Month: August 2019

Dry cleaners can either be proactive or reactive when it comes to finding out if they have perc contamination. An Indiana dry cleaner was given a heads-up about possible contamination on their property when a neighboring business conducted a Phase 1 as part of the real estate transaction process to sell their business. Instead of burying their heads, the dry cleaner faced the contamination head-on by joining their state’s voluntary remediation program (VRP).

Mercury Cleaners is a family-owned small business and has been owned and operated by the Dygert family since 1950. They’re proud members of the Valparaiso, Indiana community, and after cleaning up perc contamination from decades of operating their business, they’re still serving their loyal customers today.

Finding Out About the Contamination

The neighboring gas station near the dry cleaner was preparing to sell its business. Therefore, the gas station conducted a Phase 1 Environmental Site Assessment (ESA) as part of their due diligence required by their real estate transaction. The Phase 1 ESA found PCE contamination in the soil and groundwater which could not have originated from the gas station. The gas station owners alerted the Dygert family to the situation.

Mercury Cleaners received a Special Notice of Liability from the Indiana Department of Environmental Management (IDEM). The Dygert family was very concerned about what would happen next and what it would cost them. The Dygert family couldn’t afford to pay for the clean up on their own. If they were forced to pay for the clean up of the historical contamination, they would have had to go into bankruptcy and close their long-standing family business.

The Dygert family already knew of EnviroForensics because they had attended dry cleaning seminars where EnviroForensics CEO Steve Henshaw presented about insurance archeology and the remediation of PCE contamination. They also read EnviroForensics monthly column The Environmental Corner in Cleaner & Launderer.

EnviroForensics explained that we could conduct confidential insurance archeology to locate historical insurance coverage and tender those claims with their insurance carriers in order to pay for the cleanup of the PERC contamination.

“Working with EnviroForensics was a huge relief and the nights weren’t so sleepless because if Mercury Cleaners had to foot the bill for this, we wouldn’t have stayed in business. If you want to sell your business, you’re going to have to deal with this. If anyone is thinking about hiring EnviroForensics, I would say, without a doubt, go for it.” –The Dygert Family, Mercury Cleaners

This is when Mercury Cleaners chose to voluntarily participate in the IDEM Voluntary Remediation Program (VRP) and become environmental stewards. The VRP encourages environmental cleanups to mitigate the risk that contaminants pose to human health and the environment. They do this by providing a process for property owners to voluntarily address environmental investigations and remediations on a property that may be contaminated. The VRP along with secured funds through insurance archeology provided the funding safety net the Dygert family needed to confidently begin the investigation and remediation process.

In this video, the Dygert family shares more about their environmental and remediation process with EnviroForensics.

The Environmental Investigation and Remediation Work

The EnviroForensics team was able to work with the Dygert family to develop an environmental investigation and remediation plan that respected their wishes for continued business operations, while also incorporating multiple technologies into a holistic and efficient plan. This plan involved adjusted schedules for the EnviroForensics team to avoid disrupting business operations during their business hours–and even the temporary relocation of their prized rose bushes.

As part of the environmental investigation, EnviroForensics conducted vapor intrusion sampling and completed soil and groundwater sampling for the site. EnviroForensics used both ozone sparging (OS) and soil vapor extraction (SVE) technologies to remediate soil impacts, including a soil gas plume, and groundwater contamination.

What is a SVE system?

The SVE “sparging” system shown on the graphic injects compressed air approximately 45 feet into the ground to treat groundwater and remove the soil impacts with a heavy-duty industrial vacuum system. This method of treatment effectively cleans up the soil and groundwater, reduces potential waste to landfills, and minimizes associated local concerns through indoor air. A system similar to the one in the graphic is still in operation at Mercury Cleaners as part of their ongoing operations and maintenance, and monitoring for their remediation and future site closure.

Mercury Cleaners complete their cleanup at no cost to them

EnviroForensics was able to help Mercury Cleaners make a claim to the insurance carriers, introduce them to legal counsel, and conducted the necessary investigation and clean up activities to secure regulatory site closure. Owner Brett Dygert says, “With EnviroForensics help they were able to not only get the clean up started, but found the money to pay for it to let me stay in business.”

Mercury Cleaners and the Dygert family have not paid any out-of-pocket costs to clean up the PCE contamination.

 

We Find Funds. We Clean Up. You Stay Open.^® Contact us today for a confidential consultation.

It’s important to understand your rights and exercise them when it comes to your insurance coverage. The decisions made during an environmental investigation will impact your future business, finances, and even your reputation. Be sure your defense against a claim serves you.

What I want to tell you about today are the obligations that your insurance carriers have when they defend a claim under Reservation of Rights (ROR). I want to tell you this because there is a lot of misinformation that people have on this issue and policyholders have rights that they need to know. When people don’t know their rights, decisions can be made that could adversely affect their businesses, their financial future, and even their reputation.

What you need to know about insurance carriers and how they operate

1. The most important thing to understand about what I am telling you is that managing insurance claims is a big business and the less that insurance companies pay out in losses and damages, the better the financial statement for that insurance company will look.
2. The second most important thing to understand is that the person handling your claim may be your friend but probably is not. The claim handler has a job to do and they are oftentimes evaluated and rewarded on, among other things, metrics associated with how much your claim costs in comparison to “similar” claims.
3. Additionally, most insurance carriers do not have separate environmental claim departments. Instead, the claim handler dealing with a complex environmental claim could also be handling claims associated with theft, automobile accidents, home fires, hail, and wind damage, the list goes on. Point being, they may not be very sophisticated in terms of understanding your environmental claim. Knowing these basic facts will help you better understand the insurance claim process and why investigating and cleaning up environmental problems can take an inordinately long time and can be surprisingly contentious along the way.
4. The next thing that will be helpful for you to understand is different states interpret insurance policies and the obligations of an insurer differently. Couple the nuances from state to state with an unsophisticated claims handler and you have a recipe for confusion. In turn, confusion can lead to a project stalling, by slowing down the environmental investigation, creating unnecessary legal arguments, obfuscating the facts of the matter, requesting extensions from the regulatory agencies, not paying consulting and legal bills timely, and adding more layers such as hiring consultants to oversee consultants.

Like most people, claims handlers address easier tasks before the harder more confusing tasks and it is not uncommon for a claim handler to have as many as 125 to 175 claims in their file. There might be one or two claims that are easier than yours. But remember, as an insured, you have rights, and one of those rights is to have a defense against your claim and such a defense must serve you.

What you need to know about your insurance coverage: You have the right to select your own lawyer and typically your own consultant

Understanding your rights as an insured will benefit you in several ways. As an insured one of the rights you have is the right to select your own lawyers and typically your own environmental consultant. To put this in context, the attorney defending your claim works for you and not your insurance carrier. The insurance carrier must pay for the defense of the claim. Within reason, the “duty to defend” by an insurance carrier includes paying for your legal defense and includes assessing and determining your liability and exposure. The only way to understand your liability and exposure is to collect enough data to determine the extent and magnitude of the problem and to determine the cost of the cleanup. One of the areas where I see problems is when the insurance carriers select or appoint a lawyer to defend a policyholder. Another area is when an insurance carrier selects a consultant to oversee the consultant that you have selected to conduct the environmental investigation.

You need to know and trust your attorney

In the former, you have to understand who employs your attorney. When an insurance company retains a lawyer to “represent” you on your claim, this is referred to as a tripartite relationship. A tripartite relationship refers to the relationship among an insurer, it’s insured, and defense counsel retained by the insurer to defend the insured against third-party claims. This relationship can present actual or potential conflicts between the insurer and the insured, placing defense counsel in a difficult, and often confusing, positions.

There are all kinds of ways in which an attorney representing you, but retained by the insurance carrier on your behalf can have conflicts of interest. In fact, it is a very slippery slope for attorneys to represent you on your claim while having an ongoing relationship with your carrier.

From the most basic business fact, an attorney representing you but retained by the carrier implies that the attorney has an ongoing book of business with that carrier. In other words, they get work from the insurance carriers as their basic book of business. The attorney solicits and is retained by insurance carriers because the insurance carriers like the results that they get for them. Your attorney has to, by law, represent you, but practically speaking they cannot afford to upset their ongoing book of business, so fighting for your specific needs is generally tempered or moderated. With respect to specific conflicts of interests, the legal world is chalked full of examples where conflicts arise under the circumstances where the carriers select and appoint your defense counsel.

I have worked numerous projects where the insurance carriers have hired and retained defense counsel and more often than not the results for my clients, the policyholder, are not very favorable.

Make sure your assigned environmental consultant works for you and not your insurance carrier

With respect to other tactics designed to control defense costs, carriers employ consultants to oversee your environmental consultant. In principle, it is understandable that a claim handler with little sophistication would hire oversight consultants. They will use these consultants to review work scopes and invoices with the intention of saving money. The problem is that in order to save money, the oversight consultant often times will determine that reasonable work is unnecessary or that work is not necessary because the regulatory agency did not specifically request a certain task. You need to understand that regulatory closure does not necessarily equate a clean property. If a property is not cleaned up to at least commercial standards then your property value has not been restored.

You need to make financially sound environmental remediation decisions. Therefore, you must understand the difference between regulatory closure and environmental cleanup. For more information, read How Clean is Clean Enough? Regulatory Closure vs. Environmental Cleanup

The field of environmental investigations is very mature and most consultants understand that a groundwater plume must be delineated vertically (in-depth) and horizontally (in length). Data must be collected to determine whether the contamination is causing harm to human health or the environment. Remediation should consist of abating the problem, protecting the public health and restoring the value of the impaired property.

Oversight consultants try to show their value by reducing the amount of work necessary to achieve the answers to those questions. Usually, the work will be necessary, but the oversight consultants drag out the investigation process unnecessarily to show that they are saving the insurer money. They will reduce the work scopes by cutting back on a monitoring well here or there or reducing the number of samples being collected. The result is a long back and forth process between your consultant and the regulatory agency that ends up taking many years instead of several months.

The other area we typically see is that the oversight consultant only wants to conduct work that is specifically asked for by the regulatory agency. The problem is that the project manager for the regulatory agency has dozens and dozens of files. They may miss a component of work not included in a work scope during a particular review, but before the site is closed they will require the work to be completed before they will close the site and issue a no further action letter (NFA). Again, the back and forth results in a very long claim management process that could have been completed in a much shorter time were it not for the oversight consultant.

Finally, oversight consultants are in business to show their value and many try to show their value by ”saving” money and that means they pick apart reasonable invoices, suggesting that the work was excessive, conducted at too high a rate, or that they need more information to justify the invoice. These tactics are designed to present a short-term picture of saving money. In reality, the work needs to be conducted and is conducted, but over a much longer period of time.

Know your rights and protect yourself from future liability

The best thing that you can do is to understand your rights. Understand that you need and you have a right to select your own counsel to represent you against the claims.

Understand that you probably have the right to select your own environmental consultant and find a consultant that will be strong enough to understand what needs to be done and how to get it done in a timely manner. Your consultant needs to be able to go toe to toe with the oversight consultant if that is what it takes to defend your claim in a timely manner.

Dealing with environmental contamination is a lengthy process by the very nature of removing chemicals from soil, vapor, and groundwater. You do not want it to take longer than necessary, because your claim handler is evaluated on how much was spent on your claim or the insurance carriers are more interested in their company financials than on providing you with the best defense against your claim.

Whether you want to use old insurance policies to pay for your environmental cleanup fees or just want to ask us questions, contact us today for a confidential consultation.

 

Stephen Henshaw, CEO at EnviroForensics & PolicyFind has over 30+ years of experience and holds professional registrations in numerous states. Henshaw serves as a client manager and technical manager on complex projects involving contaminated and derelict properties, creative litigation, deceased landowners, tax liens, non-performing banknotes, resurrecting defunct companies and cost recovery. Henshaw’s expertise includes a comprehensive understanding of past and current industry and waste handling practices and the fate and transport of chlorinated solvents in soil and groundwater. He has served as a testifying expert for plaintiffs and defendants on high profile cases involving causation and timing of releases, contaminant dispersion, allocation, damages, past costs, and closure estimates. He has a strong knowledge of state and federal regulations, insurance law, RCRA, and CERCLA. He has managed several hundred projects including landfills, solvent and petroleum refineries, foundries, metal plating shops, food processors, dry cleaners, wood treating facilities, chemical distribution facilities, aerospace manufacturing facilities, and transporters and provides strategy instrumental in funding projects and moving them to closure.

WHAT’S A BIG DEAL, AND WHAT ISN’T?

BY: JEFF CARNAHAN

As we all know, at some time in the not too distant future, you or someone you know will have to deal with the result of the accidental release of perchloroethylene (Perc) or Stoddard solvent to the subsurface. Even if the release is decades old and unknown to the current owner or operator, soil and/or groundwater contamination may come to light during a property transaction, a business or property refinance or through the course of standard environmental due diligence investigations.

As I talk to dry cleaners across the country, I’ve noticed a common state of bewilderment regarding how the extent contamination is going to be a real problem for them. I hear questions like, “How bad can it be?” “Will the regulators actually care that much?” Well, they may, or they may not because it depends on the situation and on which state or regulatory program you find yourself involved with during the environmental investigation and cleanup process.

Environmental regulatory agencies are part of the U.S. government and prioritize contaminated sites based on whether or not people are currently, or could come into contact with toxic chemicals (e.g. Perc). The three primary ways (or pathways) that people can be exposed to these chemicals is by:

1. Getting contaminated soil or groundwater on their skin;
2. Eating and ingesting contaminated soil or groundwater; or
3. Inhaling the chemicals through vapor intrusion from the contaminated soil or groundwater.

If it is determined that one of these potential exposure pathways is occurring, the contaminated site becomes a priority to the regulators and their immediate objective is to stop the exposure immediately, even before the extent of the impacts have been fully defined. While it certainly makes sense to stop ongoing exposures to hazardous chemicals, some potential exposure pathways take more time, effort and money to evaluate than others.

ENVIRONMENTAL STANDARDS ENFORCED BY THE ENVIRONMENTAL REGULATORY AGENCIES​
Regulatory guidance documents are pretty consistent in their recommended investigation and assessment approaches for soil and groundwater.

The Regulation of Groundwater Contamination
There is a fairly standard approach for determining if there is an area near a contaminated site where people are drinking the groundwater and if they would be at risk if the groundwater was impacted with contaminants. If there is groundwater pulled from a well pump and it’s used for human consumption in the impacted area, someone is probably being exposed. Groundwater usage can be halted quickly and an alternative water supply can be installed or provided to reduce future risk of exposure.

This assessment can usually be conducted during the standard course of subsurface investigation activities without great delay to the overall project. If your dry cleaner site is located in a geographic area where groundwater resources are commonly used for drinking water, then you can likely expect pretty aggressive regulatory demands to determine the entire extent of groundwater contamination.

The Regulation of Soil Contamination
Soil contamination issues alone don’t usually drive aggressive regulatory action. It’s very common to see shallow soil impacts located beneath buildings or paved areas in dry cleaner release scenarios. Luckily, the threat of a person coming into direct contact with the contamination is pretty low.

As a practical matter of the way soil impacts migrate away from the area of original release, the highest concentrations of PCE are deeper the farther away they get. So in situations where soil impacts do happen to migrate away from paved areas, they are deep enough not to create an immediate threat of contact. If enough subsurface investigation sampling has been performed to let the regulators know that there aren’t significant groundwater impacts present and that vapor issues aren’t causing a problem to nearby occupied buildings, you can probably expect that the regulators won’t be overly alarmed by the soil contamination itself. The main issue with soil impacts, however, is that they usually serve as a longer-term potential source for continued contamination migration to groundwater or vapor problems.

THE REGULATION OF VAPOR INTRUSION INVESTIGATIONS IS STILL INCONSISTENT​
It is much more difficult to assess who may be breathing impacted vapors emanating from subsurface impacts, and dry cleaners can expect a significant push from regulators to make a very prompt assessment of vapor intrusion concerns. The assessment of vapor intrusion issues remains at the forefront of the regulatory agency’s mind at nearly every dry cleaner site where soil or groundwater contamination has been identified.

The initial studies of vapor intrusion at regulated environmental cleanup sites go back as far as 1989. Nearly a decade later the New Jersey Department of Environmental Protection issued some of the first guidance to assist with the investigation of vapor intrusion. It wasn’t until 2002, however, that the U.S. EPA issued subsurface vapor intrusion guidance methods that could be applied at environmental cleanup sites across the country.

Some of the vapor intrusion investigation methods currently being enforced by state regulators are narrowly based on the 2002 U.S. EPA guidance, yet some have been revised or were developed in later years when advances in the study of subsurface vapor migration, human toxicology, and predictive screening approaches could be incorporated. Fortunately, there were many private and public research organizations studying all aspects of vapor intrusion issues and their findings were constantly being incorporated into revised and re-issued guidance documents and a final technical guide by the U.S. EPA in 2015.

Since that time, the community of vapor intrusion regulators and agencies have been begun to start focusing in on this 2015 Technical Guide as the standard for conducting vapor intrusion assessments and evaluating existing or potential vapor intrusion exposure scenarios. Still, however, some state programs have not yet been updated, or have taken the initiative to maintain their own standards for application during dry cleaner contamination investigations.

Since the vast majority of contamination issues in the dry cleaning industry are related to past releases of Perc, which is extremely volatile, vapor intrusion issues will continue to be aggressively pushed by the regulators. As a default approach, it is not uncommon for regulators to consider every home, business or other occupied building within 100-feet of a significant groundwater plume of volatile contaminants (e.g. Perc) as a potential vapor intrusion concern.

In our experience with dry cleaner sites and where they are located, this could include the need to enter and collect samples from a large number of buildings, houses, schools, and apartment complexes. While this broad, brushstroke approach will definitely determine which buildings vapor intrusion may pose a true health risk; it may also expose the business and/or property owner to legal issues related to identified exposure conditions.

WHAT DRY CLEANERS CAN EXPECT​
Regulators in different parts of the U.S. and Canada will react differently to the same dry cleaner site, depending upon what is of most concern at the time the release comes to light. The evaluation of the groundwater, soil, and vapor intrusion exposure pathways is a complicated mixture of screening levels, attenuation factors, partition coefficients, preferential pathways, and regulatory guidance.

A good environmental consultant needs to be sophisticated enough to extract the appropriate information from the latest research and be able to present a strong argument to the regulatory agency whereby the assessment is appropriate and protective, but not overblown or too overcautious. As research advances are made and databases are updated, your consultant needs to be one step ahead of regulation and be able to help you understand what the right amount of “push” is from the regulators.

Ensure your consultant has the experience and knowledge to work with the regulators so that creative, but correct and effective investigation and screening methods can be considered and implemented. Remember that guidance and regulation are based on scientific research and databases.

Contact EnviroForensics, the dry cleaning industry’s most trusted environmental consultant.

As seen in Cleaner & Launderer

---

Jeff Carnahan, President at EnviroForensics
Jeff Carnahan, LPG, has 20+ years of environmental consulting and remediation experience. His technical expertise focuses on the investigation and interpretation of subsurface releases of hazardous substances for the purpose of evaluating and controlling the risk and cost implications. He has focused on being a partner with the dry cleaning industry for the past decade, and he’s a frequent contributor to the national dry cleaning publication Cleaner & Launderer. He is an industry leader in understanding that environmental risk includes not only cleanup costs, but also known and unknown third-party liability.