Case No. RR272-00229
November 1, 1996
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Motion for Reconsideration
Name of Petitioner: Tajon, Inc.
Date of Filing: January 2, 1996
Case Number: RR272-229
This Decision and Order will consider a Motion for Reconsideration filed by Tajon, Inc. in the crude oil overcharge refund proceeding currently being conducted by the Office of Hearings and Appeals (OHA) pursuant to 10 C.F.R. Part 205, Subpart V (Subpart V). Tajon filed an Application for Refund in this proceeding, which the OHA granted in a Decision and Order dated December 1, 1995. Tajon, Inc., Case No. RF272-97076 (December 1, 1995) (hereinafter Tajon I). Subsequently, on December 21, 1995, the OHA rescinded the December 1 Order, finding that the refund was improperly granted. Tajon Inc., 25 DOE ¶ 85,084 (1995) (hereinafter Tajon II). It is this latter determination that Tajon asks us to reconsider.
Background
Tajon is a trucking company that filed a claim for a refund in the Surface Transporters (ST) Refund proceeding that the OHA conducted in connection with the Stripper Well Settlement Agreement. (Case No. RF270-1535). As required by that Agreement, Tajons ST claim was accompanied by the firms signed waiver, giving up its right to participate in the OHA crude oil overcharge refund proceeding conducted under Subpart V. Subsequently, the Tajon ST refund claim was dismissed because the firm failed to provide information needed to process the application.
Although it had signed the ST waiver, Tajon nevertheless filed a refund claim in the OHA Subpart V crude oil overcharge refund proceeding. In Tajon I, we found that Tajon was entitled to a
refund of $24,281, based on its purchases of petroleum products used in connection with its trucking operation. In that determination, we noted that Tajon had filed the ST refund claim and waiver. We also pointed out that we have considered a waiver to be binding once it was filed, regardless of whether the firm received a refund under the Stripper Well Settlement Agreement. Boise Cascade Corp., 16 DOE ¶ 85,214 (1987) (Boise Cascade), affd sub nom In re: Department of Energy Stripper Well Exemption Lit., 707 F. Supp. 1267 (D. Kan. 1987). See also Mid America Dairymen v. Herrington, 3 Fed. Energy Guidelines ¶ 26,627 (Temp. Emer. Court Appeals 1989); Hoechst Celanese Chemical, 25 DOE ¶ 85,066 (1995). We nevertheless found in Tajon I that the Tajon waiver should not be considered as binding because it was incomplete. The Decision cited Acme Truck Lines, 16 DOE ¶ 85,464 (1987) (Acme) for this proposition.
In Tajon II we reversed that determination. We found that even though Tajons ST refund claim was dismissed, its waiver should nevertheless be considered binding. We cited Ellsworth Freight Lines, 25 DOE ¶ 85,077 (1995) (Ellsworth) in support of this determination. In that case we found that an ST waiver was valid when an application was dismissed for lack of information and the applicant was otherwise eligible for an ST refund. See also Coastal Industries, 20 DOE ¶ 85,432 (1990)(Coastal). We noted that this was precisely the situation in Tajons case. Based on these findings we rescinded Tajon I, and no crude oil overcharge refund check was ever issued to the firm.
Tajons Motion for Reconsideration
In its present Motion, Tajon asks that we reconsider the determination in Tajon II that its waiver was valid and binding. In support of its position that its ST waiver was not valid, Tajon refers to Acme and to Kingsway Transports Limited, 21 DOE 85,274 (1991) (Kingsway).
In Acme, the OHA dismissed the refund claims of 24 applicants in the ST refund proceeding for a variety of reasons. Tajon cites a footnote in Acme in which we stated that some claimants whose ST refund applications were dismissed might be eligible for a crude oil overcharge refund in the Subpart V refund proceeding. Acme, 16 DOE ¶ 85,464 at 88,297 (Note 4). Tajon also states that in Kingsway we examined an ST waiver, found that it was not properly completed, and therefore considered it non-binding. We therefore determined that the firm that filed the waiver, Kingsway, was eligible for a crude oil overcharge refund.
Tajon believes that these two cases provide a sufficient basis for the OHA to conclude that the Tajon waiver was similarly incomplete and invalid. In this regard, Tajon states that its ST claim set forth only total volumes of petroleum products purchased, but did not provide a year-by-year breakdown. Further, Tajon states that its application was not notarized, as provided for on the ST waiver and claim form. Due to these flaws, the firm argues that we should consider the waiver as non-binding and grant the firms Subpart V refund request.
Analysis
There is no merit to these arguments. A brief review of several key cases in this area will help to explain how we reached this determination.
As a general principle, the waiver executed by a Surface Transporter was effective upon its submission to OHA. Boise Cascade, 16 DOE at 88,412. Once it submitted the waiver, an ST applicant could not withdraw it. Id. at 88,411. Although an ST applicant could withdraw its ST refund claim at will, the waiver of the right to receive a crude oil overcharge refund remained effective. Therefore, upon filing the ST waiver, a claimant had made an irrevocable election of remedies. Id.
However, several exceptions have been made to this principle. First, in cases in which an applicant has established that the claim was filed by an outside party who was unauthorized to make such a filing, we determined that the waiver was never valid. For example, in Parker Leasing, Inc., a waiver filed on behalf of Parker by an officer of the American Trucking Association (ATA) had never been authorized. We therefore found the waiver was ineffective, and that Parker was eligible for a refund in the crude oil overcharge refund proceeding. Parker Leasing, Inc., 20 DOE ¶ 85,648 (1990). We have also made an exception in cases in which we found that an applicant that signed an ST waiver did not qualify as a Surface Transporter. Lapeer Community Schools, 16 DOE ¶ 85,351 (1987). In that case, we determined that Lapeer had not made an irrevocable election of remedies when it submitted an ST waiver, because, as a school district, it was an instrumentality of a state or local government and excluded from being eligible for an ST refund. Id. at 88,676.
Tajon does not fall within either of these exceptions. As an initial matter, as is clear from its refund application, the firm purchased 15.9 million gallons of fuel. Therefore, it purchased more than the 250,000 gallon minimum required for ST applicants. Moreover, the firm was a private trucking company and not a public entity. From all indications in its waiver and claim, it qualified as a Surface Transporter. Therefore, it does not fall within the Lapeer exception. Secondly, there is no assertion here that the waiver was signed and submitted by an outside agent and was further unauthorized, as was the case in Parker. The Tajon waiver was signed by Michael Chutz, an attorney and the Secretary of the corporation. Thus, we find that the waiver was executed by an individual who had apparent authority to act in such matters. See In Re: Stripper Well Litigation, 3 Fed. Energy Guidelines ¶ 26,613; 707 F. Supp. 1267 (D. Kan. 1987). See also Coastal, 20 DOE at 88,998.
However, Tajon cites two other cases in support of its position that its waiver was not valid and that it is entitled to a crude oil overcharge refund. The firm first cites the Acme Decision. That case is not relevant here. In Acme we dismissed the ST refund applications of 24 claimants. Some of these claimants were not eligible to participate in the ST proceeding, others did not provide adequate information, and still others requested the dismissal. Such dismissals in and of themselves say nothing about whether the waivers should be considered binding. Acme is a precedent for when ST cases may be dismissed, and not for the principles concerning the validity of ST waivers. Acme footnote 4 does no more than suggest that there are further issues regarding the validity of waivers that may need to be resolved in another appropriate proceeding. In fact, the determination as to when a waiver is binding is made in the context of considering an applicants crude oil overcharge refund claim in the Subpart V refund proceeding.
Tajon next claims that its waiver was not complete because it was not notarized. It therefore contends that the waiver should not be considered as binding. As mentioned above, Tajon cites Kingsway for the proposition that an improperly completed waiver is not valid. Kingsway is inapposite here. In that case we found that a waiver was invalid when an officer of the ATA signed the Kingsway waiver. In this sense, the Kingsway waiver was like the waiver in Parker, which was also signed by the ATA Officer. The Kingsway fact pattern is less similar to Tajons case in which the waiver was signed by an attorney, who was the secretary of the company.
Further, Kingsways ST refund application was virtually a shell application, that contained no gallonage information. Kingsway, 16 DOE at 88,828. Therefore, the application on its face did not indicate that Kingsway even qualified as a Surface Transporter. On the other hand, Tajons original application clearly indicated that it had met the threshold volume level, and thus on this basis qualified as a Surface Transporter.
Moreover, there is no support in Kingsway for the proposition that failure to notarize means that a waiver is not properly completed, and therefore invalid. We see no reason to extend Kingsway to encompass such a principle. As stated above, Michael Chutz, the Tajon officer who signed the waiver, did so knowingly. He specifically acknowledged under penalty of perjury that he was authorized to execute the waiver. Moreover, the notarization portion of Tajons waiver and release form was deliberately crossed out. Below that portion Mr. Chutz wrote in by hand the following notation: I hereby swear and affirm that the foregoing is true and correct. This was followed by Mr. Chutz signature. We certainly cannot accept Tajons belated rationalization that its own Secretarys deliberate substitution of an affirmation for the notarization should now be turned to the companys advantage and considered to invalidate the waiver itself.
Tajon also contends that its ST application was incomplete under the Kingsway standard because it submitted a total gallonage figure, without any year by year summary or explanation of the estimation methodology. As Tajon points out, we repeatedly requested that the firm provide additional volume information, but the firm failed to do so. Once again, Kingsway does not support the firms position. As we stated above, Kingsway submitted no gallonage information whatsoever. As we pointed out in Kingsway, we considered a waiver incomplete for gallonage purposes when it lacked gallonage figures, and we therefore could not even determine whether the applicant met the threshold required to be considered a surface transporter. Kingsway, 21 DOE at 88,838. This is not the case with respect to Tajon, whose ST application clearly indicated purchases of nearly 16 million gallons of petroleum products, and which thus met the threshold purchase volume requirement. Tajon failed, however, to provide appropriate corroboration for the assertions in its refund application. The fact that Tajons waiver and claim form did not contain sufficient information on its face to merit a refund does not mean that it was incomplete for purposes of determining whether that waiver was effective.
In sum, we find that the precedents to which Tajon referred do not support its position that its ST waiver should be considered invalid. In any event, to the extent that Tajon II did not make the point clear, we find that Ellsworth is the better precedent. To the extent that it is inconsistent with Kingsway, Ellsworth, which is more recent, is the controlling law in this case. See also, A.C.B. Trucking, Inc., (Case No. RF272-97874)(September 3, 1996).
In view of the above considerations, we see no basis for changing our previous determination that Tajon is not eligible for a crude oil overcharge refund. Tajons Motion for Reconsideration will accordingly be denied
It Is Therefore Ordered That:
(1) The Motion for Reconsideration (Case No. RR272-229) filed by Tajon, Inc. on January 2, 1996 be and hereby is denied.
(2) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: November 1, 1996