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Ms. Barbara L. Evoy,Fund Of • November 7,2002 Page 5 of 6 was an equitable UST owner eligible to apply to the Fund when the Trust secured a promissory note with a deed of trust on the Property, thus equitable title to the site passed to the Trust at that time, although legal title did not pass until the foreclosure. Pursuant to the Boards conclusion that if USTs are removed and contamination is found while a person is going through escrow to purchase the piece of property, the purchaser qualifies for the Fund because they are considered an equitable owner, even though legal title does not vest until escrow closes and the deed is recorded. I beg you to find the difference between that decision and the case at hand. The fact is, there is no significant difference that would make one party eligible and the other not. The Fund Manager stated that the difference is that in the Quaker State case, the person that signed the purchase agreement had an intent to become the legal owner of the property. In the current situation, the Trust did not have an intent to become the legal owner of the property. That statement is not entirely true. When a person takes a deed of trust on a piece of property in order to secure a loan, their is an intent to become legal owner of the property if the person defaults on the loan. That is the point of the deed of trust. In the Quaker State case, the purchaser, while intending to purchase the property, could ultimately not have purchased the property. The manager states that"had Ms. Marler not defaulted on the loan, the Trust would not have received title to the property." We can turn that around, the seller or purchaser could have breached the purchase agreement and therefore, the purchaser would not have received title to the property. In both cases, the previous owner removed the tanks and the next owner applied to the Fund. In both cases, the person that applied to the Fund was an equitable owner at the time that the tanks were removed. The Guido Segarini Trust was an equitable owner at the relevant time and therefore qualifies to the Fund. B. Purpose of the Fund The Barry Keene Underground Storage Tank Cleanup Fund Act of 1989 created the Underground Storage Tank Cleanup Fund Program to help owners and operators of underground storage tanks to satisfy federal and state financial responsibility requirements, and to assist with the cost of cleanup of contaminated soil and groundwater caused by leaking petroleum USTs. To be eligible to file a claim against the Fund, a person must be a current or past owner or operator of a petroleum UST that has released petroleum and which is subject to state regulation. It is Claimant's understanding that one of the intents of the Legislature in developing the Fund was to protect only innocent landowners in cleaning up contamination. To do this, the Fund specifically prohibits owners/operators from being compensated when the owner/operator has been or could be compensated by another person. (CA Health & Safety Code § 25299.54(g)) This prohibition is designed to avoid a windfall that could result when an owner purchases property known to be contaminated for a lower cost, and then subsequently gets reimbursed for the cleanup, ultimately allowing the purchaser to buy a "good" piece of property for little or no cost. In the Matter of the Petition of Lake Publishing Company, the Board concluded that where an eligible claimant acquires real property at a reduced price and the purchase contract explicitly contemplates the anticipated costs to clean up contamination, any reimbursement \\nt_oas\prolaw\documents\1818-001 USS\26055.doc