Defeat in pipeline lawsuit forces ranch sale
October 1, 2012
SILT, Colorado – Dow Rippy is a strong believer in the value of private property rights.
Yet when asked about the outcome of his 2011 lawsuit against natural gas developer SG Interests, over a pipeline the company built through his property, Rippy says something surprising.
“In hindsight, I wish I’d just given them the land.”
On Tuesday, after nearly two decades of ranching on 1,900 acres up West Divide Creek above Silt, Rippy and his wife, Kathy, are auctioning off their ranch, along with scores of farm implements, tractors and other equipment.
They say they’re doing it in part to generate funds needed to pay SG Interests (SGI) about $750,000 in damages and attorney’s fees that a Mesa County jury awarded the company in a trial in 2011.
Rippy’s family has been ranching in the area since they emigrated from Scotland just after the Civil War, and Dow Rippy is the last full-time rancher of the bunch.
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But after tangling with a gas company and losing, Rippy said he has no choice but to get out of the game for good.
SG Interests first approached Rippy about routing their Bull Mountain Pipeline through his ranch in 2004. The ranch is a hilly expanse of pasture, hayfields and oak brush that straddles the border of southern Garfield and northern Mesa counties.
The pipeline, covering a span of about 26 miles, carries gas from the company’s Bull Mountain Drilling Unit in the mountains north of Paonia to the larger Questar Pipeline, which conveys it to market in Rifle and beyond.
“When they first asked for an easement through the ranch, we told them to go around,” said Rippy, whose handlebar mustache, 10-gallon hat, and sun-cracked hands give him the look of a quintessential cowboy.
The Rippys aren’t anti-gas people, as Dow is eager to explain. The Rippy ranch was criss-crossed with pipelines owned by the Antero and Encana gas companies when Dow bought it in the late 1990s, and he claims to have dealt harmoniously with those firms.
But when Rippy expressed reservations about the new gas pipeline to SGI representatives, he claims they threatened to condemn his property unless he cooperated.
A trial transcript obtained by the Post Independent shows that the two parties signed a pipeline contract in 2007. The contract, drafted by Rippy’s attorney Nate Cheever of Grand Junction, described a 30-foot wide easement where SGI could dig, and required the company to repair damaged fences along the easement corridor.
It also stipulated that SGI would terrace slopes along the route to reduce erosion, and would pay the Rippys $110,000 as compensation for damages incurred.
One day in 2009, Rippy said, he was checking cows on his four-wheeler when he noticed an exposed section of pipe dug well outside of what he considered the easement boundary.
He demanded that workers leave his property until the matter was resolved, and relented only when SGI agreed to conduct an “as built” survey and address any problems Rippy identified when work was over.
“There was a survey conducted, and we did not feel we were in violation of our contract,” said Eric Sanford, operations and land manager for SGI, who represented the firm at trial.
“Mr. Rippy’s attorney wrote the contract,” he said. “If the agreements were more specific, some of this would have been avoided.”
Yet Rippy, who characterized the survey as “a lie,” was convinced that SGI had ignored its obligations on several counts. In the late summer of 2009, he sued SGI for trespassing and breach of contract.
At first impression, Dow Rippy appears to be a man better suited to the open range than the confines of a courtroom. The trial, which took place in Grand Junction over eight days in December of 2011, seemed to support that theory.
“This was something that should have been resolved with a handshake,” said Rippy. “The way they talk in court doesn’t fit your ears. It’s just ‘may the best liar win.'”
Cheever argued on the Rippy’s behalf that SGI had failed to replace fences and terrace slopes as laid out in their contract. He also claimed that the company had taken water from Rippy’s reservoir without authorization, and had laid the pipeline outside of the easement, on Rippy’s private property.
SGI, represented by Denver attorney Brian Tooley, denied those claims and in turn accused Rippy of costing SGI nearly half a million dollars in damages by locking workers out of his property for several days.
Sanford said, “$100,000 per day was the cost of our primary contractor at that time. That caused us to move equipment and resources around in a very inefficient way.”
Using title research done by Sanford, Tooley argued that Rippy didn’t even own the land where he thought part of the pipeline should go. And he asked jurors how changing the location of an underground pipeline could harm Rippy at all.
“Why would they want to move this pipeline?” he asked in his closing statement. “How does it benefit them?”
The threat of moving it, Tooley said, was simply intended to generate leverage for extracting a settlement payment from SGI.
“I think they portrayed my wife and me as a couple of greedy people trying to get at them, and the jury bought it,” Rippy said. The jurors awarded nearly $500,000 in damages, plus attorney’s fees, to SGI.
Despite the victory, Sanford claims the company would have preferred to avoid the lawsuit altogether.
“We are not in the lawsuit business. We are in the oil and gas business, and it was a drain on our resources, too,” he said.
Afterward, shell shocked by the verdict, the Rippys scrambled for ways to generate the cash required to pay off the gas company. They met with the Aspen Valley Land Trust about the possibility of a conservation easement, Dow said, and even considered selling the mineral rights under the ranch.
“I was trying to do anything but sell the ranch, but the problem with a judgment is they’ve got a gun against your head, and you’ve got to pay fast,” he said.
Hiring a bankruptcy lawyer, the couple reached an agreement that gave them until December of 2013 to pay damages. Nevertheless, Rippy said, he had to sell the ranch to stay afloat.
Today, Rippy has traded the sun and wind of open country for the crash of bowling pins and the click of a computer mouse. He manages the Bowlerama bowling alley in New Castle, a business he has held a minority interest in since his former construction company built it years ago.
“We’ve always had trouble making it profitable,” he said of the bowling alley. “We’ve been through a lot of managers.”
With hindsight and his hard-won knowledge about the legal process, Rippy says he would have hired a full-time supervisor to oversee the work of SGI, and asked that the company pay for it.
“You wonder, how does this kind of justice happen in America?” he said.
“You don’t expect to pay these guys almost $1 million to trespass all over you.”