September 2 , 2004 Meeting Minutes

  MINUTES
 

DRYCLEANER ENVIRONMENTAL RESPONSE TRUST FUND
COUNCIL of ILLINOIS

HOLIDAY INN SELECT
NAPERVILLE, ILLINOIS

SEPTEMBER 2, 2004
John Polak, Chairperson, called the Drycleaner Environmental Response Trust Fund Council of Illinois meeting to order at 10:12 a.m. A quorum was present. Roll call was taken with the following members present:

John Bredenkamp
Augustine Chung
David Gibson
Young B. Kim
Jerry Lewicki
John Polak

Also present were:
H. Patrick Eriksen, Program Administrator's Office
John McCarthy, Program Counsel
C. Michael Perkins, Program Administrator's Office
Juho So, Program Administrator's Office

PRELIMINARY BUSINESS

The minutes from the July 22, 2004 Council meeting were reviewed. On a motion by Mr. Bredenkamp and a second by Mr. Lewicki, the minutes were approved by a vote of 6-0.

  APPEALS
  A. Appeal of License Late Payment Fee for Waterford Cleaners, Inc., Aurora, IL
   

Mr. Eriksen reviewed with the Council that Waterford Cleaners is owned and operated by Dong K. Park and is located at 1669 Montgomery Road in Aurora, IL. Mr. Park has represented that Waterford Cleaners first opened its door for business in October 2002. He has indicated to the Administrator that he did not actually operate an active drycleaning facility at the location in October 2002 as there was minimal drycleaning business. Mr. Yung Ho Lee, who owned Oswego Cleaners, initially did the drycleaning for him. Mr. Park has indicated that he began drycleaning operations at his facility on October 6, 2003.

Mr. Park paid his 2004 license fee on December 31, 2003 and his initial license application was received on January 2, 2004. His license fee for calendar year 2003 was paid on April 21, 2004 and late fees due for calendar year 2003 were assessed in the amount of $985. Mr. Park is appealing these fees as he is under a certain amount of financial duress due to the lack of drycleaning business.

The facility is currently not licensed because of the outstanding late payment penalty for calendar year 2003.

Mr. Park introduced himself and reviewed with the Council that his drycleaning facility initially began operations as a drop-off store as business was slow and he was losing money on his drycleaning business. Mr. Park stated that he did not know that he needed to be licensed for 2003. Discussion focused on how Mr. Park initially obtained his solvent. He stated that when he bought his drycleaning machine, there was solvent in the machine. After brief discussion, the Council requested that the Administrator pursue discussions with Mr. Park as to who sold him his machine and try to track down who supplied the initial delivery of drycleaning solvent.

After discussion by the Council, Mr. Kim made a motion to waive the entire late fee in the amount of $985. The motion died for lack of a second. Mr. Bredenkamp then made a motion to reduce the late payment fee to $430, which would have been the amount due for the period of time in 2004 that he did not pay the license fee, i.e., from January 1, 2004 to April 1, 2004. This motion was seconded by Mr. Lewicki. Mr. Bredenkamp said this would give Mr. Park the benefit of the doubt as to when he became aware of the need to be licensed. The motion passed by a vote of 6-0.

  B. Appeal of License Late Payment Fees for S & B Premier Cleaners, Cicero, IL
   

Mr. Eriksen reviewed with the Council that Tom and Christine Kurysz are the owners and operators of S & B Premier Cleaners located at 4710 West Cermak Road in Cicero, IL. He indicated they purchased the facility effective November 1, 2003 and determined that they would rather purchase their own license rather than transfer the license from the existing owner who had the facility licensed through December 31, 2003.

The 2004 license renewal information was sent to the previous owner in early November 2003, as the Administrator was not aware the facility had been sold. On February 7, 2004, the Administrator's office received a call from the facility's solvent distributor stating that there had been a change in ownership at the facility and that the new owner did not have a license and wanted to know what information they needed to complete in order to be licensed. The Administrator's office contacted the Kurysz's on that date and explained to them what they needed to do in order to get their facility licensed for 2004. They were informed of the option of transferring the 2003 license from the previous owner. They indicated that they would probably purchase their own license but they would think it over and get back to the Administrator's office on what action they wished to take. On March 17, 2004, a letter was sent outlining options to either transfer the previous owner's license or purchase their own license and instructions for completing the required paperwork. On April 5, 2004, the initial license application was received and verification of the license fee for 2003 and 2004 was paid on March 22, 2004. Late fees were assessed as follows: calendar year 2003 - $700; calendar year 2004 - $405; for a total of $1,105.

Christine Kurysz addressed the Council noting that they were first time business owners who had never owned or operated a drycleaning facility previous to their purchase of S & B Premier Cleaners. They were not aware at the time they purchased the facility that they needed to have the facility licensed and did not become aware of that until Ken Bull informed them in February 2004. Ms. Kurysz stated that they were requesting leniency from the Council in regards to the late payment penalty fees due to their lack of knowledge and understanding about the Fund licensing requirements.

Mr. Polak asked if the transferring the license would eliminate the license penalty for 2003 as the facility had been licensed for calendar year 2003 by the previous owner. Mr. Eriksen replied that it would and that was an option that had been presented to the Kurysz's. Mr. Polak asked the Kurysz's if they felt they could get the necessary paperwork completed to transfer the 2003 license. They indicated that they could and that they had the original license in their possession.

After additional discussion by the Council, on a motion by Mr. Lewicki and a second by Mr. Bredenkamp, the Council waived the license late payment fees for calendar year 2003 in the amount of $700, subject to the Kurysz's transferring the 2003 license fee from the previous owners to themselves. The motion passed by a vote of 6-0

  C. Appeal of Denial of Remedial/Insurance Claim Benefits for Scott One Hour Cleaners in Winnetka, IL
 

Mr. Polak reviewed for the Council that this is a continuation of the discussion of the appeal heard June 16, 2004 by the Council. Mr. Eriksen summarized for the Council that there are two (2) appeals for the Council's action. They are as follows:
1. An appeal of remedial benefits and the insurance benefits filed by the owner/operator, Mr. Han.
2. An appeal of remedial benefits and the insurance benefits filed by the real estate owner, Mr. Hanus.

Mr. Polak noted that he had distributed a letter to the Council summarizing his research on the issue and that he had consulted with a claims attorney and claims adjuster in sorting through the issues and facts and had felt that there were two (2) key issues to address in determining these appeals. Those involved the triggers regarding: (1) eligibility; and (2) coverage.

Mr. Polak felt that for both of the parties that the remedial benefit eligibility requirements had not been met in as much as at the time the claim was filed, that the location was no longer an active or inactive facility therefore Mr. Han was not eligible to file a remedial clam and Mr. Hanus had no standing as he was simply the owner of the real estate property and had not been the owner or operator of the drycleaning facility.

Regarding the coverage issues, Mr. Polak stated under a claims made policy, the policy conditions place the responsibility for identifying the triggering event on the insured and not the insurer. In addition, regarding the terms of the liability coverage, the insurer does not owe a duty to defend if the claim was denied. He reiterated the difference between a claims-made and an occurrence-made liability policy and what events trigger coverage under each of those policies.

In summary, Mr. Polak stated that he felt that the Administrator had made the appropriate decision in denying remedial program benefits and insurance program coverage for both Mr. Han and Mr. Hanus and that the Fund did not owe Mr. Han a duty to defend the lawsuit filed against him by Mr. Hanus in as much as the claim had been appropriately denied by the Fund.

Mr. Anspach addressed the Council and briefly stated his objections to several of Mr. Polak's coverage interpretations. Mr. David Berry of the Benjamin Law Firm, representing Mr. Hanus stated that his firm's arguments parallel those of Mr. Anspach.

After additional discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Gibson, the Council voted 6-0 to deny the remedial and insurance claim appeals filed by Mr. Han and Mr. Hanus.

Mr. Polak then recessed the meeting for a break at 11:12 a.m. and reconvened the meeting at 11:40 a.m.

  OPERATIONAL ISSUES
  1. Review of New Proposed Compliance Program - National Drycleaners Institute:
 

Mr. Polak introduced Mr. Sung Do Kang, former president of the Korean American Drycleaners Association (KADA) and chairman of the National Drycleaners Institute (NDI). Mr. Kang thanked the Council for allowing NDI to make a presentation on their proposed compliance program and introduced Mr. Donald Park, board member, who would review in detail, information about the NDI and their compliance program. Mr. Park provided the Council with additional support material and a copy of the institute's first newsletter. He stated NDI recognizes the need for ongoing education and training for all drycleaners, not only in the area of pollution prevention but in terms of business management, marketing and language issues. Their intent is to provide a forum and a fresh approach for their members to be more responsible participants in the drycleaning industry. It is their intent at some point in time to be able to offer online classes via the internet.

Mr. Park introduced Jimmy Lee, who is the executive director of the Asian American Chamber of Commerce. Mr. Lee addressed the Council stating that he previously worked for Governor Ryan's office and had been working with NDI to give them some advice on how to establish their programs and to put together a group of people to advise them on environmental issues. He noted that the NDI has scheduled a meeting with the City of Chicago, the Illinois Environmental Protection Agency, and Federal EPA Region V. He thanked the Council for their support and asked if they had any questions.

After a brief discussion by the Council, on a motion by Mr. Bredenkamp and a second by Mr. Gibson, the Council approved, by a vote of 6-0, the National Drycleaners Institute as a Council approved compliance program.

2. Ethics Training:
 

Mr. Eriksen reviewed with the Council the referenced information and the background information for the ethics training that is required of all state employees and members who have been appointed to state boards and commissions. He noted that the training will be conducted at the Council member's convenience online via the internet between September 9, 2004 and October 8, 2004. The training is self administered and requires approximately one (1) hour to complete. He distributed to the Council their log in name, initial password and stated if they had any questions, that they were to contact him as he was the compliance officer for the Fund.

  3. Update on Enforcement Action Against Unlicensed Drycleaners:
   

Mr. Eriksen reviewed with the Council that the Illinois Attorney General's office conducted a mailing to 155 unlicensed drycleaners during the last week of July and first week of August and that included in their packet was a copy of the letter for their reference. He indicated that since that date, we have received 32 responses to the letter and are working with the Attorney General's office in formulating a follow-up plan for the responses that are due back by early October. Mr. Eriksen stated that he would keep the Council updated as to the status. The Attorney General's office had indicated 10% of the mailing had returned unopened.

Discussion focused around the fact that solvent distributors are not to deliver solvent to unlicensed drycleaners. Mr. Eriksen noted that he has reviewed this issue at length with the Illinois Department of Revenue and on occasion has requested that they audit the solvent distributors and where appropriate, fine them for delivering to unlicensed drycleaners. The question was raised as to who gets the money from any fines assessed against a solvent supplier. Mr. Eriksen stated that he did not know but would research the issue and report back at a future Council meeting.

  APPROVAL OF PROGRAM BILLINGS
  Mr. Eriksen noted that there were two (2) bills requiring Council review and action.
  1. Williams & Company Consulting, Inc $ 71,267.00
Standard flat fee billing for July 2004, licensing, underwriting and claims processing.
  2. John J. McCarthy $ 2,185.00
Professional legal services to the Council for the period of July 1, 2004 through August 24, 2004.
 

On a motion by Mr. Kim and a second by Mr. Lewicki, the bills were approved by a vote of 6-0.

REVIEW OF ACTIVITY REPORT AND FINANCIAL STATEMENTS
 

Mr. Eriksen stated that there were no current financial statements as we are waiting to finalize the June 30, 2004 numbers before preparing the July financial statements. He reviewed the July 2004 activity report, noting that there were currently 874 insured facilities as of July 31, 2004 and that total open remedial claims were 297. Almost $6 million has been paid to date on remedial claims and outstanding reserves total $21.7 million.

  OTHER ISSUES AS PRESENTED
 

Mr. Eriksen noted that a Council member has a conflict with the October 14, 2004 meeting date. After discussion by the Council, they tentatively set Friday, October 15, 2004 as the next meeting date.

Mr. Eriksen noted that Dr. So and himself would be attending the semi-annual State Coalition for Remediation of Drycleaners meeting in Kansas City the week of September 27, 2004.

  PUBLIC COMMENT PERIOD
 

Peter Marberry asked a general question regarding the appropriation process which was responded to by Mr. Eriksen.

There being no further business, on a motion by Mr. Bredenkamp and a second by Mr. Kim, by a vote of 6-0, the Council meeting adjourned at 12:10 p.m.

  Back to Top