Senders, In re

• Citation: 110 Ohio App.3d 199,673 N.E.2d 959
• Decision Date: 01 April 1996
• Docket Number: No. 69470,69470
• Parties: In re SENDERS. *
• Court: United States Court of Appeals (Ohio)

Page 199

110 Ohio App.3d 199

673 N.E.2d 959

In re SENDERS. ^*

No. 69470.

Court of Appeals of Ohio Eighth District, Cuyahoga County.

Decided April 1, 1996.

Ulmer & Berne, Steven D. Bell and Lynn Rogozinski, Cleveland, for appellant.

Betty D. Montgomery, Attorney General, and James J. Leo, Assistant Attorney General, Columbus, for appellee.

PORTER, Judge.

Appellant Myer Senders appeals from the trial court's order affirming the order of appellee, the Petroleum Underground Storage Tank Release Compensation Board ("the board"), denying the appellant's eligibility to participate in the Financial Assurance Fund administered by the board and obtain compensation for cleaning up a release from appellant's underground storage tank ("UST"). R.C. 3737.88 through 3737.92. The board's denial of reimbursement was based on an administrative rule which provides that recovery from the Fund is contingent upon a finding that the underground storage tank was maintained in compliance with State Fire Marshal regulations. We find no error and affirm for the reasons hereinafter stated.

On July 11, 1989, R.C. 3737.91 became effective, thereby creating Ohio's Petroleum Underground Storage Tank Release Finance Assurance Fund ("the Fund"). The Fund's primary purpose is to "protect Ohio's water resources and reduce pollution by creating a fund to reimburse owners and operators of USTs for the costs of corrective actions in the event of a release of petroleum into the environment and to compensate third parties for bodily injury and/or property damage resulting from such occurrences." State ex rel. Petroleum Underground Storage Tank Release Comp. Bd. v. Withrow (1991), 62 Ohio St.3d 111, 579 N.E.2d 705; R.C. 3737.92(B). It is financed in part through tank "assurance" fees required from petroleum UST owners and operators. The board was established to administer the Fund.

The board is required to issue a yearly certificate of Fund coverage to "any responsible person" (UST owners or operators) who has paid the annual assurance fees for his or her tanks and "demonstrated to the board financial responsibility in compliance with the rules adopted by the fire marshal under division (B) of section 3737.882." See R.C. 3737.91(D)(1). A UST is not covered for a release unless, "at the time the release was first suspected or confirmed, a responsible person possessed a valid certificate of coverage * * * for the tank system from which the release occurred." See R.C. 3737.92(D)(1). A "valid certificate of coverage" is not expressly defined in the relevant statutes.

Appellant was the owner of a UST at 15320 Miles Avenue in Cleveland, Ohio. He purchased the property in the mid-1970s with knowledge of the underground tank. The five-thousand-gallon tank was used by the previous owner to store gasoline to service a fleet of trucks. Appellant also used the tank to store gasoline for his vehicles in his remodeling business.

In 1979, appellant sold his remodeling business, but retained ownership of the Miles property and the UST. The purchaser of the remodeling business remained at the Miles address under lease from appellant and used the UST.

In August 1988, the new owner went into bankruptcy and abandoned the location. In 1988, appellant found that the tank still contained gasoline and he removed the dispenser cap from the tank to prevent vandalism. Appellant also began marketing the property.

Appellant took no action to close the tank, according to standards for abandoned tanks set forth in Ohio Adm.Code 1301:7-7-28(E)(9)(c) as promulgated by the State Fire Marshal. He did not remove flammable or combustible liquids, disconnect the suction, inlet gauge, and vent lines, fill the tank with a solid, inert material, and maintain a record of tank size, location, date of abandonment and method used for placing the tank in a safe condition as required by the regulation.

In early 1991, appellant obtained bids from three private contractors to remove the tank. During this process, appellant was told that the tank contained gasoline. In August 1991, appellant, in preparation for selling the Miles property, registered the tank and on September 16, 1991 paid assurance fees which had been owed for the three previous program years (1989, 1990 and 1991). Appellant paid $150 for 1984 and 1990 and made a payment of $300 for 1991. The increased payment of $300 reduced appellant's deductible from $50,000 to $10,000.

Following the payment of fees, the tank was removed from the ground on October 24, 1991. At this time the tank had been out of service for at least three years. Appellant could not determine when the tank was last used. Upon removing the tank from the ground, petroleum contamination was found. A fire marshal representative was present and directed the remediation. The cleanup was completed and appellant applied to the board to receive compensation from the Fund in the amount of $42,549.16.

On September 29, 1992, appellant's claim was denied by the board's director due to appellant's failure to answer questions regarding the "last in-service date" of the UST. Tanks with a "last in-service date" prior to 1989 are not insurable under the Fund. On April 15, 1993, pursuant to R.C. 3737.92(F) and 119.09, an administrative hearing was held on the claim. On August 16, 1993, the hearing officer issued a report recommending to the board that the claim be denied because, among other reasons, the appellant's application was incomplete. On September 2, 1993, the board rejected the report and recommendation and remanded the claim to the director for further review.

On July 8, 1994, the director issued a second determination denying eligibility for the claim because the UST for which coverage was sought had been improperly abandoned in violation of State Fire Marshal rules and because Ohio Adm.Code 3737-1-07 vests the director with determining the right to payment from the Fund based on compliance with such rules. Appellant waived his rights to an administrative hearing concerning the July 8, 1994 determination.

On August 10, 1994, a second report and recommendation was issued in which the hearing officer recommended that the board affirm the director's July 8, 1994 denial of the claim because of the improperly abandoned status of the UST on the contamination release date. On September 9, 1994, the ten-person board voted unanimously to affirm the July 8, 1994 denial.

On September 15, 1994, appellant appealed to the Cuyahoga County Common Pleas Court pursuant to R.C. 119.12 for a reversal of the board's September 9, 1994 order. On July 20, 1995, the trial court affirmed the board's order denying appellant's right to recover from the Fund. This timely appeal ensued.

The appellant's sole assignment of error and its six subparts state as follows:

"I. The court of common pleas erred in affirming the board's order to deny Senders' Fund eligibility.

"A. Senders is a responsible person and has satisfied the conditions precedent to a determination of eligibility to receive reimbursement from the Fund.

"B. Senders met the requirements of R.C. § 3737.91(D), and possessed a valid certificate of coverage at the time the release was first suspected or confirmed.

"C. The board has no legal authority to determine violations of the state Fire Code.

"D. The state Fire Code does not prohibit the abandonment of USTs.

"E. The board's rule O.A.C. § 3737-1-07 does not provide any basis for denying Senders' Fund eligibility.

"F. The board's unofficial policy of denying fund eligibility to 'improperly abandoned' USTs is unlawful and contrary to R.C. § 3737.94."

The standards of review in both the trial court and this court on an R.C. 119.12 administrative appeal were recently set forth in Diversified Benefit Plans Agency, Inc. v. Duryee (1995), 101 Ohio App.3d 495, 499, 655 N.E.2d 1353, 1355:

"When reviewing an order of an administrative agency, a common pleas court acts in a 'limited appellate capacity.' Univ. Hosp., Univ. of Cincinnati College of Medicine v. State Emp. Relations Bd. (1992), 63 Ohio St.3d 339, 343, 587 N.E.2d 835, 838. In reviewing an order of an administrative agency pursuant to R.C. 119.12, the common pleas court is bound to affirm the agency's order 'if it is supported by reliable, probative, and substantial evidence, and is in accordance with the law.' Pons v. Ohio State Med. Bd. (1993), 66 Ohio St.3d 619, 621, 614 N.E.2d 748, 750. See, also, Bottoms Up, Inc. v. Ohio Liquor Control Comm. (1991), 72 Ohio App.3d 726, 728, 596 N.E.2d 475, 476. The common pleas court ' "must give due deference to the administrative resolution of evidentiary conflicts" ' and therefore must not substitute its judgment for that of the administrative agency. Hawkins v. Marion Corr. Inst. (1990), 62 Ohio App.3d 863, 870, 577 N.E.2d 720, 724, quoting Univ. of Cincinnati v. Conrad (1980), 63 Ohio St.2d 108, 111, 17 O.O.3d 65, 67, 407 N.E.2d 1265, 1267.

"An appellate court's review of the trial court's decision is even more limited and requires the appellate court 'to determine only if the trial court has abused its discretion, i.e., being not merely an error of judgment, but perversity of will, passion, prejudice, partiality or moral delinquency.' Pons, 66 Ohio St.3d at 621, 614 N.E.2d at 750-751. Where the common pleas court applies a standard of review greater than that called for in R.C. 119.12, the trial court has abused its discretion. Bottoms Up, Inc., 72 Ohio App.3d at 729-730, 596 N.E.2d at 476-477."

These standards apply as well to appeals involving USTs. See Penske Truck Leasing Co. v. Petroleum Underground Storage Tank Release Comp. Bd. (Sept. 19, 1995), Franklin App. No. 95APE02-226, unreported, at 4-5, 1995 WL 559956.

The board denied coverage to appellant because his tank was abandoned in violation of the State Fire Marshal rule found at Ohio Adm.Code 1301:7-7-28(E)(9)(c). Appellant does not dispute that the tank was improperly abandoned. Ohio Adm.Code...