September 2020 - EnviroForensics | Environmental Engineering, Consulting & Remediation

How the drycleaning industry is innovating during the recession

Posted on September 29, 2020March 20, 2023 by Alex Miller

INDUSTRY EXPERTS SHARE THEIR INSIGHTS

As the last quarter of 2020 begins, we find ourselves in another economic recession. Among the hardest hit are the small and independent business owners who have been forced to cut staff, reduce operating hours, spend time filling out lengthy financial forms, and waiting on pins and needles for a phone call from the bank. It has been a particularly rough period for drycleaners who have seen a decline in demand for their services while the majority of professionals trade in their work attire for more relaxed ensembles while working from home. But, as the old saying goes, “necessity is the mother of invention”, and drycleaners are applying their entrepreneurial spirit to adapt to the changes.

We asked industry experts what they’re seeing as far as trends and innovation during the current recession.

MARY SCALCO – CEO, DRYCLEANING & LAUNDRY INSTITUTE
“The industry saw a sharp, off-the-cliff decline in sales as the pandemic hit. Businesses were forced to shut down and consumers sheltered at home. This was nothing we could prepare for but, like everyone everywhere, the fabricare industry made changes. There was no thinking about starting pick-up and delivery, routes were started. Some businesses even went with just routes and closed the retail portion of their business. Wash-dry-fold became a front and center part of the business as households provided the majority of pieces in the early parts of the pandemic. The industry adapted to consumer needs—consumers needed more household items cleaned and less drycleaning. Customers didn’t want to leave their homes so we found ways to accommodate them. We are still adapting and some of the changes the industry made will become the ‘new normal’ way of doing business.”

PETER BLAKE – DRYCLEANING & LAUNDRY INSTITUTE
“There has been a lot said about pick-up and delivery, wash-dry-fold, and some of the other areas that have expanded, but I feel some of the greatest changes have been in marketing. Now is the time to invest in your brand and community awareness. Small businesses and industries like drycleaners are struggling, but they are very resilient.

I am humbled by the optimism and the community spirit we are seeing from our industry. Cleaners all over the country are digging in and helping their communities, and that involvement will pay dividends. From free cleaning to first responders to food and clothing drives, drycleaners have been answering the call. I am proud of all we have seen.

Drycleaners also need to recognize the value they sell is free time, and the shift in marketing is highlighting those benefits. Drycleaners are looking to change the perception of dresses & shirts, blouses & skirts — to “If you can wear it, we can clean it”. The industry is becoming more than “dry” cleaning — and more complete “Fabric” care.”

MARK POLLOCK, C.P.D. – DIRECTOR OF OPERATIONS, SIGNATURE CLEANERS AND MEMBER, DRYCLEANING AND LAUNDRY INSTITUTE BOARD
“Innovations? Sure, there are obvious ones to consider: Initiate, or grow, your route business. Start, or promote, your wash dry fold service. Advertise your alteration department. On and on it goes.

My contention to you is that the greatest change or innovation you can make is this: Take a long hard look in the proverbial mirror. What do you honestly think that you do well? How about not so well? Are you running your business to its peak efficiency and profitability? Are there necessary changes that need to be made? Are you ready to do what needs to be done? It’s a whole new world out there!

If nothing else, the past six months should have given us time to pause and reflect. Many in the industry have been dropped to their knees, with their financial survival in the balance. Are you prepared to get your message out to your customer market and back it up with the quality and service required to keep standing? Here’s to better days ahead!”

CHUCK HEMPSTEAD – EXECUTIVE DIRECTOR, SOUTHWEST DRYCLEANERS ASSOCIATION
“Drycleaners wasted no time in adjusting their business model when the world changed in March. With their in-house expertise, they were among the first to make available cloth masks, and now advertise that they can clean them. They also let their customers know that any other soft materials that may need sanitizing are welcome. Many shops ramped up their routes to service customers who want to stay home, and one business I know of closed all their brick and mortar locations in favor of routes exclusively. Everyone knew that drycleaning supply outstripped demand, so now that many are closing some interesting referral partnerships are being formed. Drycleaners will continue to service their customers in innovative ways while markets return to a more customary level.”

DRU SHIELDS – DIRECTOR OF DRY CLEANING ACCOUNTS, ENVIROFORENSICS
“It has been a very surreal year and I know that many businesses are doing all that they can to survive right now. One bright spot I’ve seen come of this time is DLI and the Joint State Associations offering their weekly Zoom meetings – These meetings have provided an easily accessible platform for busy dry cleaners to share ideas and information with each other. These meetings have really drawn attention to how much an already close and collaborative group has banded together even more and it has really proven how much we’re all working to ensure the success for the future of this industry. Dry cleaners have really adapted their businesses in different ways to respond to the current global pandemic, increase production and provide convenience to their customer base, who are by-and-large still working from home, and we’re seeing that by many cleaners adding wash-dry-fold services as well as providing pick-up and delivery routes for their customers.”

Advancing ASTM Standards + Pro Tips for Real Estate Transactions

Posted on September 24, 2020March 20, 2023 by Alex Miller

ROGER COHEN, DUE DILIGENCE MANAGER AT ENVIROFORENSICS, IS AN EXPERT IN REAL ESTATE DUE DILIGENCE AND IS ON THE COMMITTEE WORKING TO CREATE THE NEXT ASTM STANDARD PRACTICE FOR ENVIRONMENTAL SITE ASSESSMENTS: PHASE I ENVIRONMENTAL SITE ASSESSMENT PROCESS (E1527). LEARN MORE ABOUT THE NEW ASTM STANDARD AND GET ROGER’S TIPS FOR CONDUCTING REAL ESTATE DUE DILIGENCE AND TRANSACTIONS.

BY: ROGER COHEN

Real estate due diligence is a formal process that assesses real estate for the potential risk of environmental contamination. Due diligence is conducted to understand the environmental conditions and prior uses of the property in order to reduce environmental liability and risk. Understanding these conditions allows a buyer to evaluate potential limitation, liabilities, and risk associated with the property and reduces environmental liabilities under CERCLA. Standards for conducting due diligence are set forth by the Environmental Protection Agency (EPA). The standards and practices described in the ASTM E1527 Standard are designed to constitute all appropriate inquiries as defined in 42 U.S.C §9601(35)(B)

WHAT IS THE ASTM?
ASTM is the abbreviation for American Society for Testing and Materials and is an international standards organization that develops and publishes voluntary consensus technical standards for materials, products, systems, and services across a variety of business sectors. ASTM has technical committees dedicated to environmental standards, and they have published hundreds of standards to promote environmental safety in areas ranging from improved environmental assessment processes to enhanced waste management and recycling programs.

ASTM due diligence standards are important because they provide consultants and regulatory agencies agreed-upon terms and best practices. For real estate transactions, ASTM E1527 defines the procedures required to perform a Phase I Environmental Site Assessment (ESA) that satisfies all appropriate inquiries under the Brownfields Amendments, allowing users of the report to qualify for limitations on the CERCLA liability.

WHAT WILL THE NEW E50.02 ASTM STANDARDS INCLUDE?
ASTM revises and updates technical standards to ensure the latest research and regulatory requirements are integrated into the standard technical practices and processes.

Roger Cohen, EnviroForensics Real Estate Due Diligence Manager, recently joined ASTM’s subcommittee E50.02 focused on Environmental Assessment, Risk Management, and Corrective Action. The first task he supported was the latest update and revision of ASTM E1527 Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process. The standards are updated and revised every eight years with the new technical standard coming out in 2021. The updated standards are submitted to them and then approved so environmental consultants can follow the latest guidelines put forth by experts in the industry.

These new technical standards will include language around Per- and Polyfluoroalkyl Substances (PFAS) and other emerging contaminants, which is new compared to the previous version, however, it doesn’t necessarily change how they will be handled. For example, PFAS are not widely regulated in the United States right now, and for a potential contamination to be considered a recognized environmental condition (REC), it must be regulated either by the EPA or the State government. Therefore, depending on the state, PFAS may not be considered a REC. As technical understandings advance, the revised ASTM technical standards will help reduce current ambiguity around emerging contaminants as RECs for environmental consultants.

PRO TIPS FROM OUR REAL ESTATE DUE DILIGENCE MANAGER
1. What things do people need to know before they do a Phase I ESA?
The environmental investigation is a key part of commercial/industrial property transfer. Buyers should incorporate budget and time into their preparations to perform the Phase I ESA and, if necessary, further investigation on a property, to ensure they have protections against environmental liability in place prior to a transfer of the property deed. Environmental issues can be frustrating for a buyer, adding additional costs or slowing down the property transfer and future redevelopment of a Site. But the process is there to protect the buyer. Environmental issues are high-liability, with environmental investigation and remediation expenses frequently costing more than a million dollars. While the environmental investigation costs are often minimal in comparison to the amounts involved in a property transfer, it is essential that the due diligence be performed thoroughly and that, if necessary, additional legal protections obtained. The Environmental Professional should be able to assist in the process and work with the buyer’s lender(s), attorney(s), and state and federal regulatory agencies to help facilitate the property transfer while ensuring buyer protections are in place.

Read our blog to learn more about Phase I and Phase II ESA.

2. What steps should someone take before starting a Phase I ESA?
It is important that a buyer have an Environmental Professional that they trust who will help them through the due diligence process. Plan enough time to ensure due diligence is performed prior to obtaining the deed for a property. Your Environmental Professional should be able to provide you with additional information regarding the property based on a general review of the property’s history and the history of land use in the general vicinity of the Site.

3. How long is a Phase I ESA good for?
In order to receive environmental liability protections, the interviews, database reviews, lien search, visual inspection of the property, and the declaration by the environmental professional all have be have been conducted within 180 days of the date of purchase. The Phase I ESA Report is good for 1 year; however, if any of the above sections are over 180 days old then the user will not be granted the liability protections afforded by the due diligence process.

4. When in the real estate transaction process should a buyer conduct a Phase I ESA?
A buy should ensure they have a valid Phase I ESA prior to the deed transfer of the property.

5. Do you have any advice or next steps for people considering a Phase I ESA?
Buyers should understand that a Phase I ESA is a comprehensive process, with reports incorporating large quantities of data. It takes time to accumulate and process the data, and there can be delays related to access to the Site or responses from government agencies that are queried as part of the interview process. COVID-19 has also caused delays and additional considerations, as access has been limited to many businesses and the response time for records requests has increased. I recommend that potential purchasers of commercial/industrial properties plan for the Phase I ESA as part of the buying process. Talk with your environmental professional up front regarding the property. They should be able to provide you general expectations based on the site’s current use and the usage and history of the surrounding area.

6. What should a buyer be on the lookout for?
Buyers should be aware that certain types of properties are at much greater risk of causing environmental impacts, such as gasoline stations, dry cleaners, and industrial facilities. Ask your environmental professional at the beginning of the process if they have any concerns and understand the risk tolerance of your financial institution.

7. What should a buyer do if a Phase I ESA turns up RECs?
Take a deep breath and do not panic. The point of the Phase I ESA is to identify potential petroleum and/or hazardous chemical impacts to avoid future liability for a buyer. Talk with your environmental professional, your lawyer, and your financial institution to determine what next steps need to be taken in order to ensure your liability protections are in place and to determine if the potential impacts will have an impact on the buyer’s proposed use of the property. Sometimes nothing needs to be done, sometimes a subsurface investigation needs to be performed, and sometimes you need to get creative to find solutions to satisfy your lender and possibly regulatory agencies. Your environmental professional can help you to understand the risk involved and provide you with next steps if needed.

Learn more about our real estate due diligence services

Roger Cohen, LPG, Manager of Real Estate Due Diligence
Roger Cohen has 10+ years of environmental consulting experience specializing in environmental and real estate due diligence, site investigation, and remediation. Roger has worked on varying projects including performing investigation and remediation of sites impacted with petroleum and chlorinated contaminants, metals, and pesticides and herbicides to industrial hygiene impacts such as asbestos, lead-based paint, and mold. He has facilitated regulatory closure and redevelopment of Sites across Indiana through the IDEM VRP, State Cleanup, LUST, RCRA, CERCLA and Brownfields programs.

Roger works with banks, real estate developers, and local and state government officials to evaluate environmental risk, determine pathways to redevelopment, and assist in finding alternative funding sources such as historical insurance policies, tax credits, federal and local Brownfield grants, and state trust funds.

EnviroForensics Takes World Cleanup Day Virtual

Posted on September 18, 2020March 20, 2023 by Alex Miller

EMPLOYEES PICK UP TRASH IN VIRTUAL CLEANUP ACROSS THE MIDWEST

While COVID-19 prevented us from coming together in a large group, it did not stop us from doing our part to clean up our corner of the world. EnviroForensics joined close to a half-billion volunteers spanning the globe for a socially distanced, virtual cleanup to celebrate World Cleanup Day 2020.

WHAT IS WORLD CLEANUP DAY?
World Cleanup Day is a day dedicated to rid the planet of litter and mismanaged waste and model good environmental stewardship behaviors for our neighbors and future generations. 380 million people across the globe unite each year, roll up their sleeves, and clean up their communities one trash bag at a time.

GOING VIRTUAL IN 2020
Normally on this day, we would come together as a team, and clean up the square block surrounding our headquarters in Downtown Indianapolis, and offices across the Midwest, to fill buckets and bags with candy bar wrappers, aluminum cans, cigarette butts, plastic, glass and pretty much anything that belongs in either a garbage bag or a recycling bin.

This year, however, the pandemic kept us in our homes and scattered our team across parts of Indiana, Wisconsin, and Kentucky. We put our heads together and came up with a plan to clean up our own neighborhoods, and show our communities how EnviroForensics walks the walk.

We challenged our teammates to take 30 minutes out of their day to pick up trash outside of their homes. Then, we met for a Virtual Happy Hour to talk about our individual experiences. While nothing compares to the experience of doing this in-person with our friends and coworkers, it was a good reminder that so much can be accomplished when a group unites behind a common goal.

Here are some of the pictures our teammates took while cleaning up their corners of the world:

trash on beach in northwest indiana — Michele Murday, Northwest Indiana

Nick Hill standing next to full garbage can — Nick Hill, Indianapolis, Indiana

Grace picking up trash in Madison Indiana — Grace Randall, Madison, Indiana

Trash in Zionsville — Jackie Cabrera, Zionsville, Indiana

Elizabeth picking up trash — Elizabeth Hemingway, Indianapolis, Indiana

Alex Miller holding up trash bag — Alex Miller, Indianapolis, Indiana

Dru holding trash and leashes of two dogs — Dru Shields, Indianapolis, Indiana

Morgan picking up trash in field of tall grass — Morgan Saltsgiver, Fishers, Indiana

Tracy holding bag of trash — Tracy McConnell, Evansville, Indiana

Rob picking up trash — Rob Hoverman, Waukesha, Wisconsin

Jeff picking up trash in field — Jeff Carnahan, Fishers, Indiana

Kim dyehouse picking up trash next to cornfield — Kim Dyehouse, Evansville, Indiana

HOLD YOUR OWN VIRTUAL NEIGHBORHOOD CLEANUP IN 4 STEPS
If we inspired you, and we hope we did, you can host your own virtual cleanup event with friends or family. Follow these four steps to get started:

Call up your group of friends and challenge them and their families to pick up at least 10 pieces of trash in their neighborhood
Gather your family members, arm them with gloves and trash bags, and unleash them on the neighborhood
Take pictures
Host a video conference call with your group of friends and share your stories and pictures from your virtual neighborhood cleanup

CLEANING UP OUR CORNER OF THE WORLD
In a sense, everyday is World Cleanup Day at EnviroForensics. We’re a national full-service environmental consulting firm, and we pride ourselves in cleaning up contamination for small business owners, large multinational organizations and governments. Our clients include dry cleaners, municipalities, attorneys, bankers and lenders, manufacturers, industrial launders and textiles, petroleum industry and agribusiness. At EnviroForensics, modeling good environmental behavior is both a professional vocation and a personal interest.

Learn more about EnviroForensics and our team of environmentally motivated leaders

How to protect yourself from other people’s perc contamination

Posted on September 11, 2020March 20, 2023 by Alex Miller

LEARN HOW TO SHIELD YOURSELF FROM HISTORICAL LIABILITIES

BY: JEFF CARNAHAN

Let’s start with a well-known fact: Many dry cleaners lease their locations rather than own them. This makes perfect business sense in many situations. However, if there were other dry cleaners operating at that property before you moved in or bought the business you could find yourself being blamed for someone else’s contamination at some point. A recent conversation with a couple of drycleaning operators amid this exact scenario has led me to prepare a few pointers to help protect yourself from someone else’s environmental liabilities.

FIRST – EACH PROPERTY HAS A HISTORY

Among those in the community that draw a line between dry cleaners and contamination, a common misconception is that the current drycleaning operator today is causing a pollution issue. Those of us within the industry understand that most likely, that is not the case. Most drycleaning operators are presently operating under best case conditions designed to specifically avoid an environmental release. These include:

The use of state of the art, or latest generation closed-loop equipment that has been engineered to prevent the escape of solvent;
The use of secondary containment spill prevention devices that are either part of the equipment or installed in addition;
Operating under a set of regulatory guidelines and best management practices intended to minimize spills and exposures; and
Operating in accordance with very specific waste solvent disposal methodologies, again intended to avoid the improper disposal of hazardous substances.

It is understood, however, that these practices were not always implemented by dry cleaners in the past. As time moved forward in the industry, these standards were developed in response to an increase in technological advancements related to efficiency and an increasing knowledge about environmental concerns and consequences of solvent releases. Thus, it is more likely that spills or releases of solvents to the subsurface occurred in the past than in the present. The old transfer machines were more prone to inadvertent spills than newer machines. Virgin and waste solvent handling practices were less defined back then. The information regarding the harmfulness of drycleaning solvents to the subsurface was mostly non-existent or not widely known by those in the industry. Non-toxic solvents that are in use today hadn’t even been perceived back in the day. Sitting here in 2020, it is far less likely that a release of Perc would occur at a drycleaning plant today than back in 1950, 1960, 1970, or even 1980 and beyond.

SECOND – HOW TO DISTANCE YOURSELF FROM HISTORICAL LIABILITY

The most important things you can do as a contemporary drycleaner who is trying to lease a space and avoid being blamed for someone else’s mess is to ask questions about the history of the property you want to lease. Preferably, this should be done before you start to operate at the leased location. Let’s put this into perspective with a few examples of common leasing scenarios encountered by drycleaners and talk about some ways that you can protect yourself.

Scenario 1

You are opening a new cleaning business, that includes the use of drycleaning or spotting chemicals that contain regulated hazardous chemicals, and you are leasing a space where there has been no history of drycleaning.

Ask your landlord to share any environmental due diligence that was performed when the property was acquired. If the commercial property changed hands within the past 20 years, there is a very good likelihood that a Phase I environmental assessment was conducted and a report was submitted, which should be in their files. This report would lay out the history of property usage and detail any operations that were performed on or near the site that could have potentially impacted it. If the report is too old, and there may have been another business operating there which may have caused environmental contamination, you may want to address it with the property owner.

You may even want to perform your own Phase I so that you can document the history of the site for yourself. From there, you are going to want to keep very clear documentation of your processes and your chemical purchases to show that you aren’t contributing to an environmental release. Even if there is a very, very little probability that your operations are going to cause an environmental problem, you will be the first person they talk to if they find someone else’s problems.

Scenario 2

You are moving your drycleaning operation business, which includes the use of dry cleaning or spotting chemicals that contain regulated hazardous chemicals, into a leased facility where others have operated in the past.

Just as in the previous scenario, talk to your landlord before you sign a lease. Understand how many former drycleaning operators were there before you and take the necessary steps to separate and document your operations from those of the past. What you really want to know is, “Is there already contamination at this property that was caused by others, before I got here.” If there has been, then you want to be indemnified for that known contamination. The best way to tell if that condition exists is to demand that some environmental sampling be performed to establish the baseline conditions that are already present before you sign the lease and start operating at that location. As a business owner who is entertaining the idea of signing a long-term lease with the property owner and thereby fulfilling the landowner’s business model by giving them money every month for a long time; you certainly have the right to ask for that.

It is a possibility that the landowner may refuse to perform a baseline environmental assessment, or even allow you to perform your own. If that is the case; be careful. Any promises made across the bargaining table regarding you not being blamed for contamination found later, without proper documentation in the lease, could quickly fall by the wayside if the landowner suddenly gets sued by an adjacent property owner who finds dry cleaning solvents on their own property. I know that it can be a challenge to find a landowner willing to lease to a solvent plant these days, but if you have to expose your business to the risk of someone else’s historical environmental pollution, is it worth it?

Scenario 3

You are buying a drycleaning business that used to operate one or more Perc machines at the location for many years, and you want to stay in the same location with the same brand.

First, do what you can to purchase only the assets and goodwill of the business. Get professional advice from an attorney or a broker to help you craft a deal that will, again, help you to separate your operations from past operations. You will be at the mercy of the landowner regarding their allowance to perform a baseline environmental assessment. Also, just as in Scenario 2, however, the landlord will hopefully be motived to assist you in exchange for an extended lease.

If you are required to inherit the balance of the lease as part of the business purchase and you are not allowed to perform a baseline environmental assessment, you may want to consider changing your operations away from anything that would muddy the distinction between your operations and the previous operations. For example, perhaps you may decide to eliminate the use of Perc and other chlorinated solvents. That way, if a problem is identified later down the road, you’ll be able to prove that you are blameless. It is also important to have clear and detailed documentation, so give it some clear thought in advance and give yourself a clear exit strategy.

Another useful tool in this scenario would be a new environmental liability insurance policy. This would not necessarily cover the cost of a spill, since you theoretically don’t have that risk, but rather to cover you in the case you are blamed for a contamination problem.

We talk a lot about what to do if you are identified as a potentially responsible party for an environmental contamination issue because we’ve helped drycleaners face these challenges for over 20 years. We understand the nuances and different types of scenarios drycleaners can face. Fortunately, most businesses and landowners have historical insurance coverage that can be used to pay for environmental cleanup without breaking the bank. If you can make the right moves and avoid inheriting someone else’s environmental liability, it’ll make your experience that much better.

As seen in Cleaner & Launderer

Jeff Carnahan, President
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 been a partner of the drycleaning industry for the past decade, and is a frequent contributor to the national drycleaning 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.

7 common questions about PCE spills

Posted on September 11, 2020March 20, 2024 by Alex Miller

WHAT YOU NEED TO KNOW ABOUT THIS POPULAR DRYCLEANING SOLVENT AND WHAT HAPPENS WHEN IT GETS INTO THE GROUND

BY: DRU CARLISLE

Perchloroethylene (PCE) spills, or releases into the ground from drycleaning operations are fairly common. In fact, they are so common that most drycleaning properties are usually subject to a Phase II Environmental Site Assessment (ESA) during a real estate transaction. Whether you are thinking of buying, selling, or maintaining a property that used PCE in the past, you’ll want to know more about this drycleaning solvent and how it can impact the environmental wellbeing of a property. Here are some common questions about PCE.

1. WHAT IS PCE CONTAMINATION?
PCE contamination is a series of releases or spills that travel into the soil and groundwater over time. Historically, chemical handling practices were not as refined as they are today, so most releases of PCE were accidental, and may have been related to cleaning of equipment filters, distiller boil-overs, storage equipment failures, or disposal of hazardous process waste as well as spills from older drycleaning machines or operations. Unfortunately, it doesn’t take that much PCE to cause contamination. A shot-glass full of it is enough to contaminate an entire olympic-size swimming pool! And, once it finds its way into the ground, either through dirt, gravel, or untreated concrete, it can easily find a pathway to the soil and groundwater below.

Learn more about the fate and transport of spilled PCE

2. IS PCE DANGEROUS TO HUMANS?
Yes, long-term exposure to PCE can be dangerous to humans. The contamination can potentially impact the indoor air and drinking water in the surrounding area of the release or spill site.

The International Agency for Research on Cancer has classified PCE as a Group 2A carcinogen. Non-cancerous effects include skin irritation, dizziness, headache, liver and kidney damage, and reproductive issues in women.

The United States Environmental Protection Agency (EPA) identified the primary health concern as neurological effects from short and long-term exposure to PCE. They evaluated the health risk as “unreasonable to workers, occupational non-users, consumers, bystanders, and the environment from certain users.” Read the EPA’s full Draft Risk Evaluation for Perchloroethylene.

3. WHAT HAPPENS WHEN PCE SPILLS GET INTO THE GROUND?
PCE spills will travel downward along what geologists call a “preferential pathway.” In other words, the path of least resistance. The high-gravity PCE will find a seam of sand or a pocket of less consolidated, grainy soil to travel through before it hits the water table. Once it hits groundwater, it will spread with the groundwater flow while continuing to drop downward because it’s heavier than water. The only thing that can stop the PCE from going further is an impermeable geologic unit like clay.

4. WHY IS PCE SO DIFFICULT TO CLEAN UP?
There are three reasons why PCE is so difficult to clean up:

PCE is heavier than water.
It’s over 60% heavier than water under normal conditions and sinks to the bottom while the groundwater floats on the top.
PCE is resistant to natural breakdown
Many times, naturally occurring conditions in the groundwater must be enhanced to take away the oxygen and more of a particular kind of microbes may need to be injected to speed up the reductive dechlorination process, also known as part of the cleanup process.
PCE vapors are persistent and mobile
PCE can remain in the soil as a vapor for a long period of time without breaking down. If the vapors reach an occupied structure, like a house, and migrate into the indoor living space, vapor intrusion (VI) is now a problem.

Read our in-depth explainer for why perc spills are so difficult to clean up.

5. WHAT SHOULD I DO WHEN PCE CONTAMINATION IS DISCOVERED?
When you learn that there has been a release of hazardous materials, such as chlorinated or petroleum drycleaning solvents, the first thing you’ll need to do is quickly find an environmental consultant and/or an attorney to make sure that you follow the required process for your state or jurisdiction.

Once the contamination has been reported to the regulatory agency, your case will receive a tracking number, which will be used throughout your time in the regulatory cleanup and closure process. A good environmental consultant will work on your behalf and represent your best interests with the regulatory agency. They will work with the regulators to determine the nature and extent of the contamination, propose an investigation and cleanup work scope, and get approval on and implement the remediation work plan (RWP).

Watch our webinar on how to respond when you find perc contamination

6. WHAT ARE THE DIFFERENT OPTIONS FOR CLEANING UP PCE?
There are a number of different ways to clean up PCE spills. The type and amount of the contamination as well as property limitations are factors when considering your options. These are the different cleanup options your environmental consultant will evaluate.

Excavation and disposal for soil source area remediation
Excavation is digging the contaminated soil out of the ground, and safely disposing of it. It’s a common approach to remove contamination from soils above the water table in areas that have access to the ground surface.
Soil Vapor Extraction (SVE) for soil source area remediation
Soil Vapor Extraction is essentially vacuuming the contaminated soil vapor out of the ground. The technology utilizes the volatile properties of drycleaning solvents. A SVE system includes a series of screened pipes that are installed in the soil, which are all piped together and connected to a high-volume, specially designed and manufactured industrial fan, or blower. When activated, air is drawn through the treatment area and extracted through the screened pipes.
Thermal treatments for soil source area remediation
Thermal is a lot like SVE, without waiting for the contaminant to naturally become a vapor. The primary approach is heating up the subsurface to a temperature high enough to increase the volatility of the contaminant, and then capturing the resulting vapors using an SVE system as described in point #2 above.
In-Situ for groundwater source area remediation and groundwater plume area remediation
In-situ remediation involves the injection of chemicals into the ground to accelerate the natural degradation of the drycleaning solvent.

Learn more about these remediation solutions

7. HOW MUCH DOES CLEANING UP A PCE SPILL COST?
It’s really difficult to put an exact price tag on the cleanup of a pce spill because there are so many variables that will be factored in. The entire purpose of a site investigation is to determine the nature and extent of the contamination, which then helps determine the best method for actually remediating the issue. Both the investigation and remediation process can be time consuming and expensive.

We’ve seen cleanups range in the several hundreds-of-thousands to even over $2 million. While that’s a wide range, the average we typically see is probably closer to $1.25 million. This is why it’s important for drycleaners to seek alternative funding options through their old Commercial General Liability (CGL) policies. These policies could potentially be worth millions of dollars in coverage and could aid in offsetting the cost of a cleanup.

PREPARE FOR THE WORST, HOPE FOR THE BEST
Whether you know your drycleaning facility has a perc contamination or you suspect it might, the best thing to do is prepare for the worst and hope for the best. Contact an environmental consultant with experience in managing the complexities of perc contamination, enlist the help of a trusted environmental attorney that will fight for your best interests, and look into bringing in an insurance archeologist to search for your historical coverage. As an environmental firm that has worked with numerous drycleaning operations, we can tell you through experience that the best to be prepared when perc contamination is found.

Dru Carlisle, Director of Dry Cleaner Accounts
For over 10 years, Dru has helped numerous business and property owners facing regulatory action, navigate and manage their environmental liability. Dru has vast experience in assisting dry cleaners in securing funding for their environmental cleanups through historical insurance policies. Dru is a member of numerous drycleaning associations in addition to serving on the Midwest Drycleaning and Laundry Institute (MWDLI) advisory council and on the Drycleaning & Laundry Institute Board (DLI) as an Allied Trade District Committee Member.

10 questions from drycleaners about insurance archeology and environmental work

Posted on September 9, 2020December 13, 2023 by Alex Miller

DRYCLEANERS ASK A PANEL OF EXPERTS ABOUT INSURANCE ARCHEOLOGY AND HOW IT CAN HELP PAY FOR NEEDED ENVIRONMENTAL CONSULTING AND LEGAL SERVICES

Insurance Archeology is an artform that –combined with a trusted environmental attorney and a proven environmental consultant– can open up new funding opportunities for drycleaners facing the possibility of expensive environmental work. Once found, old Commercial General Liability (CGL) policies can help pay for many parts of an environmental cleanup including site investigation, remediation, defense counsel, and other potentially responsible party searches. They really are worth more than their weight in gold, and an experienced insurance archeologist is the key to unlocking that treasure.

EnviroForensics’ President Jeff Carnahan, PolicyFind’s Director of Operations, Kristen Drake, Founding Partner of Paladin Law Group, John Till, and EnviroForensics’ Director of Dry Cleaner Accounts, Dru Shields, discussed this in a webinar with Cleaner and Launderer. At the end, attendees submitted questions about their own insurance archeology and environmental situations for the panel to answer.

Watch the recording of the webinar, “How to respond when you find perc contamination”

This Q&A session has been lightly edited for clarity.

1. WHAT DOES INSURANCE ARCHAEOLOGY COST? IT SOUNDS EXPENSIVE.
KRISTEN DRAKE: It sounds daunting. I hear it all the time. We really try to work with you and be forward-facing about what costs you might incur. And, so we really like to work within your budget and try to match that as much as possible. There is no one-size-fits-all answer, and I’m not trying to be cagey or dodgy. We really do try to work with you. It’s not our aim to make it scary. It’s quite the opposite actually. So, if you are thinking about insurance archaeology let’s take some time to talk about it one-on-one and let’s discuss options. There are different things we can do, and we’re glad to meet your needs.

JOHN TILL: One thing to add to that is that if there is a litigation that is started and we have the one historical insurance policy that PolicyFind is able to find, we then can use litigation strategies and tactics to actually find more coverage to search for other potential responsible parties or cover your legal and environmental costs. We at Paladin Law Group are able to take what PolicyFind has done and use the legal litigation techniques that go into some overlap and some different areas as well, which would be paid as part of the “defense” cost. In other words, costing you nothing.

2. HOW LONG DOES AN INSURANCE ARCHAEOLOGY PROJECT TYPICALLY TAKE?
KRISTEN: At PolicyFind, we typically need 90 days for an insurance archeology project with 40 to 50 hours of investigation time within that 90 day period.

3. WHAT IS THE COST STRUCTURE FOR AN INSURANCE ARCHAEOLOGIST? IS IT SUCCESS-BASED?
KRISTEN: It is not success-based. We set an “up-to” and “not-to exceed” amount for each of our projects, and then we work within those investigations that way.

JEFF CARNAHAN: Typically it’s not success-based because until we start cracking open files and seeing what’s available, we don’t really have a good idea of potential success. However, that being said, I’d be happy to talk with anybody who wants to explore that option a little bit further.

4. WHAT’S THE DIFFERENCE BETWEEN OCCURRENCE-BASED COVERAGE AND CLAIMS-BASED POLICIES?
JOHN: An occurrence-based policy means that an “occurrence” happened. Generally speaking, the property damage occurred during the policy period. So an example is if there was a release of perc in 1965 and there were policies put in place, that would be an “occurrence”, but the occurrence would continue as long as the property damage is occurring during the policy period. So, that would potentially, depending on the state in which you are in, trigger all of the policies from 1965 until 1985 when you get the “absolute pollution exclusion”. So in 1965, you might have a policy that’s only worth $25,000, but in 1980 you might have a policy that’s worth a million dollars and potentially you’re triggering/activating all of those policies. A claims-based policy, on the other hand, is kind of like your auto insurance policy. The event happens during the policy period and the claim happened in the policy period. The claim can’t come in after the policy has been terminated. That’s an important distinction. I will also caveat on auto policies. I actually have one client that we were able to trigger a general liability clause in an auto policy that is actually covering defense costs in a case. Just because it’s an auto policy doesn’t mean it doesn’t have an application. You have to read the contracts.

5. ARE YOU ABLE TO RETROACTIVELY RECOVER FUNDS FROM OLD POLICIES AFTER CLEANUP HAS BEEN PERFORMED?
JOHN: The simple answer is “yes”. And that goes to shifting the liability. You’ve incurred some investigation costs or some other cost to determine and identify other potential responsible parties. You would then sue those parties in a litigation, trigger their policies, and either settle that litigation or litigate it. And, those response costs that you’ve incurred would be recoverable as long as you were paying more than your fair share.

JEFF: In those types of cost-recovery efforts, a litigation or a legal component is almost always a part of that. It’s really a legal strategy as opposed to strictly an insurance recovery effort. So, I think that you are going to have to include the cost of legal into that calculation whether or not the attorney you’re working with is willing to work on a contingency or if it needs to be on an hourly fee.

JOHN: I should also let everybody know that there are certain circumstances where Paladin Law Group will work on a contingency and we’ve taken cases in all forms and fashion related to that. It is possible that depending on the facts/scenario in your particular circumstances we may be willing to look at it on a contingency basis.

6. IF MY BUSINESS STARTED AFTER 1985 ARE THERE ANY INSURANCE POLICIES THAT I CAN USE?
JOHN: When we start talking about the 1985-86 timeframe, we have to be careful about whether or not that exclusion is there. I have seen policies with no pollution exclusion in them all the way through 1990. There are other aspects of whether or not those policies actually have an exclusion that is applicable to your particular circumstance that you need to look at. That’s why you need partners like PolicyFind and Paladin Law Group to determine the actual coverage. Did the insurance carrier actually do what they needed to do to make that exclusion applicable to you? Just because you started in 1985 or 1996, don’t assume there are no possibilities that insurance is going to be applicable. Also, you’re still going to be looking at the prior policies because they may fund investigation/remediation that would help reduce your burden.

Read how insurance archeology can assist drycleaners when environmental contamination threatens their business

7. YOU MENTIONED THAT CASE LAW VARIES BY STATE. CAN YOU GIVE A FEW EXAMPLES OF HOW THAT MIGHT AFFECT USING INSURANCE?
JOHN: I’m going to use California as an example. There is a case there called “The Floor Case” which allows the ability to assign policies without the insurance carrier’s consent. So, as long as the damage has already occurred, statutes that date back to the early 1800s allow that policy to actually be assigned to somebody else. This can happen during the purchase process of buying a dry cleaning facility. For example, if you do a bulk sale transfer, and you transfer not only the machinery but all contracts related to the prior property, there may be an assignment of those early policies. So, even if you bought the business after 1985, this would allow you to access those historical insurance assets that date back to when the person that sold you the business actually operated.

JEFF: In Indiana, a letter from the regulatory agency requiring that you investigate and clean up actually will constitute a lawsuit. Case law says that a letter from the regulatory agency is all you need to tender a claim with your carriers. In other states, case law dictates more needs to happen. You actually have to have a third-party lawsuit to trigger insurance. It may be an older operator, a newer operator, a property owner, etc. This is why we’ve been able to offer drycleaners in states like Indiana, Wisconsin, Oregon, and many others with case law favorable to insurance archeology what I call the “full meal deal”: Burger, fries, and a shake. No money out of pocket, they’re able to tender their carriers, and get the entire thing taken care of. In other states where case law might not be as favorable, there’s still major value in those insurance policies, but maybe your environmental team can only get you a burger and a fry. In some states, it’s just the way case law is. And, in those states we might only be able to offer cost recovery or just the investigation paid off with the cleanup coming from another resource. That’s why it’s important for us to get in there to figure out your situation. What does case law look like in your state? We can talk this over so we can transparently set expectations for the level of contribution that might come from your policies.

KRISTEN: Even though we’re based in the Midwest, we work nationwide and we search for these policies in every state. It is incumbent upon us to have a working knowledge base of case law as it stands, recent changes, and things like that. Again, it’s worthwhile to just ask a question and then discuss.

JEFF: Remember, we use the word “case law”, which means those are actually legal decisions and opinions that have been passed down. Oftentimes, we will give somebody like John (an environmental attorney) a call and say, “Hey, what’s this look like?”. It’s really a legal interpretation.

JOHN: The other thing is that there are literally volumes of insurance decisions from cases covering everything from, “What does investigation mean?”, “What does defense cost mean?”, so on and so forth throughout the continental United States and in the world. It’s really state-by-state and case-specific and we have to make that analysis based on the particular facts that are presented and the particular state that you’re in, and try to advise you in the best way to move through the three-layer chessboard.

JEFF: And, just one more point on that question: Case law is always changing. I guarantee you there are tons of cases right now in litigation that are challenging the status quo as far as case law goes. And, those changes can be either more favorable for the policyholder or less favorable. That’s another reason the clock is ticking and why you should start your insurance archeology project sooner rather than later.

8. YOU’VE EITHER GOTTEN SUED OR YOU’VE TOLD ON YOURSELF. HOW LONG IS IT LIKELY TO TAKE TO GET A REGULATORY CLOSURE?
JEFF: We like to throw out somewhere in the five to six-year time frame. It can be a lot shorter if it’s not that big of a problem. It could also be a lot longer if the plume gets larger, you have other parties that need to be incorporated into the process, if you have a groundwater contamination plume and it travels under other properties, you’ve got some bigger issues that need to be dealt with. The other thing is that bigger releases take more time to investigate. It’s an iterative step-by-step process where we need to get some data, analyze it, see what that data is telling us, and then go back into the field and perform the next step. Even after that, we have to devise an appropriate remedy, there might need to be some pilot testing, and depending on the regulatory agency you’re working with and the state you’re working with, you need their cooperation as well. The fine art of consulting and being an environmental attorney is coercing the agencies to cooperate in a timely manner. But, on average I would go back to that 5 to 6 year time frame.

JOHN: It also depends on what agency project manager you get as well. That can put a significant delay on a project and unfortunately, consultants and attorneys have no way to press an agency to do something faster. With that said, the time frame is somewhat outside of your team’s control, but it also depends on whether or not it’s a case where you’re going to be litigating and that litigation may take an extended period of time. However, if you’ve triggered insurance policies it’s also saving you significant dollars to have the investigation move forward in a litigation context, generally speaking.

9. IF A DRY CLEANER HAS BEEN OPERATING AS A CORPORATION, CAN THEY ONLY PURSUE ASSETS OF THE CORPORATION?
JOHN: It depends. There’s a whole slew of other issues that go into that analysis, but piercing the corporate veil is difficult but it’s not impossible. Did you follow all the corporate minute requirements? Did you make sure that your corporation had annual meetings? Did you keep separate checking accounts? Did you have a separate insurance policy? Did you co-mingle funds with your personal accounts? There’s a whole bunch of factors that go into whether or not your corporate veil of protection is adequate, and so I can’t answer that in the specific case. As a general rule, it’s harder to get to somebody if they have a corporation, but it’s not necessarily impossible.

10. DOES HOW YOU BECAME AN OWNER DETERMINE YOUR LIABILITIES?
JOHN: If you inherited the business there’s a potential that you have some defenses related to the business. If you inherited the property there’s some wiggle room there. If you were a lender and you foreclose on a property, then maybe you might have some protections depending on the time period that passes. The answer is “maybe”, but it would be very fact-specific as to your particular setting. If you operated the business for 10 years, it doesn’t really matter how you came to own it, but if you took the business and only operated it for a month, that might be a different story.

SPEAKER BIOS

Dru Shields has over ten years of account management experience in the environmental consulting industry and serves on the Midwest Drycleaning and Laundry Institute Advisory Council and is a District Committee Member on the DLI Board. Among her many responsibilities, she assists clients in securing funding for their projects through historical insurance policies.

John Till is a founding partner and his clients consist of land and business owners, including dry cleaners impacted by environmental contamination. He has significant expertise in hazardous waste ligation in both federal and state courts. He represents his clients in identifying, locating, and obtaining the insurance policies through insurance archeology and negotiations with the insurance companies, and when necessary, litigation.

Kristen Drake is the President at PolicyFind. She combines her profession as an insurance archeologist with more than 10 years of investigative experience to reconstruct historical insurance coverage. Kristen works on behalf of policyholders and has successfully found insurance coverage on over 250 projects.