SC Administrative Law Court Decisions

This matter is before this tribunal for a contested case hearing. Petitioner Jackson Petroleum Co., Inc., ("Jackson Petroleum") appeals Respondent's ("the Department") April 22, 1997 denial of its request for assistance from the "Superb Account." The Superb Account was created to assist owners and operators of underground storage tanks containing petroleum with the costs of site rehabilitation when releases occur from such tanks. See S.C. Code Ann. §§ 44-20-40 et seq. (Supp. 1996).

A hearing was held in this matter on September 3, 1997.

Having carefully considered all testimony and arguments presented at the hearing of this matter, and taking into account the credibility and accuracy of the evidence, I make the following Findings of Fact by a preponderance of the evidence:

1. The parties filed joint exhibits.

2. Jackson Petroleum leases the Shop-N-Fill #50 ("site") in Aiken, South Carolina, but owns the underground storage tanks associated therewith. The Department has identified this location as Site #12030. On October 30, 1995, the Department conducted a compliance inspection of the underground storage tanks at the Shop-N-Fill #50. The Department conducted the inspection after a property owner across the street from the site complained that he found gasoline in a ditch during excavation.

3. The Department's inspection revealed that the site did not contain leak detectors on three of the four pumps attached to the piping. Further, leak detection records and Statistical Inventory Reconciliation reports indicate that in excess of 9,000 gallons of gasoline had been lost from the underground storage tanks over a six month period. Jackson Petroleum did not report the losses to the Department.

4. The Department notified Jackson Petroleum by letter dated November 27, 1995 of its decision to deny Superb Account funding. See Exhibit # 6.

5. Jackson Petroleum appealed the November 27, 1995 denial. However, pursuant to a Consent Order of January 22, 1996, the Department rescinded, without prejudice, its original denial, pending further investigation to identify another source of contamination. Likewise, Jackson Petroleum withdrew its appeal without prejudice.

6. By letter of February 11, 1997 from the Department, Jackson Petroleum was informed that it qualified for assistance from the Superb Account and that none of the exclusions of §§ 44-2-110 and 44-2-130 applied to the site. Further, the letter stated that the Bureau of Underground Storage Tank Management ("Bureau") approved $26,167.50 for the project. The letter was jointly signed by Jennifer Boynton, a hydrologist, and Lee A. Monts, Manager of the Bureau.

7. The Department contends that the February 11, 1997 approval letter was sent in error. On April 22, 1997, the Department informed Jackson Petroleum that it was not qualified for assistance from the Superb Account.

8. The Department contends that Jackson Petroleum did not exercise good faith and that the site was not in substantial compliance with the applicable regulations. Jackson Petroleum contends that the Department made a determination that it "qualified" for compensation from the Superb Account and that such a determination is irrevocable by law.

1. Pursuant to S.C. Code Ann. §§ 1-23-310 et seq. ( Supp. 1996), and S.C. Code Ann. §§ 44-2-10 et seq. (Supp. 1996), the Administrative Law Judge Division has jurisdiction to hear this matter.

2. The Superb Account was created to assist owners and operators of underground storage tanks containing petroleum and petroleum products with the costs of site rehabilitation after releases from such tanks. The Department is charged with administering the Superb Account. S.C. Code Ann. § 44-2-40(A) (Supp. 1996).

3. A site where a release occurs from an underground storage tank is ineligible for compensation from the Superb Account if, at the time of discovery and reporting of such release, the tank is not in substantial compliance with regulations promulgated pursuant to the Superb Account. S.C. Code Ann. § 44-2-40(A) (Supp. 1996).

"'Substantial Compliance' means that an underground storage tank owner or operator has demonstrated a good faith effort to comply with regulations necessary and essential in preventing releases, in facilitating their early detection, and in mitigating their impact on public health and the environment." S.C. Code Ann. § 44-2-20 (22) (Supp. 1996). Because the "substantial compliance" standard is subjective, the Department must decide on a case-by-case basis who meets or does not meet the standard.

4. In pertinent part, § 44-2-40(B) provides: "The department may use the fund to clean up a release at a site where the underground storage tank owner or operator does not qualify for compensation or a site which does qualify but the owner or operator is unwilling or unable to undertake site rehabilitation, and the department shall diligently pursue the recovery of any sum so incurred from the owner or operator responsible or from the United States government under any applicable federal law, unless the department finds the amount involved too small or the likelihood of success too uncertain." S.C. Code Ann. § 44-2-40(B) (Supp. 1996) (emphasis added).

5. Section 44-2-115 provides in pertinent part: "The department shall apply the eligibility requirements set forth in this chapter in a manner favoring eligibility. Once the department determines that a release at a site qualifies for compensation from the Superb Account, coverage for that release shall continue to be provided, notwithstanding the issuance of a no action letter, until corrective action is undertaken and the owner or operator is compensated by the Superb Account." S.C. Code Ann. § 44-2-115 (Supp. 1996) (emphasis added).

6. The weight and credibility assigned to evidence presented at the hearing of a matter is within the province of the trier of fact. See South Carolina Cable Television Ass'n v. Southern Bell Tel. and Tel. Co., 308 S.C. 216, 417 S.E.2d 586 (1992). Furthermore, a trial judge, who observes a witness, is in the better position to judge the witness's demeanor and veracity and evaluate their testimony. See Mann v. Walker, 285 S.C. 194, 328 S.E.2d 659 (Ct. App. 1985); Marshall v. Marshall, 282 S.C. 534, 320 S.E.2d 44 (Ct. App. 1984); McAlister v. Patterson, 278 S.C. 481, 299 S.E.2d 322 (1982); Peay v. Peay, 260 S.C. 108, 194 S.E.2d 392 (1973).

7. "The qualification of a witness as an expert in a particular field is within the sound discretion of the trial judge." Smoak v. Liebherr-Am., Inc., 281 S.C. 420, 422, 315 S.E.2d 116, 118 (1984); South Carolina Dep't of Highways and Pub. Trans. v. Manning, 283 S.C. 394, 323 S.E.2d 775 (1984). However, where the expert's testimony is based upon facts sufficient to form the basis for an opinion, the trier of fact determines its probative weight. Berkeley Elec. Coop. v. South Carolina Pub. Serv. Comm'n, 304 S.C. 15, 402 S.E.2d 674 (1991); Smoak, supra. Further, a trier of fact is not compelled to accept an expert's testimony, but may give it the weight and credibility he determines it deserves. Florence County Dep't of Social Serv. v. Ward, 310 S.C. 69, 425 S.E.2d 61 (1992); Greyhound Lines v. South Carolina Pub. Serv. Comm'n, 274 S.C. 161, 262 S.E.2d 18 (1980). He also may accept one expert's testimony over that of another. South Carolina Cable Television Assn. v. Southern Bell Tel. and Tel. Co., 308 S.C. 216, 417 S.E.2d 586 (1992).

The following issues arise in the adjudication of this matter: (1) Did the Department determine that the Jackson Petroleum site qualified for compensation from the Superb Account? (2) If the Department did, in fact, determine that the Jackson Petroleum site qualified for compensation from the Superb Account, is the Department authorized statutorily to revoke or withdraw such a "qualification" determination? (3) Does Jackson Petroleum qualify for compensation from the Superb Account?

Section 44-2-115 addresses the first two issues in dispute in this matter. This section provides, in pertinent part, that: "The department shall apply the eligibility requirements set forth in this chapter in a manner favoring eligibility. Once the department determines that a release at a site qualifies for compensation from the Superb Account, coverage for that release shall continue to be provided, notwithstanding the issuance of a no action letter, until corrective action is undertaken and the owner or operator is compensated by the Superb Account." S.C. Code Ann. § 44-2-115 (Supp. 1996) (emphasis added). There are no South Carolina cases which squarely address these issues.⁽¹⁾ Therefore, in interpreting § 44-2-115, the intent of this tribunal is to ascertain the intent of the legislature. State v. Blackmon, 304 S.C. 270, 403 S.E.2d 660 (1991); First Savings Bank, Inc. v. Gold Coast Assoc., 301 S.C. 158, 390 S.E.2d 486 (Ct. App. 1990); Creech v. S.C. Pub. Serv. Auth., 200 S.C. 127, 20 S.E.2d 645 (1942).

The language of § 44-2-115, given its plain and ordinary meaning, suggests to this tribunal that once the Department determines that a release at a site qualifies for compensation from the Superb Account, coverage must be provided. Clearly, the legislature favors eligibility. Further, in reviewing § 44-2-40(B), it is evident that the legislature believed that site rehabilitation is paramount, even when an owner or operator does not qualify or is unwilling to pay for site rehabilitation.

Based on the February 11, 1997 letter (Exhibit #8), it is abundantly apparent that the Department made a determination that Jackson Petroleum qualified for compensation from the Superb Account.

The Department, however, contends that this letter was erroneously sent by a new employee, Jennifer Boynton, who was assigned to the case. This tribunal questions this contention for three reasons. First, it would be incredible for the Department to assign a new employee to the Jackson Petroleum case without first apprising her of the history and background of the case and providing her with oversight. Secondly, Ms. Boynton was not the only signatory on the approval letter. Lee A. Monts, Manager of the Bureau of Underground Storage Tank Management, jointly signed the February 11, 1997 letter. Finally, the fact that the Bureau pre-approved the cost proposal for the site at $26,167.50 indicates a deliberative act, not an act done in haste by a lone, uninformed employee. As far as this tribunal is concerned, these three reasons make the Department's contention that this letter was erroneously sent to Jackson Petroleum less plausible.

Even if it is assumed that the letter was erroneously sent, the letter was a determination of qualification. (See Exhibit # 11, April 22, 1997 letter in which the Department contends it qualified the site in error). The question remains whether such a determination can be retracted.

It is clear from § 44-2-115 that the Department has authority to deny an owner or operator's request for compensation from the Superb Account. This section apprises an owner or operator of the right to file a petition with the Administrative Law Judge Division for a contested case in the face of such a denial. Hence, the import is that the Department makes the initial determination whether an applicant qualifies for compensation.

However, § 44-2-115 also indicates that once a determination has been made that a site qualifies, it cannot be withdrawn. Such an interpretation is consistent with the legislature's intent that petroleum releases into the environment be remediated without delay. See 1988 Act No. 486 § 1, eff. May 2, 1988. This tribunal does not question the Department's authority to determine whether a site "qualifies." Because the "substantial compliance" standard is subjective, the Department must decide on a case-by-case basis who meets or does not meet the standard. However, once the Department has exercised this authority and determined that a site "qualifies," no clear provision of law allows the revocation of such a determination. To the contrary, the clear import of § 44-2-115 precludes such a revocation. Given the foregoing analysis, this tribunal does not need to address the issue of whether Jackson Petroleum qualified for compensation from the Superb Account. This irrevocable determination was made by the Department.

Based upon the foregoing Findings of Fact and Conclusions of Law, IT IS HEREBY ORDERED that pursuant to § 44-2-115, the Department shall honor its February 11, 1997 qualification of Petitioner's site for compensation from the Superb Account.

AND IT IS SO ORDERED.

______________________________

JOHN D. GEATHERS

Administrative Law Judge

Post Office Box 11667

Columbia, South Carolina 29211-1667

December 3, 1997

Columbia, South Carolina

1. Our research reveals that the only South Carolina case which addresses the Superb Account is Ken Moorhead Oil Co. v. Federated Mut. Ins. Co., 323 S.C. 532, 476 S.E.2d 481 (1996).