Travelers Insurance v. United States

2 Cl. Ct. 758, 21 ERC 1465, 21 ERC (BNA) 1465, 1983 U.S. Claims LEXIS 1698
CourtUnited States Court of Claims
DecidedJune 27, 1983
DocketNo. 505-81L
StatusPublished
Cited by4 cases

This text of 2 Cl. Ct. 758 (Travelers Insurance v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Travelers Insurance v. United States, 2 Cl. Ct. 758, 21 ERC 1465, 21 ERC (BNA) 1465, 1983 U.S. Claims LEXIS 1698 (cc 1983).

Opinion

OPINION

SPECTOR, Senior Judge.

Plaintiff insurance carrier is subrogated to the claim of its insured, Nordstrom Oil Company, the owner and operator of an oil tank facility at Onancock, Virginia. The claim arises out of section 1321(i)(1) of the Federal Water Pollution Control Act1 which provides in pertinent part that:

In any case where an owner or operator of a vessel or an onshore facility or an offshore facility from which oil or a hazardous substance is discharged in viola[759]*759tion of subsection (b)(3) of this section acts to remove such oil or substance in accordance with regulations promulgated pursuant to this section, such owner or operator shall be entitled to recover the reasonable costs incurred in such removal upon establishing, in a suit which may be brought against the United States Government in the United States Court of Claims, that such discharge was caused solely by (A) an act of God, (B) an act of war, (C) negligence on the part of the United States Government, or (D) an act or omission of a third party without regard to whether such act or omission was or was not negligent, or of any combination of the foregoing causes. [Emphasis supplied.]

The issue in this case is whether the oil discharge was caused solely by third parties, apparently engaged in an act of vandalism.

Statement of Facts

The Nordstrom oil tank facility is located on the banks of Onaneock Creek, a navigable waterway of the United States which empties into Chesapeake Bay. Nordstrom’s compound is substantially surrounded by perimeter fencing. The only access to the non-fenced portion of the property is by water, or at water’s edge through adjoining private property.

There are no security personnel on duty during non-business hours. The facility is used to store both gasoline and heating oil. The section containing gasoline tanks, called the BP plant, is further away from Onaneock Creek than the heating oil tank area, called the Gulf plant. There were no night lights at the Gulf plant where oil is stored. Night lights are maintained at the BP (gasoline) plant, the office, and at the dock if a barge is moored there.

Large concrete retaining walls have been constructed around the Gulf and BP plants and there is also a retaining wall between the two plants. It was estimated that these concrete retaining walls had been built 30 years ago. They are 8 to 10 feet high and between 8 and 10 inches thick. When they are in good repair they embrace an area large enough and high enough to retain all the oil from a major tank failure within the Nordstrom facility and to keep any oil pooled within the retaining walls from spilling into Onaneock Creek. Permanent metal ladders provide access over the retaining walls.

A Mr. Thomas Pittman, dispatcher at the Nordstrom oil tank facility, is responsible for opening up the facility and locking it at night. The only other persons with keys to the gate are truck drivers who may arrive for an early delivery. His normal working hours are 7:30 a.m. to 5 p.m. Monday through Friday. There are a total of ten employees at the facility.

On the morning of January 23, 1980, Mr. Pittman followed his usual routine, opening the gate to the BP (gasoline) plant and entering his office nearby. It was not his practice to go to the Gulf (heating oil) plant unless it was to be used that day. It is also his duty to open and shut the storage tanks to permit delivery to ships and trucks as required. At 5 p.m., it is his normal practice to close the valves on each tank at the Gulf plant, and to lock the gate, following which he does the same at the BP plant near his office before he leaves the facility for the day.

At about 8:00 a.m. on the morning of January 23, 1980, a Mr. Davis of Davis Oil Company entered Mr. Pittman’s office holding a glass jar containing oil which he said was coming through the above-described retaining wall. Mr. Pittman went down to the Gulf plant, opened the gate, and examined the walls and tank No. 105. He was amazed to find a substantial amount of oil within the retaining walls and to see oil coming out through cracks in the walls. It appeared that the oil was emanating from tank No. 105. He ran back to the office and called Mr. Nordstrom, the Coast Guard, and the State Water Control Board. Cleanup operations were begun within an hour. The Coast Guard placed booms around the spill into Onaneock Creek, and deployed a vacuum-type cleaner. Mr. Nordstrom retained Industrial Marine Services to clean [760]*760up the oil and the job was completed by January 29, 1980.

Tank No. 105 had been newly installed and was capable of holding 120,000 gallons. Records at the Nordstrom facility show it was holding 79,000 gallons of heating oil when the oil spill was discovered on January 23, 1980. About 15,000 gallons leaked through the retaining walls and into Onan-cock Creek.

Mr. Nordstrom, the President and part owner of plaintiff’s insured, Nordstrom Oil Company, is in the business of selling home heating oil, as well as gasoline to service stations. He procures the gasoline and oil by barge from Norfolk, Virginia, and by truck from Salisbury, Maryland. His oil tank facility had been purchased from BP and Gulf. When he arrived at the scene about 10:30 a.m. on January 23, 1980, his first reaction was that his new tank, No. 105, had split. The tank had been constructed from 55 pieces of circular steel which had been welded together about 6 months earlier. When completed, it had been filled gradually in 25,000 gallon increments, to settle it on its sand and gravel base.

Because of his initial reaction that the tank had failed, Mr. Nordstrom went after the supplier. After many days of investigation by the latter’s engineers, it was determined that nothing was wrong with the tank. The plaintiff insurance carrier conducted additional dye and bubble tests, with the same result. It was eventually concluded that there was nothing wrong and the tank has since been used without incident. The accident could not have resulted from leaving oil valves open since the tank is part of a closed system. If a valve were inadvertently left open, oil would flow into other tanks.

It was finally determined that the oil had emerged from a water drain valve located only 10 inches above the ground on the new tank. This is a valve used on rare occasions to drain any accumulated water from the bottom of the tank. It is not a valve ordinarily checked by Mr. Pittman because it is rarely opened. It was found to be open a few turns after the 3-foot pool of oil behind the retaining wall was drained and the valve was revealed. The water drain valve is opened with a wheel-type handle, which was removed after this oil spill. It now can be opened only by use of a pipe wrench.

Since no Nordstrom Oil Company employee would have opened that valve and left it open, and since the oil spill occurred sometime between the close of business on January 22,1980, after Mr. Pittman had checked the premises, locked up, and left, and 7:30 a.m. on January 23,1980, when he returned to work, it is generally assumed that the valve was opened and left open by vandals. Nordstrom had experienced no incidents of vandalism prior thereto. This is a relatively rural area where vandalism is not commonplace. However, this incident occurred at a time when gasoline was high priced.

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632 F. Supp. 573 (D. Maryland, 1986)

Cite This Page — Counsel Stack

Bluebook (online)
2 Cl. Ct. 758, 21 ERC 1465, 21 ERC (BNA) 1465, 1983 U.S. Claims LEXIS 1698, Counsel Stack Legal Research, https://law.counselstack.com/opinion/travelers-insurance-v-united-states-cc-1983.