The City of Craig lost its last-ditch effort to have the disputed Estey-Simpson property lawsuit dismissed.
Judges in the 10th Circuit Court of Appeals ruled Friday to deny a request made by the city to reconsider its earlier ruling in favor of attorney Glen E. Stinson, who sued the city over the property.
"We exercised our right to appeal," City Attorney Sherman Romney said. "When you appeal, your chances aren't that good."
The Tenth Circuit Court of Appeals ruled Christmas Eve to overturn a Federal District Court ruling in favor of the city. The Federal Court ruled the city was right in denying a contract to sell the 500-acre parcel to Stinson and dismissed the case. Stinson appealed the decision to the court of appeals and the Federal Court ruling was overturned. The appeals court ruled a contract signed by former Craig Mayor Bob Quillen selling the property to Stinson is not void because state statute doesn't require the city to sell property by ordinance only.
In 1981, the city purchased a 500-acre site north of Hayden for $500,000. The property was to be used to build a reservoir to ensure future water storage for the city. Officials later learned regulatory changes made building a reservoir financially unfeasible.
In July 1997, the city opened bids for sale of the property. The sale was awarded to Stinson for $176,000 more than a $300,000 loss to the city. Quillen signed a contract for the sale of the property and City Council passed an ordinance on its first reading approving the sale. On its second reading, several Craig residents protested the sale and Council voted against the ordinance.
Stinson sued the city Nov. 6, 1997, for breach of contract contending that, according to the city charter, Council did not need to pass an ordinance to sell the property. Attorneys for the city argued the sale was only valid if an ordinance was passed or by a vote of the people.
The court of appeals ruling was the last chance the city had to end the lawsuit by having it dismissed unless the city attempts to have the U.S. Supreme Court look at the case.
"We've exhausted remedies at the court of appeals and chosen not to appeal to the U.S. Supreme Court," Romney said.
The case is now in Federal District Court where Judge Richard Matsch will consider what direction to take.
The status of the case is the same as if the Federal District Court had ruled to dismiss the lawsuit when it was first presented. The decision on how to proceed is now in Matsch's hands. Romney believes the judge will schedule a hearing to discuss how to proceed. The city has not come to a decision on the future of the lawsuit, but there is a possibility it may go to trial, Romney said.
"We're still looking at options and figuring out where to go from here," he said.
Stinson's attorney, Jim Kilroy, was not available for comment.