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Arthur G. Baggett, Jr. • • December 23, 2002 Page 4 of 7 A. The Trust is an Equitable Owner of Property In this case, the Trust became an equitable owner of the property and the USTs when it loaned Ms. Marler the money to remove the tanks, secured by a deed of trust. For the purposes of the Fund, California law defines "Owner" as the owner of an underground storage tank containing petroleum. Health and Safety Code section 25299.21. This board as further defined "owner: for the purposes of the Fund in its decision In the Matter of the Petition of Quaker State Corporation, Order No. WQ 97-06-UST p. 5 n. 1. Quaker State bought the property from Fullerton. Fullerton removed the UST's prior to the close of escrow, but soil contamination was found on the property after the close of escrow. While trying to get Fullerton to pay for the costs of this contamination, Quaker State started the clean-up and incurred costs itself. Quaker State and Fullerton subsequently entered into a settlement which required Fullerton to finish the clean-up and to submit a claim to the Fund on behalf of both its own clean-up costs and those incurred by Quaker prior to the settlement agreement. The issue before the board was whether Quaker's costs had to get priority D or could get Fullerton's Priority B. The board found that Quaker's costs had to get priority D. However, to even find that Quaker was eligible for the Fund, the staff had to get around the fact that Quaker did not acquire title to the property until after the tanks were removed (as with our client). The UST Fund Staff did this by determining that Quaker State was an equitable owner during the escrow period prior to its purchase of the property. The Claimant here is in an identical position with respect to title —it acquired fee title to the contaminated property after the removal of the USTs. However, the Claimant here is in even less of a position to remediate the contamination than the claimant In the Matter of the Petition of Quaker State Corporation. In that case, Quaker State was a large corporation and the board still found a way to allow it to seek reimbursement of its cleanup costs. Here, the claimant is a very small Trust whose only asset is the contaminated property. Surely, if equity can be used to find that Quaker State was eligible for the Fund, it can also be used to find that this Claimant is also eligible. In the case at hand, the Trust became an equitable UST owner eligible when the Trust secured a promissory note with a deed of trust on the Property. Equitable title to the site passed to the Trust at that time, although legal title did not pass until the foreclosure. The Division Chief tried to differentiate this situation involving a deed of trust with the purchase and sale agreement in Quaker State by arguing that "In this case the Trust was not in the process of purchasing the property and never intended on purchasing the property." (Nov. 26, 2002 Decision at page 2). We simply cannot agree that the Division Chief's argument has merit. A purchase and sale agreement is nothing more than conditional agreement to purchase property upon the happening of enumerated events. Upon default by a seller, a buyer can generally enforce the agreement under the doctrine of specific performance and acquire the property. A deed of trust operates under the same principals. Someone loans a property owner money with certain enumerated requirements; if those requirements are not met, the lender can enforce the loan agreement by acquiring legal title to the property subject to the \\nt_oas\prolaw\documents\1818-001\JLS\27036.doc