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. � Ronald S. Valinoti, June 8 , 1988 Page 2 property was returned to the Port. " That ,is a misstatement of California law in that ownership of the tanks is most assuredly C_ separate from that of the, real property upon which they were located. The real property has always been owned by the Port; the 'tanks 'have never been owned by the Port. Please provide us e 'with the authority on which your attorney ;;relies in asserting that the Port is the legal owner of such tanks. If it is the position of the Health District that these tanks have been improperly abandoned, then the responsibility and legal liability for such abandonment rests first with Energy Petroleum and secondarily with the Bank of Stockton which "stepped into the shoes" of Energy Petroleum by making monthly lease payments on the property and by taking possession of the assets of Energy Petroleum,' which assets Included the underground storage tanks. As we have set forth in prior correspondence, the Health District has ample authority to order either Energy, Petroleum or the Bank of Stockton to resolve this problem. Furthermore, case law is clear that the costs of complying with any, such order by Energy Petroleum will be an administrative claim .in bankruptcy entitled to priority over all other claims. ` Additionally, the Port is extremely disturbed that the Health District has repeatedly focused on the Port in respect to underground storage tanks which it does not own and for which i there is no information indicating that there has been any unauthorized release, while at the same time has taken no action whatsoever against the Port's tenant, Industrial services Corporation ("ISC") in respect to pits and tanks located on its leasehold and for which the Port has provided specific evidence of a release of hazardous substances. Based upon the Health 1 District's position regarding Energy Petroleum's tanks, it appears that the Health District is willing to sit by and let '. responsible parties ignore their legal obligations while later asserting that the Port District has assumed that responsibility. If necessary, the Port of Stockton is prepared to initiate legal action for declaratory relief and issuance of a writ of mandate to the Health District to declare the legal obligations of the parties and to ensure that the Health District takes appropriate and legal .action in respect to both the Energy Petroleum and ISC i tanks. However, we are prepared to meet with you to seek an appropriate resolution -of this matter to avoid the expense and time which litigation would necessarily email . Please advise at your earliest convenienceregarding what actions the Health District will be taking (i) against Energy Petroleum or the Bank of Stockton in respect to the underground storage tanks referred to in your May 27 letter and (ii) in respect to the ISC tanks. Both of these matters have been pending far too 4 I