Appeals court upholds $4 million verdict against drilling company

Appeals court upholds $4 million verdict against drilling company

The Colorado Court of Appeals on Thursday upheld a $4 million jury award to a western Colorado sheep rancher who argued a natural-gas drilling company had not paid him all the royalties he was due over several years.

Tulsa, Okla.-based Williams Production Co. had appealed the August 2004 verdict, arguing that evidence was improperly excluded and that the jury instructions and damage calculations were flawed.

A three-judge panel of the appeals court rejected each argument.

The suit was filed by Garfield County rancher William Clough, who has since died.
Clough, who owned 12,000 acres near Rifle and Parachute, was earning about $3 million a year in royalties from natural gas drilling on his land. He argued that Williams and Barrett Resources, which merged with Williams in 2001, had not paid him agreed-upon royalties from February 1996 to February 2004.

A Garfield County District Court jury agreed, finding Williams guilty of breach of contract, violating the state Consumer Protection Act and acting in bad faith in its dealings with Clough.

Williams spokesman Kelly Swan said company officials have not yet decided whether to appeal to the Colorado Supreme Court.

The case is No. 05CA322.
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