SC Administrative Law Court Decisions

STATEMENT OF THE CASE

The above-captioned case comes before this Court pursuant to the requests of Respondents Jake Roper, d/b/a/ Roper 66 and Helen Roper, d/b/a Roper 66 for a contested case hearing to challenge Administrative Order 05-0866-UST, issued by Petitioner, South Carolina Department of Health and Environmental Control (SCDHEC or “Department”). Respondents Jake and Helen Roper filed a timely request for a contested case proceeding with this Court in accordance with appeal procedures contained in S.C. Code Ann. § 44-1-60 (Supp. 2007). The other party named as a respondent in the Administrative Order, Bush Oil Company, Inc. (“Bush Oil”), however, neither filed a contested case request with this Court as required by the statute, nor appeared at the merits hearing held on September 25, 2008 in the Office of the Administrative Law Court in Columbia, South Carolina.

BACKGROUND

Jake and Helen Roper are the owners and operators of an unincorporated business known as Roper 66 located at 2022 Gentry Memorial Highway in Pickens, South Carolina. The business initially consisted of a convenience store that sold petroleum products to the public from underground storage tanks (USTs) at the site. In the mid 1990’s, Roper 66 leased video games for an arcade located in the store. Petroleum sales at the store ended when the USTs were permanently closed by removing the tanks and disposing of them off-site in June or July of that year. A tank closure report sent to SCDHEC and was signed by Respondent Helen Roper as owner of the USTs.

In March 2000, the SCDHEC determined that two (2) petroleum releases were present based on the results of soil samples taken during the removal of the tanks. The Department sent a directive to Respondents Roper 66 and Bush Oil to submit an initial ground water assessment report (IGWA) for each release. In response to this directive, in November 2000, Edna Bush, of Bush Oil submitted the IGWAs to the Department; however, additional assessment work was required. The Department received a Tier II Assessment Plan on December 27, 2000, and subsequently on January 3, 2001, sent Bush Oil and Respondent Helen Roper letters authorizing them to proceed with the work. Neither Respondents Ropers nor Bush Oil complied with the SCDHEC directive to proceed with the Tier II Assessment Plan.

Between 2001 and 2007, the Department tried unsuccessfully to bring Respondents Ropers and Bush Oil into compliance with its regulations, and Respondent Jake Roper passed on September 2, 2005. Although denying responsibility for the work, claiming that she neither owned nor operated the USTs removed from the site, Respondent Helen Roper, on May 17, 2007, submitted an Individual Ability to Pay Claim (“Indipay”) form to SCDHEC. However, after reviewing the submission, the Department determined that the form was incomplete and sent another Indipay form to Respondent Helen Roper, which was completed and returned to the Department on June 4, 2007. After reviewing this Indipay form, the Department again determined that it was incomplete.

On August 29, 2007, the Department issued Administrative Order 05-0866-UST against Respondents Ropers and Bush Oil. The Order made several findings of fact, including that Bush Oil owned and Respondents Jake and Helen Roper operated the USTs that were the cause of the two petroleum releases at the site and that neither of the Respondents had complied with the SCDHEC directive to implement the approved Tier II Assessment Plan. Based on these findings of fact, the Department concluded that the Respondents had violated 25A S.C. Ann. Reg. 61-92. 280.65 (2007) by failing to determine the full extent of the release in accordance with the schedule established by the Department, and ordered that the Respondents 1) submit a Tier II Assessment Report; and 2) pay a civil penalty of eighteen thousand, seven hundred seventy-eight dollars ($18,778.00) within forty-five (45) days of the effective date of the Administrative Order. From this decision, the Respondents Jake and Helen Roper requested this hearing.

FINDINGS OF FACT

A hearing on the merits was held on September 25, 2008. The parties each presented opening statements outlining their cases. Petitioner SCDHEC stated the evid3ence would establish that Respondents Jake and Helen Roper were the owners or operators of the USTs removed from 2022 Gentry Memorial Highway, Pickens, South Carolina (the “Site”) and that, as such, they were obligated to comply with all of the requirements of Administrative Order 05-0866-UST. Respondents Jake and Helen Roper stated that the evidence would establish that they neither owned nor operated the USTs removed from the Site. Respondents also stated that they were not challenging the appropriateness of any of the relief sought by the Department in the Administrative Order. During the trial, the Court heard testimony from four witnesses Joe W. Gladney, for SCDHEC, and Tim Roper, Michael J. Mravich, and Helen Roper, for the Respondents. The Court also received into evidence twenty-one (21) exhibits stipulated to by the parties.

Having carefully considered all the testimony and exhibits admitted into evidence, and taking in to count the arguments presented and the adequacy and credibility of the evidence, the Court makes the following Findings of Fact by the preponderance of the evidence:

1.                  The Findings of Fact enumerated in Administrative Order 05-0866-UST are supported by preponderance of the evidence.

2.                  Bush Oil Company, Inc. owned the four USTs located at 2022 Gentry Memorial Highway, Pickens, South Carolina, and registered under UST Permit Number 07178.

3.                  Respondent Jake Roper owned Roper 66, also known as Roper’s Grocery, which is located at the Site.

4.                  Respondent Jake Roper had an agreement with Bush Oil that Bush Oil would supply petroleum product that would be stored in the UST and dispensed and sold by Roper 66. Each week, Roper 66 would purchase petroleum products that was placed in the USTs and sold to its customers.

5.                  In 1989, Respondent Jake Roper retired and Respondent Helen Roper took over the day-to-day operation of Roper 66.

6.                  Respondent Jake Roper operated the four USTs located at the Site, as the term “operator” is defined in the SUPERB Act, S.C. Code Ann. § 44-2-20 (10).

7.                  In or about 1995, Respondent Helen Roper signed a contract on behalf of Roper 66 for video games for the arcade located at the back of the store.

8.                  On May 24, 1999, the Department received a UST Certificate of Financial Responsibility form and a Personal Financial Statement form that were signed by Respondent Helen Roper. The forms evidence that Respondent Helen Roper had sufficient net worth to cover the twenty-five thousand dollar ($25,000.00) SUPERB deductible that all tank owners and operators must maintain and that she was willing to use the funds to meet the deductible in the case or a release.

9.                  The USTs were removed from the ground on July 1, 1999.

10.              On March 9, 2000, SCDHEC received a UST Assessment Report for the four USTs that indicated that two of the petroleum tanks removed from the site had released petroleum into the environment. The report was certified by Respondent Helen Roper.

11.              The Department received an Initial Groundwater Assessment Report from an environmental consultant for the two releases on November 1, 2000.

12.              The Department received a Tier II Assessment Plan from an environment consultant for the two releases on December 27, 2000.

13.              On January 3, 2001, the Department sent written notification to Bush Oil and Respondent Helen Roper directing each to resume rehabilitation activities in accordance with the Tier II Assessment Plan submitted to the Department and submit the findings in a report to the agency.

14.              None of the Respondents complied with the SCDHEC directive to implement the Tier II Assessment Plan and submit the findings to the agency in a report.

15.              On September 2, 2005 Respondent Jake Roper died. His estate, which includes Roper 66, has not been probated.

16.              On May 17, 2007 and June 4, 2007, SCDHEC received Individual Ability to Pay Claim (Indipay) form and IRS Form 4506-T that had been signed by Respondent Helen Roper. The Indipay forms denoted the Respondent Helen Roper was the owner and operator of the USTs and that Roper 66 was a Sole Proprietorship.

17.              Respondent Helen Roper has a ninth-grade education; however, she has engaged in course of conduct whereby she has signed legal documents on behalf of Roper 66 as set forth above. During her testimony she was able to accurately describe the term “Sole Proprietorship.”

THE ISSUE ON APPEAL

Are Respondent Jake Roper, d/b/a Roper 66 and Helen Roper, d/b/a Roper 66 the owners or operators of the underground storage tanks located at 2022 Gentry Memorial Highway, Pickens, South Carolina?

DISCUSSION AND CONCLSUIONS OF LAW

Based upon the foregoing findings of fact, the Court concludes the following as a matter of law:

Jurisdiction and General Principals

1.                  The Administrative Law Court (ALC) has subject matter jurisdiction over this matter pursuant to S.C. Code Ann. § 1-23-600(B) (Supp. 2007), S.C. Code Ann. § 44-1-60 (Supp. 2007), and S.C. Code Ann. § 44-2-140 (2002 and Supp. 2007).

2.                  In reviewing this matter, the Court serves as the finder of fact and makes a de novo determination regarding the matters in controversy. See S.C. Code Ann. § S.C. Code Ann. 1-23-600(B) (Supp. 2007); Brown v. South Carolina Department of Health and Environmental Control, 348 S.C. 507, 512, 560 S.E.2d 410, 413 (2002). The standard of proof used by the Court in weighing the evidence and making a decision on the merits during a contested case proceeding is the preponderance of the evidence. National Health Corp. v. South Carolina Department of Health and Environmental Control, 298 S.C. 373, 380 S.E.2d 841 (Ct.App. 1989). In addition SCDHEC has the burden of proof pursuant to ACL Rule 29(B) since this case involves the enforcement of an administrative order.

3.                  The State Underground Petroleum Environmental Response Bank (SUPERB) Act, S.C. Code Ann. § 44-2-10 et seq. (2002 and Supp. 2007) was enacted in 1988 to establish a comprehensive framework governing underground storage tanks used to store petroleum products. To accomplish this task, the Act established two accounts-- the Superb Account and the Superb Financial Responsibility Fund-- to assist owners and operators of underground storage tanks with containing petroleum and petroleum products with the costs associated with such releases. S.C. Code Ann. § 44-2-50(A). The Superb Account pays the “usual, customary, and reasonable costs for site rehabilitation of releases from underground storage tanks containing petroleum and petroleum products,” and the Superb Financial Responsibility Fund compensates third parties for actual costs of bodily injury and property damage caused by releases from regulated tanks. Id. Together these accounts provide the owner and operator of a regulated tank with a total of one million dollars ($1,000,000.00) of coverage for each qualifying release, provided that the tank owner or operator pays the first twenty-five thousand dollars ($25,000.00) for costs associated with the release. Code Ann. § 44-2-50(D).

4.                  The SUPERB act also mandated that SCDHEC “promulgate regulations relating to the permitting, release detection, prevention, and correction applicable to all owners and operators of underground storage tanks as may be necessary to protect human health and the environment.” S.C. Code Ann. § 44-2-50(A). Pursuant to the authority granted in S.C. Code Ann. § 44-2-50, SCDHEC promulgated the Underground Storage Tank Control (USTC) Regulations, which are codified at 25A S.C. Code Ann. Regs. 61-92 (Supp. 2007). Pertinent to the matters in this case, Subpart F of the USTC regulations governs release response and corrective action for regulated USTs. Specifically, the Subpart requires that “[o]wners and operators of petroleum or hazardous substance UST systems must, in response to a confirmed release from the UST system, comply with the requirements of this subpart except for USTs excluded under Section 280.10(b) and UST systems subject to the RCRA Subtitle C corrective Action requirements . . . .” 25A S.C. Code Ann. Regs. 61-92.280.60. Additionally, “[i]n order to determine the full extent and location of soils contaminated by the release and the presence and concentrations of dissolved product contamination in the ground water, owners and operators must conduct investigations of the release, the release site, and the surrounding area possibly affected by the release . . . and must submit the information collected under paragraph (a) of this section as soon as practicable or in accordance with a scheduled established by the Department.” 25A S.C. Code Ann. Regs. 61-92.280.65.

5.                  The SUPERB Act defines “owner” in two was applicable to this case. First, and owner is “a person who owns an underground storage tank system used for the storage, use, or dispensing of regulated substances” in use on or after November 8, 1984. S.C. Code Ann. § 44-2-20(12)(a). Second, owner is “a person who has assumed legal ownership of the underground storage tank thorough the provisions of a contract of sale or other legally binding transfer of ownership.” S.C. Code Ann. § 44-2-20(12) (c). The term “operator” is defined as “any person in control of, or having responsibility for the daily operation of an underground storage tank.” S.C. Code Ann. § 44-2-20(10).

6.                  At the hearing, the Department asserted that Respondents Jake and Helen Roper were either the owners or operators of the USTs removed from the Site and, as such, were responsible for determining the full extent of the two confirmed releases at the Site and submitting a Tier II Assessment Report in accordance with the schedule established by SCDHEC. Joe W. Gladney, the former SCDHEC employee who drafted Administrative Order 05-0866-UST testified that he relied upon documentary evidence available to the agency that indicated that the Respondent Helen Roper of Roper 66 owned and operated the USTs at the Site. First, he testified that he reviewed the Notification for Underground Storage Tanks in Operation form, which admitted into evidence as Petitioner’s Exhibit 2. This form indicates that, in 1987, four USTs located at 2022 Gentry Memorial Highway in Pickens, South Carolina were registered under Permit No. 07178. The owner of the tanks was listed as Roper 66 and Helen Roper was listed as the contact person for Roper 66. The form is not the original form sent to the UST Program; rather, it was prepared by the UST Program in May 1994 to replace the lost original, as indicated on the form.

Second, Gladney relied on the Certificate of Financial Responsibility form received by the UST Program on May 24, 1999, and admitted into evidence as Petitioner’s Exhibit 3. According to Mr. Gladney, the SUPERB Act requires that the owner or operator of a regulated UST must submit a form indicating how that party would pay the twenty-five thousand dollar ($25,000.00) deductible that must be paid for assessment and remediation of each reported release before the SUPERB Act would pay the balance, up to the statutory limit of one million dollars ($1,000,000.00). The Certificate of Financial Responsibility form provides the Department with information necessary for it to determine how the responsible party intends to pay the deductible. Respondent Helen Roper signed the form on May 20, 1999, which indicated that she owned the USTs. Attached to the form was a Personal Financial Statement, dated May 20, 1999, that was signed by Helen Roper in her individual capacity.

Third, Gladney relied on the UST Assessment Report, which was received by the Department on March 9, 2000. Under the SUPERB Act and USTC Regulations, a UST Assessment Report must be submitted for all USTs removed from the ground. The purpose of the Report is to determine if any of the removed USTs released petroleum or petroleum products while the tank was in service. The Report, which was admitted into evidence as Petitioner’s Exhibit 4, indicates that petroleum or petroleum products were released at the site and that Roper 66 is the owner of the USTs that had been removed. The accuracy of the Report was certified by Respondent Helen Roper, who signed as the owner or operator of the removed USTs.

Fourth, Mr. Gladney stated that he reviewed the January 30, 2006 letter sent by R. Scott Dover, Esquire on behalf of Respondents Jake and Helen Roper and attachments, which were admitted into evidence as Petitioner’s Exhibit 9.[1] In that letter, the Ropers’ attorney stated “I do not deny that Jake and now, Helen Roper have been the operators of that service station since the early 1970’s. However, the Roper’s (sic) never owned the equipment or the underground tanks.” (Emphasis in original).[2] Attached to that letter were three lease agreements dated March 2, 1974, October 11, 1976, and September 1, 1977, which were admitted into evidence as Respondents’ Exhibit 1 - 3, respectively. These agreements indicate that the USTs were owned by Bush Oil and that they were operated by Jake Roper and Roper 66.

Lastly, Mr. Gladney testified that he considered the information contained in the Individual Ability to Pay Claim (Indipay) forms submitted to the Department by Respondent Helen Roper. The first Indipay form was received by the Department on May 17, 2007, and admitted into evidence as part of Petitioner’s Exhibit 11. The second Indipay form received by SCDHEC on June 4, 2007, and was admitted into evidence as part of Petitioner’s Exhibit 12. Each form had a page that asked Respondent Helen Roper to identify the owner and operator of the facility to which the Respondent identified herself as both.

7.                  During their case-in-chief, Respondents Jake and Helen Roper put forth testimonial and documentary evidence that they assert established that they did not own or operate the USTs at the Site. Tim Roper, the son of Respondent Jake and the stepson of Respondent Helen Roper, testified that Bush Oil installed the tanks and pumps at the Site and that Edna and Ernest Bush, the owners of Bush Oil, maintained and operated the tanks. Mr. Roper also testified that Roper’s Grocery, a/k/a Roper 66, was started by his father in 1973, as a grocery store, which gradually evolved over the years into an arcade. From 1973 until December 21, 1998, petroleum products were sold from the USTs and the tanks would be replenished weekly. Roper 66 would collect the money from the sales of the petroleum products and pay for the weekly replenishment deliveries from its income.

Mr. Michael Mravich is the owner of AET, Inc, an environmental consulting firm located in Liberty South Carolina. He testified that, in 2002, AET, Inc was hired and paid five thousand dollars ($5,000.00) by Mary C. Bush of Bush Oil to perform work identified in the Tier II Assessment Plan. AEC, Inc. started the work but did not complete it because Ms. Bush would not pay the costs necessary to comply with the Tier II Assessment Plan. In support of this testimony, Mr. Mravich cited a handwritten note purportedly written by Ms. Bush that stated Bush Oil would pay when the work was completed. This document was admitted into evidence as Respondents’ Exhibit 7.

Finally, Respondent Helen Roper stated that she was a stay at home wife, who only started working at Roper 66 when her husband reached retirement age in 1989. She stated that when she started working at the store she replenished stock on shelves and mopped the floors. Over time, her level of work at Roper 66 increased as Jake Roper decreased his involvement in the store, until she was running the store. In the mid-1990’s, Helen Roper stated that she signed a written contract on behalf of Roper 66 to lease arcade machines for the store.

Helen Roper also testified that she did not operate the tanks, although she acknowledged taking money from customers for fuel sold. She also acknowledged signing UST Certificate of Financial Responsibility form and attached Personal Financial Statement (Petitioner’s Exhibit 3) and signing the Indipay forms and IRS 4506 Request for Transcript of Tax Return forms contained in Petitioner’s Exhibits 11 and 12. She, however, attempted to minimize this testimony by claiming that she was not aware of the significance of the documents because she only had a ninth grade education.

8.                  Based on this testimony and the documents in evidence, the Court finds that the SCDHEC made a prima facie showing that Respondents Jake and Helen Roper were the owners of USTs at the Site in accordance with the definition of the term “owner” contained in S.C. Code Ann. § 44-2-20(12(a). Exhibits 2, Notification for USTs in Operation form; 3, Certificate of Financial Responsibility form; UST Assessment Report; and 11 and 12, Indipay forms, each identify Roper 66 or Helen Roper as the owner of the USTs. Moreover, each of these forms was signed by Respondent Helen Roper except for Exhibit 2, and the signature block contained caveats that placed the signer on notice of the importance of the signature to the document. Further, in her testimony Respondent Helen Roper acknowledged her signature on Petitioner’s Exhibits 3, 11, and 12.

The Court, however, finds that based on the definition of “owner” contained in S.C. Code Ann. § 44-2-20(12)(c), Respondents Jake and Helen Roper are not the owners of the USTs. In addition to the definition of previously discussed, the statute also defines and owner as “a person who has assumed legal ownership of the underground storage tanks thorough the provisions of a contract of sale or other legally binding transfer of ownership.” S.C. Code Ann. § 44-2-20(12)(c). Here, the Court received into evidence signed lease contacts between Bush Oil and Respondent Jake Roper that identify Bush Oil as the owner of the USTs. Respondents’ Exhibits 1 – 3. This uncontested evidence is sufficient to establish that Bush Oil was the “owner” of the USTs. Therefore, as a matter of law, Respondents Jake and Helen Roper are not the owners of the USTs removed from the Site.

9.                  Although the Court finds that Respondents Jake and Helen Roper were not the owners of the USTs, the Court does find that the testimony and documentary evidence establishes that there were the operators of the USTs. The term “operator” is defined by the statute as “any person in control of, or having responsibility for the daily operation of an underground storage tank.” S.C. Code Ann. § 44-2-20(10). In his testimony, Tim Roper stated that Roper 66 sold petroleum products from the USTs for which the store collected money and paid weekly to have the USTs replenished. Additionally, the documents submitted by both SCDHEC and the Respondents established that Roper 66 operated the USTs.

Further, the documents submitted by both the Department and the Respondents established that Roper 66 operated the USTs. Specifically, Petitioner’s Exhibits 11 and 12, the Indipay forms signed by Respondent Helen Roper, which Respondent Helen Roper acknowledged signing, indicate that the operator is the same as the owner. Moreover, the signature block for these forms is located on the same page as the information on the owner, operator, and type of business is located. Additionally, Respondents’ Exhibits 1 – 4 each contain excerpts from a series of lease agreements and extensions between Bush Oil and Respondent Jake Roper d/b/a Roper 66 that expressly state that Respondent Jake Roper is the operator of the USTs. For example, the lease contract admitted as Respondents’ Exhibit 1 states , in pertinent part, that “[t]he Operator Jake Roper agrees to keep the equipment in good condition, to be responsible for any damages except for normal wear.” Finally, the handwritten invoices contained in Respondents’ Exhibit 5 unambiguously shows that on average Roper 66 took in $3,500.00 monthly from the sale of petroleum products. Thus, both Respondents Jake and Helen Roper were operators of the USTS as that term is defined in the statute.

10.              Except for the general denial that he was not an operator, no evidence was presented to the Court to mitigate or refute the evidence establishing Respondent Jake Roper as the operator of the USTs. Therefore, Respondent Jake Roper d/b/a as Roper 66 is an operator and is subject to all statutory and regulatory requirements imposed upon operators, including complying with a directive to proceed with the implementation of the Tier II Assessment Plan in accordance with the scheduled established by the Department. See 25A S.C. Code Ann. Regs. 61-92.280.65.

11.              Respondent Helen Roper, however, did put forth evidence to mitigate the evidence that she was an operator. Relying on her own testimony and that of her stepson, Tim Roper, she contended that her lack of education made her reliant upon others to explain documents that she signed. After carefully considering these facts along with the other evidence presented, the Court finds Respondent’s Helen Roper’s educational level does not bar her from being held liable for the obligations of an operator under the SUPERB Act.

The Court heard testimony from Respondent Helen Roper that Edna Bush, a/k/a Mary Bush, completed the UST Certificate of Financial Responsibility form and Personal Statement, and told her where to sign. The Court also heard testimony from Tim Roper that he routinely assists his stepmother in the signing of documents by reading and interpreting the documents for her, and provided that assistance with regard to the Indipay forms. With regard to the UST Financial Responsibility for, the Court finds this testimony credible and supportive of Respondent’s contention that she was duped into signing the form by Edna Bush. However, with regard to the Indipay forms, although the Court finds the testimony credible, the testimony does not support Respondent Helen Roper’s claims. The testimony regarding Edna Bush could be viewed as providing a motive for Edna Bush to have Respondent Helen Roper incorrectly acknowledge that she operated the USTS. The same cannot be stated for the testimony regarding Tim Roper; hence, the Court does not believe that he intentionally or maliciously mislead his stepmother astray. Nor does the Court believe that Mr. Roper misapprehended the significance and importance of accurately completing the form, particularly in light of the fact that the pertinent information was recorded on the same pages as the certification in which the following disclaimer is prominently displayed:

Under the penalty of perjury, I declare that this statement if assets, liabilities, and other information is true, correct, and complete to the best of my knowledge and belief. I further understand that I will be subject to prosecution under State law should I provide any information that is not true, correct, and complete to the best of my knowledge.

Petitioner’s Exhibits 11 and 12. Thus, even it the Court discounts the information contained in the UST Certificate of Financial Responsibility form, the information contained in the two Indipay forms are sufficient for the Court to conclude that Respondent Helen Roper operated the USTs.

12.              The Court’s determination that Respondent Helen Roper is an operator is bolstered further by the following facts: the Indipay forms were forwarded to the Department by her attorney; and her attorney conceded this matter in correspondence to the Department. Respondent Helen Roper’s claim that her educational level prevented the Department form accurately determining that she was an operator is without merit.

CONCLUSION

Accordingly, this Court finds that the preponderance of the evidence supports the conclusion that Respondent Jake Roper d/b/a Roper 66 and Respondent Helen Roper d/b/a Roper 66 operated the underground storage tanks removed from 202 Gentry Memorial Highway, Pickens, South Carolina and the issuance of Administrative Order 05-0866-UST by the Petitioner South Carolina Department of Health and Environmental Control is supported by the evidence.

ORDER

Based in the Findings of Fact and Conclusions of law stated above,

IT IS HEREBY ORDERED that the issuance of Administrative Order 05-0866-UST against Respondent Jake Roper d/b/a Roper 66 and Respondent Helen Roper d/b/a Roper 66 by the South Carolina Department of Health and Environmental Control is AFFIRMED.

AND IT IS SO ORDERED.

____________________________________

Carolyn C. Mathews

Administrative law Judge

December 31, 2008

Columbia, South Carolina