Fuel spill triggers lawsuit by resident

Cleanup plan in place, but owner blocks access

Ray McCarty put up a sign to bring attention to a fuel spill that he says has destroyed the value of his land. Enlarge photo

Sam Green/Cortez Journal

Ray McCarty put up a sign to bring attention to a fuel spill that he says has destroyed the value of his land.

A prolonged dispute about land contaminated by fuel at a former gas station on U.S. Highway 160 has reached an impasse.

Wild Wild Rest, between Mancos and Mesa Verde National Park, used to host motorcycle races and other entertainment events. The property also operated as a Sinclair Gas station and convenience store for many years.

But all that is gone now, and what’s left behind is a bitter feud between landowner Ray McCarty and an engineering firm hired by the former gas station operator Fraley & Co. Inc., about cleanup procedures of fuel contamination.

The frustration of living on contaminated land that has yet to be restored caused McCarty to recently install a large orange banner visible from the highway that reads: “Massive Petroleum Spill, Toxic Site.” Skull-and-crossbones graphics bracket the message. Other signs warn of benzene, a toxic petrochemical ingredient in gasoline.

“I put up the banner because nobody was paying attention, I was getting no action from anyone,” McCarty said during an interview at the site. “I feel duped, and I feel that my land and all of its value has been destroyed.”

Federal lawsuit

The details of the case are complicated and accusatory, a saga that played out during a U.S. District Court case that ended in March 2012.

The problem began seven years ago in 2006 with spillage of leftover fuel during tank removal, McCarty said.

Under state laws regulated by the Colorado Division of Oil and Public Safety, or OPS, closed gas stations must remove fuel storage tanks and infrastructure, and clean up any contaminated land.

The Sinclair station closed in 2004, and in 2006, OPS deemed Fraley & Co. the operator responsible for removing the tanks, officials said.

But according to McCarty, when the three above-ground tanks were removed, residual fuels flowed back through gas lines and spilled out onto the land.

“They didn’t shut off the valves at the pumps, and thousands of gallons flowed onto the ground,” he said.

In attempt to remedy the situation, Fraley & Co. hired engineering firm Souder, Miller & Associates Inc., or SMA, which obtained a corrective action plan from OPS regulators, according to agency officials.

McCarty says while he was away, SMA drilled test holes and installed 22 wells on the property to determine where clean up and mitigation should occur.

McCarty and his lawyer in the case, James Preston, sued SMA in federal court, arguing that the drilling was trespass because a written access agreement with the landowner was not in place.

They further sought $1.7 million in damages, claiming negligent drilling techniques made the contamination worse by causing it to drain into the aquifer and spread throughout the property.

“They drilled through the Mancos shale bedrock, and into the artesian aquifer,” McCarty said. “The spilled fuel migrating below the bedrock is poisoning my land and the water table completely.

“I can smell it in the water, on the land; the stress of it is going to give me a heart attack.”

The federal court jury had a mixed verdict. They ruled that SMA engineers did trespass because a signed access agreement was not in place, but awarded McCarty only $1 in damages.

The lawsuit was not filed against Fraley & Co. specifically. Engineering firm SMA is listed as the defendant.

Cleanup stalled

SMA disputes claims that the contamination was more widespread, and asserts it had a verbal agreement to do the testing, according to court documents. The engineers said testing wells did not exceed 40 feet and were not 70 feet deep as claimed in the lawsuit. They also challenged the existence of an artesian aquifer under the property or that there was a massive spill from fuel tanks.

Fraley referred questions to an attorney, Tim Gablehouse.

Asked whether the test drilling had been done improperly, Gablehouse responded, “The jury’s verdict speaks for itself, is all I can say,” referring to the $1 awarded in damages.

Now the cleanup has stalled, and McCarty refuses to allow SMA back onto his property to continue further cleanup. He doesn’t trust the company. It’s a situation akin to a boyfriend who crashed your car asking to drive it again, he said.

McCarty also wants to be compensated for the damage already caused to his property by SMA’s drilling that he says has caused water to migrate up from the underground aquifer and permanently damage the foundation of his buildings.

Distrust has prompted McCarty to close off access to his property for any further mitigation.

“I just don’t see any hope, so I put up the sign to raise awareness,” he said.

The stalemate puts a cleanup solution in limbo.

“The ball is in his court now; there is nothing else Fraley can do until access is granted,” Gablehouse said. “Or (McCarty) is free to submit his own corrective action plan and get someone else to do the work. It is a fairly straightforward cleanup procedure there; it’s not extraordinary.”

That lack of access is a major obstacle for a prompt cleanup, said OPS Director Mahesh Albuquerque.

“These fuel cleanups at old gas stations are 99 percent of the time completed very smoothly, and owners are happy to have it done and behind them,” he said. “But this case has been problematic because the operator and the landowner are separate parties and they are having some differences.”

McCarty would not be responsible for the cleanup, he said, because it is covered by a state reimbursement program, and involves no costs for the landowner.

“We will send him a letter explaining the program that allows cleanup to occur and defers costs, but there has to be access agreed to onto the property to break the logjam,” Albuquerque said.

Mitigation includes removal of contaminated soil, re-contouring the property and installing monitoring stations, he said. Cleanup costs were estimated to be around $200,000 for the site, according to OPS officials.

The company who does the work applies for the reimbursement, regulators said. But no application for cost recovery has been submitted as of yet.

Neighbors concerned

McCarty said he is not satisfied with the corrective cleanup plan as it stands, and he believes the contamination level is much higher than is being reported. Mitigation would involve a large drainage ditch to be installed, he said, and would cause a health hazard by directing contaminated runoff into Mud Creek, a tributary of the Mancos River, and off the property.

“The plume of contaminants has already migrated off of the property and under the highway,” said Preston, McCarty’s attorney in the case. “It has negatively impacted the water quality here as well. All of this property has been devalued, the test wells are in trespass violation, and there needs to be an agreement on damages before they could be let onto the property.”

Spilled fuel that has left the property could trigger more enforcement action from state regulators. A continued stalemate could also force the state to step in and conduct the cleanup, Albuquerque said, although a negotiated settlement with the affected parties is the primary goal.

“We will continue to work with the landowner to allow access, because that is what will allow the cleanup process to go forward,” Albuquerque said.

Neighbors were startled by the “Toxic Site” banner, and the subject was raised at Monday’s county commission meeting.

“We were scratching our heads when we saw it, wondering why would someone do that?” said neighbor Ted Ullman. “It makes me worried about health risks. There are eight to 10 families around here. There needs to be some sort of monitoring installed so people know if it is coming their way.”

Herald Staff Writer Emery Cowan contributed to this report.

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