitioner) is eligible to receive reimbursement from the Excess Liability Trust Fund of 67% of eligible costs for the facility locat= ed at 312 South Mayflower, South Bend, Indiana.

      You are fur= ther notified that pursuant to provisions of I.C. § 4-21.5-7-5, the Office of Environmental Adjudication serves as the ultimate authority in administrati= ve review of decisions of the Commissioner of the Indiana Department of Environmental Management. Thi= s is a Final Order subject to Judicial Review consistent with applicable provision= s of I.C. § 4-21.5. Pursuant to I.C. § 4-21.5-5-5, a Petition for Judicial Review of this Final Order is timely only if it is fi= led with a civil court of competent jurisdiction within thirty (30) days after = the date this notice is served.

IT IS SO ORDERED this 2nd day of Apri= l, 2009 in Indianapolis, IN.   =             &= nbsp;           &nbs= p;           &= nbsp;           &nbs= p;            &= nbsp;         &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;                    &= nbsp;

   =             &nb= sp;            =             &nb= sp;            =             &nb= sp;            =       Hon. Catherine Gibbs

Environmental Law Judg= e

[2009 OEA 30: end of decision]

2009 OEA 30 in .doc format

20= 09 OEA 30 in .pdf format