Shiloh III Wind Power Project Litigation

Prevailing winds from the Sacramento River Delta have made Solano County, CA a focus for renewable energy companies, which have been developing wind turbine projects there since the early 2000s. The companies have entered into agreements with local landowners to install wind turbine generators on their properties as well as the underground electrical collection and transmission lines needed to transport generated electricity to market.

DIII Properties, LLC is a Rio Vista business owned by Duncan McCormack III, whose family has been ranching in Solano County for over 100 years.  In 2011, DIII entered into an easement agreement with multinational energy giant EDF Renewable Energy Inc. to permit the installation of three high-voltage electrical collection lines in an approximate 30-foot corridor in the southern portion of his property.  The installed lines would transmit electricity generated by EDF’s Shiloh III Wind Power Project.

After the construction was complete, EDF approached DIII with a new easement agreement that nearly doubled the agreed-upon width and granted EDF expanded rights as to the use of the corridor, but did not provide for any additional compensation. EDF’s apparent need for a wider easement alerted Mr. McCormack to the possibility that the lines might not have been installed per the agreement. Despite repeated requests for information, Mr. McCormack was unable to get clear answers on where the collection lines had been installed on the property.

After several months, it became clear to Mr. McCormack that he would need to apply legal pressure to EDF in order to get his questions answered, and he hired Adrian Webber and Steve Saxton from Downey Brand to do it.  A complaint was filed in October of 2012.  Shortly after the complaint was filed, EDF disclosed that the lines had indeed been installed outside the agreed-upon easement area, but denied that any trespass was committed. Rather, EDF attempted to reinterpret the parties’ original easement agreement to excuse the out of bounds installation. EDF continued to deny DIII’s claim that EDF trespassed on the property throughout the legal proceedings.

Finally, after almost 6 years of hard-fought litigation and a two-week trial, the court determined that a trespass had been committed when the collection lines were installed outside of the agreed-upon corridor. Not only that, the court determined that EDF knew that the collection lines would need to be installed in an area greater than the 30-foot corridor before the original agreement was signed, and did not share this information with Mr. McCormack and DIII Properties. The court found EDF liable not only for trespass but also fraud by entering into an agreement it knew that it was going to violate.  Finally, the court found that EDF acted in bad faith, breaching California’s implied covenant of good faith and fair dealing.

EDF was required to compensate DIII Properties for the encroachment and was also required to reimburse DIII for attorneys’ fees and costs, all of which came to a grand total of $1,850,477.62.  Today, Duncan McCormack can be confident about the location of the high-voltage collection lines and is able to protect his family, property, and business appropriately.

Steven P. Saxton

Of Counsel

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