Former Scurry County Chief Appraiser Larry Crooks will have to answer questions from the attorney for four Scurry County taxing entities claiming Kinder Morgan mineral values were underappraised.
On Wednesday, District Judge Ernie B. Armstrong signed an order allowing Brent Lemon to take a deposition with Crooks on Jan. 21 at the appraisal district office. Lemon represents Scurry County, Snyder ISD, Western Texas College and the Scurry County Hospital District.
Lemon has also asked Armstrong to allow him to take depositions from Thomas Y. Pickett and Company President Stephen Campbell and a representative from Kinder Morgan with the “most knowledge of representation” of the company’s appraisals.
Armstrong did not order those depositions as part of his ruling.
Armstrong also set a hearing for 9:30 a.m. Feb. 15 in his courtroom to hear the appraisal district’s and Kinder Morgan’s plea to jurisdiction of the case.
Both the appraisal district and Kinder Morgan have argued in court filings that the courts are not the proper venue for the case. Kinder Morgan’s attorneys have written and said in court hearings that Lemon and the entities are stating fraud occurred in valuing the company’s property. Since the Appraisal Review Board did not hear those claims in June during a hearing to re-appraise the values, the action should not be brought to district court because the board did not rule on a fraud claim.
Armstrong wrote that if that plea is denied, he would then hold a hearing on Lemon’s motion to the timeliness of Kinder Morgan’s motion to dismiss.
Lemon said Kinder Morgan did not file the paperwork for its motion in a timely manner. The original discovery petition was filed on Aug. 29 and, according to Lemon, Kinder Morgan had 60 days to file a motion to dismiss. It did so on Dec. 17, which was 110 days after the original filing.
If that motion is overruled, Armstrong wrote that he would hear Lemon’s request for discovery.
Lemon is requesting communications and emails exchanged between the appraisal district, Pickett and Kinder Morgan from 2013-18, specifically between Crooks and Kinder Morgan’s Walter Knight.
He also requested Kinder Morgan appraisals from 2013-18 prepared by Pickett and the working papers prepared by Pickett for those appraisals.
In August, Lemon’s original discovery petition requested all data used to set the mineral values for the years in question. Those figures include gross oil production, net revenue interest, net oil production, starting gross oil price, escalation rate, oil price, gross income, operating expense details, severance taxes, net income, discount factor and discounted cash flow. The updated petition requested the same information.
Lemon’s services will be at no cost to the entities unless future settlements are reached in the matter. If that occurs, Lemon will receive 20 percent of any settlement. It was later revealed that U.S. Consults, LLC, would also receive 20 percent of any settlements reached in the lawsuits.
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