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Leaking Underground Storage Tanks

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What to do with a leaking tank? See Stuart Lieberman’s Lawline Presentation.

May 21, 2004

Leaking Underground Storage Tanks Don’t Have To Ruin Your Life

By: Stuart Lieberman, Esq

As an environmental lawyer, leaking underground storage tanks are not new phenomenon to me, by any means. But if you’re the home owner that this happens to, the odds are that it will be the first time that you’ve encountered this. And you might be overwhelmed by what it all entails.

I’m here to tell you that you can survive a leaking underground storage tank. It might seem scary at first, but with proper guidance and the correct professional approach, you will survive.

How do you know when your underground storage tank is leaking? There are various ways. Often, clients come to us because their furnace or heater stopped working. Once that happens, one of the first questions that has to be asked is whether or not there is a hole in the underground storage tank that contains the oil. If there is a hole, you might be losing the oil into the environment and therefore nothing is left to feed the furnace.

Other clients learn that they have leaking tanks when they try to sell their homes. It is now commonplace as part of transactions involving underground storage tanks for purchasers to insist that sellers prove that the tanks are in good working order. Often, some kind of test is involved and when necessary the seller is required to remove the tank before the sale can proceed.

Oil leaking into the environment violates state and federal laws. It is certainly no laughing matter and knowledge that your tank is leaking oil requires immediate action.

Under many state and federal laws, there is a requirement that the tank leak be reported to the government. Often, this will result in the leak being assigned a case number and a case manager will be assigned to oversee the cleanup of the spill.

If you find out that your tank is leaking, here are some measures that you may want to consider:

  • Reach out for an environmental consultant as soon as possible to stop the discharge and minimize any environmental problems that might have resulted. As the owner of the tank, you are responsible for the discharge and if any third party, including persons with drinking water wells who are downgrade from your well are affected, that will be your responsibility. So the first thing is to address the emergent conditions.
  • The second thing is to place any applicable insurance carriers on notice. Many people do not understand that their insurance may respond to a leak. Homeowners and renters policies should be examined as well as any other applicable policies.
  • Very often, legal assistance is required in order to insure that the cleanup is being undertaken properly and that all possible sources of funding have been tapped. Legal counsel can also interface with carriers, neighbors and the regulators. Counsel will also ensure that you are being protected from possible civil and perhaps (not usually) criminal exposure.
  • The fourth thing to do is to work with your environmental consultant and attorney to develop a cleanup plan that is satisfactory to the regulatory agency in charge of the cleanup. This involves an understanding of the extent of contamination, an understanding of the cleanup options that are available, and the preparation of a submission of any necessary reports required by the agency.
  • The fifth thing to do is to determine whether any other individuals may have legal responsibility for the tank leak. Of course, if the tank leak is minor and not expensive to address, this might be irrelevant. But if the problem looks like it will be prolonged, it might be important to determine whether any third parties are responsible. This can include the former owner of the tank, the tank manufacturer, the tank installer, the maintenance company that serviced the tank, and in certain instances perhaps even the oil company may have liability. Do not forget any fraud claims and negligent remediation claims that might exist.
  • The sixth thing to do is to determine whether any other sources of funding might exist. For example, many governments have local funding available for tank removals. There might be loans and grants from other sources that are available. Every resource must be evaluated to insure that there exists a funding source.

Often insurance companies will initially deny these types of claims. If that occurs, it is important for your attorney to evaluate the claim denial and determine whether an appeal should be filed. There might be an administrative appeal available and there might also be a need to resort to the Courts.

But here’s a word of warning. If you need to file suit there is usually a very short time period allowed for such a suit to be filed. If you miss it, you may lose you right forever.

Tank cleanups can often involve groundwater contamination. If groundwater contamination is involved, there are varieties of technical methods available for addressing the contamination. It is up to you, your consultant, your lawyer, and regulatory agency to determine which method makes the most sense under the circumstances. And it will be important for everyone to agree on a single approach.

You should know that oil tank leaks also result in injury to third parties, specifically neighbors and anyone else with drinking water wells that may be impacted. Sometimes, those neighbors commence suit or file a notice of claim against the owner of the leaking tank. Should that happen, it is important that you provide the notice of claim or the lawsuit to your lawyer and insurer as soon as possible. Your lawyer will want to defend you properly and may very well tender the defense of the claim to your insurance company.

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