Case No. RR300-00292

April 28, 1998

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Motion for Reconsideration

Names of Petitioners: Gulf Oil Corp./Amerigas Propane, Inc.

Gulf Oil Corp./Utility Propane Co.

Dates of Filing: April 8, 1998

April 27, 1998

Case Numbers: RR300-00292

RF300-21843

Amerigas Propane, Inc. (Amerigas), requests reconsideration of Gulf Oil Corp./Amerigas Propane, Inc., 27 DOE ¶ _____ (1998) (March 20, 1998) (Gulf/Amerigas). In that decision, we granted a refund to KCS Group, Inc. (KCS) based on the purchases of Utility Propane, Co. (Utility Propane), a propane and fuel oil distributor during 1973 to 1981 (the refund period). We rejected the claim by Amerigas that it acquired the right to the refund when it purchased the assets of Utility Propane. In its Motion for Reconsideration, Amerigas requests that we reconsider that decision and grant Amerigas the refund. As explained below, we have reconsidered the decision and determined that Amerigas is entitled to the refund.

I. Background

A. The Gulf Refund Proceeding

The Gulf refund proceeding is the result of a consent order entered into between the DOE and Gulf. The consent order resolved DOE allegations that Gulf violated the mandatory petroleum regulations in its sales of crude oil and refined petroleum products from January 1, 1973 through January 27, 1981 (the consent order period).

The procedures for the Gulf refund proceeding are set forth in Gulf Oil Corp., 16 DOE ¶ 85,381 (1987) (Gulf). Gulf provides for a two-

stage proceeding for distributing the portion of the consent order amount attributed to refined product violations ($42,499,566). The first stage consists of granting refunds to firms that are able to demonstrate that they were injured by such violations. Any funds remaining after the first stage will be used to make indirect restitution in accordance with the provisions of the Petroleum Overcharge Distribution and Restitution Act of 1986, 15 U.S.C. § 4501 et seq. (1994).

Gulf adopts a presumption that each claimant was overcharged $.00064 per gallon of covered Gulf product purchased. This volumetric amount was calculated by dividing the portion of the consent order amount attributed to refined product violations ($42,499,566) by the estimated volume of refined products sold by Gulf from August 1973 through the date of decontrol of the relevant product (66,387,563,569 gallons). Gulf, 16 DOE at 88,736.

Gulf further provides that refiner, reseller, or retailer claimants must demonstrate that they were injured as a result of their Gulf purchases; that is, that they were unable to pass through the presumed overcharge amount to their customers. Gulf establishes a presumption of injury for end-users (the end-user presumption). Gulf also establishes a presumption of injury for claims of $5,000 or less (the small claims presumption) and a 40 percent presumption of injury for claims between $5,000 and $50,000 (the medium range presumption).

Successful applicants receive interest. The current interest volumetric is $.00061 per gallon.

B. The Competing Applications

On November 5, 1991, Amerigas filed a refund application, Case No. RF300-18151, based on the propane purchases of Utility Propane. Amerigas claimed the right to the refund, citing its 1989 purchase of the propane and fuel distribution operations of Utility Propane. Amerigas submitted excerpts from the sale and purchase agreement.

On November 8, 1991, KCS filed a similar application, Case No. RF300-18293. KCS claimed the right to the refund for Utility Propane purchases, citing its status as the successor corporation to Utility Propane.

Both applicants claimed a refund for 27,130,018 gallons of propane. Each supported its claim with a copy of a computer print-out from the Warren Petroleum Company, a subsidiary of Gulf, listing that volume of propane purchases by Utility Propane.

In Gulf/Amerigas, we determined that the sale and purchase agreement did not transfer the right to the refund. We based that determination on a finding that the description of assets was not sufficiently broad to include the right to the refund.

In response to Gulf/Amerigas, Amerigas filed the instant motion, together with a complete copy of the sale and purchase agreement. KCS filed a response, in which it continues to assert its right to the refund.

II. Analysis

Under OHA precedent, the right to a refund generally remains with the owner of the business that made the purchases for which the refund is sought. There are two exceptions to this rule. The first is where the business is a corporation and the stock of the corporation is sold. The second is where an agreement transferring the business (i) specifically includes the right to the refund or (ii) contains language so broad as to encompass the right to a refund.

In Gulf/Amerigas, we applied the foregoing standard and determined that the sale and purchase agreement did not transfer the right to the refund. Instead, we determined that the agreement involved a sale and purchase of assets, and that the agreement did not contain language so broad as to encompass the right to the refund.

In response to the reconsideration request, we have reviewed the specific provisions of the sale and purchase agreement, upon which Amerigas relies. We have also reviewed the entire sale and purchase agreement.

Based on the foregoing review, we have determined that the sale and purchase agreement transfers the right to the refund to Amerigas. The “Background” section of the agreement states that the parties desire to transfer “all of the assets relating to the liquefied petroleum gas business and fuel oil distribution business of Seller.” Agreement at 1. The “Terms and Conditions” section of the agreement describes the transferred assets as “all of the assets, properties, rights, causes of action and other claims of every kind and description, wherever situated, tangible or intangible . . . .” Agreement at 10. The foregoing language is sufficiently broad to include the right to the refund. See, e.g., Gulf Oil Corp./Marine Fueling, Inc., 25 DOE ¶ 85,011 (1995) (“any and all claims, rights, [and] choses in actions”); Murphy Oil Corp./Marine Fueling Div., 21 DOE ¶ 85,329 (1991) (“any and all claims, rights, [and] choses in actions”). See also Primerica Corp., 27 DOE ¶ 85,001 at 88,003 (1998) (“all . . . rights . . . known or unknown, fixed or unfixed, choate or inchoate”); Murphy Oil Corp./Aldridge and Love Service Station, 23 DOE ¶ 85,025 at 88,059 (1993) (“all right, title and interest . . . to all property and assets . . . of every kind and nature whatsoever, both tangible and intangible”); Texaco Inc./Coker’s Pedigreed Seed Co., 21 DOE ¶ 85,418 at 89,238 (1991) (“all properties, assets, claims, goodwill, rights, and entitlements . . . of every kind, character, and description whatsoever . . . whether real, personal, or mixed, tangible or intangible”); Shell Oil Co./Genetin & Walizer Shell, 21 DOE ¶ 85,278 at 88,846 (1991) (“all rights and credits of every kind and nature . . . and all other property and assets”); Murphy Oil Corp./Severson Oil Co., 20 DOE ¶ 85,695 at 89,613-14 (1990) (“all of the property and assets . . . of every kind except as specified” including “tangible or intangible”).

Because Amerigas is entitled to the refund for the purchases of Utility Propane, its Motion for Reconsideration should be granted. Accordingly, Gulf/Amerigas will be rescinded. Although Amerigas’ parent has already received a Gulf refund in another case, that refund did not include the purchases of Utility Propane. See Gulf Oil Corp./AP Propane, Inc., 20 DOE ¶ 85,630 (1990) (total refund of $22,424 based on reseller presumption of injury). Accordingly, in this case, Amerigas is entitled to a $13,565 refund for the Utility Propane purchases, based on the reseller presumption of injury (27,130,018 gallons x. $.00125 per gallon x .4 = $13,565).

It Is Therefore Ordered That:

(1) The Motion for Reconsideration filed by Amerigas Propane, Inc. on April 8, 1998, Case No. RR300-00292, be and hereby is granted, as set forth in Paragraphs (2) through (4) below.

(2) The refund granted to KCS Group, Inc. in Gulf Oil Corp./Amerigas Propane, Inc., Case No. RF300-18293 is hereby rescinded, in Case No. RF300-21843.

(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 a total of $13,565 from the DOE deposit fund escrow account maintained at the Department of the Treasury and funded by Gulf Oil Corporation, Consent Order No. RGFA00001Z to "Amerigas Propane, Inc. OR Michael O’N. Barron" at the following address:

Amerigas Propane, Inc. OR

Michael O’N. Barron

12417 Conway Road

St. Louis, Missouri 63141

(4) The determination made in this Decision and Order is based on the presumed validity of statements and documentary material submitted by the applicant. The determination may be revoked or modified at any time upon a finding that the factual basis underlying the Application for Refund is incorrect.

(5) This is a final Order of the Department of Energy.

George B. Breznay

Director

Office of Hearings and Appeals

Date: April 28, 1998