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COURT OF APPEALS DECISION DATED AND RELEASED MAY 14, 1996 |
NOTICE |
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A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62(1), Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-3274
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT III
FURNISHINGS UNLIMITED,
INC.,
a/k/a Tom Van
Lieshout,
Petitioner-Appellant,
v.
DEPARTMENT OF
INDUSTRY,
LABOR, AND HUMAN
RELATIONS,
Respondent-Respondent.
APPEAL from an order of
the circuit court for Outagamie County:
JAMES T. BAYORGEON, Judge. Affirmed.
Before Cane, P.J.,
LaRocque and Myse, JJ.
LaROCQUE, J. Furnishings Unlimited, Inc., appeals an
order affirming a Department of Industry, Labor and Human Relations (DILHR)
decision denying reimbursement from the Petroleum Environmental Cleanup Fund
(PECFA) for costs Furnishings incurred cleaning and removing an underground
storage tank from its property. Section
101.143(4)(c)7, Stats., provides
that such costs are not eligible for reimbursement "unless those costs
were incurred before November 1, 1991, or unless the claimant had signed a
contract for services ... before November 1, 1991."[1] DILHR denied reimbursement on grounds that
its administrative rules define "costs incurred" as actual payment to
the creditor. Furnishings maintains
that its costs were incurred when it entered into an oral agreement with a
contractor in June 1991 to have the tanks removed. Because the legislative history shows that DILHR was intimately
involved in developing the statutory scheme excluding reimbursement of costs of
tank removal pursuant to a legislative desire to reduce costs of the PECFA
program, and because that agency's definition of "costs incurred" is
a reasonable interpretation, we affirm the order.
The facts are
stipulated. Furnishings entered into an
oral agreement with a contractor for removal of an underground storage tank on
property it owned on or about June 1, 1991. The contractor began the process of closing and removing the
underground storage tank by September 3, 1991. The tank was removed on November
13 and 14, 1991. The project of
cleaning and disposing of the tank was completed on February 11, 1992. Furnishings paid the contractor by check
issued January 27, 1993. Furnishings
sought reimbursement from the PECFA program for the expenses.
Initially, a PECFA
financial manager determined that certain costs totaling $8,079.35 were
ineligible for reimbursement because Furnishings paid the costs after November
1, 1991. Then DILHR affirmed the
initial determination of the financial manager. The parties filed a stipulation of facts with an ALJ, who also
affirmed the initial determination.
Furnishings appealed to DILHR's deputy secretary, who affirmed the ALJ's
decision. Furnishings petitioned for
judicial review of DILHR's decision.
The circuit court affirmed DILHR's decision.
Furnishings contends
that because it entered into an oral contract in June 1991 agreeing to pay a
contractor the costs of removal, it had "incurred" the costs to
remove the tanks prior to November 1, 1991.
Furnishings relies upon the definition of "incur" found in a
standard dictionary.[2]
We review the agency's
decision and not that of the circuit court.
Carrion Corp. v. DOR, 179 Wis.2d 254, 264, 507 N.W.2d 356,
359 (Ct. App. 1993). When an agency
interprets a statute in a case of first impression and the agency lacks special
expertise or experience, our review is de novo. Jicha v. DILHR, 169 Wis.2d 284, 291, 485 N.W.2d
256, 258-59 (1992). But where the
legislature has specifically charged the agency with the duty of administering
and applying the particular statute, we may infer that the agency is competent
to interpret the statute and is entitled to a degree of judicial deference is
this regard. Wisconsin Central
Ltd. v. PSC, 170 Wis.2d 558, 567, 490 N.W.2d 27, 31 (Ct. App.
1992). Where the legislature has
ambiguously expressed its intent, we uphold the agency's interpretation where
it "is based on a permissible construction of the statute." See Wisconsin Hosp. Ass'n v.
Natural Resources Bd., 156 Wis.2d 688, 706, 457 N.W.2d 879, 886 (Ct.
App. 1990) (quoting Chevron U.S.A. v. Natural Resources Defense Council,
467 U.S. 837, 843 (1984)). Whether a
statute is ambiguous is a question of law, and a statute is ambiguous if
reasonable persons could differ as to its meaning. See State v. Frey, 178 Wis.2d 729, 737, 505 N.W.2d
786, 789 (Ct. App. 1993).
The legislature has
specifically charged DILHR with the duty of administering the PECFA. Section 101.143(4)(a), Stats., provides in part:
If
the department finds that the claimant meets all of the requirements of this
section and any rules promulgated under this section, the department
shall issue an award to reimburse a claimant for eligible costs incurred
.... (Emphasis added.)
Furnishings
does not challenge the validity of the legislature's delegation of power to
DILHR. Pursuant to this authority,
DILHR adopted Wis. Admin. Code
§ ILHR 47, Petroleum Environmental Cleanup Fund, regulating PECFA awards,
and includes ILHR 47.015(8), defining "costs incurred" for purposes
of an award: "Costs are considered
incurred when funds are disbursed to the creditor, i.e.; invoices have been
paid and verification is available."
Neither of the
conflicting meanings of "costs incurred" found in
§ 101.143(4)(c), Stats., as
proposed by Furnishings and by DILHR, is unreasonable. We therefore conclude that the statute is
ambiguous. If a statute is ambiguous,
we look to the legislative intent, which may be found in the language of the
statute in relation to its scope, history, context, subject matter and object
to be accomplished. Ellingson v.
DILHR, 95 Wis.2d 710, 713-14, 291 N.W.2d 649, 651 (Ct. App. 1980).
The legislative history
of the exclusion from reimbursement for tank removal shows that DILHR submitted
recommendations because the legislature sought assistance to reduce the
escalating costs of the PECFA program.
Correspondence memoranda from drafting records for § 101.143, Stats., to the legislature's joint
committee on finance shows that DILHR submitted a list of proposed changes to
control PECFA's costs to the joint committee in April 1991. Among the proposed exclusions included costs
of tank removal altogether.[3] The drafting records also indicate that the
drafters were fully aware that a disallowance of closure costs would affect
claims in process and companies performing tank‑related services.
The legislature adopted
that proposal to disallow closure costs and excluded reimbursement for any
costs associated with closing or removing petroleum product storage systems.
1991 Wis. Act 39, § 2328f, effective August 15, 1991.[4] Then, pursuant to 1991 Wis. Act 82,
§ 7, enacted November 25, 1991, published December 10, 1991, and effective
December 11, 1991, the legislature created a retroactive exception to the
exclusion for tank removal, but only if the "costs were incurred before
November 1, 1991 ... or unless the claimant had signed a contract for services
... before November 1, 1991."
Following these developments, DILHR adopted ch. ILHR 47 defining
"costs incurred."
In context of the
preceding legislative history, we conclude that we should accord deference to
DILHR's definition. The legislature
authorized DILHR to administer the statute.
Because the legislation under review was adopted only after DILHR's
close and immediate involvement, we should defer to the agency because it
placed a permissible construction upon an ambiguous term within that
legislation. See Wisconsin Hosp. Ass'n, 156 Wis.2d 688 at
706, 457 N.W.2d at 886.
We also reject
Furnishings' alternative argument that its oral contract satisfies the signed
contract exception. Furnishings reasons
that the legislative intent behind the requirement of a signed contract in lieu
of "costs incurred" is to provide adequate proof of the agreement,
and its oral contract fulfills that intent because the parties stipulated to
its existence and terms. We reject this
argument. The exception for a signed
contract unambiguously requires a written document. DILHR's order is therefore affirmed.
By
the Court.—Order affirmed.
Not recommended for
publication in the official reports.
[1]
Section 101.143(4)(c), Stats.,
provides in part:
(c) Exclusions from eligible costs.
Eligible costs for an award under par. (a) do not include
the following:
....
7. Costs of emptying, cleaning and disposing of the tank and other costs normally associated with closing or removing any petroleum product storage system or home oil tank system unless those costs were incurred before November 1, 1991, or unless the claimant had signed a contract for services for activities required under sub. (3) (c) or a loan agreement, note or commitment letter for a loan for the purpose of conducting activities required under sub. (3) (c) before November 1, 1991. (Emphasis added.)
[2] Furnishings refers to the definition of "incur" as "to become liable or subject to, esp. as a result of one's own actions; bring upon oneself." American Heritage Dictionary 653 (2d ed. 1985). Furnishings' argument is undercut by the fact that if we interpret "incurred" to mean when the claimant is legally bound to pay a cost, the statute's signed contract exception becomes superfluous because, assumably, one is legally bound to pay a cost when one has signed a contract to do so.