Iowa Comprehensive Petroleum v. Mobil Oil

• Decision Date: 16 February 2000
• Docket Number: No. 98-372.,98-372.
• Citation: 606 N.W.2d 359
• Parties: IOWA COMPREHENSIVE PETROLEUM UNDERGROUND STORAGE TANK FUND BOARD, Appellant, v. MOBIL OIL CORPORATION, Appellee.
• Court: Iowa Supreme Court

606 N.W.2d 359

IOWA COMPREHENSIVE PETROLEUM UNDERGROUND STORAGE TANK FUND BOARD, Appellant, v. MOBIL OIL CORPORATION, Appellee.

No. 98-372.

Supreme Court of Iowa.

February 16, 2000.

Thomas J. Miller, Attorney General, David R. Sheridan and David S. Steward, Assistant Attorneys General, and John R. Perkins of Shearer, Templer & Pingel, West Des Moines, for appellant.

Robert V.P. Waterman, Jr. and Judith L. Herrmann of Lane & Waterman, Davenport, for appellee.

Brenda Myers of Barnhill & Goodman, West Des Moines, for amicus curiae Shell Oil Company.

Considered by McGIVERIN, C.J., CARTER, NEUMAN, and CADY, JJ., and HARRIS,¹ S.J CADY, Justice.

This case concerns the responsibility of a petroleum refiner and supplier under the Iowa Comprehensive Petroleum Underground Storage Tank Fund Act, Iowa Code chapter 455G (1997) (Tank Fund Act), for the corrective costs of the release of petroleum into the ground from an underground storage tank. The district court found the oil refiner and supplier was not responsible for the corrective costs as a matter of law, and granted summary judgment. We affirm.

I. Background Facts and Proceedings.

Schroeder Oil Company owned and operated a gas station in Carroll, Iowa from 1974 to 1978. The station was operated under the Mobil trademark and sold Mobil gasoline. In 1978, Schroeder sold the station to Donald Kitt, who then leased the site back to Schroeder. Schroeder continued to display the Mobil trademark, accept Mobil gasoline credit cards, and have its employees wear Mobil uniforms.

Schroeder was known as a Mobil "jobber," an independent distributor of Mobil gasoline. It purchased gasoline from Mobil at Mobil's Omaha terminal, and distributed it to various Mobil stations, including the station it leased in Carroll. Schroeder placed the petroleum into underground storage tanks located at the station, which was then dispensed to customers through pumps.

Mobil had the ability to "debrand" a jobber's station, such as the Carroll station, by terminating its relationship with the Mobil branded station if the jobber placed another brand of gasoline into the underground storage tank, or if the jobber did not pay for the petroleum products purchased. Mobil also dictated the geographic territory in which a jobber could sell its gasoline.

A petroleum leak from the underground storage tank at Schroeder's Mobil station occurred in 1984. This leak, however, was not detected until 1988.

In 1990, Kitt applied to the Iowa Comprehensive Petroleum Underground Storage Tank Fund Board for statutory benefits under the Tank Fund Act to pay for the cost of clean up. His claim was approved, and the Board paid and will continue to pay, up to the statutory limit, for the corrective action costs incurred at the site. See Iowa Code § 455G.9(1).

In 1997, the Board filed a petition in district court against Mobil Oil seeking to recover the corrective action costs. Under the Tank Fund Act, the Board recovers corrective costs from the "owner, operator, or other potentially responsible party . . . ." Id. § 455G.13(1). The Board alleged Mobil was liable as an "operator."

Mobil moved for summary judgment. It claimed that its status as a wholesale supplier of gasoline to a distributor and the station's use of the Mobil trademark were insufficient as a matter of law to impose liability as an "operator" under the Tank Fund Act. Mobil did not own or lease the station, and had no franchise agreement with Schroeder.

The trial court granted summary judgment for Mobil. It interpreted the Tank Fund Act to exclude a wholesale supplier of petroleum who did not participate in the daily operations of the station, and found no facts to indicate Mobil participated in the daily operation of the underground storage tank.

The Board appealed. It claims the term "operator" under the Tank Fund Act must be broadly construed to include wholesalers who not only control the operation of the tank, but have the ability to control the tank. It claims Mobil maintained the ability to control the underground tank based on its authority to refuse to deliver gasoline to the distributor and to debrand a jobber station.

II. Scope of Review.

We review a summary judgment ruling for errors at law. Iowa Comprehensive Petroleum Underground Storage Tank Fund Bd. v. Farmland Mut. Ins. Co., 568 N.W.2d 815, 817 (Iowa 1997). Summary judgment may be entered if the record shows "no genuine issue as to any material fact and ... the moving party is entitled to judgment as a matter of law." Id.; Iowa R. Civ. P. 237(c). Thus, we must determine whether a genuine issue of material fact exists and whether the court correctly applied the law. See Schuver v. E.I. Du Pont de Nemours & Co., 546 N.W.2d 610, 612 (Iowa 1996)

. We view the facts in the light most favorable to the party opposing the motion for summary judgment. Shriver v. City of Okoboji, 567 N.W.2d 397, 400 (Iowa 1997). When the conflict in the record concerns only the legal consequences flowing from undisputed facts, entry of summary judgment is proper. See Thompson v. City of Des Moines, 564 N.W.2d 839, 841 (Iowa 1997).

Our review for issues involving statutory construction is for legal error. Board of Trustees of Mun. Fire & Police Retirement Sys. v. City of West Des Moines, 587 N.W.2d 227, 230 (Iowa 1998).

III. Background of Tank Fund Act.

Like many other states, Iowa has enacted a comprehensive law regulating petroleum underground storage tanks, including the prevention and remediation of contamination from underground tanks. See Hagen v. Texaco Ref. & Mktg., Inc., 526 N.W.2d 531, 535 (Iowa 1995)

; 1989 Iowa Acts ch. 131, §§ 1, 2; see also William B. Johnson, Annotation, State & Local Government Control of Pollution From Underground Storage Tanks, 11 A.L.R.5th 388, 388, 399 (1993). The law is commonly referred to as the Tank Fund Act, and followed the enactment of comprehensive federal regulations designed to address the growing problem created by a variety of hazardous wastes, including petroleum storage. See Comprehensive Environmental Responsibility, Compensation and Liability Act (CERCLA), 42 U.S.C. § 9601-9675 (1995) (enacted in 1980); Resource Conservation and Recovery Act (RCRA), 42 U.S.C. § 6901-6992k (enacted in 1976). The storage tank legislation was largely a response to threats posed to the quality of our groundwater from leaks in underground tanks containing petroleum. In 1988, for example, the United States Environmental Protection Agency reported there were over two million underground storage tanks located in over 700,000 facilities nationwide, and ten to thirty percent of the tanks had begun to leak or would soon leak if prompt action was not taken. William B. Johnson, Annotation, State & Local Government Control of Pollution From Underground Storage Tanks, 11 A.L.R.5th 388, 399 (1993) (citing Fed.Reg. 37082, at 37095-96 (Sept. 23 1988)). Most of the leaks have resulted from corrosion to the tanks. The problem was identified as a leading threat of groundwater pollution. Id.²

These types of findings set the groundwork for Iowa's Tank Fund Act.1989 Iowa Acts ch. 131, § 1. In enacting the Tank Fund Act, our legislature found that the maintenance of Iowa's petroleum distribution system was dependent upon financial assistance to clean up past and existing petroleum spills, and that petroleum storage in underground tanks endangered groundwater and was a threat to the public health and welfare. Id. Consequently, the Tank Fund Act established the Iowa Comprehensive Petroleum Underground Tank Storage Fund which is administered by the Board. Iowa Code §§ 455G.3, .4. The purpose of the fund is to assist owners and operators of underground storage tanks in complying with federal technical and financial responsibility regulations, and to protect and improve the quality of Iowa's environment. Id. § 455G.3(2); see 1989 Iowa Acts ch. 131, § 2. One way the fund assists owners and operators is in financing "corrective actions." See Iowa Code §§ 455G.3(3)(a), .9. Revenue for the fund includes bonds, taxes, fees, insurance premiums, and recoveries from persons liable for petroleum releases. Id. § 455G.8.

Chapter 455G also established the framework for the Board to recover moneys expended for corrective action costs. See id. § 455G.13. In general, the Board is required to recover the full cost of the corrective action from "the owner, operator, or other potentially responsible party." Id. § 455G.13(1).³ The Board does not claim Mobil is liable as a "owner" or "other potentially responsible party" but is strictly liable as an "operator." See id. § 455G.13(7). Thus, the resolution of this case turns on the meaning of "operator."

IV. Summary Judgment.

A. Legislative Intent.

Although the Tank Fund Act does not include a definition of "operator," the term is defined in a companion statute as "a person in control of, or having responsibility for, the daily operation of the underground storage tank." Id. § 455B.471(5). The companion statute defines the regulatory responsibility of the Iowa Department of Natural Resources over underground storage tanks, and is properly read in pari materia with chapter 455B. See id. § 455G.16 (Board shall cooperate with Department of Natural Resources in implementing chapter 455G). Thus, our legislature has specifically defined an "operator." Nevertheless, the terms "control," "responsibility," and "daily operation" within the definition are not further defined by the statute, and this lack of a definition forms the basis for the dispute presented on appeal. It is our function to examine the history and language of the Tank Fund Act to discern the intent of our legislature. Hamilton v. City of Urbandale, 291 N.W.2d 15, 19 (Iowa 1980).

In interpreting the statute, our ultimate goal is to ascertain and give effect to the intent of the legislature. Iowa Federation of Labor AFL-CIO v. Iowa Dep't of Job Serv., 427 N.W.2d 443, 445 (Iowa 1988). We look to...