OAG 93-34

April 16, 1993

Jack B. Hall, Executive Director

Petroleum Storage Tank Environmental

Assurance Fund Commission

59 Fountain Place

Wilkinson Boulevard

Frankfort, KY 40601

RE: Petroleum Storage Tank Environmental Assurance Fund Commission

Reimbursement of Attorney Costs

Dear Mr. Hall:

This office is in receipt of your letter requesting an opinion regarding the interpretation of statutory authority possessed by the Petroleum Storage Tank Environmental Assurance Fund Commission ("Commission"). Under KRS 224, Subchapter 60, the Commission is authorized "to reimburse petroleum storage tank owners or operators for the costs, expenses, and other obligations incurred for corrective action as the result of a release into the environment from a petroleum storage tank." KRS 224.60-140(2)(a). You have also noted in your letter that corrective action is further defined by KRS 224.60-115(5) as meaning:

[t]hose actions necessary to protect human health and the environment in the event of a release from a petroleum storage tank. Corrective action includes initial responses taken pursuant to KRS 224.60-135, remedial actions to clean up contaminated groundwater, surface waters, or soil, actions to address residual efforts after initial corrective action is taken, and actions taken to restore or replace potable water supplies. Corrective action also includes actions necessary to monitor, assess, and evaluate a release, as well as actions necessary to monitor, assess, and evaluate the effectiveness of remedial action after a release has occurred.

You have stated that during the course of reviewing claims you have been faced with decisions regarding payments for attorney fees as "costs" which are reimbursable under the statutory authority of the Commission. The question you have presented is "whether attorney fees asserted by claimant are costs associated with corrective action." You have also indicated that in the past the Commission has determined that certain attorney fees would be appropriately reimbursable as "costs," while other fees would not.

As a general matter, it should be noted that under the laws of most of the states, including Kentucky, attorney fees are not considered allowable as costs unless there is a specific statute or agreement which authorizes the court to make such an award. Kentucky State Bank v. AG Services, Inc., Ky. App., 663 S.W.2d 754 (1984). However, the law in this area concerns suits by private parties under various statutes which impose liability for litigation, a situation not applicable to your question. Obviously, the Commission is not involved in determining who should pay the "costs" for litigation between two parties.

It is also of no assistance to examine cases interpreting KRS Chapter 224, Subchapter 60, since this law was only passed in 1990 and there are no court interpretations of which we are aware. There are, however, general principles of statutory construction which are of assistance.

First, in numerous cases the Kentucky Supreme Court has stated that in ascertaining the meaning of a statute the court is to consider the entire enactment. Budget Marketing, Inc., v. Commonwealth ex rel. Stephens, Ky., 587 S.W.2d 245, 247 (1979); Commonwealth v. Trousdale, 297 Ky. 724, 181 S.W.2d 254, 255 (1944); Seaboard Oil Company v. Commonwealth, 193 Ky. 629, 237 S.W. 48, 49 (1922); Commonwealth v. Trent, 117 Ky. 34, 77 S.W. 390, 393 (1903). Therefore, in analyzing the meaning of KRS 224.60-140(2)(a) we must necessarily include reference to KRS 224, Subchapter 60, in its entirety. In addition, KRS 446.080 states:

(1) All statutes of this state shall be liberally construed with a view to promote their objects and carry out the intent of the Legislature, and . . .

(4) All words and phrases shall be construed according tot he common and approved usage of language, but technical words and phrases, and such others as may have acquired a peculiar and appropriate meaning in the law, shall be construed according to such meaning.

Although the term "costs" does have an established, technical meaning in litigation, your question need not be answered on this basis, since attorney fees could be considered as "costs," "expenses" or "other obligations" under the statute. KRS 224.60-140(2)(a). The key point is whether attorney fees are reimbursable as part of the "costs, expenses and other obligations incurred" in taking corrective action.

To determine whether corrective action could include the work of an attorney, and what sort of work should be considered appropriate, we need to turn to another general rule of statutory construction. This rule is that, where possible, statutory interpretations should give effect to the "intent and purpose" of the law. Seaboard Oil Company v. Commonwealth, 193 Ky. 629, 237 S.W. 48, 49 (1922); City of Owensboro v. Noffsinger, Ky., 280 S.W.2d 517, 519 (1955).

It is clear from the statement of purpose contained in the Act creating the Petroleum Storage Tank Environmental Assurance Fund Commission that the Commission is to facilitate the remediation of environmental problems associated with petroleum storage tanks. The money appropriated to the Commission is used to aid landowners in these efforts. Accordingly, anything which makes it less likely that assessment and remediation will be quickly, efficiently, and effectively undertaken will undercut the stated purpose of the Act. For this reason, this office is of the opinion that, under appropriate circumstances, attorney fees may be properly considered as part of the "costs, expenses and other obligations incurred for corrective action."

This is not to say that every item for which an attorney might charge would be included. The Commission should require that all attorney expenses be fully documented and be specifically related to facilitating assessment or remedial action of a specific, identifiable site. For example, initial consultation with a landowner would not be included, even though the attorney may spend considerable time advising the client of the existence of his or her obligation and the measures necessary to obtain reimbursement from the Commission. Those costs or expenses, although associated with the fact that a problem site may exist, are not directly related to the assessment or remediation effort.

On the other hand, an attorney fee based upon services which are necessarily related to the assessment or remediation effort would, in our opinion, be properly reimbursable by the Commission. For example, where it is necessary for an attorney to draw up a contract between the landowner and the company which will actually perform the assessment or remediation, these fees may be recoverable. In some cases, the assessment or remediation may have to be undertaken on land which belongs to other individuals, or there may be specific circumstances which will require legal agreements or an attorney's assistance. If the activity is found by the Commission to be directly related to the assessment or remediation effort, it is our opinion that it would be reimbursable. Again, it should be stressed that the attorney's work must ultimately benefit the on-going cleanup effort at a particular site or sites.

In conclusion, we summarize by stating that attorney fees are, in our opinion, reimbursable by the Commission where the fee represents a reasonable cost for actually work performed, as indicated by complete and comprehensive invoicing from the attorney, and where the work performed is reasonably and necessarily required for assessment or remediation efforts of a specific site or sites. The Commission is not authorized to pay for general advice or other matters which are not specifically required for the cleanup effort.

We trust this opinion has been of assistance to you.




John S. Gillig

Environmental Special Counsel

To the Attorney General

Room 118, Capitol

Frankfort, KY 40601

(502) 564-7600