ILLINOIS POLLUTION CONTROL BOARD
March 26, 1992
CLINTON COUNTY OIL CO., INC.,
)
HOFFMAN/MEIER’S SHELL and
)
CLARENCE MEIER,
)
)
Petitioners,
)
v.
)
PCB 91—163
)
(Underground Storage
ILLINOIS ENVIRONMENTAL
)
Tank Reimbursement)
PROTECTION AGENCY,
)
)
Respondent.
JON K. ELLIS APPEARED ON BEHALF OF PETITIONER;
RONALD L. SCHALLAWITZ APPEARED ON
BEHALF OF RESPONDENT.
OPINION
AND ORDER OF THE BOARD (by M. Nardulli):
This matter is before the Board on petitioners’ September 5,
1991 filing of a petition for review pursuant to Sectjon 22.l8b(g)
of the Environmental Protection Act. (Ill. Rev. Stat. 1989, ch.
111 1/2 par. 1022.18b(g).) Petitioners Clinton County Oil Co.,
Inc., Hoffman/Meier’s Shell and Clarence Neier (collectively
Clinton) seek review of the Illinois Environmental Protection
Agency’s (Agency) imposition of a $50,000 deductible on Clinton’s
claim for reimbursement from the Underground Storage Tank .Fund
(Fund) for corrective action costs associated with a release from
an underground storage tank (UST) (Ill. Rev. Stat. 1989, ch. 111
1/2, par. 1022.18b(d)(3)(C)(ii)). A hearing was held on November
8, 1991, attended by members of the public. In addition to the
parties’ briefs, the Illinois Petroleum Marketers Association filed
an amicus curiae brief.
FACTS
Clinton owned two USTs located Hofffman/Meier’s Shell, Highway
161 and Main Street in Hoffman, Clinton County, Illinois. (Tr. 13-
A14.)gasolineClintonservicesuppliedstationHoffman/~hasbeenMeier’slocatedShellatwiththegasoline.siteforover
(~~)
40
years. (Tr. 61.) Clinton seeks reimbursement for corrective
action costs associated with a 1,000 gallon UST and a 2,000 gallon
UST installed in 1981, registered April 1, 1986 and taken out of
service and removed December 19, 1988. (R. 3; Tr. 82.) There have
been other USTs located in the same hole as the two tanks for which
reimbursement is sought. (Tr. 68.)
The subject tanks were removed in 1988 for economic reasons.
(P. 4) The Office of State Fire Marshall (OSFM) observed the tank
removal. (Tr. 27.) Thomas Aaron of OSFM testified that the UST5
131—491
2
had not been leaking, that the visual appearance of the soil was
clean and there was no odor and that he did not recommend that the
Emergency Services and Disaster Agency (ESDA) be notified. (Tr.
28—34, 36-38.) According to Aaron, he has never left a site where
he felt a release had occurred without the responsible party
notifying ESDA for an incident number.. (Tr. 34.)
Dale Wade, manager of Clinton Oil, testified that both tanks
were wrapped in polyethylene and that he,has never removed a tank
wrapped in polyethylene that has leaked. (Tr. 20.) John Liening,
maintena~ncesupervisor for Clinton Oil, was present at the tank
removal and testified that “both tanks were in good condition
when we took them out”, he did not recall seeing any holes in the
tanks and that he did not smell any fumes. (Tr.45, 48.) Clarence
Neier, operator of Hoffman/ Meier Shell, testified that he was also
present at the removal and that there were no leaks to his
knowledge. (Tr. 53.) Wade also stated that he had no idea where
the source of the contamination came from. (Tr. 69.)
Clinton’s application states that it became aware of the
release on March 25, 1991. (P. 3.) Those testifying on behalf of
Clinton stated that the first time they became aware of the release
was on March 25, 1991 when digging began for the installation of
two new 5,000 gallon tanks. (Tr. 15, 55—58, 87.) The proposed
location of the new tanks is approximately 30-40 feet from the
location of the subject tanks. (Tr. 59; Pet. Ex. 2.) Extensive
contamination was discovered during excavation for the 5,000 gallon
tanks. (Tr. 121—22.) Also on March 25, 1991, ESDA was notified of
the release. (Tr. 66, 70.)
Clinton’s application for reimbursement states that the
release is a “product overfill”. (P. 4.) Vance Luksetich,
secretary for Clinton Oil, testified that he helped prepare the
application and that “product overfill” was checked because “we
knew it was not a tank leak
...
we didn’t know of any product
spills on the property, so we were left with the fourth.., and only
alternative to check this box.” (Tr. 79-80.)
William Eves of the Agency testified that he reviewed
Clinton’s application and that he concluded that if the USTs “were
removed in December of 1988 and there was contamination present,
they would have been aware of that prior to the cutoff date of July
28, 1989.” (Tr. 100.) Eves testified that it is the Agency’s
position that, in applying the $50,000 deductible, if a tank is
removed prior to July 28, 1989, such removal constitutes
constructive knowledge. (Tr. 104.)
On August 1, 1991, the Agency imposed the $50,000 deductible
on the basis that Clinton had knowledge of the release prior tc
July 28, 1989. Subsequent to rendering its decision, on August 30,
1991, the Agency sent Clinton a letter requesting “additional
information regarding the history of this site prior to March 25,
13 1—492
3
1991.” (Resp. Brief Ex. A.) On November 4, 1991, Clinton
responded to the Agency’s request for more information. Clinton
seeks review of the Agency’s determination arguing that the correct
deductible is $10,000 because it established that.it did not have
knowledge of the release until March of 1991.
DISCUSSION
The issue is whether Clinton met its burden of establishing
that it did not have knowledge of the release prior to July 28,
1989 such that the Agency incorrectly applied the higher
deductible. The Agency asserts that, not only did Clinton fail to
meet its burden, it actually established that corrective action
costs were not incurred as a result of a release from registered
USTs. Therefore, the Agency now asserts that Clinton is not even
eligible to access the Fund. Clinton alleges that the Agency
cannot now assert that it is ineligible for the Fund and that the
only issue is whether the deductible determination is correct.
The Board first addresses whether the Agency can change its
mind and assert lack of eligibility as its reason for denying
access to the Fund. The Agency based its new determination on a
November 4, 1991 letter sent by Clinton in response to the Agency’s
request for more information and upon testimony at hearing. The
Agency made no attempt to introduce this November letter at hearing
or to supplement the record with the letters.
The Board has previously noted that, pursuant to Section
22.18b(g) of the Act, UST determinations are governed by permit
appeal procedures. (Ill. Rev. Stat. 1989, ch. 111 1/2, par.
1022.l8b(g); Rosman v. IEPA (December 19, 1991), PCB 91—80 at 4—7;
Pulitzer Community Newspaper v. IEPA (December 20, 1990, PCB 90—
1425-6.) Consequently, the Agency is bound on review by the
reasons given in its denial letter regarding access to the Fund.
(Pulitzer (PCB 90-1420 at 7.) Fundamental fairness would be
violated if the Agency were free to cite a new basis for its Fund
determination after it has taken final action and after hearing has
been held. (Pulitzer (December 20, 1990), PCB 90-142 at 7.) The
Board concludes that the Agency cannot assert lack of eligibility
to access the Fund for the first time in its post-hearing brief.
The Agency’s arguments in this regard will not be considered by the
Board on review.
Additionally, it is well established that an administrative
agency has no inherent authority to amend or change its decision
and may undertake reconsideration only where authorized by statute.
(Pearce Hospital v. Public Aid Commission (1958), 15 Ill.2d 301,
154 N.E.2d 691; Reichold Chemicals Inc. v. PCB (3d Dist. 1991), 204
Ill. App. 3d 674, 561 N.E.2d 1343.) ~Althoughthe Board possesses
such power, the appellate court has held that the Agency has no
such reconsideration powers. (Reichold, 561 N.E.2d 1343.)
Here, the Agency deemed Clinton eligible to access the Fund and
13 1—493
4
then determined the appropriate deductible amount. The Agency has
no power to reconsider this final decision. Arguments raised by
the Agency after hearing contending that Clinton is not eligible
for the Fund are not properly before the Board on review.
Lastly, the Agency’s request for more information after it had
rendered a final, decision on Clinton’s application for
reimbursement and Clinton’s response are outside the record and
will not be considered by the Board in its review. The Agency made
no attempt to introduce this information at hearing1, nor did the
Agency mbve to supplement the record. Therefore, not only was this
information sought and obtained after the Agency rendered its final
decision, the Agency made no valid attempt to introduce the
documents into the record before the Board. The Board also notes
that the Agency did not utilize its procedure initiated in July of
1991 of requesting supplemental information on when an applicant
first had knowledge of the release where the application indicated
tank removal prior to July 28, 1989. (First Busey Trust &
Investment Co. v. IEPA February 27, 1992), PCB 91-213 at 7.) Had
the Agency followed this procedure, the information discovered at
hearing would likely have been available to the Agency prior to
rendering its final decision.
Based upon the above, the Board concludes that the issue of
eligibility is not before the Board on Clinton’s appeal of the
Agency’s deductible determination. Because the Agency’s argument
of lack of eligibility is outside the record on review, the Board
will not rule upon the Agency’s allegation that Clinton failed to
meet its burden of establishing a release from a UST.
The only remaining issue is whether Clinton established that
it did not have constructive knowledge that the release occurred
prior to July 28, 1989. (Ill. Rev. Stat. 1989, ch. Ill’ 1,2, par.
l022.l8b(d)(3)(C)(ii).) Section 22.lBb(d)(3)(C)(ii) of the Act
provides that if costs incurred were in response to a release of
petroleum which first occurred prior to July 28, 1989 and the
owner/operator had actual or constructive knowledge that such a
release occurred prior to that date, the deductible is $50,000
rather than $10,000.
(~~)
The Act imposes a burden on the
applicant to show that it did not have such knowledge.
(~~)
The Agency presumed constructive knowledge from the fact that
Clinton’s USTs were removed prior to July 28, 1989. The IPMA’s
brief challenges this presumption. Previously, the Board stated
The affidavit of Pod Rowe, an Agency LUST division
employee, states that Clinton’s response was hand
delivered to the Agency four days before hearing. The
affidavit also states that the information in the letter
is virtually identical to testimony given at hearing.
(Agency Brief Ex. A.)
13 1—494
5
that the Agency may presume a release occurred prior to July 28,
1989 when the UST is removed before that date. (Lawrence Cadillac
v. IEPA (February 6, 1992), PCB 91-133 at 3.) The applicant then
has the burden to establish that it did not have actual or
constructive knowledge of the release prior to July 28, 1989.
(~)
However, the Board questions the Agency’s practice of
presuming knowledge based solely on the, date of tank removal
because the date of tank removal does not conclusively establish
the date of knowledge of the release. The Board notes that the
Agency’s new application form developed in July of 1992 now asks
the appl~Lcantto submit information on the date of knowledge of the
release with the application. (First Busey Trust & Investment Co.
v. IEPA (February 27, 1992), PCB 91-213 at 7.)
Here, the record establishes that when the two UST5, as well
as lines, pumps and dispensers, were removed on December 19, 1988,
it did not appear to anyone present that there had been a release.
In addition to persons employed by Clinton and Hoffman/Meier’s
Shell (Tr. 45, 48, 53), Thomas Aaron of the OSFM testified that it
did not appear that the tanks had leaked, he neither saw or smelled
any evidence of contamination and he did not recommend that ESDA be
notified as he normally would have had he suspected a release.
(Tr. 28—34, 36-38.) Aaron testified that, at that time, OSFN was
operating under the
“sight
and smell procedure and visual
appearance of the soil” ~and
that the trenches appeared clean. (Tr.
28.) According to Clinton’s witnesses, they first became aware of
the release on March 25, 1991 while excavating the area in
preparation of installing new tanks about 30-40 feet from the
location of the subject UST. (P. 3; Tr.15, 55—58, 87; Pet. Ex. 2.)
ESDA was notified of the release on March 25, 1991. (P. 3; Pr.
66,70.)
The Agency argues that, due to the extensive contamination
revealed during the March 1991 excavation, Clinton must have been
aware of the release at the time the tanks were removed. The
Agency also argues that since Clinton indicated that the release
was a product of overfill, such a release would have been visible.
Agency project manager Karl Leiser testified that such extensive
contamination would have been apparent upon excavation. (Tr. 132.)
The record does indeed reveal extensive contamination.
However, the record also establishes that those present when the
tanks were removed in 1988, including a representative of OSFM, did
not see or smell any contamination indicating a release, nor did
they see any holes in the tanks wh.ich would indicate a release.
The testimony of Thomas Aaron completely supports Clinton’s
position that it did not have actual or constructive knowledge of
the release when the tanks were removed in 1988. While the Agency
may feel that Clinton must have known of the release when the tanks
were removed because of the extensive contamination, the testimony
of those present at the removal indicates otherwise. The Agency’s
presumption that Clinton had the requisite knowledge at the time
13 1—495
6
the tanks were removed because of the extent of the contamination
is not supported by any testimony of those actually present at the
tank removal.
The Agency also relies on the fact that, on its application
form, Clinton stated that the release was “a product of overfill”
in support of its contention that Clinton had constructive
knowledge of the release. Again, the Agency presumes that since
the tank was removed before July 28, 1989, the overfill must have
occurred before that date. This presumption is reasonable. As
with the’Agency’s argument that Clinton must have been aware of the
release at tank removal due to extensive contamination, the
Agency’s argument with regard to the visibility of overfill is not
borne out by the testimony of those present at the site. The
Agency also appears to allege that Clinton intentionally misled the
Agency by answering th’at the release was a product of overfill.
However, Vance Luksetich, secretary for Clinton who completed the
application form with the assistance of Ron Beavers of Armor
Shield, testified that they were somewhat confused by the form.
According to Luksetich, “We didn’t know what else to put
down. We
knew it was not a tank leak. System leak did not seem possible..
we didn’t know of any product spills on the property, so we were
left with the fourth
...
and only alternative to check in this
box.” (Tr. 79—80.)
The Agency’s application limits the applicant to a series of
form answers which may not accommodate all factual situations. (P.
4; see also, Lawrence Cadillac v. IEPA (February 6, 1992) PCB 91-
133 at 1—2.) Here, Clinton was unsure as to the type of release
involved and was uncertain as to how to complete the Agency’s form.
The Board finds that this uncertainty about filling out the form
provided by the Agency does not warrant imposition of the
constructive knowledge deductible.
The Board concludes that Clinton has met its burden of
establishing that it did not have constructive knowledge of the
release prior to July 28, 1989. Therefore, the Agency’s decision
is reversed and this case is remanded to the Agency for imposition
of a $10,000 deductible.
The Board also notes that it has decided to remand to the
Agency those determinations of eligibility which did not reach the
issue of reimbursibility of costs because such incomplete
determinations are not appealable. (Ideal Heating v. IEPA (January
23, 1992), PCB 91—253.) However, this procedure has only been
applied in cases where no hearing has been held.
(~~)
Because a
hearing had already been held in this case, the Board has decided
the case on the merits.
This opinion constitutes the Board’s findings of fact and
conclusions of law in this matter.
13 1—496
7
ORDER
The Agency’s imposition of the $50,000 deductible is reversed
and this case is remanded for imposition of the $10,000 deductible.
IT IS SO ORDERED.
R.C. Flemal and B. Forcade dissent.
Section 41 of the Environmental Protection Act (Ill. Rev.
Stat. 1989, ch. 111 1/2, par. 1041) provides for the appeal of
final Board orders. The Rules of the Supreme Court of Illinois
establish filing requirements.
I, Dorothy M. Gunn, Clerk of the Illinois Pollution Control
Board, hereby certif~ythat the ,above opinion and order was
adopted on the
‘~~-‘
day of
~
,
1992 by a vote
of
_________
I
P01
Control ‘Board
13 1—49 7