Case No. RF272-97604
March 18, 1997
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Applications for Refund
Names of Petitioners: Wales Transportation, Inc.
Ed McCormickJohn Burkhart
Richard Cook
Dates of Filing: June 20, 1994
March 13, 1997
Case Numbers: RF272-97064
RF272-97065
RG272-1050
RG272-1051
This Decision and Order will consider Applications for Refund filed by Wales Transportation, Inc. (Wales), Ed McCormick, John Burkhart and Richard Cook. The three individuals are applying as the shareholders of C.A. White Trucking Company (White). (1) These applications are being considered together because Mr. McCormick, the sole owner of Wales, also owns a 25 percent share of White.
These applications are based on the Wales and Whites purchases of refined petroleum products during the crude oil price control period (August 19, 1973 through January 27, 1981). The applicants have requested a refund from crude oil overcharge funds available for disbursement by the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) under the provisions of 10 C.F.R. Part 205, Subpart V.
I. Background
In the past, purchasers of refined products were allowed to apply to the OHA for a refund from crude oil overcharge funds collected by the DOE. 51 Fed. Reg. 27899 (August 4, 1986). We have established refund procedures for these funds, which have been made available through consent orders between the DOE and numerous firms that sold crude oil during the price control period. E.g., Berry Holding Co., 16 DOE ¶ 85,405 (1987); A. Tarricone, Inc., 15 DOE ¶ 85, 495 (1987); Mountain Fuel Supply Co., 14 DOE ¶ 85,475 (1986).
The refund procedures specify that in order to receive a refund, an applicant generally must: (1) document its purchase volumes and (2) show that it was injured by alleged crude oil overcharges. Applicants who were end-users of petroleum products, however, and whose businesses were unrelated to the petroleum industry are presumed to have absorbed the crude oil overcharges. These applicants need not submit proof of injury to receive a refund in the Subpart V proceeding. City of Columbus, Georgia, 16 DOE ¶ 85,550 (1987).
II. The Wales Refund Application
Wales 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. RF270-2252). As required by that Agreement, Wales ST claim, filed in December 1986, was accompanied by a signed waiver, giving up the right to participate in the OHA crude oil overcharge refund proceeding conducted under Subpart V. In a letter of May 21, 1987, Mr. McCormick withdrew the firms ST refund claim. Accordingly, the OHA dismissed the Wales ST refund application and the firm never received an ST refund. Although there was a signed ST waiver in the firms name, Wales nevertheless filed the instant refund claim in the OHA Subpart V crude oil refund proceeding. We must therefore consider whether Wales is eligible to receive a Subpart V crude oil overcharge refund, in spite of the existence of an ST waiver in its name. (2)
As a general principle, the waiver executed by a Surface Transporter was effective upon its submission to OHA. 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). Once it submitted the waiver, an ST applicant could not withdraw it. Boise Cascade, 16 DOE 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 under Subpart V 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 and waiver were filed by an outside party who was unauthorized to make such a filing, we determined that the waiver was never valid. Parker Leasing, Inc., 20 DOE ¶ 85,648 (1990)(Parker). 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)(Lapeer)(school district, as an instrumentality of a state or local government, was excluded from being eligible for an ST refund).
Wales does not fall within either of these exceptions. It is true that the Wales ST refund claim and waiver were filed by an outside party, an officer of the American Trucking Association (ATA). In a letter of November 18, 1996, Mr. McCormick states that his filing service, Wilson, Keller & Associates (Wilson, Keller) informed him of this ATA ST refund application. Mr. McCormick asserts in the letter that the ATA was not authorized to file that claim and waiver.
We cannot find, based on the complete record, that this was actually an unauthorized filing. The implication in the November 1996 letter, that Mr. McCormick only learned of the ATA filing recently, is disingenuous. Obviously, Mr. McCormick knew long ago that an ST claim and waiver had been filed in Wales name. As discussed above, in 1987 Mr. McCormick personally withdrew the ST refund claim. In fact, in his May 26, 1987 letter to OHA withdrawing the ST refund application, Mr. McCormick recognized that the ATA refund claim had been filed on Wales behalf. That letter did not indicate that the ATA filing was unauthorized. Mr. McCormick stated that he wished to withdraw the Wales ST refund claim because the supporting documentation was not available. We find this contemporaneous statement of the reason for its withdrawal of the claim to be more believable than the November 1996 post hoc contention that the original ST claim was unauthorized. Wales therefore does not fall within the Parker exception. (3)
There is also no question that Wales, a private trucking company, was eligible for an ST refund and therefore does not fall within the Lapeer exception. Although its ST refund claim did not provide a gallonage figure, as its present Subpart V refund application now makes clear, its fuel purchases of more than 39 million gallons were well above the 250,000 gallon threshold volume applicable in the ST proceeding. We therefore must conclude that Wales qualified as a Surface Transporter. A.C.B. Trucking, Inc., (Case No. RF272- 97874) (July 30, 1996). We consequently find that the filing of the Wales ST claim and waiver was an effective waiver of its right to a Subpart V crude oil overcharge refund. Ellsworth Freight Lines, 25 DOE ¶ 85,077 (1995). Accordingly, the Wales refund claim will be denied.
III. The Refund Applications Based On Whites Purchases
We turn now to the Subpart V crude oil overcharge refund claims based on Whites purchases of refined petroleum products. (4) The firm has estimated that it purchased 7,168,202 gallons of fuel and motor oil during the price control period. We find that this estimate is reasonable. The refund amount for Whites purchases is equal to the purchased gallonage multiplied by the current volumetric refund amount of $.0016. Accordingly, Whites allocable share is $11,469 (7,168,202 X $.0016 = $11,469). Since White used the fuel and motor oil to power and lubricate its trucks, it was an end-user of those products, and is not required to show it was injured by crude oil overcharges. Consequently, it is entitled to receive its full allocable share.
We must next consider how to disburse this refund. Normally, if a firm that purchased petroleum products is still in existence, the refund check will be made out in the firms name. Thus, in this case, if White is still in existence, we would make the check payable to the firm.
In the present case, there has been a series of confusing statements regarding the current status of White. In the original refund application, Mr. McCormick stated that the company is still active. Then, in a letter of March 12, 1996, Peter McMickle of Wilson, Keller, stated that the firm is no longer active, but it is in good standing, according to the State of Texas. In a March 4, 1997 telephone conversation with an OHA attorney, Chris Edwards of Wilson, Keller indicated that White is still in existence and is active. He then asserted in a letter of March 7, 1997, that according to the Secretary of State of the State of Texas, C.A. White Trucking Company is active and in good standing. In that same letter Mr. Edwards suggested that a refund could be granted to the firm, even though he could not provide a current address for one of the three owners, Mr. Cook. He asserted that White could be responsible for appropriate disbursement of the refund.
However, in a letter of March 12, 1997, Mr. Edwards stated that he had located Mr. Cook. He therefore contended that the refunds should be granted individually to each of the firms three shareholders on a pro rata basis because of the current inactivity of C.A. White (emphasis added).
Since we were uncertain about Whites current status, we contacted each of the three White shareholders. We were able to confirm their current addresses and phone numbers, that they were associated with White and that they are the appropriate parties to receive a refund based on Whites purchases. We will not probe any further the question of Whites current status, and will issue refunds to the three individuals.
The $11,469 refund will be divided among the three shareholders of White according to their proportionate ownership, as set out in their applications. Therefore, Mr. Ed McCormick and Mr. John Burkhart shall each receive 25 percent of the total, or $2,867. Mr. Richard Cook will receive 50 percent of the total, or $5,735.
However, some consideration is still warranted with respect to the inconsistent statements by Mr. Edwards and Mr. McMickle of Wilson, Keller about a critical piece of information in this refund case, the status of White. These inconsistencies are most troubling.
It is one of the primary responsibilities of filing services, such as Wilson, Keller, to insure that they have provided accurate information concerning the claimants they represent. We count on the veracity of their assertions about the current status of those claimants. It is because we believe that a filing service is trustworthy that we are willing to mail refund checks to the service on behalf of refund recipients.
Due to the inconsistent assertions by the Wilson, Keller representatives concerning the current status of White, we have lost some of our confidence in the ability of the firm to fulfill its obligations scrupulously. We see here a rather disquieting willingness to make statements that are expedient, rather than accurate.
In prior instances in which we have lost confidence in a filing services truthfulness, we have disqualified it from representing clients before the OHA. See Energy Refunds, Inc., 23 DOE ¶ 85,076 (1993); Kens Professional Waterproofing, 18 DOE ¶ 85,771 (1989). We do not believe such a draconian measure is warranted here. However, in this particular case, instead of following our normal procedure of sending the refund checks to the Wilson, Keller firm, for ultimate disbursement to the refund recipients, we will direct the Controller of the DOE to mail the refund checks directly to the three shareholders of White.
The final deadline for filing refund applications in the crude oil overcharge refund proceeding was June 30, 1995. It is the current policy of the DOE to pay eligible crude oil refund applicants at the rate of $.0016 per gallon. We will decide whether sufficient crude oil overcharge funds are available for additional refunds for these and other successful applicants when we are better able to determine how much additional money will be collected from firms that have either outstanding obligations to the DOE or enforcement cases currently in litigation.
It Is Therefore Ordered That:
(1) The Application for Refund filed by Wales Transportation, Inc. (Case No. RF272-97064) is hereby denied.
(2) The Applications for Refund filed by Ed McCormick (Case No. RF272-97065), John Burkhart (Case No. RG272-1050) and Richard Cook (Case No. RG272-1051) are hereby granted as set forth in Paragraph (3) below.
(3) The Director of Special Accounts and Payroll, Office of Departmental Accounting and Financial Systems Development, Office of the Controller of the Department of Energy shall take appropriate action to disburse to the three owners of C.A. White Trucking Company a total of $11,469 from the DOE deposit fund escrow account maintained at the Department of the Treasury denominated Crude Tracking-Claimants 4, Account No. 999DOE010Z. The amount should be disbursed as follows:
(i) 25 percent of the total refund ($2,867) should be sent to Ed McCormick, 7510 Glen Albens Circle, Dallas, TX 75225;
(ii) 25 percent of the total refund ($2,867) should be sent to John Burkhart, P.O. Box 40907, Indianapolis, IN 46240; and
(iii) 50 percent of the total refund ($5,735) should be sent to Richard Cook, 1123 Clermont Ave., Dallas, TX 75223.
(4) To facilitate the payment of future refunds, the refund recipients shall notify the OHA in the event that there is a change in their addresses or if an address correction is necessary. This notification shall be sent to:
Director of Management Information
Office of Hearings and Appeals
Department of Energy
1000 Independence Avenue, S.W.
Washington, D.C. 20585-0107
(5) The determinations made in this Decision and Order are based on the presumed validity of statements and documentary material submitted by the Applicant. Any determination may be revoked or modified at any time upon a determination that the basis underlying the application is incorrect.
(6) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: March 18, 1997
(1)Originally, an Application for Refund was filed in Whites name by the filing service Wilson, Keller and Associates. The reason that we have substituted the individual shareholders as the applicants here is discussed in detail below.
(2)Wales Subpart V refund application is based on purchases of 39,354,587 gallons of refined petroleum products.
(3)Moreover, unlike the instant case, in Parker, the request for dismissal of the ST refund claim was made by the ATA. 20 DOE at 89,471, 89,472.
(4)Ed McCormick was the owner of all of the stock of Wales, and owns a 25 percent share of the stock of White. We must give some consideration as to whether the Wales ST waiver is binding on White, due to the common ownership. Since the owner of Wales did not have control of more than 49 percent of White, the limited common ownership between White and Wales does not affect the eligibility of White, the firm, to receive a Subpart V crude oil overcharge refund, or Mr. McCormicks eligibility to receive a disbursement of any refund granted here to White. See Stripper Well Settlement Agreement, VI.A.