Tenants Harbor Gen. Store v. Maine Dep't of Envtl. Protection

STATE OF MAINE SUPERIOR COURT

KENNEBEC, SS. CIVIL ACTION

DOCKET NO. AP-98-13

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TENANTS HARBOR GENERAL

STORE, LLC,

Petitioner

v. ORDER

MAINE DEPARTMENT OF

ENVIRONMENTAL PROTECTION,

Respondent

Before the court is Tenants Harbor General Store's petition for judicial review of

final agency action pursuant to 5 M.R.S.A. § 11001 and M. R. Civ. P. 80C.

This action is for review of a letter-decision by the Maine Deparbnent of

Environmental Protection (DEP) that the petitioner would have to seek a variance to

install underground fuel storage tanks as set forth in 38 M.R.S § 563-C. The property at

issue is a general store that sells gasoline. It is undisputed that the gasoline storage

tanks do not comply with 38 M.R.S. § 563-C, commonly referred to as the Siting Law,

because they are within 1000 feet of a public water supply and within 300 feet of a

private water supply. However, section 563-C is not retroactive, and only applies to

tanks that were registered or installed after September 30,2001. Because the tanks were

in existence prior to the effective date of the statute, they were exempted from the

requiremen t.

On February 16, 2007, Paul Volle entered into a contract to purchase Tenants

Harbor from its owner, Joanne Kroll. Volle's decision was based largely on the fact that

the location sold gasoline, and would therefore be a profitable acquisition considering

that he also owned a general store in a neighboring town. On June 5,2007, the property

was conveyed to Tenants Harbor General Store, LLC. 1

Following the signing of the contract, but prior to the conveyance of the

property, leakage was discovered on the inner wall of the storage tanks. For this

reason, the use of the tanks ceased and the tanks were removed on May 16, 2007. Kroll

filled out a form that is required to remove underground oil storage tanks. It was her

understanding that if the tanks were replaced within twelve months; the tanks would

continue to be exempt from the Siting Law. She did not intend to waive the rights as

the property owner to have them replaced.

Volle then investigated the DEP rules for replacing underground oil storage

facilities. His understanding of the rules was that the store would be grandfathered for

twelve months pending the replacement of the tanks. To confirm this belief, he

contacted the DEP? Volle then negotiated a new price for the store, reducing the price

to reflect the cost of completing the replacement of the tanks. After purchasing the

store, Volle received approval by the Planning Board to replace the tanks and applied to

the DEP to permit replacement. The DEP took the position that the tanks had been

abandoned and that Volle's application was for a new installation, not a replacement.

The Commissioner then sent Volle a letter-decision dated May 13, 2008, that stated his

1 Volle having assigned his rights to the LLC.

2 The substance of this phone call appears to be in dispute, and is relevant to petitioner's equitable

estoppel argument. Petitioner claims that John Dunlap, a DEP employee, told Volle that he had a

twelve-month window to replace the tanks and maintain his exempt status. The court heard live

testimony on this issue at a hearing on March 27, 2009. Respondent introduced testimony of Mr. Dunlap,

reflecting that Dunlap has no recollection of such a conversation occurring.

2

application was in violation of 38 M.R.S. § 563-C and he would need to seek a variance

to proceed. On June 13, 2008, petitioner filed its petition for review?

When a judicial review of a administrative agency's decision is pursued pursuant

to M.R. Civ. P. 80C, the court reviews the agency's decision directly for abuse of

discretion, errors of law, or findings not supported by the evidence. Centamore v. Dep't

of Human Servs., 664 A.2d 369, 370 (Me. 1995). "The administrative agency's

interpretation of a statute administered by it, while not conclusive or binding on this

court, will be given great deference and should be upheld unless the statute plainly

compels a contrary result." Thacker v. Konover, 2003 ME 30, <JI 14, 818 A.2d 1013, 1019

(internal citations quotations omitted). Because the DEP is charged with administering

the underground oil facilities requirements found in 38 M.R.S. § 563-C, the court must

grant deference to the DEP's construction, so long as its construction is reasonable and

comports with legislative intent. See FPL Energy Me. Hydro LLC v. Dep't of Envtl. Prot.,

2007 ME 97, <JI 24, 926 A.2d 1197 1204 (cert. denied, 128 S. Ct. 911 (2008)).

Petitioner asserts two separate grounds upon which the Commissioner's decision

should be vacated. First, petitioner argues that the Commissioner made errors of law

and fact in concluding that its application does not fit within the

replacement-exemption found in the Siting Law. Second, petitioner argues that even if

the court finds there was no error, the Commissioner should be estopped from denying

the permit because Volle claims that the he was told by a DEP representative that he

had twelve months from the date of removal to replace the tanks.

Title 38 M.R.S. § 563-C provided that a person may not register or install an

underground oil storage facility that is either within 1000 feet of a public water supply

3 Decisions by the Commissioner can be reviewed in the Superior Court, notwithstanding the fact that

there exists a procedure for review of a commissioner decision by the Board. See 38 M.R.S. §§ 342(2-A),

346(1).

3

or within 300 feet of a private water supply in existence at the time of application. s The

statute provided an exemption permitting replacement of facilities that were in

existence prior to the effect date of the law, but also stated that a facility cannot remain

out of service for longer than twelve months without approval of the Commissioner. 38

M.R.S. § 563-C(2).

The DEP has taken the position that petitioner's application does not fall within

the definition of replacement under § 563-C. Specifically, the DEP argues that because

the tanks had already been removed by the time that petitioner filed its application for

replacement, the application was not truly a replacement, and was instead a new

installation. The DEP interprets the statute in this manner to prevent a person from

removing a non-conforming tank under the guise of replacement, then install a new

tank, and claim that he or she intended to replace the tank during the period. The DEP

further identifies that this policy is harmonious with the legislative intent of the

Underground Oil and Ground Water Protection Law, providing that its provisions are

"necessary for the general welfare, public health and public safety of the State and its

inhabitants, and shall be liberally construed to effect the purposes set forth .. .." 38

M.R.S. § 570-G.

Petitioner argues that the DEP's construction is irrational in this case.

Specifically, petitioner points out that an underground oil facility cannot be out of

service for more than twelve months without the approval of the DEP, which addresses

the DEP's concern of persons removing tanks for an unspecified period under the guise

of replacement. The interpretation of the DEP, according to petitioner, would have the

4 Title 38 M.R.S. § 563-C was replealed by P.L. 2007, ch. 569, § 3. Its applicability to the dates in

question has not been challenged.

5 Subsequently, 38 M.R.S.A. § 563-C was repealed. P.L. 2007 c. 569 § 3 (effective 06/30/2008).

However, Section § 563-C was in effect when the decision under review was issued on 5/13 /08.

4

absurd result of a person seeking to replace a tank automatically losing its exemption

the moment the original tank is removed from the ground, making replacement

practically impossible.

Petitioner also argues that the DEP's construction is incongruent with the

legislative intent and the statutory scheme. Specifically, 38 M.R.S. § 566-A specifies

detailed requirements for the process of abandoning a tank, which is defined as a tank

being out of service for a period of more than twelve months. Furthermore, petitioner

also points to the requirement that an owner is required to promptly report leaks to the

DEP, and that the rules require that a leaking tank be removed, but permits their

replacement within twelve months.

The DEP does not argue that tanks must be immediately replaced after removal

to retain their exemption under § 563-C. Rather, the DEP argues that to replace an

existing tank that is ruptured or damaged, the applicant must register for a replacement

prior to the removal of the tanks. In other words, the DEP is requesting that applicants

declare their intent to replace a tank prior to the actual removal.

Petitioner is correct that both the statute and rules provide for a twelve-month

window in which the tank may be out of service for replacement purposes. However,

the rule does not provide that the owner necessarily has twelve months to decide

whether or not to replace a removed tank. Rather, it merely states that replacement

must be completed within twelve-months. This is a reasonable construction of the

Siting Law. While Volle undoubtedly intended to replace the tank when he learned of

the leak, he did not own the property and the landowner did not file a replacement

application. The DEP has determined the proper procedure to distinguish between a

replacement and abandonment under section 563-C is to require the applicant to file a

replacement application prior to the tank's removal, rather than filing for abandonment,

5

removing the tanks, and then registering for an installation. Accordingly, there was no

existing tank at the time petitioner made its application to replace the tanks and the

decision of the DEP was proper.

The Law Court has described equitable estoppel as follows:

When reviewing an equitable estoppel claim, we review the totality

of the circumstances, "including the nature of the government

official or agency whose actions provide the basis for the claim and

the governmental function being discharged by that official or

agency." F.S. Plummer Co. v. Town of Cape Elizabeth, 612 A.2d 856,

860 (Me. 1992). [The claimant] must prove that (1) the statements

or conduct of the town planner or Board induced [the claimant] to

act; (2) the reliance was detrimental; and (3) the reliance was

reasonable. Id. Moreover, because it seeks to estop the

enforcement of a zoning ordinance, and "forceful policy reasons

militate against restricting the enforcement of municipal zoning

ordinances," [the claimant] bears a greater burden. City of Auburn

v. Desgrosseilliers, 578 A.2d 712, 715 (Me. 1990).

Kittery Retail Ventures v. Town of Kittery, 2004 ME 65, fj[ 34, 856 A.2d 1183, 1194. The Law

Court has further explained that equitable estoppel can only be asserted "as a defense

and cannot be used as a weapon of assault." Tarason v. Town of S. Bemick, 2005 ME 30,

fj[ 16, 868 A.2d 230, 234.

Here, petitioner claims that it is asserting equitable estoppel as a defense against

an actual government decision. Petitioner distinguishes a line of unfavorable equitable

estoppel cases claiming that the claiming parties were asking the court to enjoin future

action. 6 The court does not find these distinctions persuasive. Petitioner is not the

target of any action by the DEP and is not asserting equitable estoppel to prevent any

action from being directed at him. Rather, he is attempting to assert equitable estoppel

6 See Tarason, 2005 ME 30,868 A.2d 230 (claimant sought to enjoin an order to discontinue the use of a

third dwelling in an apartment building, arguing that the CEO had issued permits for constructing the

third dwelling with knowledge of the claimant's purpose); Buker v. Town of Sweeden, 644 A.2d 1042

(Me. 1994) (claimant sought review of a town's denial of his conditional use permit, claiming that the

Zoning Board had lead him to believe that his permit would be approved if he acquired an authorization

from OHS for his activity); Waterville Homes v. Dep't of Trans., 589 A.2d 455 (Me. 1991) (claimant sought to

enjoin the MOOT from changing the location of an interchange on 1-95 after purchasing property that

would be benefited by the original location based on representations by the MOOT).

6

to compel the DEP to grant him a registration to install new tanks.? Such relief would

take the form of a mandatory injunction.

As stated above, the entry will be:

The decision of the Maine Department of Environmental Protection in the

matter of Tenants Harbor General Store, LLC, certified number 7006 2150

000569399134, dated May 13, 2008, ~iS

AFFIRMED.

DATED: (-v- {~-07

Donald H. Marden

---

Justice, Superior Court

7 There is a strong policy for this result. To the extent that the agency brings an action against

an aggrieved party regarding matters upon which it advised the party, the Due Process

considerations make it just for the agency to be enjoined and bound. However, when dealing

with an applicant requesting the legal counsel of an administrative agency, the agency should not

be bound if those representations are later revealed to be inaccurate and would require the

agency to act inconsistent with law or policy. However, the court is distressed by the actions of

the Department of Environmental Protection in this case. The regulation relied upon by the DEP

is section 11, chapter 691. This makes reference to the closure of an underground oil storage

facility that "has been or is intended to be out of service for a period of morc than hvelve

months." It makes reference to "proper abandonment" of tanks. It further makes reference to

"storage or disposal of removed tanks ...." In essence "abandonment by removal" is to be out of

service for a period in excess of twelve months. The casual use of the term "abandonment" as

distinguished from "removal" is completely absent from the form required to be submitted by, in

this case, the seller of the facility on its form entitled Notice of Intent to Abandon (Remove).

Furthermore, as explicitly found and noted by the court and an exhibit in the transcript of the

March 27, 2009 hearing, the "registration general information of underground oil storage tanks"

which must accompany the registration form for underground oil and petroleum products

storage tanks makes no reference to a requirement that the facilities be "present" at the location at

the time of registration under the terms of the exemption. Finally, nowhere in the document

required to be filed with the DEP indicating a notice of intent to remove the facility, the only form

available, is there an indication on the form to complete that the removal is based upon an intent

to replace the facility within a twelve-month period. Notwithstanding the inability to claim

equitable estoppel in this matter, neither the petitioner nor his grantor have been well served by

the State of Maine agency.

7

q.­

Date Filed 6/13/08 Kennebec Docket No. .--,ABJP=O.Jj8~4L3L- _

County

Action 80(c)

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TENANTS HARBOR GENERAL STORE, LLC YS. MAINE DEPT OF ENVIRONMENTAL PROTECTION

Plaintiff's Attorney Defendant's Attorney

Clifford Goodall, Esq. Mary M. Sauer, AAG

61 Winthrop St 6 State House Station

Augusta, Maine Augusta Maine 04333-0006

Date of

Entry

6/17/08 Petition to review administrative action rule 80C filed by Atty Goodall

on 6/13/08.

6/19/08 Certified return receipt served. on Steven Rowe, AAG and Commisseion Littell

on 6/16/08

7/1/08 Motion for additional time to file record filed by Atty Sauer.

7/24/08 ORDER, Jabar, J.

The time for filing the administrative record is. hereby enlarged by 60 days

and is extended to September 11, 2008

Copies mailed to attys. of record.

9/11/08 Administrative Record and Certification of Record, filed. s/Sauer, AAG

9/11/08 Notice And Briefing Schedule mailed to attorneys of record.

9/19/08 Plaintiff's Motion For Taking Of Additional Evidence, Proposed Order,

Request For Hearing, filed. s/Goodall, Esq.

10/10/08 Memorandum In Opposition To Petitioner's Motion For Taking Of Additional

Evidence, with Attachments A and B; Department's Motion To Supplement The

Record & Incorporated Memorandum Of Law, with Attachments A and B; Request

For Hearing, filed. s/Mills, AAG

10/23/08 Petitioner's Opposition To Department's Motion To Supplement The Record,

filed. s/Goodall, Esq. (with attachment)

10/30/08 Department's Reply to Petitioner's Opposition to Department's Motion to

Supplement the Record, filed. s/Mills, AAG

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Date of

Docket No.

Entry

3/12/09 ORDER. Jabar. J.

The petitioner's motion to take additional evidence is hereby GRANTED.

The court will schedule a hearing for purpose 0 ftaking testimony on the

issue or equitable estoppel. MSAD#15 v. Raynolds. 413 A.2d 523 (Me. 1980).

Copies to attys. of record.

Hearing scheduled for March 27, 2009 at 10:30 a.m.

Notice mailed to attys. of record.

3/23/09 Letter regarding hearing on Friday, filed. s/Goodall. Esq.

3/27/09 Hearing held with the Hon. Justice Joseph Jaba•• presiding.

Attys. present oral arguments to the court.

3/30/09 NOTICE AND BRIEFING SCHEDULE ISSUED.

Copies mailed to attys. of record.

4/14/09 Transcript, filed. s/Drouin. CR

5/22/09 Plaintiff's Bri~f, fil~d. s/Goodall. Esq.

Suppl~m~nt to Administrativ~ R~cord. fil~d.

6/25/09 Bri~f of R~spond~nt. fil~d. B/Sau~r, AAG

7/10/09 Plaintiff's R~ply Bri~f. fil~d. s/Goodall, Esq.

12/16/09 ORDER, Marden, J.

The decision of the Maine D~partment of Environmental Protection in

the matter of-Tenants Harbor General Store, LLC, certified number

7006 2150 0005 6939 9134, dated May 13, 2008, is AFFIRMED.

Copies to attys. of record.

Copies to repositories