Issue link: https://read.dmtmag.com/i/668677
30 Oil Prophets H. Dean Mooty, Jr. Mooty & Associates, P.C. There are recurring issues that come across my desk that continue to confuse some in the industry. I may have done a poor job over the years making these points clear, but thought I would take a few minutes and try to clear these up once and for all. There are TWO deductibles required when you have a Trust Fund-eligible release and a resulting third party lawsuit. Countless times tank owners have called me who have been involved in a Trust Fund-eligible cleanup following a reported release when they are also sued by an adjoining landowner for impact on their property. When I explain how the Trust Fund works, what it pays, including that they would owe the $5,000.00 deductible, the tank owner says, "I've already paid the deductible." Of course, what they've already paid is the initial $5,000.00 "cleanup" deductible, oftentimes years ago when the release was first reported. This consists of the first $5,000.00 of the cleanup cost resulting from a release from a Trust Fund-eligible underground storage tank. (That cleanup deductible is $10,000.00 for a Trust Fund-eligible release from an aboveground storage tank). The statute is quite clear that when a third party lawsuit results, and a judgment is entered or more typical a settlement is reached, the tank owner owes the first $5,000.00 of that settlement or judgment. (Similarly, this second deductible is $10,000.00 for a settlement or judgment in a third party action resulting from a release from an aboveground storage tank eligible for benefits under the Trust Fund). So to be clear, once and for all, if you have a Trust Fund-eligible release and are subsequently sued by an adjoining landowner for impact from that release, you will owe two deductibles if a settlement occurs or a judgment is entered. There is no six cent ($.06) cost of doing business standard or rule under the Alabama Motor Fuel Marketing Act. As most of you know, I have become the "below cost clearinghouse" in the state for lack of a better description over the past 25 years or so. On a given day like we've had the last couple of weeks (mid March) as the wholesale price has risen and, as usual, the retail price lags too slowly, I probably field 15 to 20 emails or calls a day about below cost complaints around the state. Oftentimes, the complaining marketer will say, "That price puts them 10 cents below laid-in cost…and that's before adding the six cents." Sometimes I ignore the six-cent comment and sometimes I can't resist and ask what they're talking about or just simply tell them there is no six cents in play. The belief is apparently a result of one of our prior successes in an earlier lawsuit – likely the Murphy Oil litigation in Huntsville about 15 years ago – that there was a ruling that Murphy was required to use six cents a gallon as a cost of doing business. That is not the law, nor was it any part of the Court's Order coming from that case. My best guess is the confusion stems from the fact that there was testimony from Murphy Oil that they used as a "rule of thumb" a cost of doing business variable of 6.8 cents per gallon. The testimony in that case was that their cost of doing business was anywhere from 5 ½ to 10+ cents per gallon at the small kiosk facility at issue and, of course, it changed as its volumes changed since based on a cents per gallon. So, there is no six cents per gallon overhead or cost of doing business rule under our below cost law. Jobbers have always told me over the years that their cost of doing business at full scale, full service convenience stores is certainly double digits, and in the 10 to 15 cents per gallon range. The old Murphy Oil kiosk at Wal-Marts doing a high volume certainly would have a lesser overhead expense as calculated under our Act as would operations like Costco or Sam's which though not truly unattended facilities, operate on a lesser cost of doing business/overhead than a full service convenience store. Aboveground storage tanks are not required to be registered with ADEM. It remains somewhat of a longstanding "hole" in the tank regulations with ADEM, but aboveground storage tanks are still not required to be registered as underground tanks are. However, aboveground tanks may be registered LEGAL CORNER Debunking a Few Industry "Myths" I. II. III.