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IN THE COMMONWEALTH COURT OF PENNSYLVANIA

MH Davis Estate Oil Co., Inc., and :
West Chester Land Corporation, :
Petitioners :
:

v. :
:
Underground Storage Tank :
Indemnification Board, : No. 1000 C.D. 2001
Respondent : Argued: November 5, 2001
BEFORE: HONORABLE JAMES GARDNER COLINS, Judge HONORABLE BERNARD L. McGINLEY, Judge HONORABLE JOSEPH F. McCLOSKEY, Senior Judge
OPINION BY JUDGE McGINLEY FILED:  December 14, 2001
M.H. Davis Estate Oil Co., Inc. (Davis) and West Chester Land Corp.
(West Chester) (collectively, Petitioners) seek review of an order of the
Underground Storage Tank Indemnification Board (Board) that denied Petitioners'
coverage under the Underground Storage Tank Indemnification Fund (USTI
Fund).
The Presiding Officer made the following pertinent findings of fact1:
1.
. . . Davis is the distributor of gasoline for the West
Chester Citgo retail sales facility . . . .


2.
Davis is also the operator of the Facility and of the
underground storage tanks located at the Facility.
. . . .



4. . . . West Chester is the owner of the Facility.
. . . .

1
The Presiding Officer acknowledged that his Findings of Fact are almost verbatim of the stipulation of facts entered into between the parties.
7.
West Chester and Davis . . . are separate entities.

8.
The Facility sells gasoline and diesel fuel to the public. The retail sales operations are adjacent to a bulk storage facility servicing a home heating oil operation.

9.
There have been a total of eighteen (18) storage tanks at the Facility. Seventeen of those tanks are underground; one tank was above ground, was used to store kerosene, and has since been taken out of service.

10.
Davis is the operator of the seventeen underground storage tanks and was the operator of the above ground tank until it was taken out of service.

11.
The underground storage tanks have been registered in accordance with the requirements of section 503 of the Storage Tank and Spill Prevention Act . . . ("the Tank Act").

12.
No permit is required under sections 501 and 504 of the Tank Act.

13.
Since February 1, 1994, the date established by the Underground Storage Indemnification Board for the payment of fees required by section 705 of the Tank Act, through December 1999, West Chester has paid $62,304.93 in capacity fees to the Fund for underground storage tanks located at the Facility.

14.
For the Facility, the following capacity fee payments were made:

1994 $7,775.75 1995 $16,628.88 1996 $10,795.00 1997 $6,475.[00] 1998 $-0-July 1999 $18,470.30 June 2000 $960[.00].

15.
Capacity fee invoices are sent in December and due in thirty days, or may be paid in twelve monthly installments over the course of the year.

16.
Davis paid thousands of dollars in throughput fees for gasoline sold at the Facility.

17.
No capacity fees were paid for the Facility between September 23, 1997 and July 1999. Davis paid no throughput fees to the Fund between July 1997 and July 1999. Prior to July 1997, Davis paid $689,013.32 in throughput fees for gasoline delivered at numerous locations at which Davis was the distributor, including throughput fees paid for gasoline delivered at the Facility. During the months January-July 1996, Davis overpaid throughput fees in the total amount of $80,000.00, which was applied as a credit against throughput fees due during the months September 1996-June 1997. (emphasis added).

18.
By Amendment to Order dated May 28, 1999, the Pennsylvania Department of Environmental Protection ("DEP") found that Davis . . . failed to pay or arrange for the payment of capacity and throughput fees to the [USTI] Fund.

19.
As an additional condition for Davis, [and] West Chester . . . to reopen operations at the Facility, the Amendment to Order added that payment of throughput and capacity fees be demonstrated.

20.
By letters dated July 20, 1999 Davis paid past due capacity fees and throughput fees. The [USTI] Fund does not currently dispute the amount of throughput fees paid by Davis. Davis has submitted throughput fee payments for 2000, and since July 20, 1999, has timely paid throughput fees to the [USTI] Fund. (emphasis added).

21.
Davis demonstrated payment of the throughput fees and capacity fees to DEP's satisfaction, and DEP permitted Davis to reopen operations at the Facility. (emphasis added).

22.
The release that is the subject of the claim occurred after February 1, 1994, the date established by the Board for payment of the fee required by section 705(d) of the Tank Act.

23.
Davis first discovered a suspected release of product at the Facility in the Spring of 1999. Davis confirmed the suspected release in June 1999. At these times, the fees currently due had not been paid although the due date for the fees had passed. (emphasis added)

24.
The claim was first reported to the [USTI] Fund by telephone on September 23, 1999. (emphasis added).

25.
At the time the claim was reported to the [USTI] Fund, the fees required under section 705 of the Tank Act had been paid. (emphasis added).

26.
The [USTI] Fund's Claim Investigator denied the claim by letter dated January 26, 2000. At that time, the fees required under section 705 had been paid.

27.
As of June 2000, the fees required under section 705 have been paid.

28.
The sole basis on which the [USTI] Fund denied the claim was that the throughput and capacity fees had not been paid at the time that the suspected release was discovered and confirmed. (emphasis added).


Proposed Report and Recommendations of the Presiding Officer, September 28,
2000, Findings of Fact Nos. 1-2, 4, and 7-28 at 3-7.
The Presiding Officer recommended denial of coverage for a storage
tank release discovered and confirmed by Petitioners while current fees were
delinquent:
Under the Tank Act, tankowners in essence pay for coverage by current payment of the fee and compliance with other requirements. You don't get what you don't pay for. Allowing fee payment only when needed for a claim would mean that a tankowner does not pay for coverage, but rather pays a processing fee for issuance of a reimbursement check. This absurd result was not intended by the General Assembly. The result is harsh for a participant which pays thousands of dollars in fees except for a window of time in which the claim is unearthed. However, this result is mandated by statute and is in the control of the participant paying or withholding the fee. It also is no less harsh than denying medical or automobile catastrophic loss coverage to the victim of medical malpractice or an automobile accident, something which has been upheld by the appellate courts.
Presiding Officer's Report and Recommendation at 19.
The Board adopted the Presiding Officer's Report and
Recommendation and affirmed:
[T]he Board finds that Section 706(2) was intended to assure that tank owners and operators have paid for coverage before a loss is incurred. Moreover, given that the Act's eligibility requirements are not overly taxing, it is certainly not unreasonable to require a tank owner or operator to have their fees paid before coverage is needed, not after the discovery of the loss.
The Board's Decision, March 30, 2001, at 16.
On appeal2 Petitioners contend that the Board erred as a matter of law
when it determined that Petitioners did not satisfy the eligibility requirements
under Section 706(2) of the Storage Tank and Spill Prevention Act (Tank Act)3, 35
P.S.

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