Claremore Daily Progress

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April 18, 2014

Local attorneys fight to eliminate judgment

Petition filed to vacate $27.9M Material Services judgment

CLAREMORE —

Claremore attorneys — Thomas H. Williams and Jack E. Gordon Jr. —   filed a petition Tuesday to vacate the $27.9 million judgment awarded to Material Service Corp. 
 Their strategy is to have the “windfall judgment” voided by the court after the county lost the inverse condemnation case to the mining company in 2012. 
“We have a company that was prohibited from miming for 3 1⁄2 years and essentially they received $10 million a year for not mining and that is outrageous,” Gordon said.
Material Service Corp. filed the action against the county in 2000, claiming the county had improperly annexed 320 acres that prevented the company from mining the land. The lawsuit continued for more than 10 years. 
Now, the attorneys claim the judgment awarded for a 3-1⁄2 year delay of the mining of the Begley Lease near Oologah was won by  “actual fraud of concealment from the court  instead of the actual term” of the lease, according to the documents.
The estimate of the damages awarded to the mining company was based on a 50-year lease, according to the court documents.
Gordon and Williams contend the actual term of the lease was five years with an option to renew.
They assert court records show the term of the lease was omitted when it was filed with the county clerk.
“If the judgment is set aside, then they must pay back the money,” Gordon said. “I hope to recover a nice chunk of change for the county.”
The attorneys also contest the expert testimony of Jim Hinkle and his estimate of damages based on “generally accepted account principles.”
Records show the estimated value of the lease was $7.87 million.
Hinkle’s testimony was based on the claim of a non-existent terminal value of the lease. Gordon and Williams asserts the testimony was confusing, false and fraudulent, according to the documents filed in the case.

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