Objection to Denial of Excess Liability Trust Fund Claim No. 200202502-8,
GasAmerica #45, New Palestine, Hancock County, Indiana.
2008 OEA 83 (03-F-J-3212)
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OFFICIAL SHORT CITATION NAME: When referring to 2008 OEA 83 cite this case as
GasAmerica #45, 2008 OEA 83.
TOPICS:
Excess Liability Trust Fund Claim
cost
reimburse
work performed prior
date of release
reported
petroleum release
Leaking Underground Storage Tank
Phase II Site Inspection
corrective action plan
summary judgment
cross motion
IC 4-21.5-3-23
IC 13-23-8-4(b)
IC 13-23-9-2
315 IAC 1-3-3
328 IAC 1
Ind. Trial Rule 36
PRESIDING JUDGE:
Davidsen
PARTY REPRESENTATIVES:
Claimant: David L. Hatchett, Esq.; Thomas W. Baker, Esq.
IDEM: Julie E. Lang, Esq.
ORDER ISSUED:
July 24, 2008
INDEX CATEGORY:
Land
FURTHER CASE ACTIVITY:
[none]
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) ENVIRONMENTAL ADJUDICATION
COUNTY OF MARION )
IN THE MATTER OF: )
)
EXCESS LIABLITY TRUST FUND No. 200202502-8 )
GASAMERICA #45 ) CAUSE NO. 03-F-J-3212
GASAMERICA SERVICES, INC. )
NEW PALESTINE, MADISON COUNTY, INDIANA. )
FINDINGS OF FACT, CONCLUSIONS OF LAW and FINAL ORDER
This matter is before the Court pursuant to a Motion for Summary Judgment (“Motion”) filed by Petitioner/Claimant Lee & Ryan Environmental Consulting, Inc. (“Lee & Ryan” or “Petitioner”), and a cross motion filed by Respondent, Indiana Department of Environmental Management (“IDEM”) as to whether any genuine issues of material fact exist as to IDEM’s denial of Excess Liability Trust Fund Claim No. 200202502-8, on the basis that costs for work performed prior to the date the release was reported to IDEM are not reimbursable. The Chief Environmental Law Judge (“ELJ”) having considered the petitions, testimony, evidence, and pleadings of the parties, now finds that judgment may be made upon the record. The Chief ELJ, by substantial evidence, and being duly advised, now makes the following findings of fact and conclusions of law and enters the following Final Order:
FINDINGS OF FACT
1. The site at issue in this cause is a convenience store and gas station at 5058 West Highway 52, New Palestine, Indiana (“Site”). GasAmerica Services, Inc. (“GasAmerica”) owns and operates the Site facilities, currently and at all times relevant to the issues in controversy in this case. On or about February 4, 2002, a petroleum release at the Site was reported. On or about September 2, 2003, per an assignment of rights from GasAmerica, Lee & Ryan applied for reimbursement (“ELTF Submittal”) from the Excess Liability Trust Fund (“ELTF”) for work performed at the Site between January 1, 2002 and February 28, 2002. Motion, p. 3.
2. As part of its ELTF Submittal, Lee & Ryan provided the following Executive Summary to the LUST site investigation: [Lee & Ryan] was retained by [GasAmerica] to perform a Leaking Underground Storage Tank (LUST) Site Investigation (SI) at the GasAmerica #45 facility . . . The LUST SI was performed to determine the nature and extent of petroleum impacted soil and/or groundwater discovered during a Phase II subsurface investigation. The release was reported to the IDEM LUST Section on February 4, 2002. IDEM assigned the site incident number 200202502 and a medium priority ranking. On January 24, 2002 Lee & Ryan conducted a Phase II Subsurface Investigation as part of GasAmerica’s corporate policy to assess the potential of soil and/or groundwater contamination resulting from the
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begins]
operation of current UST systems located at the aforementioned facility. During the Phase II Subsurface Investigation, Lee & Ryan installed eight soil borings, collected soil samples from each of the borings and groundwater samples from seven of the borings for laboratory analysis. As part of the LUST SI, Lee & Ryan installed seven additional soil borings (including one hand augur boring) and six monitoring wells during March 13 through May 15, 2002. IDEM Response, Ex. A.
3. After its review, IDEM issued an October 21, 2003 determination (“Determination”) denying the amount of $9,836.99, a portion of Lee & Ryan’s ELTF submittal. The denied costs were for work performed during a Phase II subsurface investigation conducted prior to the reporting of a release to IDEM. Motion, Ex. A. IDEM’s Determination stated that the reason for denial was “costs for work performed prior to the date the release was reported to IDEM are not reimbursable.” Id.
4. On October 23, 2003, Lee & Ryan timely filed a Petition for Administrative Review of IDEM’s October 21, 2003 Determination of ineligibility.
5. On January 22, 2004, per Ind. Trial Rule 36, Lee & Ryan submitted Requests for Admission to IDEM, asking that IDEM, under oath, affirm or deny certain statements. Motion, Ex. B. IDEM did not respond to the Requests for Admission, but filed its Objection to Requests for Admission as Being Deemed Admitted on April 29, 2005.
a. Between January 1, 2002 and February 28, 2002, it was not IDEM’s policy to deny reimbursement for corrective action costs incurred for work performed prior to the reported release date. Motion, Ex. B, Admission No. 3.
b. Between January 1, 2002 and February 28, 2002, IDEM had no non-rule policy published in accordance with IC 12-14-1-11.5 that provided that corrective action costs incurred for work performed prior to the reported release date were not reimbursable from the ELTF. Id., Nos. 2, 4.
c. Between January 1, 2002 and February 28, 2002, there was no regulation under 328 IAC 1 that provided that corrective action costs incurred for work performed prior to the reported release date were not reimbursable from the ELTF. Id., Nos. 1, 5.
In its April 29, 2005 Response brief, IDEM stated that “there is no published non-rule policy nor was there, prior to September 29, 2004, a regulation under 328 IAC 1 that provides that costs incurred for work performed prior to the reported release date are not reimbursable from the ELTF.” This statement confirms the state of then-applicable legal authority.
6. 328 IAC 1 was amended as of September 29, 2004, to require that costs incurred more than 24 hours before a release was reported shall not be reimbursed by ELTF. 328 IAC 1-3-5(d).
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7. On March 24, 2005, Lee & Ryan filed its Motion for Summary Judgment. Respondent, IDEM filed its April 29, 2005 Cross Motion for Summary Judgment and Response in Opposition to Lee & Ryan’s Motion for Summary Judgment. In its May 13, 2005 supporting Reply, Lee & Ryan moved to strike IDEM’s Cross Motion for Summary Judgment. On May 29, 2008, IDEM filed a supplemental opposing brief; Lee & Ryan’s supplemental response was filed on June 20, 2008. The parties fully briefed their positions on summary judgment, and did not request oral argument. IDEM filed its Proposed Findings of Fact, Conclusions of Law and Order on May 13, 2005 Lee & Ryan filed its Proposed Findings of Fact, Conclusions of Law and Order on May 19, 2005.
CONCLUSIONS OF LAW
1. The Office of Environmental Adjudication (“OEA”) has jurisdiction over decisions of the Commissioner of the IDEM and the parties to the controversy pursuant to IC 4-21.5-7-3. IC 4-21.5-3, et seq., and 4-21.5-7 allow the OEA to promulgate rules and standards in order to allow it to conduct its duties.
2. This is a Final Order issued pursuant to IC 4-21.5-3-23, IC 4-21.5-3-27, and 315 IAC 1-2-1(9). Findings of fact that may be construed as conclusions of law and conclusions of law that may be construed as findings of fact are so deemed.
3. In this case, Lee & Ryan moved for summary judgment, and IDEM cross-moved, as to whether any genuine issues of material fact exist as to IDEM’s denial of Excess Liability Trust Fund Claim No. 200202502-8, on the basis that costs for work performed between January 1, 2002 and February 28, 2002, were prior to the February 4, 2002 date the release was reported to IDEM and are thus not reimbursable.
4. The OEA may enter judgment for a party if it finds that “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits and testimony, if any, show that a genuine issue as to any material fact does not exist and that the moving party is entitled to judgment as a matter of law.” IC 4-21.5-3-23; Wade v. Norfolk and Western Railway Company, 694 N.E.2d 298, 301 (Ind. Ct. App 1998); Ind. T.R. 56(c).
5. The moving party bears the burden of establishing that summary judgment is appropriate. “A genuine issue of material fact exists where facts concerning an issue that would dispose of the litigation are in dispute or where the undisputed facts are capable of supporting conflicting inferences on such an issue.” Laudig v. Marion County Bd. of Voters Registration, 585 N.E.2d 700, 703-04 (Ind. Ct. App. 1992). “A factual issue is said to be "genuine" if a trier of fact is required to resolve the opposing parties differing versions of the underlying facts.” York v. Union Carbide Corp., 586 N.E.2d 861, 864 (Ind. Ct. App. 1992). A fact is “material” if it helps to prove or disprove an essential element of plaintiff’s cause of action. Weida v. Dowden, 664 N.E.2d 742, 747 (Ind. Ct. App. 1996). All facts and inferences must be construed in favor of the non-movant. Gibson v. Evansville Vanderburgh Building Commission, et al., 725 N.E.2d 949 (Ind. Ct. App. 2000); State v. Livengood, 688 N.E.2d 189, 192 (Ind. Ct. App. 1997). The moving party must present specific facts demonstrating a
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genuine issue for trial. Hale v. Community Hospital of Indianapolis, 567 N.E.2d 842, 843 (Ind. Ct. App. 1991), citing Elkhart Community School Corp. v. Mills, 546 N.E.2d 854 (Ind. Ct. App. 1989). A moving party’s mere assertions, opinions or conclusions of law will not suffice to create a genuine issue of material fact to preclude summary judgment. Sanchez v. Hamara, 534 N.E.2d 756, 758 (Ind. Ct. App. 1989), trans. denied; McMahan v. Snap-On Tool Corp., 478 N.E.2d 116, 122 (Ind. Ct. App. 1985). Factual disputes that are irrelevant or unnecessary will not be considered. Owen v. Vaughn, 479 N.E.2d 83, 87 (Ind. Ct. App. 1985). Once each moving party sets out a prima facie case in support of the summary judgment, the burden shifts to the non-movant to establish a factual issue.
6. The fact that both parties requested summary judgment does not alter our standard of review. Instead, we must separately consider each motion to determine whether there is a genuine issue of material fact and whether the moving party is entitled to judgment as a matter of law.” Laudig v. Marion County Bd. of Voters Registration, 585 N.E.2d 700, 703-04 (Ind. Ct. App. 1992). In this case, each party has the burden of showing whether IDEM’s determination to deny a portion of Lee & Ryan’s ELTF Claim No. 200202502-8, on the basis that costs for work performed between January 1, 2002 and February 28, 2002, were prior to the February 4, 2002 date the release was reported to IDEM and are thus not reimbursable, either complied with, or was contrary to law or is somehow deficient so as to require revocation, as a matter of law. AquaSource Services and Technology, 2002 OEA 41, 44. Each movant has the burden of proof, persuasion and of going forward on its motion for summary judgment. IC 4-21.5-3-14(c); IC 4-21.5-3-23. In this case, Lee & Ryan has the burden of showing that no genuine issue of material facts exists that IDEM’s ELTF claim determination was contrary to law or is somehow deficient so as to require revocation, as a matter of law; IDEM bears a similar burden that no genuine issue of material fact exists on the validity of its Determination, as a matter of law.
7. The OEA’s findings of fact must be based exclusively on the evidence presented to the Environmental Law Judge (“ELJ”) and deference to the agency’s initial factual determination is not allowed. IC 4-21.5-3-27(d); Indiana Dept. of Natural Resources v. United Refuse Co., Inc., 615 N.E.2d 100 (Ind. 1993); Indiana-Kentucky Electric v. Commissioner, Indiana Department of Environmental Management, 820 N.E.2d 771, 781 (Ind. App. 2005). “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 Indianapolis, 425 N.E.2d 247 (Ind. Ct. App. 1981).
8. OEA is required to base its factual findings on substantial evidence. Huffman v. Office of Envtl. Adjud., 811 N.E.2d 806, 809 (Ind. 2004)(appeal of OEA review of NPDES permit); see also, IC 4-21.5-3-27(d). While the parties disputed whether IDEM properly denied of ELTF Claim No. 200202502-8 on the basis that costs for work performed between January 1, 2002 and February 28, 2002, were prior to the February 4, 2002 date the release was reported to IDEM and are thus not reimbursable, OEA is authorized “to make a determination from the affidavits . . . leadings or evidence.” IC 4-21.5-3- 23(b). “Standard of proof generally has been described as a continuum with levels ranging from a "preponderance of the evidence test" to a "beyond a reasonable doubt" test. The "clear and convincing evidence" test is the intermediate standard, although many varying descriptions
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may be associated with the definition of
this intermediate test.” Matter of Moore, 453 N.E.2d 971, 972, n. 2. (Ind. 1983). The "substantial evidence" standard requires a lower burden of proof
than the preponderance test, yet more than the scintilla of the evidence test. Burke
v. City of Anderson, 612 N.E.2d 559, 565, n.1 (Ind. Ct. App. 1993). GasAmerica
#47, 2004 OEA 123, 129. See also, Blue River Valley,
2005 OEA 1, 11-12. Marathon Point Service and Winamac Service,
2005 OEA 26, 41.
9. ELTF was established to provide “a source of money to satisfy liabilities incurred by owners and operators of underground petroleum storage tanks under IC 13-23-13-8 for corrective action.” IC 13-23-7-1(2). In cases not involving third-party liability suits, the ELTF may only reimburse “costs allowed under IC 13-23-9-2 . . . arising out of releases of petroleum.” IC 13-23-8-1(1). The ELTF reimbursements compensates work that “concerns the elimination or mitigation of a release of petroleum from an underground storage tank . . . including release investigation.” IC 12-23-9-2(b)(3)(A). IDEM based its ELTF Determination on the fact that Lee & Ryan discovered the release in the course of conducting a Phase II Site Investigation. IDEM asserted that a compensable release can occur only after a release has been found and reported, usually as part of a site investigation/characterization performed after contamination is discovered and reported to IDEM. IDEM contends that a Phase II site investigation is not a release investigation, but is an assessment to determine if there is petroleum contamination at a site; Indiana law does not provide ELTF compensation for costs incurred arising from contamination discovered in the course of a Phase II site investigation.
10. For an ELTF claim to be reimbursed, IC 13-23-8-4(b) requires “An owner, operator, or transferee of property under subsection (e) is eligible to receive money from the fund before the owner, operator, or transferee has a corrective action plan approved or deemed approved if:
(1) the work for which payment is sought under IC 13-23-9-2 was an initial response to a petroleum release that created the need for emergency action to abate an immediate threat of harm to human health, property, or the environment;
(2) the work is for a site characterization completed in accordance with 329 IAC 5; or
(3) [IDEM] has not acted upon a corrective action plan submitted under IC 13-23-9-2 within ninety (90) days after the date [IDEM] receives the:
(A) plan; or
(B) application to the fund; whichever is later.
11. IC 13-23-9-2-(b)(3) provides that to receive money for an ELTF claim, the ELTF administrator must determine that the work performed concerns the elimination or mitigation of a release, including a release investigation. IC 13-23-9-2(d) requires that the ELTF “administrator shall notify the claimant of an approval or a denial of a request made under subsection (b) . . . Except as provided in subsection (f), the administrator shall notify the claimant of all reasons for a denial or partial denial.”
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12. A review of applicable legal authority and publications shows that between January 1, 2002 and February 28, 2002, there was no regulation under 328 IAC 1 that provided that corrective action costs incurred for work performed prior to the reported release date were not reimbursable from the ELTF, nor did an IDEM non-rule policy published in accordance with IC 13-14-1-11.5 so provide. Substantial evidence of the existence of a regulation, or of a non-rule policy, is more reliably contained in the relevant documents, than in an admission as to IDEM’s institutional knowledge or belief. This substantial evidence also outweighs any assertion or admission of IDEM’s unpublished policy. Therefore, the regulatory terms are taken as substantial evidence from the (absence of) content of regulations and non-rule policy documents.
13. A statute’s meaning is controlled by its express language. Chavis v. Patton, 683 N.E.2nd 253, 257 (Ind. Ct. App. 1997). A court may not read into a statute that which is not the expressed intent of the legislature. State v. Derossett, 714 N.E.2d 205 (Ind. App. 1999). Instead, a court is to ascertain and give effect to the legislature’s intent, Hendrix v. State, 759 N.E.2d 1045 (Ind. 2001), and to do so in a way so as to prevent absurdity and hardship, and to favor public convenience. Livingston v. Fast Cash USA, Inc., 753 N.E.2d 572, 575 (Ind. 2001). When a statute or regulation is clear and unambiguous on its fact, the court does not need to “apply any rules of construction other than to require that words and phrases be taken in their plain, ordinary and usual sense.” St. Vincent Hosp & Health Care Ctr., Inc., v. Steele, 766 N.E.2d 699, 703, 404 (Ind. 2002.)
14. IDEM’s Determination was silent as to the terms or cites to the above statutes. Both statutes are silent as to the timing of work performed relative to the discovery of the release, but through reference to specific work noted in other applicable rules, focus instead on the type of work performed.
15. IC 13-23-8-4(b) does not address what costs may be reimbursed, but limits reimbursement to when costs may be submitted to IDEM: before a corrective action plan is approved. The terms of this statute protect the ELTF for costs for actual remediation, instead of investigative costs or costs for emergency measures incurred before IDEM approves a corrective action plan. Lee & Ryan’s ELTF submittal did not include actual remediation costs and is therefore not eligible for denial under this statute.
16. IC 13-23-9-2(b)(3) does not contain language limiting reimbursement to costs incurred prior to release reporting or discovery. IC 12-23-9-2(b)(3) further applies “only after receiving a corrective action plan”; no evidence was presented to the Court to show that Lee & Ryan’s costs were submitted after the submission of the corrective action plan and were therefore subject to denial under this statute.
17. Undisputed substantial evidence exists to show that IDEM’s Determination was for the reason that “costs for work performed prior to the date the release was reported to IDEM are not reimbursable.” No regulations applicable prior to September 29, 2004 provide IDEM with the legal authority to deny costs on the basis that they were incurred “prior to the date the release was reported to IDEM.” To the extent that IDEM’s subsequent legal argument
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serves as a new basis for denial, IC 13-23-9-2(d) does not prohibit IDEM from asserting a new basis for denial, as the term “shall” has been determined by this forum as directory, and not mandatory. Circle K Mini Mart, 2000 OEA 75, 78-79. See also, May v. Department of Natural Resources, 565 N.E.2d 367, 371 (Ind. Ct. App. 1991).
18. On Lee & Ryan’s Motion for Summary Judgment, Lee & Ryan has provided substantial evidence required to meet its burden of showing that IDEM’s Determination to deny a portion of the ELTF claim did not comply with applicable law, as a matter of law, and that no genuine issue of material fact exists to the contrary. On IDEM’s Cross Motion for Summary Judgment, IDEM has not provided substantial evidence required to meet its burden of showing that IDEM’s Determination to deny a portion of the ELTF claim complied with applicable law, as a matter of law, and that no genuine issue of material fact exists to the contrary. Lee & Ryan is entitled to judgment as a matter of law that IDEM erred in its October 21, 2003 Determination to deny $9,836.99 of Lee & Ryan’s September 2, 2003 application for reimbursement from the Excess Liability Trust Fund. Lee & Ryan is therefore eligible for reimbursement of $9,836.99 from the Indiana Underground Storage Tank Excess Liability Trust Fund, effective as of the October 21, 2003 date when IDEM issued its Determination denying reimbursement.
FINAL ORDER
AND THE COURT, being duly advised, hereby FINDS AND ORDERS that Claimant/Petitioner, Lee & Ryan Environmental Consulting, Inc., has provided substantial evidence required to meet its burden of showing that the Indiana Department of Environmental Management’s October 21, 2003 Determination to deny an $9,836.99 portion of Lee & Ryan’s September 2, 2003 application for reimbursement from the Excess Liability Trust Fund, did not comply with applicable law, as a matter of law, and that no genuine issue of material fact exists to the contrary. Respondent, Indiana Department of Environmental Management, did not provide substantial evidence required to meet its burden of showing the lack of genuine issue of material fact that Lee & Ryan’s September 2, 2003 application for reimbursement from the Excess Liability Trust Fund did not comply with applicable law, as a matter of law, and that no genuine issue of material fact exists to the contrary. Claimant/Petitioner Lee & Ryan Environmental Consulting, Inc., is entitled to judgment as a matter of law that its claim for $9,836.99 complied with applicable law and should be reimbursed from the Indiana Underground Storage Tank Excess Liability Trust Fund, effective as of the October 21, 2003 date when IDEM issued its Determination denying reimbursement.
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that Claimant/Petitioner Lee & Ryan Environmental Consulting, Inc.’s Motion for Summary Judgment is GRANTED; Respondent Indiana Department of Environmental Management’s Cross Motion for Summary Judgment is DENIED. A Final Order is entered in favor of Claimant/Petitioner Lee & Ryan Environmental Consulting, Inc. and against Respondent, Indiana Department of Environmental Management. All further proceedings before the Office of Environmental Adjudication are hereby VACATED.
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You are further notified that pursuant to provisions of IC 4-21.5-7-5, the Office of Environmental Adjudication serves as the ultimate authority in administrative review of decisions of the Commissioner of the Indiana Department of Environmental Management. This is a Final Order subject to Judicial Review consistent with applicable provisions of IC 4-21.5, et seq. Pursuant to IC 4-21.5-5-5, a Petition for Judicial Review of this Final Order is timely only if it is filed with a civil court of competent jurisdiction within thirty (30) days after the date this notice is served.
IT IS SO ORDERED this 24th day of July, 2008 in Indianapolis, IN.
Hon. Mary L. Davidsen
Chief Environmental Law Judge
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