DB Land sues Empire Consulting for breach of contract

By Kyla Asbury | Sep 18, 2012

CHARLESTON -- DB Land, LLC is suing Empire Consulting Services, LLC for breach of contract.

CHARLESTON -- DB Land, LLC is suing Empire Consulting Services, LLC for breach of contract.

Snap Creek Processing, Inc., is also named as a defendant in the suit.

Beginning in 2009, Empire agreed to perform consulting services for DB Land to assist DB in evaluating a possible acquisition of mineral leasehold interests from Snap Creek in property located in Logan County, according to a complaint filed Aug. 21 in Kanawha Circuit Court.

DB claims in connection with the work, Empire agreed to provide information on the location and quantity of mineral coal reserves in various seams in a tract known as the Hinchman Tract.

In the fall of 2009, Empire produced a series of maps purporting to show reserves in various seams on the Hinchman Tract, along with mining projections and an estimate of tonnage that could economically be mined by underground and surface mining methods, according to the suit.

DB claims Empire provided estimates showing substantial quantities of mineable and merchantable coal in various seams, including coal seams known as Williamson, the Upper Cedar Grove, Lower Cedar Grove and No. 2 Gas and 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 plaintiff paid Empire more than $40,000 for its services and in reliance upon Empire's work and advice, purchased the leasehold interests from Snap Creek pursuant to an Asset Purchase Agreement and Assignments on Feb. 9, 2010, according to the suit.

DB claims unknown to it, Empire performed its services negligently, ignoring inconsistencies in its own work and failing to verify its work against other available information, which would have revealed that Empire's conclusions and estimates were "wildly overstated and incorrect and that the mining projections presented...would not have been achievable using currently known mining methods."

The negligent and shoddy work performed by Empire included mis-correlating coal seams; misidentifying the Upper Cedar Grove coal seam and the Williamson seam; providing mine projections for seams and areas that available data showed were not mineable; failing to obtain and consider reasonably available data and ignoring conflicting data; failing to follow appropriate methodology in calculating recoverable tonnages; and failing to advise DB not to purchase the Hinchman tract, according to the suit.

DB claims it suffered damages because of the defendants' negligence.

Snap Creek warranted that it was the sublessor under the sublease, which breached its warranty with DB because the sublease was invalid due to Snap Creek's failure to obtain the consent of Pardee Minerals to the sublease, according to the suit.

DB Land is seeking compensatory damages. It is being represented by Rudolph L. Di Trapano, Joshua Barrett, Elizabeth G. Kavitz and Mary L. Wolff.

The case has been assigned to Circuit Judge Louis H. Bloom.

Kanawha Circuit Court case number: 12-C-1678

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