The land company that recently gave eviction notices to more than 30 families living at Rita is suing a local business and the former owner of the property.
DB Land LLC filed a complaint in the Kanawha County Circuit Court against Empire Consulting Services LLC and Snap Creek Processing Inc. on August 21. The complaint against Empire is for failing to advise the land company not to purchase the property and against Snap Creek Processing Inc. for selling their rights under a Deed of Lease without permission of the lessors.
Empire Consulting Services LLC, whose owner and president is William K. “Kem” Abraham, provides consulting services to the mining industry, including surveying, permitting, estimates, and recommendations concerning the location, quantity and mineability coal reserves. DB Land states in the complaint that they entered into an agreement with Empire in 2009 to evaluate a possible acquisition of mineral leasehold interests from Snap Creek Processing.
DB Land alleges that Abraham met with land company officials on two occasions, providing estimates showing substantial quantities of mineable and merchantable coal in various seams, including the coal seams known as Williamson, the Upper Cedar Grove, Lower Cedar Grove, and No. 2. Gas; most notably, Empire estimated that there were more than 1.8 million tons of unmined coal in place, available to be removed by underground and highwall mining methods, in the Williamson Seam alone.
The complaint alleges that Abraham further told the land company investors ‘that he had personally walked the entire property and observed a consistent outcrop, and said to several investors, “I think you’ve got a real good project here.”’ DB Land states that it paid Empire more than $40,000 for its services.
DB Land alleges that “in reliance upon Defendant Empire’s work and advice,” they purchased the aforesaid leasehold interests from Snap Creek pursuant to an Asset Purchase Agreement and Assignments dated February 9, 2010.
DB Land states that in August 2010, DB Land conducted additional core drilling of the property to begin the DEP permitting process. “This drilling encountered a void at the elevation that Empire, through its principal, “Kem” Abraham, had represented was the unmined Williamson seam,” the complaint states. The land company stated that was when it learned that the coal reserves depicted and mining projected by Empire “were incorrect” and that much of the leasehold that they had purchased “contained seams that were mined out, virtually worthless, or not economically mineable.”
DB Land states that it would not have purchased the leasehold interests had Empire not negligently estimated and misrepresented the available mineable reserves on the Hinchman Tract and as a result of Empire’s negligence, DB Land “has suffered damages in an amount to be determined by a jury.”
The counts listed in the complaint are:
Count I — Negligent performance of consulting services by Empire
Count II — Breach of implied warranty of workmanlike performance by Empire
Count III — Misrepresentation — Empire
Count IV — Misrepresentation — Snap Creek
Count V — Breach of warranty — Snap Creek
In all counts, DB Land is asking for the amount to be determined by a jury, lawyer fees and court costs.
A Special Warranty Deed filed February 10, 2010, in the Logan County Clerk’s office, lists tracts and parcels totally approximately 2,220 acres; all the rights title and interest to any other real estate within the boundaries and all the right, title and interest to real estate owned or controlled by the estate of George Hinchman. The deed, signed by Norman T. Daniels Jr., vice president of Snap Creek Processing Inc., lists the “consideration paid for the subject property” at $1,000,000.00.