SHERIDAN — The Wyoming Supreme Court recently upheld a 4th Judicial District Court decision that awarded a Sheridan County landowner more than $1.1 million in damages in a case against Pennaco Energy, Inc.
In February 2015, a jury in 4th Judicial District Court awarded Arvada-area rancher Brett Sorenson $1,055,982.62 for damages and $332,662.97 for attorney fees in the case.
Sorenson initiated the lawsuit when he stopped receiving payments for use of his land for coalbed methane drilling and production operations.
Sorenson had signed a surface damage and use agreement with Pennaco Energy, Inc. in 2001.
During the course of operations, Pennaco drilled 10 coalbed methane wells, constructed 5.67 miles of road, installed 4.19 miles of pipeline and constructed four water disposal pits, court documents state.
The decision from the Wyoming Supreme Court issued March 11 indicates after Pennaco’s July 2010 assignment of its interest in the operations to CEP-M, which then assigned the interest to High Plains Gas, Inc., the wells, pipelines and roads on Sorenson’s land were “for all practical purposes abandoned.” In 2010, Sorenson stopped receiving the payments outlined in the surface damage and use agreement.
Pennaco Energy Inc. appealed the district court ruling to the Wyoming Supreme Court, stating that the company was not liable under the surface damage and use agreement signed with Sorenson because it had assigned its interest to other companies. It also argued that the district court didn’t have the authority to use a multiplier when determining attorney fees.
According to the Wyoming Supreme Court’s ruling, Pennaco says its obligations “passed like a quarterback passes the football to a receiver — once the ball is passed, the receiver has it, and the quarterback does not.”
But, the high court disagreed.
“We view Pennaco’s attempts to relieve itself of the obligations it bargained to perform more as a game of hot potato,” the decision stated.
The court also affirmed that the district court did not abuse its discretion in the way it awarded attorney fees to Sorenson.