GRANDVIEW WINS LAWSUIT AGAINST KANSAS OIL COMPANY

On October 15, a jury rejected a Kansas Oil Company’s claims that the City of Grandview owed it $5.6 million in Jackson County Circuit Court.

JTC Oil, Inc., of Osawatomie, Kansas, filed a lawsuit against the City of Grandview, represented by City Attorney Joe Gall and attorneys with Humphrey, Farrington, & McClain, alleging it had the right to drill 71 oil wells right outside people’s homes.

A 12-member jury unanimously disagreed with the oil company’s view. 

According to testimony at trial, a dairy farmer granted Town Oil the right to drill and produce oil and gas from his property in 1986. Over time, the farm was split up and sold to several other property owners who built homes. Throughout Town Oil’s 27-year-old lease, it had drilled only a few wells which produced less than a barrel of oil a day.

In 2013, JTC Oil’s President, Tom Cain purchased the oil lease from Town Oil for just $65,000. According to trial testimony, Cain believed the oil and gas lease was worth millions. The court was shown evidence JTC intended to drill an additional 71 oil wells across Grandview residents’ properties.

Testimony revealed that Cain did no research to find out about the City’s oil regulations or if anyone lived on that property before making his plans for a Texas-style oil field. The City’s lead attorney Kenneth B. McClain said Cain’s only research was a quick drive-by.

“It was clear to anyone with eyes that there were homes out there and a quick call to the City would have shown the property’s zoning had rules on drilling new wells,” McClain said. 

The City’s Zoning Ordinance required companies looking to drill new wells to submit applications which then had to be approved by the Grandview Board of Alderman. Cain applied and was ultimately denied. 

Testimony from City officials revealed Grandview’s ordinances required JTC’s wells to be at least 165 feet from each landowner’s property lines and have the landowners’ consent. JTC’s applications failed to meet either of these requirements.

A month after JTC’s applications were denied, Cain filed a lawsuit against the City claiming Grandview’s denial deprived JTC of its property worth $5.6 million. City Attorney Joe Gall said based on JTC and Cain’s actions, it seemed like a lawsuit was always the endgame.

“We did everything we could to assist JTC through the process and give them a fair hearing,” said Gall. “We told their attorney repeatedly, your plan is too big, it doesn’t comply with the ordinances, but they didn’t listen – it was like JTC was trying to get its applications denied.”

McClain agreed and said the whole thing had the hallmarks of a scam.

“In my opinion, this was a set-up,” says McClain, “Once oil prices tanked in 2015, it was easier to extract millions from the City than oil from the ground.”  

After hearing all the evidence the jury found that the City’s actions did not take JTC’s property and awarded it $0.

“Grandview did the right thing fighting for its residents against JTC and because of it families won’t wake up a year from now living in the middle of an oil field,” said Kenneth B. McClain. “I’m honored to represent the City of Grandview in that endeavor.”

The trial was held in Circuit Court of Jackson County, Missouri with the Honorable S. Margene Burnett presiding.

The City was represented by Kenneth McClain, Colin W. McClain, Timothy J. Kingsbury from Humphrey, Farrington & McClain and Joseph Gall, the Grandview City Attorney.