Court Opinion

ID: 44567
Source: CourtListenerOpinion
Date Created: 2010-04-25 22:24:29+00
Date Added: 2024-06-11T09:38:56.795096
License: Public Domain

[DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT                      FILED
                      ________________________          U.S. COURT OF APPEALS
                                                          ELEVENTH CIRCUIT
                                                             December 21, 2006
                             No. 06-13876                  THOMAS K. KAHN
                         Non-Argument Calendar                 CLERK
                       ________________________

                  D. C. Docket No. 04-03186-CV-WSD-1

KENAN TRANSPORT COMPANY,

                                                           Plaintiff-Appellant,

                                  versus

THE UNITED STATES COAST GUARD,
NATIONAL POLLUTION FUNDS CENTER,
as Administrator of the Oil
Spill Liability Trust Fund,

                                                        Defendants-Appellees.

                       ________________________

                Appeal from the United States District Court
                   for the Northern District of Georgia
                     _________________________

                           (December 21, 2006)

Before DUBINA, CARNES and WILSON, Circuit Judges.

PER CURIAM:
       Kenan Transportation Company (“Kenan”) challenges the United States

Coast Guard’s and its National Pollution Fund’s (“NPFC”) denial of its claim to

recover removal costs from the Oil Spill Liability Trust Fund. Kenan argues that

the NPFC acted “contrary to law” when it found that Kenan had released its claims

to a third party, making Kenan ineligible for relief from the fund.

                                   BACKGROUND

       In 1998, a tanker trunk owned by Kenan collided with a pickup truck driven

by Lisa Huffman. Three thousand gallons of diesel fuel discharged from the

tanker, impacting stormwater catch basins which discharged into the

Chattahoochee River. Kenan hired a local emergency response contractor to

perform the clean-up work, incurring $105,575.02 in clean-up costs. Kenan’s

truck was also determined to be a total loss with property damage valued at

$34,884.89. It is undisputed that Kenan was not at fault in the accident. Kenan

sought to settle with Huffman’s insurance company, Allstate Insurance Company.

Allstate agreed to provide Kenan with $25,000, the liability policy limit, and a

Kenan company representative signed a release executed December 9, 1998, which

stated, in part:

             [F]or myself and for my heirs, personal representatives and
       assigns, I do hereby release and forever discharge Lisa Huffman and
       any other person, firm or corporation charged or chargeable with
       responsibility or liability, their heirs, representatives and assigns, from

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      any and all property claims, demands, damages, costs, expenses,
      actions and causes of action arising from any act or occurrence up to
      the present time and particularly on account of all property damage, or
      damages of any kind related to property only, already sustained or that
      I may hereafter sustain in consequence of an accident that occurred on
      or about the 5th day of August, 1998, at or near Marietta, Road.

      In November 2001, Kenan filed a claim with the NPFC under the Oil

Pollution Act (“OPA”), 33 U.S.C. § 2701 et seq., seeking reimbursement for the

amount paid in clean up costs after the accident. The OPA allows for

reimbursement of spill removal costs to owners who incur such expenses when the

spill is caused by a third party. 33 U.S.C. §§ 2702(d)(1)(A), 2703(a)(3).

Reimbursement is conditioned upon the claimant transferring to the government

the claimant’s rights to recover from the responsible party. 33 U.S.C. § 2712(f).

The NPFC denied Kenan’s claim finding that the release limited its ability to

recover from the responsible party, Huffman.

      Kenan sued in district court where the parties stipulated that the only issues

before the court were two questions of law: (1) whether § 2712(f) required the

claimant to be able to transfer all claims to the Government and (2) whether the

scope of the release between Allstate and Kenan limited the government’s right to

recover from Hoffman. The district court reviewed the agency’s decision under

the Administrative Procedure Act, 5 U.S.C. § 706, and held that the NPFC’s denial

was neither arbitrary, capricious, nor contrary to applicable law.

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                                     DISCUSSION

      On appeal, Kenan argues that Kenan was required to transfer only the

environmental claims to the government under 33 U.S.C. § 2712(f). Kenan also

argues that the NPFC decision denying Kenan’s claim was contrary to law because

the NPFC interpreted the release as releasing the claims to environmental clean-up

costs when the release was limited to property damage claims. The government

argues that its interpretation of the release is entitled to deference. It also

maintains that the OPA requires claimants to be able to transfer its rights of

recovery against the responsible party for the claimed costs, and Kenan was

unable to do so because of the release it signed with Allstate.

      While agency decisions within their area of expertise are often entitled to

deferential review, when the agency requests deference on contract interpretation, a

question of law, we are presented with a more difficult issue because in the abstract

the agency has no comparative advantage over the court. See Muratore v. U.S.

Office of Personnel Mgmt., 222 F.3d 918, 922-23 (11th Cir. 2000). However, we

need not decide whether the agency should receive such deference in this case

because Kenan would not prevail under any standard.

      For Kenan to prevail, the release agreement must preserve claims against

Huffman for clean-up costs. See 33 U.S.C. § 2712(f)(requiring the subrogation of

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claims against responsible party to the government). We agree with the district

court that the language of the release agreement waived these claims. Under

Georgia law, a release agreement is subject to the ordinary rules of contract. U. S.

Anchor Mfg., Inc. v. Rule Indus., Inc., 443 S.E.2d 833, 835 (Ga. 1994). The

parties’ intentions at the time of the agreement control, and it should not be

presumed that parties intended to contract away legal rights unless the subject

matter appears clearly within the release. Id.

      Kenan and Allstate’s agreement releases damages claims “of any kind

related to property only.” Clean-up costs due to property damage would fall within

this provision. Furthermore, the release covers “costs” or “expense” that “aris[e]

from, any act or occurrence up to the present time and particularly on account of all

property damage. . . .” In this case, the clean-up cost arose from damage to

Kenan’s property, the tanker truck, and were released under this provision as well.

Like the district court, we are further convinced of this interpretation by the

evidence of parties’ intent. See Georgia Highway Exp., Inc. v. United Parcel

Service, Inc, 297 S.E.2d 497, 498 (Ga. Ct. App. 1982) (“When a standard form

release is employed, it is essential that any accompanying properly authenticated

contemporaneous documents be construed in pari materia with the form release, so

that the intentions of the parties may be ascertained and allowed to control.”)

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When Kenan submitted its claim to Allstate, it listed both the property damage and

clean-up costs, noting that “clean-up costs are continuing as directed by GA EPD.”

      Given the language of the release agreement, the government could deny

Kenan’s reimbursement claim because Kenan was unable to transfer its rights to

clean-up costs to the government as required by § 2712(f). The district court

correctly interpreted the release agreement, and its order is affirmed.

      AFFIRMED.

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