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Highland Heights to Consider Settlement with Bass Energy

City would pay $600,000, bringing lawsuit to a close.

 

Highland Heights City Council will consider a $600,000 settlement proposal in its lawsuit with Bass Energy as early as Tuesday.

Council President Cathy Murphy said she, Mayor Scott Coleman and Law Director Tim Paluf met with Bass Energy representatives and the company's counsel Friday to reach a settlement in the longtime breach-of-contract lawsuit regarding the drilling of gas wells in the city park. Bass sought $7 million from the city.

Murphy said the law director will craft the settlement resolution for council to consider as early as Tuesday. The group has a committee-of-the-whole meeting scheduled that night, but would likely adjourn into a special meeting for the first reading of the resolution.

"It would be premature to say how I feel the vote would go, but council has authorized the law director to prepare settlement legislation," Murphy said. "It involves a cash settlement, where the city would pay $600,000 to the plaintiff on his breach-of-contract claim that would bring to conclusion a lawsuit that has lasted for four and a half years.

"There will be no gas wells in this city."

Related Topics: Bass Energy, gas wells, and highland heights council
What do you think about the proposed settlement? Tell us in the comments.

Mike Times

12:22 am on Friday, April 27, 2012

Thanks alot Murphy, Instead of getting royalties and more energy for the area, you are wasting my tax dollars. Understand my street was to be repaved this year, meaning Miner Rd will not be repaved as it should. Where is the money coming from? Certainly not from the council and mayor.

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Roger Vozar

6:57 am on Friday, April 27, 2012

While it's certainly valid to question the best use of money, I just thought I'd remind that many people came forward to tell city officials to spend what it takes to settle the lawsuit as long as there were no wells in the park. And I only remember John Graves speaking out against spending money to settle.

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Sean Milroy

7:43 am on Friday, April 27, 2012

Hooray for the council members. They listened to the residents and they have done a good job over the last few years building up a cushion in the budget. Time to put this mistake behind us.

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Scott Andrew Mills

9:54 am on Friday, April 27, 2012

Mr. Times, lest I remind you that this is not Mrs. Murphy's fault!! Had the mayor NOT signed a contract that he had NO authority to sign, we wouldn't have been in this mess. You should be directing your frustration at Mr. Coleman and ask him when we are FINALLY going to fix Miner Road that should have done 3 years ago!!!

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amy feran

11:52 am on Friday, April 27, 2012

Clearly Mr. Times is not one of the 73% of Highland Heights residents who voted to keep gas wells out of our community park.
What is unclear is why Mr. Times singled out Council President Cathy Murphy for blame.
This legal fiasco has always been a group effort.
Bass Energy's breach of contract lawsuit is based on a drilling lease that Mayor Coleman signed in March 2007---a lease that Judge Eileen Gallagher later concluded the mayor had "no power" to sign. Without that lease, there would be no lawsuit---and no need for a financial settlement.
The 2008 Charter amendment took drilling in the park off the table.
Therefore the city was left with 2 choices for resolving the Bass Energy lawsuit: a cash settlement or arbitration. Of those two choices, a financial settlement is by far the less risky bet.
$600,000, while not peanuts, is 8.5% of the $7 million in damages that Bass originally demanded from the city. From that perspective it appears that Council President Cathy Murphy has done well in negotiating on residents' behalf.
As far as infrastructure needs, replacing the Highland Road water main is the city's most critical priority---and since that will require digging up the Highland/Miner Road intersection, it makes sense to postpone renovating Miner Road until after the water main is replaced. Otherwise taxpayers will end up paying to repair two newly reconstructed intersections instead of just one---the Highland/Bishop intersection.

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marie harmon

2:23 pm on Friday, April 27, 2012

The most interesting and true comment was "taxpayers will end up paying..." Our area has seen at least 2 foreclosures recently. Residents unable to live in their homes because they cannot afford the cost of mortgage-taxes-maintenance. Mr. Coleman has not made any statements as to why he decided to sign an agreement that the people whom he represents already said at the ballot they did not want. Who was pulling his strings that day? Certainly not the taxpayer.

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Rob Hawkins

10:38 am on Saturday, April 28, 2012

I'm confused Amy. If the contract was signed by some one with "no power" to sign the contract, the contract is therefore null and void. Why is there even a lawsuit let alone contemplation of paying $600,000 settlement? What am I missing?

AMA

7:21 am on Sunday, April 29, 2012

In the eyes of Bass, they got what they wanted....a SIGNED contract. Mickey Mouse could have,signed the contract. A signed contract is a signed contract, is a signed contract.

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amy feran

10:17 am on Sunday, April 29, 2012

Rob, the judge's ruling came a year after the suit was filed.
For whatever reason (maybe because the mayor has steadfastly refused to acknowledge any drilling deal missteps) the city's outside council never asked the judge to declare the drilling lease void. Since litigants are masters of their suits, the judge didn't make that ruling. Instead she sent the parties to arbitration.
Litigation,whether in a court or before an arbitration panel, is always a crap shoot to some extent, regardless of the strength of your case.
A financial settlement, however bitter a pill to swallow, is the less risky option for both parties.
No doubt the city considered: its past legal expenses; the cost of going to arbitration (including the arbitrators', lawyers' and expert witnesses' fees); and its potential damages exposure.
Likewise Bass had to assess its past and future litigation/arbitration costs, the strength of its legal claim, and the economics of drilling in the park.
In the end, the parties came up with a proposed settlement that is a fraction of what Bass Energy originally claimed as damages.
The public will have an opportunity to weigh in on the proposed settlement at the May 8th council meeting, if they want to do so.

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Ken Messinger-Rapport

10:20 am on Wednesday, May 2, 2012

I can clarify the question as to why the City and Bass ended up in arbitration. Judge Eileen T. Gallagher, in her opinion found that the parties, meaning Bass and the City, acted as if a valid contract existed by their actions outside of Court and by their arguments in Court. For example, both parties argued their cases based on rights and conditions found within the terms of the lease. Because the parties acted like there was a valid contract the Judge found that there was a contract, although she observed that in fact the mayor did not have the power to enter into the lease until after the drilling sites were located and approved by council. In other words, despite the inconsistency, the Judge decided that on balance the city acted as if a contractual relationship did exist. Once Judge Gallagher decided that the lease contract existed, she upheld the contract rejecting the City Council's attempt to rescind it, and she granted Bass's request to pursue arbitration as a matter of public policy. That is how the case ended up in arbitration.

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Educated Elizabeth

6:47 pm on Wednesday, November 14, 2012

When is Scott Coleman up for re-election? Or should I say, when can I vote for the person running against him?

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