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No lease, no basis for suit, county argues

February 15, 2012
By TOM GIAMBRONI - Staff Writer , Morning Journal News

LISBON - Colum-biana County commissioners have officially advised the judge they never signed a natural gas lease that is the basis for a lawsuit filed by the city of East Liverpool.

Commissioners acknowledged the letter of intent they approved has since expired without the board ever actually signing any lease, according to documents filed last week in county Common Pleas Court.

The filing was in response to a lawsuit filed in November by East Liverpool laying claim to any revenue the county receives from entering into a gas lease with Chesapeake Energy. The lease money and future royalties are being sought to help satisfy the $4.8 million judgment owed East Liverpool by the Buckeye Water District as a result of the city's successful breach-of-contract lawsuit against the BWD.

Commissioners are also on the hook for the judgment because the county is a co-defendant in the breach-of-contract lawsuit for having once operated the water district that later became the BWD in the 1990s. The contract to purchase water from East Liverpool was inherited by the BWD when it was formed.

On Aug. 3, commissioners approved a letter of intent to lease 568 acres of county property to an agent for Chesapeake, with the county scheduled to receive $2,700 per acre and 17.5 percent royalties. This was followed by East Liverpool's lawsuit laying claim to the money to satisfy the BWD judgment.

But two weeks ago during a commission meeting, Commissioner Mike Halleck revealed the letter of intent was only binding for 30 days and it had since expired without the commissioners ever signing the actual lease agreement.

In the court filing from last week, commissioners pointed out that the letter of intent had expired. "The letter of intent is not a binding contract between the parties thereto and no funds are due from or to anyone thereunder," wrote Assistant County Prosecutor Tad Herold.

For this reason and others cited in the county's response, Herold requested Judge Scott Washam dismiss East Liverpool's lawsuit.



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