Phillips v. Petroleum Underground Storage Tank Release Compensation Bd., 2009 Ohio 626 (Ohio App. 2/12/2009), 91245.
| Decision Date | 12 February 2009 |
| Docket Number | No. 91245.,91245. |
| Citation | 2009 Ohio 626 |
| Parties | John H. Phillips, DBA, Etc., Plaintiff-Appellee, v. Petroleum Underground Storage Tank Release Compensation Board, Defendant-Appellant. |
| Court | Ohio Court of Appeals |
Nancy Rogers, Attorney General, Cheryl R. Hawkinson, Assistant Attorney General, 30 East Broad Street, 26th Floor, Columbus, Ohio 43215, Attorneys for Appellant.
Bruce O. Baumgartner, Baker Hostetler, LLP, 3200 National City Center, 1900 East Ninth Street, Cleveland, Ohio 44114, Angela Hayden, Baker Hostetler, LLP, 312 Walnut Street, Suite 2650, Cincinnati, Ohio 45202-4038, Attorneys for Appellee.
Before: Kilbane, J., Cooney, A.J., and Boyle, J.
JOURNAL ENTRY AND OPINION
{¶ 1} Defendant-appellant, Petroleum Underground Storage Tank Release Compensation Board ("the Board"), appeals the decision of the lower court. Having reviewed the arguments of the parties and the pertinent law, we hereby affirm the lower court.
{¶ 2} The Board reimburses responsible persons for the costs of corrective action due to accidental releases of petroleum. To be eligible, the responsible person must have paid the annual tank fees and have a valid certificate of coverage at the time of release. Pursuant to R.C. 3737.92 and O.A.C. 3737-1-07, the director shall grant eligibility if the director determines the release is from an underground storage tank that had a valid certificate of coverage at the time of the release, and the application for eligibility was timely filed. If the director grants eligibility, the tank owner must then submit claims for reimbursement of corrective action costs.
{¶ 3} In June 2003, appellee John Phillips, dba Phillips Marathon, discovered a petroleum release on his property located in Chagrin Falls, Ohio. As a result, Phillips filed an application for eligibility for compensation from the Board. The director of the Board denied Phillips's application, determining that the release occurred in 1989 and not 2003 as reported by Phillips. Phillips filed an objection to the director's denial on July 19, 2004.
{¶ 4} An administrative hearing was conducted on March 21 and April 14 of 2005. The parties presented evidence and argued that Phillips was not in
compliance with state fire marshal rules regarding the suspected release in 1989. The hearing officer issued a recommendation that the Board affirm the director's denial of eligibility. In the recommendation, the hearing officer did not dispute that a release occurred in June 2003, but, rather, found that Phillips was not in compliance with the state fire marshal rules related to the suspected 1989 release. The Board then accepted the hearing officer's findings of fact, conclusions of law, and recommendation in their entirety and issued an adjudication order on July 7, 2006.
{¶ 5} On July 21, 2006, Phillips filed a timely notice of appeal of the adjudication order in the common pleas court. The parties briefed the matter fully. The lower court judge reversed the decision of the Board. The judge stated that according to the evidence, the release occurred in 2003 when Phillips had a valid certificate of coverage. It is from that order that the Board now appeals.
{¶ 6} Phillips Marathon is owned and operated by John Phillips and is located at 10 West Orange Street, Chagrin Falls, Ohio. It was an operating gas station for approximately 25 years, until mid-2003. During the time when Phillips was selling gasoline, two 6,000-gallon underground petroleum storage tanks were connected by pipelines to the pump dispensers. Until 1998, two 4,000-gallon petroleum storage tanks were also located on the property, but were not in use while Phillips owned Phillips Marathon.
{¶ 7} In October 1989, Gamekeepers, a nearby restaurant, reported gas fumes in the basement of its building. As a result, Reggie Brown from the Environmental Protection Agency ("EPA") came to investigate the suspected release
of petroleum. Petroleum vapors and free petroleum product were found in the storm sewer near Phillips Marathon. On November 1 and 2, 1989, Phillips had his tanks and lines "tightness tested," and the tanks and lines tested tight. Brown reviewed the tests and informed Phillips that there were no signs of any leaks from Phillips's tanks. Therefore, no release was confirmed.
{¶ 8} Subsequently, in March 1990, Gamekeepers again reported petroleum vapors in its basement. Brown again investigated and instructed Phillips to take soil borings and to install monitoring wells as close as possible to the tanks, and then excavate around the old unused tanks to check for possible leaks. Phillips hired EDP Triggs to take the borings and install monitoring wells. EDP Triggs installed wells designated EDP MW-2 and RCW at the locations where the soil borings were taken. The borings and monitoring wells showed no signs of free product, and the 4,000-gallon tanks were completely dry. On March 22, 1990, EDP Triggs's final report concluded that the contamination in the sewer south of Phillips Marathon could not have come from Phillips's tanks. Brown from the EPA again reported to Phillips that there were no leaks from his property. Again, no release was confirmed.
{¶ 9} In November 1998, Phillips had the unused tanks removed. The pipelines running from the northern 6,000-gallon tank to the pump dispenser had to be removed and replaced during this process. After the completion of this project, Phillips had a closure assessment report prepared by Marlin Company and a tank integrity test conducted by Tank Integrity Systems. The Marlin Company report
indicated that the soil samples in the east cavity tested far below action levels after the tanks were removed. The tank integrity test also indicated compliance.
{¶ 10} The Bureau of Underground Storage Tank Regulations (BUSTR) is an agency under the Ohio state fire marshal's authority that regulates the safe operation of underground storage tanks.
{¶ 11} There is no dispute that BUSTR made numerous requests beginning in 1990 to have Phillips perform a site assessment for the 1989 suspected release. However, Phillips did not do so until spring 2003, because he believed he had assurances from the EPA representative, as well as Felicia Cheatem from the Board, that he did not need to do anything further. However, after continued requests by BUSTR to have a site assessment, Phillips hired EnviroMatrix to review the letter he had received from the fire marshal and determine a course of action. EnviroMatrix noted the existence of two monitoring wells on the site already and made plans to install three ground water-monitoring wells. It opened the existing wells on the same day, May 28, 2003, that it physically installed the borings at the site. These borings were later converted to monitoring wells and labeled MW-1, MW-2, and MW-3. The existing wells were checked later that day, and there was no indication of petroleum being released.
{¶ 12} EnviroMatrix returned to the site about a month later to check all of the wells — those installed by EnviroMatrix, and the existing wells that had been installed by EDP Triggs. EnviroMatrix found contamination at boring B-1, eventually becoming well MW-1, which was placed at the southeast corner of the property near
the storm sewer where the 1989 contamination occurred. This was expected by Mr. Dattilo, the engineer from EnviroMatrix, because of the prior reports of free product in the storm sewer directly adjacent to the contaminated property. Dattilo determined that this contamination was preexisting and not connected to Phillips's tanks or lines.
{¶ 13} EnviroMatrix also discovered free product in EDP MW-2, a well that had been checked a month earlier and contained no product. At the same time, Phillips was experiencing problems with his pump system and believed he could possibly have a leak in the line. Dattilo thought that was likely because of the free product found in EDP MW-2, when there had been none the month before. Dattilo concluded that the recent contamination was due to a compromised line. The Board was contacted and the suspected release was reported. It was then that Phillips made the decision to have the remaining tanks removed and leave the gas-pumping business.
{¶ 14} Precision Pump was hired by Phillips to excavate and remove the tanks. It found a cracked pipe around which the petroleum odor was strong.1 In addition, while Precision Pump excavated the tanks, EnviroMatrix took soil core samples every 20 feet, starting with the northern tank, along the pipeline from the northern tank to the gas pumps. The samples were clean until EnviroMatrix reached the 80-foot
mark, when the samples suddenly began showing a high concentration of petroleum. The 80-foot mark was close to the southeast corner of the service station building, at the northeast corner of the building near the gas pumps.
{¶ 15} EnviroMatrix determined that a one-time release of at least 25 gallons of petroleum occurred where the pipe was cracked, and the free product flowed west from the break in the pipe to EDP MW-2, causing the four inches of free product in that well. EnviroMatrix installed a recovery well to recover the free product that was discovered in EDP MW-2, and Precision Pump excavated and removed most of the material that was contaminated with petroleum from the 2003 release.
{¶ 16} All relevant reports were provided to the Board. In August 2003, after the clean up of the June 2003 release was completed, Phillips applied for eligibility for compensation from the Board, which was denied. The Board stated that the contamination was not the result of the 2003 release, but rather linked it to the 1989 suspected release. On appeal, the common pleas court determined that the Board had erred, because the...
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