Court to hear motion to dismiss lawsuit

Hannah Grover
Power lines cross U.S. Highway 550 on Aug. 20 on the north side of Bloomfield.

FARMINGTON – A Wednesday hearing in district court in Aztec will address the city of Farmington’s motion to dismiss a city of Bloomfield lawsuit related to the latter’s attempts to create its own electric utility.

Bloomfield sued the city of Farmington in August, alleging that Farmington had broken an agreement dating back to the 1960s that would allow Bloomfield to purchase utility infrastructure within its borders if it ever desired. In October, the city of Farmington filed a motion to dismiss the lawsuit because the city of Bloomfield did not file a motion to enforce the 1960 judgment within 14 years, as required by the statute of limitations.

Bloomfield maintains that the 1960 judgment is not subject to the statute of limitations.

Farmington City Manager Rob Mayes said in an emailed statement that the question before the court is what legal rights Bloomfield has based on a 1960 court decision known as the Culpepper Decree. If the case is not dismissed on Wednesday, it will go to trial.

The case dates back to 1944, when the North Continent Utility Corp. decided to sell its assets in the Four Corners area. The city of Farmington wanted to purchase the utility infrastructure within city limits, but North Continent would only sell the San Juan County assets as a whole. Laws at the time did not allow a municipality to own utilities outside of a five-mile radius of the city’s boundaries. Because of that, a group of residents formed a company known as Basin Light & Power Co. The city of Farmington owned the utility within city limits and a five-mile radius outside of the city limits. Basin Light & Power Co. owned the rest and operated the entire system. When the laws changed, the city of Farmington took over all those assets and, by 1959, Basin Light & Power Co. no longer existed.

The 1960 Culpepper Decree stipulated that Aztec and Bloomfield had the right to acquire the assets that belonged to Basin Light & Power Co. Within a year, Aztec decided to purchase the assets from Farmington. Bloomfield did not purchase the assets.

Bloomfield maintains that the Culpepper Decree gave it the right to acquire the utility infrastructure within its city limits at any time, while Farmington claims the decree only gave Bloomfield the right to the assets previously belonging to Basin Light & Power Co. That would be approximately three poles inside the Bloomfield city limits, according to Bloomfield Mayor Scott Eckstein.

Farmington Mayor Tommy Roberts said during a phone interview Thursday that if Bloomfield's interpretation is ruled to be correct, it would mean that Bloomfield could evaluate the economic value of assets near its city limits. And if the Farmington Electric Utility System had installed assets that Bloomfield wanted, the city of Bloomfield could annex the land and acquire the infrastructure, he said.

"That is a result that we believe is unintended," Roberts said.

Nann Winter, a lawyer representing Bloomfield, said in an emailed statement that if Bloomfield annexed land, it would be required to pay Farmington for the infrastructure acquired through the annexation. She said the Culpepper Decree requires the two cities to come to an agreement on the price of those assets, and if the cities could not come to an agreement, then a court would make that decision.

In a meeting Thursday at The Daily Times, Winter cited Aztec's multiple annexations and subsequent acquisitions of electric utility infrastructure as evidence that Farmington acknowledges Aztec's right to acquire the assets.

Roberts said when Aztec has annexed land, Farmington has agreed to sell Aztec the utility assets within the new city boundaries because it made sense rather than because of the Culpepper Decree.

Bloomfield also points to previous franchise agreements with the city of Farmington it says supports its interpretation of the Culpepper Decree.

In her emailed statement, Winter said the last franchise agreement states that the city of Bloomfield has the right to acquire the utility system within its boundaries at any time and that the agreement references the Culpepper Decree. The franchise agreements lay out the fee that Farmington pays Bloomfield twice a year. During the Thursday meeting, Winter compared the franchise fees to rent paid for rights of way needed to operate the utility within Bloomfield's city limits.

Roberts acknowledged the agreements, which have all expired, but he said the franchise agreements reaffirm the rights to acquire the utility "pursuant to the Culpepper Decree."

Because the two cities have such different interpretations of the Culpepper Decree, Roberts said Farmington officials knew the issue would have to be resolved through a court decision.

"We couldn't come to any pre-litigation agreement," he said.

Hannah Grover covers Aztec and Bloomfield, as well as general news, for The Daily Times. She can be reached at 505-564-4652.