Case No. RR272-00246
March 14, 1997
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Motion for Reconsideration
Name of Petitioner: Specialized Trucking Service, Inc.
Date of Filing: September 10, 1996
Case Number: RR272-00246
On August 20, 1996, the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) issued a Decision and Order (Order) denying the Application for Refund filed on behalf of Specialized Trucking Service. Specialized Trucking Service, Case No. RG272- 00931 (August 20, 1996). On September 10, 1996, Mr. Ronald Brader of Specialized Trucking Service, Inc. (STS) filed a Motion for Reconsideration (Motion) asking that we re-evaluate the determination reached in that Decision and Order. As explained below, we have determined that the Motion should be denied.
The Refund Application
The original Application for Refund requested a refund for petroleum products purchased by Specialized Trucking Service between 1973 and 1976. The firm was a sole proprietorship until July 1, 1976, at which time it was incorporated under the name Specialized Trucking Service, Inc. (STS). The company continued its operations until it was officially dissolved on August 19, 1991. In reviewing the Application, the OHA determined that the corporation STS applied for a Refund from the Surface Transporters Escrow in the Stripper Well refund proceeding. Because all Applicants in the Stripper Well proceeding waived the right to receive refunds in the Subpart V crude oil refund proceeding pursuant to the required Waiver Form, the OHA determined that STS had waived its right to receive future crude oil refund monies in the Subpart V proceeding. Accordingly, we denied the Application for Refund.
Motion for Reconsideration
In the Motion for Reconsideration (Motion), Mr. Brader asks the OHA to review its determination regarding Specialized Trucking Services eligibility to receive crude oil refund monies. Mr. Brader presents two basic arguments for reconsideration: (1) that Specialized Trucking Service was a sole proprietorship during the portion of the refund period (August 1973 to July 1976) for which Mr. Brader sought restitution in Case No. RG272-00931 and, as such, should not be bound by the Waiver Form that Mr. Brader signed on behalf of STS; and (2) that the Application for Refund filed by Specialized Trucking Service, Case No. RG272-00931, should have been considered wholly separate from the Application of STS in the Stripper Well proceeding, because commonality of name or ownership should not force any two individuals or entities to become a single identity. (1) On the basis of these statements, Mr. Brader asks that we reconsider our denial of his previous claim and grant a refund to STS.
Analysis
In creating the Stripper Well escrow accounts, the court announced that [a]ll parties and claimants receiving refunds under this agreement will waive any further claims to crude oil refunds. The waiver provision is found in Paragraph 7(a) of the Waiver Form, which states that the signer:
hereby releases, and waives all [the signer's] existing and future claims whether assertable at law or in equity, and whether known or unknown that fall within any one or more of the following classes ... :
... (2) all present and future claims asserting rights to share in existing or future monies paid, ordered to be paid, or held for payment as restitution as a result of any judicial or administrative proceeding relating to the federal mandatory allocation and price regulations applicable to crude oil ...
In addition, Paragraph 10 of the Waiver Form provides that:
... [the signer] hereby agrees to withdraw and to take all necessary steps to file appropriate withdrawals of any and all claims it now has or hereinafter may have for funds in any Court or agency proceedings, including "Subpart V" proceedings, where such funds are related to Alleged Crude Oil Violations ... [the signer] agrees it will not file any such claims for refund of Alleged Crude Oil Violations in these or similar proceedings in the future.
In accordance with the court-approved Settlement Agreement, the OHA has determined that the language of the Settlement Agreement and Waiver Form means:
...an Applicant must choose between obtaining relief under M.D.L. 378 [Stripper Well] Escrows or under the Subpart V process. Once an applicant files an Application for Refund from a [Stripper Well] Escrow, it is precluded from receiving a refund in crude oil refund proceedings conducted under the provisions of 10 C.F.R. Part 205, Subpart V.
Roberts Dairy Co., 16 DOE ¶ 85,573 at 89,147 (1987); enforced sub nom. Mid-American Dairymen, Inc. v. Herrington, 704 F. Supp. 198 (D. Kan. 1988); affd 878 F.2d 1448 (Temp. Emer. Ct. App. 1989); see also Boise Cascade Corp., 16 DOE ¶ 85,214 (1987); enforced sub. nom. In Re: The Department of Energy Stripper Well Exemption Litigation, 707 F.Supp. 1267 (1987).
Specialized Trucking Service operated as a sole proprietorship until July 1, 1976, at which time the firm was incorporated as STS. After incorporation, STS maintained the same business operations, address, ownership (Ronald and Shirley Brader), and basic functions as it did before incorporation. A company is considered a successor-in-interest to another if it continues to retain the same rights as the original company without change in ownership, and if there is a change in form only, and not substance, of the company. Following the incorporation of Specialized Trucking Service, STS was a successor-in-interest to Specialized Trucking Service, because the change to the business was in form only and there was no change in actual ownership. Mr. Braders attempt to create a distinction between the two firms is completely artificial and self-serving, and we see no basis to accept it.
Mr. Brader also contends that commonality of name should not force two separate entities to be considered a single entity. But that is not the case here. Specialized Trucking Service and STS are not related by name only: they shared common ownership, business operations, locations, etc. They are, in effect, the same company. As stated above, STS is the successor-in-interest to Specialized Trucking Service. Similarly, Mr. Braders contention that commonality of ownership should not force two entities to be considered a single entity totally misses the point. In fact, this is the very essence of the Waiver Form. By signing the Waiver Form, Mr. Brader waived the rights of not only STS, but those of Specialized Trucking Service, which he also owned and which was subsumed by STS. Accordingly, Mr. Braders argument that the two companies should be considered wholly separate from one another is without merit.
Mr. Brader has presented no information that would cause the OHA to change its previous determination in this case. Accordingly, we will deny the Motion for Reconsideration filed on behalf of Specialized Trucking Service, Inc.
It Is Therefore Ordered That:
(1) The Motion for Reconsideration filed by Ronald Brader on behalf of Specialized Trucking Service, Case No. RR272-00246, is hereby denied.
(2) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: March 14, 1997
(1)See Motion for Reconsideration, Case No. RR272-00246, filed by Ronald Brader on behalf of STS on September 10, 1996.