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FARMINGTON — The family and wife of Sherman Edward Dugan settled their dispute earlier this month over the distribution of the deceased oilman's estate.

The parties in the dispute filed a joint motion on May 14 to dismiss the lawsuit brought last spring by Sherman Dugan's wife, Sally Dugan.

Sally Dugan filed a petition May 14, 2014, asking that a district court judge find that she is entitled to a community property interest in her late husband's estate, which would include part-ownership of Dugan Production Corp., despite her signing a prenuptial agreement when they married.

Sally Dugan claimed in an amended petition filed in October that her husband's son, Sean Dugan, had conspired with his grandfather, Tom Dugan, to hide assets that belonged to the estate and ignored amendments she and Sherman Dugan made to the prenuptial agreement.

She estimated the estate was worth at least $50 million and potentially hundreds of millions of dollars more than that.

Sean Dugan and his grandfather denied the claims, and Sean Dugan countersued, according to court filings.

Sean Dugan, the personal representative for Sherman Dugan's estate, argued in court filings that Sally Dugan was only guaranteed $1 million of Sherman Dugan's wealth.

According to the will, Sherman Dugan's interest in the family oil company was to be allocated to his children: 75 percent to Sean Dugan and 25 percent to his daughter, Megan Dugan.

The lawsuit was set to go to trial in November, but was dismissed with prejudice by Judge Daylene Marsh on May 18 as a result of the joint motion.

Albuquerque attorney Karl Roepke represented Sally Dugan in the matter.

He said Thursday that a settlement was reached by the parties through court-ordered mediation, but the attorneys are barred from discussing it.

"The terms of the settlement are confidential," he said.

A spokeswoman for Tom Dugan's attorney, Charles Peifer, also of Albuquerque, said Peifer had no comment on the matter.

Attorney Bill Chappell, also of Albuquerque, represented Sean Dugan in the lawsuit.

"The personal representative of the estate arrived at something that was acceptable to him," Chappell said, but the confidentiality agreement barred him from saying more about the settlement.

Dugan Production Corp. employs 150 people and controls about 1,000 wells in the area. It is one of the largest independent natural gas producers in the San Juan Basin.

Sherman Dugan died on Dec. 21, 2013, from complications related to diabetes, according to court records. He was 59.

Steve Garrison covers crime and courts for The Daily Times. He can be reached at 505-564-4644 and stgarrison@daily-times.com. Follow him on Twitter @SteveGarrisonDT on Twitter.

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