Issue link: http://read.dmtmag.com/i/122447
LEGAL CORNER when we are finalizing settlement discussions and I tell the tank owner they owe $5,000, their response is, "I've already paid my $5,000." At that point I have to tell them that there is a second deductible that they owe because of this lawsuit. Remember also that the Trust Fund currently provides indemnity benefits up to $1.1 million dollars per release incident. If the clean-up costs exceed that limit, then any costs above that amount are the responsibility of the registered tank owner. The indemnity limit was increased to $1.1 million from $1 million just a few years ago. That increase occurred when the Trust Fund charge itself was increased from one cent to 1.25 cents per gallon. Thanks to the efforts of the Alabama Department of Environmental Management ("ADEM") and the Trust Fund Management Board, we have one of the finest – and most solvent - state trust funds in the country which has served the tank owner industry in this state quite well for many years, and more importantly, provided a ready source of funds to clean up releases that threaten the public health and the waters of this state. Tank owners in Alabama are quite fortunate in that regard as many states' funds have failed. Also, to ADEM's and the Management Board's credit, they were able just this past year to reduce the Trust Fund charge back to one penny a gallon; a reduction that many believed would never occur once the charge was increased. The final point I wanted to re-visit is what benefits the Trust Fund provides an eligible tank owner in its legal costs when sued over a release on a Trust Fund-eligible site. When the Trust Fund was created and became effective in 1988, there were no defense cost benefits to the tank owner in a third party lawsuit. Within a few years by regulation, we were able to include the benefits that exist today. When a tank owner is sued in a third party lawsuit over a release, the Trust Fund will pay defense costs for that tank owner up to a total of $25,000. However, those benefits are paid at $85 an hour. I can't speak for other lawyers defending these cases, but my practice is to bill monthly in these cases. I send a bill to the Trust Fund each month for services rendered in the third party action on behalf of the tank owner at the rate of $85 an hour and send a separate bill directly to the tank owner at the hourly rate which is the net of the agreed hourly rate between myself and the tank owner and the $85 an hour provided by the Trust Fund. Consequently, as noted, these defense cost benefits have been in place – and unchanged – for the past 20 years. It is an issue that needs revisiting with the hopes of increasing those benefits, or at a minimum, increasing the hourly rate at which they are paid. The $85 an hour certainly bears no relationship to the actual hourly rate a tank owner would have to pay an attorney in 2013, and some reasonable increase in that rate under the Trust Fund would seem to be in order. If you have questions, please contact P&CMA, your local attorney, or me.S You are all about convenience and cost saving. And so are we. As a member of the Petroleum & Convenience Marketers of Alabama - and having extensive industry experience - Jackson Thornton understands the issues faced by petroleum jobbers and C-store owners. And how to solve them. • Tax Preparation & Planning • Business Consultation • Healthcare Reform Consultation • Business Valuation For the experts who know your industry, call Jackson Thornton at 334.240.3691. SPRING 2013 OIL PROPHETS 17