Contract analysis

I. Purpose and Summary of Interview This memorandum documents the substance of an in-person witness interview conducted by Devon Archer on July 2, 2025, at the offices of Calderwood & Harkness LLP, located at 1200 McKinney Street, Suite 4100, Houston, Texas 77010. The interview was conducted in a private conference room, and no other individuals were present during the interview. No audio or video recording of the in

II. Witness Background and Employment History Full Name: Craig Pemberton Current Residence: Katy, Texas. Mr. Pemberton's specific residential address has been withheld from this memorandum for privacy purposes. His full contact information, including home address, cellular telephone number, and personal email address, is on file with Devon Archer at Calderwood & Harkness LLP. Employment with DTS: Mr. Pemberton was em

III. Overview of RCFD Joint Operating Agreement and Southern Tank Farm Operations A. Execution of the JOA (1991) Mr. Pemberton recalled that the Joint Operating Agreement between DTS and Rowan Creek Fuel Distributors, Inc. was executed in 1991. At the time of the JOA's execution, Mr. Pemberton was employed as an Operations Technician and was therefore not involved in the negotiation or drafting of the agreement. Howe

IV. Tank Condition and Maintenance Practices Under RCFD Control A. General Observations on RCFD Maintenance Standards Mr. Pemberton described RCFD's maintenance of the southern tank farm over the period of the JOA (1991–2010) as "consistently below the standard we maintained in the northern farm." Mr. Pemberton stated this assessment plainly and without hedging, and he provided specific examples to support his charac

V. Documented Releases — RCFD-Operated Tanks A. 1996 Release — Tank S-4 (Approximately 8,000 Gallons Diesel) Mr. Pemberton recalled the 1996 release from Tank S-4 as the first major release from the southern tank farm under RCFD's operations. Mr. Pemberton was a Shift Supervisor at the time and was on duty or on site when the release was discovered. The release involved approximately 8,000 gallons of diesel fuel and

VI. DTS-Attributable Releases Mr. Pemberton was forthcoming in acknowledging that DTS's operations at the Site were not without incident. He described two documented releases attributable to DTS's operations in the northern tank farm and at the shared loading rack facility, as follows. A. 2003 Release — Tank N-3 (Approximately 1,500 Gallons Gasoline) — TCEQ Incident No. 158432 Mr. Pemberton acknowledged the 2003 rele

VII. RCFD Reporting Practices and Environmental Compliance Concerns Mr. Pemberton was asked to provide his overall assessment of RCFD's environmental compliance posture during the period of the JOA. He summarized RCFD's approach as "reactive rather than proactive" and "motivated by cost avoidance rather than environmental stewardship." Mr. Pemberton stated that this characterization was based on his direct observatio

VIII. Pemberton's Knowledge of Post-2010 and Post-2015 Events Mr. Pemberton was asked about his knowledge of events at the Site after RCFD's departure in 2010 and after DTS's cessation of operations in 2015. His knowledge of post-2010 and post-2015 events is summarized below. Post-RCFD Departure (2010–2015). After RCFD's departure from the Site in 2010, DTS inherited the dormant southern tank farm. Mr. Pemberton, as

IX. Documentary Evidence Referenced by Pemberton Throughout the interview, Mr. Pemberton referenced a number of categories of documents that he believes exist within DTS's archived records, which are now in the possession of DEH. Mr. Pemberton stated that these documents, if located, would corroborate his testimony regarding RCFD's maintenance deficiencies, RCFD's delayed reporting of releases, and DTS's efforts to e

1. Written recommendations from DTS to RCFD regarding tank inspections. Mr. Pemberton recalled that DTS sent written correspondence to RCFD's corporate offices in Austin on at least four occasions — in approximately 1997, 2002, 2005, and 2007 — recommending that RCFD conduct API 653-compliant internal inspections of the southern tank farm tanks. These letters would have been signed by the DTS Terminal Manager or Vice

2. Internal DTS incident reports. DTS prepared internal incident reports for all significant releases at the Site, including the 1996 Tank S-4 release, the 2001 Tank S-7 release, the 2003 Tank N-3 release, the 2008 Tank S-11 release, and the 2014 loading rack release. These reports would document the date, time, cause, volume, and response actions for each release, as well as any regulatory notifications made.

3. Monthly operations reports. DTS prepared monthly operations reports for the Dunmore Wharton Terminal throughout its operational history (1991–2015). These reports included inventory data for all tanks, both in the northern and southern tank farms. Mr. Pemberton stated that the monthly operations reports for the southern tank farm would show inventory discrepancies during periods of product loss attributable to rel

4. Correspondence between DTS management and RCFD regarding maintenance deficiencies. In addition to the tank inspection recommendation letters referenced above, Mr. Pemberton recalled that DTS management sent other correspondence to RCFD addressing specific maintenance concerns, including secondary containment deficiencies, SPCC plan compliance, and operational practices. This correspondence would have been maintain

5. DTS's SPCC plans and annual inspection checklists for the northern tank farm. These documents would demonstrate the standard of care that DTS applied to its own operations and would provide a contrast with RCFD's practices in the southern tank farm. The SPCC plans were required to be maintained on site and reviewed regularly under federal regulations.

6. Photographs of the southern tank farm containment area conditions. Mr. Pemberton recalled that DTS personnel photographed berm erosion and containment deficiencies in the southern tank farm in approximately 2004 and 2007. These photographs, if located, would provide contemporaneous visual documentation of the maintenance deficiencies described by Mr. Pemberton in Section IV of this memorandum. Mr. Pemberton offere

X. Witness Availability and Willingness to Testify Mr. Pemberton confirmed his willingness to serve as a fact witness in potential cost-recovery litigation against Rowan Creek Fuel Distributors, Inc. He stated that he has no reservations about testifying and that he believes it is important for the facts regarding RCFD's operations at the Site to be placed on the record. Mr. Pemberton confirmed that he has no conflic

XI. Assessment and Recommendations Credibility. Mr. Pemberton presents as a highly credible and knowledgeable witness. He has twenty-seven years of direct experience at the Site, spanning the entire period of RCFD's operations under the JOA (1991–2010) and continuing through DTS's cessation of operations in 2015. His testimony is detailed, specific, and internally consistent. He was able to provide dates, names, appr

1. Delayed Reporting. Mr. Pemberton's testimony regarding RCFD's failure to timely report the 2001 Tank S-7 release (TCEQ Incident No. 142876, approximately two to three weeks of delay) and the 2008 Tank S-11 release (TCEQ Incident No. 197503, approximately ten days of delay) supports arguments that RCFD's culpability extends beyond the initial releases themselves. The delayed reporting allowed released product to mi

2. Systematic Resistance to Tank Inspections. Mr. Pemberton's testimony regarding RCFD's persistent refusal to conduct API 653-compliant tank inspections — over a nearly twenty-year period, despite repeated written recommendations from DTS — supports the argument that RCFD's operational negligence contributed directly to the tank bottom failures that caused the 1996 Tank S-4 and 2008 Tank S-11 releases. This testimon

3. Secondary Containment Deficiencies. Mr. Pemberton's testimony regarding RCFD's failure to maintain the earthen containment berms around the southern tanks supports the argument that RCFD's negligence facilitated the migration of released product beyond the immediate tank areas and into the surrounding soil and groundwater. The documented breaches and deterioration of the berms around Tanks S-4, S-7, S-9, and S-11

XII. Signature block and Distribution This memorandum was prepared by Devon Archer, Working Associate, Calderwood & Harkness LLP, based on the in-person witness interview conducted on July 2, 2025, and contemporaneous notes taken during that interview. Prepared by: ________________________________________ Devon Archer Working Associate Calderwood & Harkness LLP 1200 McKinney Street, Suite 4100 Houston, Texas 77010 Da