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Mr. Harlin Knoll <br /> December 27 , 1990 <br /> Page 2 <br /> Any recourse you plan in making your decision to treat the <br /> present owners of the property as the responsible party on the <br /> soiled analysis done by Falcon Energy is misplaced. They were <br /> not the Lorzs ' representative and had no authority to either <br /> commit them to clean-up the property or assume responsibility for <br /> a clean-up. If you intend to make an analysis of the rights <br /> between the Lorzs ' and the Conways, you need to examine the real <br /> estate contract and the escrow instructions. You will note each <br /> is silent on this point and, as any other purchaser of real <br /> property in California, the Conways took the property and its <br /> contents as they found it. <br /> The Conways entered a purchase agreement with full knowledge <br /> that a tank was present on the property. Even if the Lorzs were <br /> required to fund any environmental response, the Lorzs would need <br /> authorization from the Conways to enter the property and conduct <br /> the activity. The Conways are the current owners and most suited <br /> for making decisions regarding the property and exercising <br /> control over it. <br /> Although reaching this conclusion would, we submit, be <br /> inappropriate, should you determine that the Lorzs are the <br /> responsible party, they have no financial ability to finance the <br /> response work that your agency is requiring. As we have <br /> discussed, the Lorzs are approaching retirement. Both Mr. and <br /> Mrs. Lorz work at the family business. Their combined income for <br /> the last five years has averaged less than $30 , 000 . Our office <br /> has copies of their IRS tax forms for the last five years if you <br /> require documentation of their inability to pay. <br /> Based on the foregoing, the Conways should be determined to <br /> be the responsible party for this property. In addition state <br /> and federal policy considers that the property owner is the party <br /> who will derive a benefit from the clean up and increased value <br /> of the property. Because the Conways control the property they <br /> are better able to be responsive and make the necessary decisions <br /> regarding the property. Further, since a response requires a <br /> financial commitment, the Conways may be able to respond. The <br /> Lorzs are not. <br /> LORZ.LT1/TXTBKB <br />