BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

MA!?

23

2005

FREEDOM OIL COMPANY,

)

STATE

OF

ILL

t’~o

POllution Controj

BO~

Petitioner,

)

PCB

03-54

)

PCBO3-105

vs.

)

PCBO3-179

)

PCB 04-02

ILLINOIS ENVIRONMENTAL

)

(LUST Fund)

PROTECTION AGENCY,

)

PCB

03-56

)

(UST Appeal)

Respondent.

)

(Consolidated)

MOTION FOR DEFAULT JUDGMENT OR IN THE ALTERNATIVE

TO PROHIBIT INTRODUCTION OF EVIDENCE

NOW

COMES

the

Petitioner,

FREEDOM

OIL

COMPANY,

an

Illinois

corporation (“Petitioner”), by

its

attorneys, Howard and Howard Attorneys,

P.C., and in

support of its Motion

for Default Judgment or in

the Alternative

to

Prohibit Introduction

ofEvidence, states as follows:

BACKGROUND FACTS

This

matter has been delayed by the Illinois Environmental Protection

Agency’s

(“IEPA”) lack of attention to it.

As

discussed below, this matter was continued for over a

year while

Petitioner waited for a

settlement

position

promised by

the

state.

Once

it

became

apparent

no

settlement

offer

would

be

forthcoming,

Petitioner

requested the

hearing

be

set.

Since

then,

additional

delays

have

arisen

from

the

IEPA’s

failure

to

comply

with

Board

discovery

rules

and

two

Hearing

Officer

Orders

setting

discovery

deadlines.

Moreover, the agency record has never been filed despite Orders by the Board

and

Hearing

Officer

setting

filing

deadlines.

The

IEPA’s

delays

are

prejudicial

to

Defendant and

without justification

given Petitioner’s

rights

at

issue.

As

a

result, the

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conduct justifies the imposition of default judgment or in

the alternative an

order barring

agency evidence at hearing.

This case was initially filed on October

25,

2002, over two-and-a-half years

ago.

Freedom incurred significant early action and corrective action

costs to address April and

August 2002 releases at Freedom’s Paris

Illinois gasoline station.

IEPA denied Freedom

reimbursement

of

approximately

Two

Hundred

Seventy

One

Thousand

Dollars

($271,000.00) from the LUST

Fund and Freedom appealed to

the Board.

IEPA denied

the majority of the

costs

($240,000.00) because some

tanks

ineligible

for

LUST

Fund

reimbursement

were

discovered

during

Freedom’s

clean

up

of

the

2002

releases.

Freedom maintains the

Ineligible Tanks

were

a

coincidental discovery during

the

clean

up.

More

importantly,

Freedom

maintains

the

Ineligible

Tanks

did

not

create

any

conditions at the Property requiring remediation.

As

the reports

filed by Petitioner with

the state demonstrate, the tanks had been filled with

sand and closed in place by the prior

property owner.

In addition, the

soil surrounding the Ineligible Tank cavity did not show

color,

odor,

or

PID

readings

indicating

the

presence

of

gross

contamination

or

contamination

requiring

remediation

under

35

IAC

Part

732

or

742.

As

a

result,

apportionment of clean

up

costs

to

these

tanks

is

inappropriate.

To

date, the IEPA has

not offered

an

explanation why clean up

costs

were

apportioned to

the Ineligible Tanks

beyond the conclusionary statements

in its denial letters.

At

the

time of the

appeal

filing,

Petitioner advised

the Hearing Officer

it was

prepared to

go to

trial and did not plan to

file a waiver of the statutory decision deadline.

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Petitioner agreed

to

extensions

of the

decision

deadline

to

allow

consolidation

of the

cases

as

it would

be

more efficient for Petitioner, the Board

and

the agency to hear the

appeals

together

as

the

facts

and

issues

were

identical.

To

permit

consolidation,

an

extension regarding the

waiver of statutory

deadline

decision

until

July

10,

2003

was

filed.

After

that,

Petitioner agreed

to

postpone

the hearing

for settlement

negotiations.

During this

period, IEPA made several representations

to

the Hearing Officer that

IEPA

would

make a settlement proposal.

In the belief the negotiations would be

worthwhile,

Petitioner agreed

to

the delays.

Petitioner’s

counsel and

consultants met with

IEPA and

IEPA’s counsel in August 2003

and explained why the site information demonstrated the

Ineligible

Tanks

did

not

cause

any

conditions

requiring remediation.

(Exhibit

1)

At

IEPA’s

request

Petitioner provided

further explanation in

follow

up

to

the

meeting

in

December 2003.

(Exhibit 2)

Petitioner also

requested that at a minimum, IEPA correct

the apportionment

allocations

for Application

1

and

2

for which

there was

no

dispute.

(See Exhibit 2)

Based

upon

the

belief

that

IEPA’s

technical

unit

would

consider

Freedom’s

information

and

that

thereafter

the

parties

would

resume

settlement

negotiations,

Petitioner

filed

an

open

waiver

of

decision

deadline

following

a

January

15,

2004

teleconference.

The matter was further continued based on

the agency’s representations

in March and July 2004 that settlement proposals would be made to Petitioner.

As

reflected by the Board’s record, during a telephonic conference status

hearing

on

March

18, 2004,

IEPA represented

to

the Hearing Officer that

its

technical

unit had

THIS

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the additional

information and that the IEPA would

send a proposal

to Petitioner within

two

weeks

(See

March

18,

2004

Hearing

Officer

Order).

In

reliance

on

this

report,

Petitioner’s

counsel

agreed

to

an

extension

of

six

weeks

on

a

May

27,

2004

teleconference call.

Three months after the telephonic conference in which IEPA represented it would

make a proposal, IEPA still had not made the promised proposal.

Nonetheless,

on a July

13,

2004, telephone conference with the Hearing

Officer, IEPA confirmed to the Hearing

Officer that

it planned to

make

a

settlement

offer

within

one

week

(See

July

13,

2004

Hearing Officer Order).

During the August 31, 2004 status hearing, IEPA committed to a

September

meeting

to

explore settlement

(See August

31,

2004 Hearing Officer Order).

The meeting did not take place.

At the September 24, 2004, status hearing, IEPA advised

counsel was

still checking with the technical unit and would contact Petitioner soon (See

September 24, 2004 Hearing Officer Order).

Even though

Petitioner relied upon

these representations in

agreeing to

constant

continuances,

IEPA

did

not

make

a

settlement

offer

and

did

not

engage in

settlement

discussions.

Moreover, IEPA did not inform Petitioner it did not

intend to make an offer.

Lastly, IEPA did not take steps to correct the erroneous allocations on Applications

1 and

2

for which

there was

no

dispute.

(IEPA corrected the allocation error in

Application

1

after Petitioner filed a Motion for Partial

Summary Judgment in February 2005).

Once it

became apparent

further continuances

would be unproductive,

at the Petitioner requested

the hearing officer set

a hearing

date.

As

a

result,

a tentative

hearing date was

set for

February

8, 2005.

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Delays in Filing the Record

On January 23, 2003,

the Board

ordered the IEPA to

file the Record by February

13,

2003.

On February

18, 2003,

IEPA filed a Motion

for Extension ofTime

to File the

Record.

In support ofits

Motion,

IEPA noted the agency’s intent to

conduct settlement

discussions

with

Petitioner

and

that

the

agency

would

report

the

progress

of

said

negotiations

to

the Board.

IEPA further represented that the Record would

be filed not

less

than

fourteen days

from

the date

the Board

issued

notice

of a

hearing or

earlier if

requested by Petitioner.

On February

19,

2003

the Hearing Officer granted the agency’s

motion.

Thereafter the

Board

entered

orders

requiring the

agency to

file the

Record.

While

these

later

orders may

have been

confusing

as

to

whether the

Hearing Officers

Order was voided, the Administrative Record of the agency’s determination has not been

filed with the Board even though hearing dates

were

set

for February

8,

2005, March 2,

2005, and April 6, 2005.

Delays in Discovery

In preparation for the February

8,

2005,

hearing, Petitioner

sought

discovery of

the

basis

for IEPA’s

allocation

of corrective action

costs

to

the

Ineligible

Tanks.

In

accordance with the rules Petitioner submitted discovery requests on November

17, 2004.

(Exhibit

3)

The

Rules

required IEPA

to

answer by December

14,

2004.

IEPA did not

comply with the December

14,

2004

rule

deadline.

During a teleconference on

January

4,

2005,

the

Hearing

Officer was

advised of the outstanding

discovery requests.

The

Hearing Officer ordered IEPA to

comply

by

January 27,

2005,

and set

the hearing date

for March 2, 2005.

(Exhibit 4)

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IEPA

did

not

comply

with

the

January

27,

2005,

deadline

established

by

this

order.

As

a result, Petitioner filed a Motion for Discovery Relief on

February 21,

2005,

seeking to bar the agency’s evidence at hearing.

At a February 24,

2005, teleconference,

the Hearing Officer once again ordered IEPA to

respond to the discovery requests setting

a new due date ofMarch

2, 2005.

Petitioner indicated the Motion

for Discovery Relief

could be

withdrawn based on

the state’s agreement with the revised discovery deadline.

As

the hearing could not proceed without the discovery, the hearing had to

be postponed

until April 6, 2005.

(Exhibit 5)

IEPA did

not

comply

with

March

2,

2005,

discovery deadline.

On March

16,

2005,

IEPA

counsel

advised

Petitioner

via

email

he

was

on

paternity

leave

until

March 29,

2005.

Counsel

for the IEPA indicated a continuance would be

requested by

the state and has notified the hearing officer via email on March 22, 2005, ofthat intent.

Petitioner agreed to

continue the statutory decision deadline in reliance on IEPA’s

representations that settlement discussions

would be

productive.

Instead, there have been

no

substantive

settlement

discussions

and

Petitioner

continues

to

suffer

economic

penalties by IEPA’s

delay.

As

discussed below, Petitioner does not believe the answer is

continued

delays and continuances.

Nor should Petitioner be

forced into a hearing where

evidence

may

be

produced

that

was

not

produced

in

discovery.

Instead,

Petitioner

believes at this point default judgment in

Freedom’s

favor is

appropriate.

Alternatively,

the

agency

should

be

barred

from

presenting

any

evidence

that

should

have

been

produced

in

response

to

Petitioner’s

written

discovery

at

the

hearing

which

should

proceed at the earliest possible time.

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ARGUMENT

The

Board’s Procedural

Rules

authorize relief,

including

default judgment,

for

failure to comply with discovery orders.

35 Ill.

Admin. Code

§

101.800 provides:

a)

Ifany person unreasonably fails to comply with.

.

.

any order entered by

the..

.

hearing officer,.

.

.

the Board may order Sanctions...

b)

Sanctions include the following...

2).

The

offending

person

may

be

barred

from

filing

any

other

pleading or other document relating to

any

issue to

which the refusal or

failure relates;

3).

The

offending

person

may

be

barred

from

maintaining

any

particular.

.

.

or defense relating to that issue;

4).

As

to

claims

or

defenses

asserted

in

any

pleading

or

other

document

to

which

that

issue

is

material

a

judgment

by

default

be

entered against the offending person;

5).

Any portion

of the

offending person’s

pleadings

or

documents

relating to that issue

may be stricken and, if appropriate, judgment may

be entered as to that issue;

and

6).

The witness may be barred from testifying concerning that issue.

In determining to impose a sanction, Rule 101.800 further provides:

c).

In

deciding

what

sanction

to

impose,

the

Board

will

consider

factors including: the relative severity of the refusal or failure to

comply;

the past history ofthe proceeding, the degree to which the proceeding

has

been

delayed or prejudiced,

and

the existence of bad

faith on

the part of

the offending party or person.

A.

IEPA’s

Failure

To

Comply

With

The

Hearing

Officer’s

Orders

Justifies

Striking All Defenses And Entering Default Judgment In Petitioner’s Favor.

Rule

101.800

is patterned after Illinois

Supreme Court

Rule

219.

Although

it is

well settled under that

rule that

default is a drastic remedy, such result is warranted where

“there

is

a

deliberate

and continuous

disregard of the rules.”

Illinois

E.P.A.

v.

Celotex

Corp.

168

Ill.

App.

3d

592,

522

N.E.2d 888,

119 Ill.

Dec.

226

(1988).

Furthermore,

in

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reviewing the appropriateness ofthis

sanction, the Board may consider the history ofthe

entire

proceeding,

including

not

only

the

failure

to

comply

with

the

Hearing Officer’s

discovery orders, but also

the making ofpersonal commitments

to

a hearing officer that

were repeatedly disregarded.

Modine Manufacturing Company

v.

The Pollution Control

Board

192 Iii. App.

3d 511,

517,

548 N.E.2d 1145,

1149,

139 Ill.

Dec.

589,

593

(1989).

In

short,

an

unwarranted

disregard

of

the

hearing

officer’s

authority

is

sufficient

to

impose a default.

Modine

192

Ill.

App. 3d at

517,

548

N.E.2d at

1149,

139

Ill.

Dec.

at

593.

In

Celotex,

a

witness

produced

by

the

IEPA

refused

to

answer

questions

concerning

monitoring

well

data in the agency’s

files.

The hearing officer ordered the

witness

to

answer the questions.

The IEPA, however,

cancelled the deposition

in which

compliance would have occurred.

Again,

the hearing officer ordered compliance.

Once

again,

the IEPA cancelled

the deposition

and

offered

no

substitute

date.

Similarly,

the

IEPA

failed

to

produce another

expert

witness

as

required

by

order.

In

addition,

the

IEPA failed to produce certain documents as required by order.

This

Board

found

the

conduct

to

be

sanctionable

stating

that

the

“pattern

of

sluggish response or disregard of hearing officer orders” coupled with only a justification

of “unforeseeable

events” was unacceptable.

522

N.E.2d

at

890,

119

Ill.

Dec.

at

228.

Further,

this

Board

also

stated the

conduct had

to be

viewed “in light of the pattern of

disregard

of deadlines

set

in

hearing

officer

orders

and

failure

to

request extensions

thereofin advance of default.”

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The Board

reserved decision on the sanctions pending briefs.

In the interim, the

IEPA then

failed

to

conform

to

a

hearing

officer’s order

to

specify the violated

water

pollution standards and parameters.

This

Board then determined the appropriate

sanctions.

It

struck Count IV of the

IEPA’s

complaint

and further barred any assertion of groundwater claims

by

the IEPA.

The Illinois Appellate Court upheld the Board’s decision because the IEPA engaged

in a

“pattern

of

dilatory

response

to

hearing

officer

orders,

unjustifiable

cancellation

of

depositions”

and

“further that

the

explanations

tendered

for

these

activities

were

not

reasonable.”

Similarly,

in

Modine,

the Board imposed the sanction of dismissal with prejudice

for failure to

file a timely brief.

In justifying this sanction, this Board took

into account

not only repeated late

filings but also

that

Plaintiff ignored an order of a hearing officer

and

failed to

honor personal commitments made to the hearing officer.

In upholding this

dismissal,

the

Illinois

Appellate

Court

also

noted the impropriety of failing

to

seek

an

extension of time before the deadline in an order occurs.

While noting sanctions are not a

punishment,

they

nonetheless still

need to

be

used “as

a general

deterrent

to

provide a

strong

incentive

for all

litigants

to

fully

and

accurately

comply

with

procedural

rules.”

192 Ill.

App. 3d at 518,

548 N.E.2d at 1150,

139 Ill. Dec. at 594.

The court

in

Modine

also

stressed the fact that

the litigant’s

conduct served

the

purpose of delay.

This

Board

found in

Modine

that such conduct, being used to

create

delay, was a serious matter.

The Illinois Appellate Court agreed.

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Celotex

and

Modine

are

applicable

to

this

matter.

Striking

all

defenses

and

entering

a

default judgment

in

favor

of Petitioner

is

not

only

warranted, but

the

only

means

by

which

this

Board

can

establish

a

general

deterrent

to

unreasonable

delay

or

disregard ofhearing officer orders.

In

this

case,

IEPA denied Fund Reimbursement based

on

discovery of Ineligible

Tanks

during soil

excavation.

However, the agency has not provided a factual basis

for

this

position in

any

letter

or

other

document

in

response

to

Freedom’s

appeal

of the

denial.

Freedom has

directed the

agency’s

attention to

information in

the reports

filed

with

the state supporting

Freedom’s position.

JEPA, however,

has offered no

factual or

other

evidence

in

response

that

the

Ineligible

Tanks

caused

a

release

requiring

remediation

such that

allocation of corrective action costs to these tanks was appropriate

under

Illinois

law.

Discovery

in

this

case

sought

the

evidence

and

basis

for

IEPA’s

position.

IEPA’s

delays

suggest

the possibility

the agency lacks

a

defensible

position

in

response to Freedom’s technical

information.

Even if this is not the

case, the state delays

demonstrate Freedom is entitled

to relief because IEPA

did not meet its commitments.

Personal commitments to attempt

settlement were

made to the hearing officer, but

never

honored.

Petitioner

waived

its

statutory

deadline

rights

upon

assurances

that

settlement negotiations would

occur.

Petitioner’s

conduct was reasonable given that the

agency

made

credible

commitments

some

settlement

position

would

be

forthcoming.

The commitments by IEPA’s counsel were credible and Petitioner wasjustified in relying

on them

because they were

made

to

the hearing officer as the

basis

for continuing

the

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hearing.

Notwithstanding

the

commitments

made,

IEPA

never

made

a

settlement

proposal.

While

IEPA had

no

obligation

to

make

a particular settlement

offer

or

any

offer

at

all,

the

agency

did

have

an

obligation,

having made

the

commitment,

to

let

Petitioner know the agency would not make a proposal.

Moreover,

IEPA did not follow

through on its

commitment to correct the undisputed allocation

error.

Instead, Petitioner

had to

incur even more

legal

fees to

file a Motion for Partial Summary Judgment on the

issue after waiting for two years.

Commitments

to

a

Hearing

Officer

are

the

equivalent

of representations

to

a

judge.

Such

commitments

impact

the

officer’s

willingness

to

enter

certain

orders

including

the

granting of extensions

and

induce action.

Repeated

or serious failure

to

follow through

on commitments

can provide the basis

for relief.

This

Board in

Modine

agreed with this

approach, finding that the failure

to

honor personal commitments

made

to a hearing officer is a significant factor in awarding sanctions.

In addition,

the agency did not

comply with

the Board’s rules,

the

two

orders of

the Hearing Officer regarding discovery or the Board and Hearing Officer orders

to

file

the Record to

allow Petitioner to prepare for hearing.

The IEPA did not comply with the

Board’s

order

or

its

commitment

to

file the

Record fourteen days

prior

to

the hearing

date.

After missing the discovery deadline established by the Board’s rules,

the agency

thereafter missed

two

deadlines

set

by

the

hearing

officer.

Furthermore,

the

agency

allowed the most recent deadline to pass without seeking an extension of time to

respond

before the deadline occurred.

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Petitioner recognizes and respects the importance of paternity leave and the many

obligations

agency counsel must attend to.

Having

had prior cases with agency counsel,

Petitioner realizes the

procedural

history

may arise from workload

and/or the need

for

client information, not

a personal

inclination

to

disregard commitments,

Board rules

or

hearing

officer

orders.

However,

Freedom

has

waited

for more

than

two

years

for

reimbursement ofover $240,000.00

in corrective action costs

(some ofwhich the agency

didn’t

dispute)

from

the

LUST

Fund.

Freedom

incurred

these

costs

in

reliance

on

reimbursement

from

the

Fund.

As

the Board

and

agency are aware,

the

Fund plays

a

critical

role in

the ability of the petroleum retailers to offer gasoline at reasonable

prices,

particular

small

and

medium

sized

companies

such

as

Petitioner.

For

this

reason,

Petitioner’s rights are not insignificant and less important than other agency matters.

It

would

be

unfair

to

have

a

hearing

without

Freedom

being

afforded

the

discovery it

properly

requested.

Continuance

of the hearing,

however,

is

not

the

fair

solution to Petitioner given the procedural history of unfulfilled settlement

commitments

and

Board

discovery rule and

missed discovery

and

record order deadlines.

Given

this

history and the substance of the issues,judgment

in Freedom’s favor should be

entered.

Based on the agency’s Fund denial

letters which

are part of the record, it appears

the

agency’s

position

is

that

the

Ineligible

Tanks

were

found

during

excavation,

and

therefore,

corrective action costs

can be allocated

to

them.

Illinois law

does not provide

for such allocation.

Allocation to

ineligible tanks

is

allowed when the corrective action

costs

cannot be justified

based

on

releases

from

Eligible

Tanks.

415

ILCS

5/57.8(m).

Petitioner provided IEPA

considerable material

demonstrating

the Ineligible

Tanks

did

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not create

any

need for remediation

and that

the corrective action

costs were

associated

with releases

from

the Eligible

Tanks.

According to

IEPA’s

counsel, the material

was

reviewed by

its

technical

unit

over

nine months

ago.

Presumably,

IEPA

would

have

developed

its

case

to

respond to

this

data, if

it

had

one,

before

Petitioner delivered

its

discovery request.

B.

Alternatively,

IEPA

Should

be

Precluded

From

Presenting

Evidence Any

Document Not Produced

By

the Deadline And

Witness From Testifying as to Any Matter Covered By The Discovery Requests

If

this

Board

is

reluctant

to

enter

default,

alternatively

it

may

bar

IEPA’s

witnesses

and

IEPA

documentary

evidence that

falls within the scope of the discovery

requests.

Thus,

the IEPA may examine Petitioner’s witnesses at trial

and

argue

its

case

based

upon

evidence

submitted

by Freedom.

It

may

not present

its

own

witnesses or

evidence.

Such

sanction

is

fair.

IEPA

has

not

responded

to

any

discovery

request

of

Petitioner.

It

has not

identified

potential

witnesses

and

the

subject of their testimony

despite an interrogatory as to such matters.

It has not answered the interrogatory as to the

IEPA’s basis

for allocation of corrective action

costs to

the Ineligible Tanks or supplied

any documents evidencing such basis.

It

would

be

unfair

to

require Petitioner

to

address

the testimony of undisclosed

witnesses and evidence contained

in

undisclosed documents at the hearing.

It is

further

unfair to

postpone this hearing any longer or to set yet another discovery date in an order.

Therefore,

the

hearing should

proceed and

IEPA

should be

barred from

presenting any

THIS FILING IS

SUBMITTED ON RECYCLED PAPER

13

---

evidence that was the subject of the discovery requests.

As such requests go

to

IEPA’s

entire defense, the result would be a complete bar as to

the presentation ofany

witnesses

and evidence by the IEPA.

Rule

100.800

specifically

contemplates

the barring of witness

and

documentary

evidence.

Moreover,

this

Board

has

previously

employed

this

remedy

in

similar

circumstances.

This

Board has recognized barring

evidence

as

an

appropriate sanction

when a party has repeatedly delayed a

proceeding.

This

was true in a case in

which the

party had

only disregarded one order to

comply, not two as in this case.

In

Unity

Ventures

v.

the

Pollution

Control

Board,

132

Ill.

App.

3d

421,

476

N.E.2d

1368,

87 Ill.

Dec.

376

(1985),

Unity received discovery requests.

Appropriately,

Unity filed for extensions of time

and was granted several.

Finally,

the hearing

officer

entered an order requiring Unity to

respond to

discovery by a date certain.

On that date,

Unity filed objections to discovery.

The Board denied the motion

to strike interrogatories

and ordered a response

to

discovery by

November

19,

1982.

Unity

did not receive the

order until November 18,

1982.

When Unity failed to

respond, this Board entered an order finding their actions to

be “intentionally dilatorious.”

The order struck matters from their Petition and prohibited

them from raising any issues

concerning such matter at its hearing.

Seeking the vacation of this Board’s order,

Unity argued to

the Illinois

Appellate

Court that

the

sanctions were inappropriate because

in

effect

it violated

only

one

order

compelling

discovery

and

that

the

sanctions

were

equivalent

to

a

default,

a

sanction

requiring higher standard be met before imposition.

The Appellate Court disagreed,

THIS FILING IS SUBMITTED ON RECYCLED PAPER

14

---

Initially,

we

note

that

the

Board

did

not

dismiss

Unity’s

petition

for

variance.

Unity

was

afforded

an

evidentiary

hearing,

and,

in

fact,

as

discussed

above,

has

argued

in

this

court

that

it

was

able

to

present

sufficient evidence at that hearing

to require a decision in its

favor.

What

the Board did

was to prohibit Unity from

introducing evidence concerning

the issues on which it had failed to provide discovery.

We are aware ofno

authority,

and Unity has cited none,

to the effect that the standards

relating

to the sanctions ofdismissal are applicable under these circumstances.

See also, Allaert Rendering, Inc.

v.

Ill. Pollution Control Board,

91111.

App.

3d

160, 414

N.E.2d 497, 46

Ill.

Dec.

613,

615

(1980) (“Further, when Allaert

failed to

comply

with

the

discovery

orders,

the

hearing

officer

had

the

power

to

apply

such

sanction

as

prohibiting the introduction ofevidence regarding Allaert’s financial condition and there

was no error in the Board’s affirmance ofthis

action.”)

Conclusion

This case has been unduly

delayed to the prejudice of Petitioner.

Further delay is

unwarranted and

causes

further financial

damage

to

Petitioner.

IEPA

has

had

ample

opportunity

to

comply with discovery requests.

Freedom’s Petition for reimbursement of

the Fund costs

is reasonable

and consistent with Illinois law.

THIS FILING IS SUBMITTED ON RECYCLED PAPER

15

---

WHEREFORE, Petitioner requests that this Board enter an order:

1.

Striking all defenses of the IEPA and entering default judgment in favor of

Petitioner;

or

2.

Barring IEPA from introducing evidence at the hearing.

Dated: March

22, 2005

Diana M. Jagiella

Attorney for Petitioner

Howard &

HowardAttorneys, P.C.

One Technology Plaza, Suite 600

211

Fulton Street

Peoria, IL

6 1602-1350

Respectfully submitted,

HOWARD & HOWARD ATTORNEYS,

Diana

M.

16

---

CERTIFICATE

OF SERVICE

CLERK’S OFFICE

MAR 232005

STATE OF ILLINOIS

I, the undersigned, hereby certify that on this

22nd

day ofMarch,~~rh~Qr~4’8bard

the attached

Motionfor Default Judgment or in

the Alternative to

Prohibit Introduction of

Evidence

by depositing same via first-class U.S. mail delivery to:

Dorothy M. Gunn, Clerk

Illinois Pollution Control Board

State ofIllinois Center

100 West Randolph, Suite

11-500

Chicago, IL

60601-3218

Carol Webb

Hearing Officer

Illinois

Pollution Control Board

1021 North Grand Avenue East

P.O. Box

19274

Springfield, IL 62794-9274

Diana M. Jagiella

Howard & Howard Attorneys, P.C.

One Technology Plaza, Suite 600

211 Fulton Street

Peoria,

IL

61602

(309) 672-1483

man\Julie\G:\F\Freedom OiI\p!dgs\Obj. to Continuancesdoc

John J. Kim, Assistant Counsel

Division of Legal Counsel

Illinois Environmental Protection Agency

1021

North Grand Avenue East, P. 0.

Box

19276

Springfield,

IL

62794-9276

THIS FILING IS SUBMITTED ON RECYCLED PAPER

Diana

M.

Jagiella,

Petitioner

A~7ey

or

17

---

m

0~

-1-

---

-

omfield

Hills

Kalamazoo

Lansing

F

~ia

Howard

f~

Howard

law

for

business

directdial: 309.999.6309

Diana M. Jagiella

email: djagietla~howardandhoward.com

June 30, 2003

John J.

Kim,

Esq.

Division ofLegal Counsel

Illinois Environmental Protection Agency

1021 North Grand Avenue East, P. 0. Box

19276

Via Facsimile (217) 782-9807

Springfield, IL

62794-9276

Re:

Freedom Oil Company, Paris, Illinois

Our File No.

17273-1

Dear

John:

As

you know, two release incidents

occurred

at the Freedom Oil Company station in

Paris,

Illinois (“Property”) in

2002.

In April,

2002 a shear valve leaked.

This was discovered after

vapors

were

noted

in

the

sewer

connected

to

Paris

High

School

across

the

street

from

the

Property.

(Incident

20020433)

In August

2002,- a

tank

liner failure

occurred.

This

was discovered after

vapors were reported in the southern sewer.

(Incident 2002112)

IEPA has denied LUST Fund reimbursement

to Freedom Oil Company (“Freedom”) in the

amount

of $293,733.95.

Specifically,

on

December

18, 2002,

$102,122.04

was

denied.

On

March 19, 2003,

$169,051.90

was denied.

On May 28, 2003,

$22,559.71

was denied.

Freedom has

appealed denial ofthese costs to the Illinois Pollution Control Board.

We seem to

be in agreement

that

a

discussion

prior

to

a

Board

hearing

to

determine if settlement

can be

reached

would

be

appropriate.

As

promised,

set

forth

below

is

a

summary of the

costs

denied,

and

our basis

for

requesting EPA to reconsider its denial.

I.

Handling

Costs

EPA

denied

$24,638.82

in handling

costs.

-

As

illustrated in

the chart below,

based

on

handling

charges

allowable

under

the

law,

Freedom

is

entitled

to

an

additional

$9,643.95

in

handling charges.

One

Technology

Plaza,

Suite

600,

211

Fulton

Street,

Peoria,

IL

61602.1350

309.672.1483

Fax:

309.672.1568

www.h21aw.com

---

John J.

Kim,

Esq.

Division ofLegal Counsel

Illinois Environmental Protection Agency

June 30, 2003

Page 2

ESE Invoice 0383876

Invoice

Allowable Handling

Subcontract!

Field Cost’

Mileage

-

292.36

35.08

Vehicle Rental

194.61

23.35

Lodging

736.83

88.42

Subcontractors

-Bodine (109,598.23)

-Ribbe Trucking (2,081.65)

119,689.88

7,091.96

251.00

Lab

190,360.24

8,707.20

Equipment Rental

1,990.08

238.81

Field Supplies

720.81

86.50

Postage

206.22

24.75

Printing

92.50

11.10

Total

$306,283.53

$16,558.17

Amount Paid by IEPA

$11,279.72

-

Amount Still

Owed to Freedom

$

5,278.45

ESE

Invoice

Amount

Allowable Handling

Subcontract!

Field Cost

Mileage

609.55

73.15

Vehicle Rental

240.11

28.81

Lodging

855.47

102.66

SubContractor

-Ingrum (774.00)

-Bodine (62,520.28)

-Illiana (1,980.00)

-Brickyard

Disposal

(206,655.80)

271,930.08

92.88

5,026.01

.

237.60

9,033.12

Lab

5,521.50

652.15

Calculated using IEPA’s

Howard 1~

Howard

---

John J. Kim, Esq.

Division ofLegal Counsel

Illinois Environmental Protection Agency

June 30, 2003

Page 3

ESE Invoice 0369674

Invoice

Allowable Handling

Subcontract!

Field Cost

Equipmentrental

520.69

62.40

FieldSupplies

355.31

42.64

-

Photo

21.24

2.54

Printing

1.00

.12

Total

$280,054.95

$15,354.08

Amount Paid by EPA

$10,988.58

Amount Still Owed to Freedom

$

4,365.50

H.

$362.84 for Cell Phone

and Mileage Handling Costs

•

$226.76 was deducted for cell phone rental

from 10/28/2002

-

11/27/2002.

Apparently,

EPA made this

deduction based

on a belief ESE staff were on site

for five days, not

nine

days.

A

similar

deduction

of

$103.96

was

made

for

the

period

09/28/2002-10/27/2002.

Attached

are time sheets verifying ESE staff were

on site

for

these time periods.

•

$23.39

was deducted

as

a handling

charge

on

mileage costs.

This

should

have

been

allowable.

HI.

$20,000 Deductible Assessed

EPA denied reimbursement of $20,000 as deductible amounts owed.

Although no

reason

for

this

deduction

was

specified,

it

appears

the

adjustment

was

made

because

an

additional

deductible was anticipated to be owed with respect to a subsequent incident number assigned at the

facility

for the

release

caused by

tank

liner failure

in August

2002.

(Incident 20021122)

It

also

appeared EPA

was

unaware the $10,000

deductible for Incident

20020433

was

already paid by

Freedom.

Accordingly,

Freedom

should

be

reimbursed for

the

$10,000

deductible

for Incident

20020433 which had already beenpaid.

IV.

$27.76

—

Tracer Dye

I

$140.00

—

Notice ofSmoke Testing

EPA denied $27.76

for dye

for tracer testing the sewer on the basis it

“has been determined

to notbe related to

Early Action Activities.

Therefore, it is not reasonable

.~.

.

.“

MACTEC completed dye tracer testing of sewer in order to

determine if a sewer connection

existed between the Freedom Oil station and sewers in the vicinity

ofthe site.

The dye

testing

Howard 1~

Howard

---

John J. Kim, Esq.

Division of Legal Counsel

Illinois Environmental Protection Agency

June 30, 2003

Page4

sewer was completed at the direction of EPA-Office of Emergency Response (“OER”) as part of

Early

Action/Emergency

Response

activities.

Therefore,

this

cost

should

be

eligible

for

reimbursement.

EPA also

denied $140.00 for publication fees associated with the notice of smoke testing.

MACTEC

completed smoke

testing of sewer in

order to

determine if a

sewer connection existed

between the Freedom station and sewers in the vicinity ofthe site.

The dye testing ofthe sewer was

completed at the direction of OER as part ofEarly Action/Emergency Response activities.

Public

notice was

required by

the City of Paris

in

order

for pennission

to

be

granted to

MACTEC

to

complete the test.

Therefore, this cost should be eligible forreimbursement.

V.

$33.25

—

VHS

Copies

These

charges

were

for

VHS

tape

copies

of

the

sewer

investigation

conducted

by

MACTEC.

The Illinois

Attorney General’s Office and OER specifically requested copies of these

videos.

VI.

Corrective Action Costs

As

previously

stated, three reimbursement

applications

were

submitted by

Freedom.

As

explained below, EPA

denied a certain percentage of corrective action

costs in each application

based on the presence ofunregistered (and, therefore, Fund ineligible) tanks.

By wayofbackground, the following table contains a complete and accurate list ofthe tanks

known to

have been at the site

and the

registration

status of each tank.

In summary,

a total of

22,000

gallons

of tank product storage capability had been present at the

site (18,000 gallons of

which would be associated with Fund eligible tanks and 4,000 gallons ofwhich would be associated

with Fund ineligible tanks).

Registered and Known Tanks

Registered. 20020433;

20021122

3

4,000

J

1

Gasoline

Registered. 961825; 962059;

20020433; 20021122

2

4,000

I

Gasoline

Howard 1~

Howard

---

John J. Kim, Esq.

Division ofLegal Counsel

Illinois Environmental Protection Agency

June 30,2003

Page

5

Volume

~

I

Status/

_~SI #

~g~ons~j

Product

J

1ncid~nt

#

4

4.000

Gasoline

Registered.

20020433;

20021122

5

1,000

Gasoline

Registered.

930540, tank

removed priorto April 1, 2002;

incidentclosed

6

1,000

Kerosene

Registered. 20021122

Total

18,000 gallons

The following table

lists the Old Tanks subsequently discovered at the site during the clean

up. These tankswere apparently

taken out ofservice prior to

1974. TheOldTankswerelocatedon

the

east

side of the property.

Although there were

no

releases from

these

tanks, EPA

assigned

Incident No. 20021420 to thesetanks.

Unregistered/Previously Unknown Tanks (“Old Tanks”)

.

.:.

~~Vo1unIe..-~

~(g~ml1ons).’;

Product

7

500

Heating Oil

8

1,000

Gasoline

9

1,000

Gasoline

10

1,000

Gasoline

11

500

Heating Oil

Total

4,000 gallons

Reimbursement Application I.

Corrective Action costs in the amount

of$185,644.12 were

incurred between April 3,

2002

and August 2,

2002

in connection with Incident 20020433.

These

costs were incurred based on activities

orderedby OER for the purpose ofidentifying the migration

pathway from the shear value release to

a conduit causing vapors in the school.

In summary, these

costs included trench excavation to

halt migration and

sewer exploration to

identify the conduit of

the

free product entering

the sewer purported to

have caused

gasoline vapors

in the school.

On

December 18, 2002, EPA denied $81,954.58 ofthe requested costs based-on the presence oftanks

ineligible forreimbursement.

EPA reimbursed 55.8 14

of the

costs.

In reaching this amount,

EPA

decided a total of

21,500

gallons

of tank product

storage

was

present

at the

site.

Twelve

thousand

gallons

was

considered by IEPA to be

associated with Fund eligible tanks (Tanks 2,

3

and 4) and 9,500 gallons

to

be associated with Fund ineligible tanks (Tanks

1,

5, 6,

7,

8,

9 and 10).

According to EPA, in

evaluating this

application,

it considered the

following tanks with the registration/eligibility

status

notedbelow:

Howard E~

Howard

---

John J.

Kim, Esq.

Division of Legal Counsel

Illinois Environmental Protection Agency

June 30, 2003

Page6

Tank

1

4,000 gallon diesel

Ineligible

Tank 2

4,000 gallon gasoline

Eligible

Tank 3

4,000 gallon gasoline

Eligible

Tank 4

4,000 gallon gasoline

Eligible

Tank

5

1,000 gallon gasoline

Ineligible

Tank 6

1,000 gallonkerosene

Ineligible

Tank

7

500 gallonheating oil

Ineligible

Tank 8

1,000 gallon petroleum

Ineligible

Tank

9

1,000 gallon petroleum

Ineligible

Tank

10

1,000 gallon petroleum

Ineligible

Total

21,500 Gallons

12,000 Gallons Eligible/9,500 Gallons Ineligible

With respect to the December 2002 denial ofthe

$81,954.58,

there does not appear to be a

dispute that at least some

eligible costs

were denied because EPA

was unaware Tanks

1,

5

and 6

were registered and Fund eligible.

In fact, all three ofthese tanks were properly registered and Fund

eligible.

Reimbursement

Application

2

-

December

24,

2002.

After

August

2,

2002,

corrective

action

costs

were

incurred in

connection principally with

the

second

release

assigned

Incident

20021122.

These

costs

were

incurred

based

on

the

tank

liner

failure.

The

December

2002

reimbursement submission related to these costs requested $709,748.50.

On March 19, 2003, EPA

denied

$143,123.59

of

the

requested

costs

based

on

the

presence

of

tanks

ineligible

for

reimbursement.

EPA

reimbursed 79.07

of the

costs.

In reaching this

amount, EPA

decided a total of

21,500

gallons

of tank product

storage

had

been present

at the

site.

According

to

EPA,

in

evaluating the

application

it considered the

following tanks with the registration/eligibility

status

noted below:

Tank

1

4,000 gallon diesel

Eligible

Tank 2

4,000 gallon gasoline

Eligible

Tank 3

4,000 gallon gasoline

Eligible

Tank

4

4,000 gallon gasoline

Eligible

Tank 5

-

1,000 gallon gasoline

Ineligible2

Tank 6

1,000 gallon kerosene

Eligible

Tank 7

-

500 gallon heating oil

Ineligible

Tank 8

1,000 gallon petroleum

Ineligible

Tank

9

1,000 gallon petroleum

Ineligible

Tank

10

1,000 gallon petroleum

Ineligible

Total

21,500 Gallons

17,000 Gallons Eligible/4,500 Gallons Ineligible

2IEPA incorrectly determined

this

tank to be unregistered.

In fact,

it was registered and had been previously

Howard!~

Howard

---

John J. Kim, Esq.

DivisionofLegal Counsel

Illinois Environmental Protection Agency

June 30, 2003

Page 7

As noted,

17,000 gallons was considered by IBPA to

be associated with Fund eligible tanks

(Tanks

1, 2, 3,4,

and 6)

and

4,500 gallons to be associated with

Fundineligble

tanks (Tanks

5,

7,

8,

9,

and

10). Basedon this ratio,EPA reachedan 80.95

reimbursement allocation.

Reimbursement Application 3

-

February 11, 2003.

The next

reimbursement

submission,

dated February

11,

2003, requested $116,848.37. OnMay28, 2003,EPA denied $22,189.00 for

similar reasons.

EPA

reimbursed

80.95

of the

costs.

In reaching

this

amount,

EPA

found a

total

of

20,000 gallons oftank product had been present at the site.

According

to EPA,

in

evaluating this

application, it considered the following tanks with the registration/eligibility status notedbelow:

Tank

1

4,000 gallon diesel

-

Eligible

Tank 2

4,000 gallon gasoline

Eligible

Tank 3

4,000 gallon gasoline

Eligible

Tank 4

4,000

gallon gasoline

Eligible

Tank

5

Excluded from

consideration by EPA

.~

Tank 6

1,000 gallon kerosene

Eligible

Tank 7

500 gallon heating oil

-

Ineligible

Tank 8

1,000 gallon petroleum

Ineligible

Tank 9

1,000 gallon petroleum

Ineligible

Tank 10

1,000 gallon petroleum

Ineligible

Tank 11

500 gallon heating oil

tank

Ineligible

Total

20,000 Gallons

17,000 Gallons Eligible/4,000 Gallons Ineligible

As noted, 17,000 gallons was considered by EPA

to be associated with Fund eligible tanks

(Tanks

1, 2,3,4,

and 6) and 4,500 gallons to be associated with Fund ineligible tanks (Tanks 5, 7,

8,

9, and 10).

Based on this ratio, TEPA reached a

80.95

reimbursement allocation.

There is No Scientific Evidence Whatsoever Connecting the Old Tanks atthe Site to the

Work Undertaken

With respect to the corrective action amounts denied, denial ofthesecosts is contraryto law.

While Section 57.8(m)(1) ofthe Act allows the Agency to apportion reimbursement costs to eligible

and ineligible tanks, this

apportionment must be based on the corrective action actually necessitated

by the Old Tanks and the owner’s

failure to justify the costs

as related to the eligible tanks.

In this

case, there is no relationship between the costs incurred and the Old Tanks at the site.

The presence

ofthe Old Tanks did not necessitate any ofthe work conducted.

Howard ~ Howard

---

John J. Kim, Esq.

Division ofLegal Counsel

Illinois Environmental Protection Agency

June 30, 2003

Page8

There is no evidence conditions associated with the Old Tanks contributed in any way to the

school vapor problem or to contamination cleaned up as a result of the tank liner failure.

None of

the work conducted was related in any wayto conditions associated with the Old Tanks.

In fact, the

pre-74 tanks

did not have to

be removed.

These

tanks were

properly abandoned in place.

EPA

OER demanded removal ofthe tanks.

Analysis

of

extensive

soil

borings

completed

on

the

northern

portion

of

the

site

in

connection with the April

incident did not identify contamination

in

excess

of applicable

TACO

criteria (see Table

1).

A Site Map has been attached identifying the corresponding soil sampling

location and the sample numbers.

Further, photoionization detector (“PID”) field screening ofthe soil in the vicinity ofthe Old

Tanks

conducted

following

the

August Incident

indicated

readings

less

than

eight

units

above

background readings.

Thus,

field screening did not indicate the presence of a recent

release that

would be

causing an imminent threat to

human health and safety.

Since this

emergency response

action was under the direction ofthe EPA

EmergencyResponse Unit with a deadline mandated by

the

injunction

obtained by

the

state, Freedom was not

afforded the opportunity

to

stop

work

to

collect

and

analyze

soil

samples

to

verify

the

orphan

tanks

were

not

contributing

to

the

site

condition.

Nonetheless, subsequent

analytical results from soil sampled from the bottom and sidewalls

of the excavation adjacent to

Tanks

7,

8,

9,

10,

and

11

were below EPA

Remediation Objectives

(see Table 2).

This

scientific evidence amply demonstrates the Old Tanks

did not give

rise to

any

conditions

that

could have caused the vapors

in the school located north ofthe

site or the sewer

located

south

of the

site.

Quite

simply,

any

residual impact

caused by

the

Old

Tanks

was

so

insignificant it could barely register on a PID, let alone cause a sheen and vapors in a sewer 200 feet

north adjacent to the school, or 100 feet south withinthe alley.

As

discussed above, we strongly believe that

it is inappropriate to allocate

costs in this

case

on the basis of “eligible”

and “ineligible” tanks.

None of the costs incurred in remediating the site

are

the result of the presence of

tanks

designated as ineligible. No analytical data

exists

to indicate

that theseineligible tanks contributed to the need for

any

oftheworkundertaken.

It is also important to keep inmind that the corrective actionwork performed

was

directed

byEPA OERand required to be performed for the mostp~on an emergency basis. MACTEC

objected to muchof the work as unwarranted, but was overruled byEPA OER. Due to the

time

constraints by EPA OER, MACTEC

was

also denied the

opportunity

to demonstrate

through

further testing that the work was unwarranted.

Accordingly,

it is not equitable to require Freedom

to performworkit objectedto, and then deny Fund reimbursement.

Howard E~

Howard

---

John J. Kim, Esq.

Division ofLegal Counsel

Illinois Environmental Protection Agency

June 30, 2003

-

Page9

Conclusion

We hope this

information is

helpful to

explain Freedom’s position it should not have been

deniedthe requested Fundreimbursement.

We look forward to hearing from you.

Sincerely,

HOWARD & HOWARD ATTORNEYS,

Diana M. Jagiella

Enclosures

cc:

A. MichaelOwens

Michael J. Hoffman

sw;fvk\sw;G:\F\Freedom Oil\cor\iepa (kim) 6-30-03

.doc

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---

217/782-6762

ILLIN(fl

~NVIRONMENTAL

PROTECT’~-

AGENCY

1021

NoRm

G~N0 AViNLJ~

EAST,

P.O. 8ox 19276,

5Fs1NCFI~LO,ILLINOIs

62794-9276

JAMES

R. THo~.wsONCENTER,

1CO

WEST

RANOOI.PH,

SUITE 11-300.

Ct-liCAcc,

IL 60601

GEORGE

H.

RYAN,

GQVER~OR

R~NEE

CIFRJANO,

DIRECTOR

‘OEC

18

2U02

Fre~domOil Company

Attn:

Gene

Adams

Post

Office Box.3697, 814 W. Chestnut

Bloomington., Illinois

61702

Re:

LPC

#0450305043

--

Edgar County

Paris/Freedom Oil

Co.

401

South Main Street

LUST LncidentNo. 20020433

LUST FISCAL

FILE

DearMr. Adams:

The Illinois

Environmental Protection. Agency

has

completedthe

review

~f your

application for

payment from the Underground Storage

Tank

Fund

for the above-referencedLUST

incident

pursuant

to Section

57.8(a)

of

the Illinois Environmental Protection Act(Act),

and

35

IlL

Adm.

Code 732, Subpart F.

This information is

dated

September

17, 2002 and was received by the

Ageiicy on September 18, 2002.

The application for payment co’vers the.peiiod from April 3,

2002 to August 16,

2092.

The

amount

requested is $135,644.12.

Thedeductible

amount

to beassessed

on

this claim

is $20,000.00, which is

being deducted from

this

payment. In addition to the deductible,

there are

costs from

this

claim

that

are notbeing

paid. Listed in AttachmentA

are

the costs

that

are

not

being

paid

and

the

reasons

these costs are

notbeing paid.

On

December

12, 2002, theAgency

received

yourcomplete

application

for

payment

for

this

claim. As a result ofthe Agency’s review of

this

application for

payment,

a

voucher

for

-

$83,521.78 willbeprepared for

submission to

the Comptroller’s Oftice for

payment

as funds

become available

based upon

the date the

Agency received

yourcomplete

request

forpayment.of

this

application for

payment.

Subsequent applications

forpayment

that

have

beeh/are

submitted

will be processed based upon the date

complete

subsequent

application for payment requests are

received by the Agency.

This constitutes

the Agency’s

final

action with regard to the

above

application(s) for payment

.

An underground storage tankowner or

operator

may appeal

this final

decision

to the

Illinois

Pollution Control Board

(Board)

pursuant to Section

57.8(i)

and Section

40

oftheAct by

filing a

Rccx,OPD—4302 North

Mari

Street.

Rcck(od,

1(61103 —(815) 987.7760

•

Des

Pr.*j~ts*9511

W.

Ha_rrtso~

SE. D~Pbirtes.

Ii. 60016

—(847)

294-4000

—

595 South

State.

Elgin,

It.

60123

—(847) 608-3131

•

Pu~*s.&

—

5415

N.

Univtulty

St..

Peoria,

1161614—(30~

693-5463

~

.

Pro~

—

7620 N.

Uni’ier~ky

St., Peoria,

1(61614

—(309) 693-5462

•

Cr~a~aics

—

2125

South

First Sueet. Chacnpaign,

II.

61820—

(217) 278-5800

5prsr,.~cnao

—

4.5005.

SIxth Street Rd..

SpringfIeld.

IL 62706 —(217) 786-6892

•

Cotud’aij.(

—

2009 MalI

Street,

CollinsviIte,

II. 62234— (618)

346-5120

—

2309W. Main SL Suite 116, M~ricn.

IL

62959— (613)

993-7200

Pasr4reo

ow Rt~’rc.t~

PASt*

---

Page 2

petition for a

heaiing within

35

days

after the

date of issuance

ofthe final

decision..

However,

the 35-dayperiodmaybe extended for a

period of

time

not to exceed 90 daysby written~iotice

from

theowner or operator

and

the

illinois

EPA

within

the initial35-day

appeal

period. If the

applicantwishes to receive a 90-day extension, a written

request

that

includes a

statement

ofthe

date

the

final decision

was

received, along

with

acopyof

this

decision,mnst be sentto the

illinoisEPA as soon as

possible.

For

information regarding the

filing ofan

appeal,

please contact:

Dorothy

GunLn,

Clerk

illinois Pollution Control Board

State ofillinois Center

100 West Randolph,

Suite

11-500

Chicago, illinois 60601

312/814-3620

For information regarding the filing of an extensiori~,

~iease contact:

Illinois Environmental Protection Agency

Division of

Legal

Counsel

1021 North

Grand

Avenue East

Springfield, Illinois 62794-9276

.

~.

-

217/782-5544

.

‘

Ifyou have

any questions or require further

assistance, please contact Michael Heaton of

Michael Lowder’s staff at 217/782-6762.

Sinc

Dougl~E: Oakley, Manager

(

LUST

Claims Unit

Planning & Reporting Section

BureauofLand

.

.

DBO:LH:MH:ct\02135.doc

.

-

.

Attachmcni

cc:

Hardin.gESE

---

Attachment A

Technical Deductions

Re:~

LPC # 0450305043

—

Edgar County

Paris / Freedom Oil Company.

401

South Main Street

LUST

incident No. 20020433, 2002 1-122, and

20021420

LUST File

-

NOTE:

Citations in this attachment are from

35

illinois Administrative Code (35

IAC)

and the

Illinois Environmental Protection Act (Act).

Item #

Description ofDeductions

-

1.

527.76

~for USA

Bluebook

(dye

for

dye

tracing

of

sewer).

This

cost

has

been

determined to not be related to Early Action activities; therefore,

it is notreasonable

J.AC~732.6O6(ii)).

2.

.

$140.00

Parish

Beacon Publishing

(notice of smoke testing in newspaper).

This

cost

has

been

determined

to

not

be

related

to

.

Early Action

activities;

therefore,

it is

not

reasonable

(35

IAC 732.606(ü)).

-

3..

581,954.58

for

deductions

for .costs

for

corrective .action

activities

for underaround

storage tanks for which the owner or operatorwas deemed ineligible to

access the fund

(Section

57.8(m)(1)

of

the Act and

35

IAC

732.608).

Specifically, there were ten tanks

at the subject facility, each of which was determined

by the Office of State Fire Marshall to

have had a significant release.

Tank Nos. 2,

3.

~nd 4

were

deemed

eligible

to

access

the LUST

Fund

for reimbursement purposes.

Tanks

1,

5,

6,

7,

8,

9,

and

10

have not been determined

fo be

eligible

to access

the

LUST Fund for reimbursement purposes

.

Tank #

Description

1

4,000

gallon diesel tank

.2

4,000 gallon gasoline tank

3

4,000 gallon gasoline

tank

4

4,000

gallon gasoline tank

5

1,000

gallon

gasoline tank

1,000 gallon kerosene

tank

7

500

gailon heating

oil tank

8

1,000 gallon gasoline and/or diesel tank

9

L000 gallon gasoline

and/or

diesel tank

10

1,000 gallon

gasoline and/or

diesel tank

---

Attachment A

Page 2

The total

gallonage

of

tanks

eligible

to access

the LUST Fund

is

12,000

gallons.

the

tctal

gallonage

of

tanks

not

eligible

to

access

the

LUST

Fund

is.

9,500

.gailons.

Therefore,

55.814

âf costs

are appoxtionedto

the tanks

eligible

to

access the

LUST

Fund,

and 44.186

of costs

are

apportioned

to

the

tanks

not

eligible

to

access

the

LUST Fund.

With regard to $81,954.58

deduction, $40,014.29

was

deducted from ?ersonnel,

$27.40

was deducted

from Equipment,

$857.23

was

deducted

from

Materia1~

and Expendable

-

.

(in

stock

.

items),

$2,866.22

was

deducted

from

Materials

&

Expendables

(field

purchases, after

the

$140

and

$27.76

deductions

listed on lines

a

aria b

above),

and

$38,189.44

was

deducted

from Subcontractors.

MTL=ih\020433a3

.doc

ioTa.. P.~

---

ILLINOIS

ENVIRONMENTAL

PROJ.~cTONAGENCY

1021

NCRT~

GgAt~D

AVENUE

E~r P.O. &c~

~927ó. S9cp~~,

~

62794-9276

..~

R.

TM~O~.

C~rt~.

100 W~s~

~

S~T~

1-300, CHic.~cO.

ft

60601

Roo

R.

BLACOJEVICH, Gov~oR

R~NE~

CIPR:..~NC-.DIREcTOR

217/782-6762

-

CERTIFIED MAIL ~

Freedom Oil Co.

Attention:

Mike

Owens

Post

Office

Box

3697

Bloomin

ton,

IL

61702

*

Re:

LPC

#0450305043

--

Edgar County

Paris/Freedom

Oil Co.

401

South Main

S~eet

LUST Incident

No.

20020433

LUST FISCAL FILE

Dear Mr. Owens:

The Jilinois Environ.mental Protecrioi Agency has completed the review ofyourapplication for

pavm~ntfrom the Under~roundStorage

Tank Fund for

theabove-referencedLUST incident

pursuant to

Section

57.8(a)

of the Illinois Environmental Protection Act (Act), and

35

III. Adm.

Code

732.

Subpart F.

This information is dated December 24, 2002

and was

received by the

Agency on December 30. 2002.

The application

forpaymentcovers

the period from June 30.

2002 to November 22. 2002.

The amount requested is

$709,748.50.

The deductible amount for this claim is

$20000.00. which was previously deducted from the

billing submittal receiv~d

by

the Agency on December 12. 2002 for Sl85~644.12.There are

coSts t~om

this claim that

are

not being paid.

Listed in Attachment A are the costs that are no~

being paid

and

the reasons these costs are not beini~

paid.

On February 7.

2003.

the Agency received your complete application forpayment for this claim..

As

a

result ofthe Agency’s review of this application

for

payment. a voucher for S540.696.60

will b~

prepared for submission to the Comptroller’s Office for payment as funds become

available based upon

the date the Agency received your complete request for payment ofthis

ap~llcationfor payment.

Subsequent applications

for

payment thai have been/are submitted will

be

processed based

upon the daze complete subsequent application for payment requests are

received by the’Agency.

This constitutes the Agency’s final action

with regard to

the above

~pplicaiior.(s) for payment.

An~U~derground

storage rank cwner or operator may appeal this final decision to the Illinois

Pollution Control Board (Board) pursuant

to Section 57.8(1) and Section 40 ofthe Act by filing a

~ezitjon

fora hearing within

35 days

after

the date

ofissuance ofthe fiuial decision.

However.

~

~.

~

\tp’(,

M,~.n$f#~i.

~

II.

~.

10

~

—

~

~l~l:tt

•

Pt

~is

—

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---

Page 2

the 35-day period

may

be extended for a

period oftime not

to exceed

90 days by written notice

from the ov~eror operator and the illinois

EPA v~’ithinthe

initial

35-day appeal period.

Ifthe

applicant wishes to receive a 90-day extension: a written request that includes a statement ofthe

date the flnal decision was received, along with a copy

of

this decision, must be

sent

to the

Illinois EPA as soon as possible..

For information regarding the füing of an appeal, please conract

Dorothy Gunn, Clerk

-

-

Illinois Pollution

Control Board

State ofIllinois Center

100 West Randolph7 Suite

11-500

-

Chicago, Illinois 60601

312/814-3620

-

-

For

information regarding the filing of an extension, please contact:

flhinois Environmental

Protection

Agency

-

Division ofLegal Counsel

1021 North

C-rand

Avenue

East

Springfield, Illinois 62794-9276-

--

.

-

217/782-5544

Ifyou

have any

questions

or require further assistance, please contact Lieura

Hackman

of

mv

scuff or Michael Heaton ofMichael Lowder~sstaff at

2171782-676L

DEO:LH~jk\O3295S.doc

AttachmentS

-

cc:

Hardizu~ESE

E.

Oakley. Manager

LUST Claims Unit

Planning

St

Reporting Section

Buraau of La.nci

-

---

Attachment A

Accounting Deductions

Re:

LPC

#0450305043

—

Edgar County

ParisfFre~domOil

Co.

401

South Main

Street

-

LUST

Incident No. 20020433

LUST

Fiscal File

Citations in this attachment

are from

and

the Environmental Protection Act (Act)

and 35 Illinois

Administrative

Code (35 fli.

Adm. Code).

Item #

Description ofDeductions

$362.84,

deduction for costs which are unreasonable as submitted.

(Section

57.7(c)(4)(C)

of

the

.Act

and

35

Ill. Mm.

Code 732.606(hh))

A deduction in the amount of

$22676

was made from the cell phone rental for the

period of October

28,

2002 to November

27,

2002 (staff was

at the site

for 5

days

of

this billing period; the

costs have been pro-rated).

A deduction in the amount of $8.73 was

made

for late charges on the cellphone

rental

for the period ofOctober 28. 2002 to

November27, 2002.

A deduction in the amount ofS 103.96 was made from

the cell phone rental for the

period of September28, 2002 ta October27. 2002 (staff was at the site for4 days; the

costs have been pro-rated).

A deduction in

the amount of

S23.39

was made for the request for handling charges

on

mileage costs.

-

~g96.64.

deduction for costs

that lack supporting documentation

(35

Ill.

Adm. Code

732.606(g~)).Since there is

no

supporting documentation

ofcosts, the Illinois EPA

cannot determine that

costs were not used

for

activities

in excess ofthose necessary

to

meet the minimum requirements of Title XVI of the Act (Section 57.5(a)

oftheAct

and 35

III. Adm.

Code

732.606(o)).

-

The following deductions were made on the Bodine invoice numbered 014084.

The

amounts

requested on the Bodine invoice

were

greater than the

invoIces

from the

subco~ttractors:

A

deduction in the amount of$480.00was

made

because

the At’s

Backhoe

(invoice ~925)

submitted with the claim was less than amount requested by

Bodine.

~

deduction in the amount of 551.00

was

made because the

Neals

Machinery

(invoice ~0020l4)

submitted with the

claim

was

less

than

the

amount requested

by Bodine.

---

t-.

Page2

-

-

A deduction in the

amount

of

$359.66

was

made because the Jones &

Son invoice

“?ubi-nirred with the

claim

was less than the amount requested by Bodine.

A deduction in the amount

of S5~.98

was

made for

a

meal

far R.

Pletz on

September 27, 2002.

3.

30.27, deductionfor costs due

to

a

mathema~cal

error.

(Section

57.7(c)(4)(C)

ofthe

Actand 35

Ui.

Adrn. Code

732.606(a))

This deduction was made because the

amount

requestedon theSubcontractors

form

dated August

23.

2002 and October 15, 2002

is incorrect.

The

amounts

listed on the

form

total

5302.409.85.

-

-

-

-

4.

529.74, adjustment

in the

handling charges

dueto the deduction(s) ofineligible costs

(Section 57.8(f) of the

Act and

35

Iii.

Mm.

Code 732.607).

A deduction of$1 7.83

was made on the ineligible

costs

of 3890.66 requested an ESE

-

invoice 0000369674.

A deductionof~l1.91

was made on the ineligible cell phone costs in the

amount

of

$342.15.

$24.63 8.82.

deduètion forhandling

charges

in

the billing(s) exceed the handling

charges set

forth in

Section

57.8(f)

ofthe

Act.

Handling charges are elizible for

payment only ifthey are

e~uai

to

or lessthanthe amount

determined by the following

table

(Section

57.8(f)

ofthe

Act and

35

Iii.

Mm.

Code 732.607):

Subcontract

or

EligibleHandling

Charges

Field

Purchase Cost

as a Percenza~eofCost

S0-55.000

12

S5.001-515.000

$600 ÷

10

of amount over 55.000

SI

5.00 1-S50.000

$1600

+

8

ofamount

over

$15,000

530.00 1-5100.000

54400

+

5

of

amount over $50,000

$100.00 1 -51.000.000

-S6900 ~2

ofamount over$100,000

A

deduction in the amount ofSl3.223.0l was madeon

the 1-larding

ESE invoice

numbered

0000383876.

A

deduction in

the

amount

ofSll.415.81

was made on

the

Harding ESE

invoke

* .-..

numbered 369674.

DEQLHJk\032955.doc

---

ArtachrtientA

Technical

Deductions

Re:

LPC #

0450305043

--

Edgar County

Paris

I

Freedom

Oil

Company

401

South Main Street

LUST incident No. 20020433, 20021122, and 20021420

LUST File

NOTE:

Citations in

this attachment are from 35 illinois

Administrative

Code

(35

JAC) and the

illinois

Environmental Protection Act (Act).

item

#

Description ofDeductions

*

*

$143.123.59

for

deductions

for costs

for corrective

action

activities for under~ound

storage tanks

for which

the owner or operator

was deemed ineligible to access

the

fund

(Section 57.8(n)(1) of the Act and 35 IAC 732.608).

Specifically, there

were

ten tanks

at the subject facility, each ofwhich

was determined

by the Office

of State Fire

Marshal to

have

had

a si~iificantrelease.

Tank

Nos.

1. 2,

3,

4,

and 6

were

deemed

eligible

to

access

the LUST

Fund

for

reimbursement purposes.

Tanks

5,

7,

8,9,

and

10

have riot

been determined to

be

eligible

to

access the LUST

Fund for reimbursement purposes.

Tank

~

Description

*

-1

4,000-gallon diesel tank

*

2

4,000-gallon gasoline tank

3

4,000-gallon gasoline tank

-

4

4.000-gallon gasoline tank

*

5

1 ~000-gaUongasoline tank

-

6

1,000-gall-an kerosene tank

7

500-gallon heating

oil tank

8

1.000-gallon gasoline and/or diesel tank

*

9

1,000-gallon gaso1in~

and/or diesel tank

10

1.000-gallon gasoline and/or diesel

tank

The total

gallonage of tanks

eligible

to

access the LUST

Fund

is

17.000

gallons.

the

total

.

gallonage

of

tanks

nor

eligibic

to

access

the

LUST

Fund

is

3,500

gallons.

Therefore. 79.07

of costs are apportioned to

the

tanks

eligible to

access

the

LUST

Fund.

and

20.93

of costs are apportioned to the tanks not eligible to

access

the LUST

-

Fund.

-

M~’L:tnb\O20433a4.doc

-

TOT~~L

P.~?

---

-

1LUNO~S

ENVIRONMENTAL

PR0TErI0N

AGENCY

1021

NORTH

CRAr~O

AvEHUE

EAST,

P.O.

BOX 19276,

SPRft4GFIELO,

IUJNOIS

62794-9276

JAMEs R.

THOMPSON

C~rr~R,.

100

Wts-r

R~oou~i-i,

Surr~

11-300, CH~c.~co,

IL

60601

Roo

R.

BLAGOJEVICH,

GOVERNOR

REt~EE

CIPRtANO,

DIRECTOR

t1AY28

2003

Freedom Oil Co.

*

-

-~

Attention:

Gene Adanis

Post

Office

Box 3697

-

Paris,

IL

61944

*

Rei

LPC#0450305043-.-EdgarCounty

Paris/Freedom

Oil

-

401 SouthMain

LUST IncidentNo. 20020433

LUST FISCAL FILE

Dear Mr. Adams:

-

The Illinois

Environmental ProtectionAgencyhas completed the

review

of your application for

payment from the Underground Storage Tank Fund for

the above-referenced LUST incident

pursuant to Section

57.8(a)

ofthe Illinois Environmental Protection Act (Act), and

35

ilL Adrn.

Code 732, Subpart F.

This

information is

dated February 11,2003 and was received by the

Agency

on February 20, 2003.

The application forpayment covers the period from March

1,

2002

to January 24,2003.

The amount requested is $116,848.37.

The deductible amount for this claim is S20,000.00. which was previously deducted from the

invoice Voucher dated January

17, 2003.

Listed in Attachment A are the costs which are not

being paid

arid the reasons these costs are not being paid.

*

On

March 3, 2003, the Agency received your complete application for payment for this

claim.

As a result ofthe Agency’s review of

this application

for

payment,

a voucher for $94,288.66 will

be prepared for submission

to

the Comptroller’s Office forpayment as funds become available

—

*

based upon the date the Agencyreceived your complete

request

for payment ofthis

application

-

for payment.

Subsequent applications for payment that have been/are submitted will

be

-.

*

processed based upon the

date complete subsequent application for payment requests are

received by the Agency.

This

constitutes the Agency’s final action

with

regard

to the above

-

-:

application(s)

for

payment.

-

-

-

*

-

An underground

storage

tank owner

or operator may appeal

this final

decision

to

the illinois

Pollution Control Board (Board) pursuant to Section 57.8(i)

and Section 40 ofthe

Act by

filing

a

petition for a

hearing within 35

days

after the date

ofissuance of

the

final decision.

However,

the 35-day period may be extended for a period

of time not to exceed 90

days

by

written

notice

Rocx~o*o

—

4302

NGI~)I

Mair,

Srcct.

Rocklotcl.

It.

61103

—

(a15i

987-776t)

•

C)~3

P~,AiNf5—9311

W. Harrison

St., Des

Plainei,

H.

60016— (847)

294—4000

-:

ELGIN

—

393

South State. Elgin.

IL 60123—

(6471 603.3131

•

—

5415 N,

University

St..

Peoria,

11 61614

—(309)

693-3463

*EAU Qf

L*~o-

P~oQ’~~

—7620

N.

Unive~ity

Si.

Peori.~,

11 61614

009

693-5462

•

C,IAMP*iCN

—2125

South

F’rs~

Sr’eet,

Champaign.

IL 61820—

(217)

278-5800

S~cttr

—

~S00S. Sixth

Street Rd.. Sprin5field,

It.

62706

..

(2111

786.6692

-

CowNsvttt.t

—

2009

MalI

Street.

Collintville.

It,

62234—

(61

SI

346-S120

M4R*0r4

—

2309

W. Man

St..

SUite

116, Marion,

It.

62959

—

(618)

993-7~c1

217/782-6762

Pe..~~r(t,

ON

Rccycuo

PAPER

---

Pàge2

-*

*

from the owner or operator and the Illinois

EPA ‘vithinthe initial

35-day

appeal

periocL

Ifthe

applicant wishes to recei\’e a 90-day

extension, a writtenrequest that includes a

statement ofthe.

date the final decision

was received, along with a

copy ofthis

decision, must

be seat to the

illinois EPA

as

soon as possible.

*

For

information regarding the

filing

ofan

appeal,

please

contaet:

Dorothy Gunn,

Clerk

Illinois Poiltition Control Board

State

of

Illinois Center

-.

100

West Randolph, Suite

11-500

*

Chicago, Illinois

60601

-

312/814-3620

For

information

regarding the filing ofan

extension, please

contact:

Illinois Environmental Protection Agency

Division

of

Legal

Counsel

-

lO2lNorthGran.dAveriueEast

*

•

*

*

Springfield,

Illinois 62794-9276

2-17/782-5544

•

*

Ifyou have any questions or require

further

assistance, please contact Lieura Hackinan

of

my staff or Michael Heaton ofMichael Lowder’s stiff at217/782-6762.

Since

ely.

D~gl~s

E. Oaldcy, Manager

LUST

Claims Unit

Planning & Reporting Section

Bureau of

Land

Attachment

cc:

Harding

ESE

---

Attachment

A

Technical Deductions

‘

Re:

LPC~0450305043

—

Edgar

County

Pads /Freedom

Oil Conipany

-

*

401

south

Main Street

LuSt

Jncjdc~rt

No. 20020433, 20021122

and

20021420

LUSt

File

• Citations IlL this

attachment

are from

the

Environmental Protection Act (Act) and

35 Illinois

~

Code

(35 lB. Mm.

Code).

Iteth#

t)esèrj~on

of

Deductions

-

*

*

S~3.2S

for ~HS

copies.

This cost

has been

determined

to not be related to

Early

Action

activities, therefore is

not

reasonable

(35

IAC 732.606Ui))..

$22,189.00,

for

deductions

for

costs

for

‘corrective

action

activities

for

underground storage tanks

for

which

the owner

or

operatorwas .deemed ineligible

-

to

acces.~

the fund (Section

57.8(n)(l)

of’the

Act

and

35

LA.C 732.608).

Specifically,

there

were

ten

tanks

at

the

*

subject

facility,

each

of

which

was

determined

.by the Office ofState

Fire Marshal

to have had a

signifi~ant

release.

*

Tank

Nos.

1, 2, 3, 4,

and

6 were

deemed

eligible

to

aëcess

the LUST

Fund

for

reimbursement purposes, Tanks

5.

7, 8, 9.

and

10 ~avc

not

been determined

to be

eligible to access the

LUST

Fund for reimbursem~tpurposes.

Since~

Tank S

‘was

addressed

under

~

Incident No.

930540,

-it i~

not

included .in

the

gallonage

total

fo,r

Taij~ks

for

which

an

eligibility

detcrnt~nationhas

not

been

made

by

fllinois Office of State

Fire

Marshall

(OSFM).

Tank #

Description

-

1

‘4.0OO-~a1lon

diesel tank

2

4,000-gallon gasoline tank

-

*

*

3

4,000-gallon

gasoline tank

4

4,000-gallon

gasoline tank

5.

1,000-gallon gasoline tank

6

1,000-gallon kerosene tank

7

500-gallon heating

oil tank

8

1,000-gallon gasoline and/or-diesel tank

9

1,000-gallon gasoline

and/or

diesel tank

*

10

1,000-gallon gasoline

and/ordiesel tank

11

500-gallon

heating oil tank

---

Attachment A

Technical Deductions

Page2

The

total

gallonage

oftanks eligible

to access the

LUST

Fund as

determined liy

OSFM

is

17,000

gallons,

the total gallonage

of tanks

not

eligible

to access

the

-

*

-

LUST

Fund

as

detezniined

by

OSPM

is

4,000

gallons.

Therefore,

80.95

of.

costs ~e

apportioned to

the tanks

eligible

to access the

LUST

Fund, and

19.05

-

-

.

of

costs are apportioned to

the tanks

not-eligible

to access

the

LUST

Fund.

MTL.’xnh\020433a5.doc

.

*

---

I

I

•

I

a-

___

-

LEGEND

MW—i

•

MONITORING

WELL

*

SOIL

BORING

o

TANK

FILL

MANHOLE

I~l

POWER

POLE

ddN

WATER

METER

WATER

VALVE

_4I_

LIGHT

POLE

—

APPROXIMATE

PROPERTY

BOUNDARY

INCIDENT

#20021122

HIGH

SCHOOL

MAINTENANCE

BUILDING

SCHOOL

BUILDING

GENERAL

NOTESI

1.

INCIDENT

#20021122.

2.

DATE:

AUGUST

7,2002

THROUGH

PRESENT.

3.

WORK

COMPLETEDI

•

INSTALL

INTERCEPTOR

/

COLLEC’TlON

ALONG

ALLEY.

•

INVESTIGATE

SEWERS

AND

HOMES

SOUTH

AND

WEST

OF

SITE.

•TESTUSTL

•

COLLECT

GROUND

WATER

FROM

TRENCHES.

•

COMPLETE

VAPOR

EXCAVATION

FROM

SEWER

AND

TRENCH.

•

REMOVE

ACTUAL

USTS

PUMP

ISLAND

AND

CANOPY.

•

DEMOLISH

FREEDOM

OIL

EUILDING.

•

EXCAVATE,

TRANSPORT

AND

DISPOSE

OF

S,ISG

CUBIC

YARDS

OF

SOIL.

•COLLECTED

AND

ANALYZED

E4

SOIL

SAMPLES.

‘CAP

ALL

FORMER

SEWER

LINES.

•EACK

FILL

SITE

EXCAVATION.

•

COMPLETE

IEPA

REPORTING.

0

r-_

—

40

80

SCALE

1”

=

40’

F

ICIDENT

NUMBER20021122

SITE

MAP

Harding

ESE

FREEDOM

OIL

A

MACTEC

Compony

PARIS,

IL

HIGH

SCHOOL

BUILDING

HIGH

SCHOOL

BUILDING

(~)

GIN

INVERT

EL9G.79

I~I

GRASS

SIGN

0—c

SIGN

CRAWFORD

STREET

PARKING

LOT

Freeproduct

observed

In

MV-3(2’)

und

RV—2(8’)

APRIL

4.

2002

RESIDENTIAL

---

(TOTAL)

EXCAVATION

~N

RW.1

MW—i

~

MONITORING

WELL

B~l

*

SOIL

BORING

o

TANK

FILL

MANHOLE

I~l

POWER

POLE

d~H

WATER

METER

-

WATER

VALVE

LIGHT

POLE

—

APPROXIMATE

PROPERTY

BOUNDARY

—

INCIDENT

#20020433

GENERAL

NOTESr

1.

INCIDENT

#20020433.

SHEAR

VALVE

RELEASE

2.

WORK

COMPLETEDi

-

o

EMERGENCYJ1ESPONSE

I

MITIGATION

OF

SEWER

BY

HIGH

SCHOOl..

-

•

SAMPLE