Outcome of hearing for Step Back Inn owners on alleged confidentiality violation sealed, Tweeti and Linn Blancett faced sanctions for revealing settlement amount

Outcome of hearing for Step Back Inn owners on alleged confidentiality violation sealed, Tweeti and Linn Blancett faced sanctions for revealing settlement amount by James Fenton, November 23, 2012, The Daily Times
Court documents that could reveal the outcome of a motion hearing to determine whether Tweeti and Linn Blancett would be punished for publicly revealing the amount of a settlement with Western Refining over gasoline that allegedly leaked onto their property have been sealed by state District Court Judge Daylene Marsh. The Daily Times received no response from phone messages, faxes and emails sent to the judge requesting an explanation for the action. When a Daily Times reporter appeared at the court in person to ask for records of the motion hearing, the only new documents were in two envelopes marked “sealed.”

Tweeti Blancett shared a copy of the settlement agreement — which included the amount, $425,000 — with The Daily Times last month. Oil company attorneys said that was a breach of the terms of the confidentiality agreement and asked for sanctions against the Blancetts. When Blancett provided the copy, she said she had not given it her final approval. She said her lawyer had signed the agreement but she had not. She said she did not want to release the company from responsibility for cleaning up the contamination. Because of that, Blancett said, she did not believe she was bound by the agreement. The agreement contained a “Covenant of Nondisclosure” and a section titled “No Admission of Liability.”

“The Defendants expressly deny any liability, responsibility, or culpability for any and all of the Plaintiff’s claims,” the agreement states. And it releases the company from all “claims for negligence, nuisance, and trespass.” In a section titled, “Disclosure to Subsequent Buyer of Property,” the agreement states that the Blancetts will inform prospective buyers “that all claims in the Litigation and any potential claim related to environmental damage to the Property have been settled and released and that there are no further claims made or which could be made against the Released Parties…”

For years, the couple fought Dial Oil Company — and now Western Refining, the company that bought the gas station across from the Blancett’s Step Back Inn — over what they say is underground pollution. The Blancetts argue that as early as 1992, the station’s tanks leaked gasoline into the ground, which spread under the road to their property. The New Mexico Environment Department did a partial cleanup of the seeping gasoline, which was documented by an engineer hired by the Blancetts.

The hearing before Marsh last week in New Mexico’s Eleventh Judicial District Court centered on whether a settlement agreement had been reached. Michael Newell, who previously represented the Blancetts in the case, appeared as a witness and was questioned by Steven Murphy who represented the Blancetts at this month’s hearing. “It was my understanding that the terms (covered by) the confidentiality agreement were the amount of the settlement and the terms of the settlement,” Newell said. “It’s my understanding that the amount was something that everybody would keep confidential, and it would generally be known that the matter was settled for a confidential amount. But it’s almost like a car wreck or an oil field accident — the Blancetts were still free to talk about what happened so long as they didn’t discuss the settlement.”

A mediation conference on Sept. 13 in Albuquerque between the Blancetts and Dial Oil culminated in the term sheet signed by both parties that Tweeti Blancett later disputed as being a binding settlement agreement. Newell said he believed the agreement was final. Murphy also contested the defense’s insistence that Stuart Faith, the environmental engineer who tested and analyzed the gas leaks for a decade, could also be required to keep the settlement terms confidential. “You want to talk about bullying practices. Here it is,” Murphy said. “I don’t know (how) you can tell someone else to keep their mouth shut and then enforce it. They want to go further than just the amount. In every settlement agreement I’ve been part of, it’s the amount that is confidential. But they want to put a gag on Mrs. Blancett and any other party, even the employees of the law office. I’m not sure how you can do that.”

Murphy said the settlement tries to impose unreasonable restrictions on the Blancetts’ heirs or future owners of the property. “They want silence and then they want people that buy this in the future, they want to buy their silence, and I don’t think my clients have an obligation to do that. … And how can they be liable sometime in the future for some person who purchases this property to be bound by the terms of this and keep their mouths shut? I know they want this quiet, but that’s not what they bargained for.”

Murphy also said neither he nor his client had knowledge of the contents of “other pages” referenced in the settlement, which apparently included additional restrictions. When asked by the judge and Murphy about the contents of those pages, Charles Vigil, attorney for the defendants, provided no further details. “Obviously there’s not a meeting of the minds on the terms of the settlement,” Murphy said, “then there is no settlement.” The company attorneys said the Blancetts should face punitive damages for breaching the terms of the settlement. “She (Tweeti Blancett) breached it — it’s undisputed, it’s out there,” Vigil said. “I think she ought to be sanctioned for that and the sanction should be fees and costs for my clients … to prepare for this hearing and attend this hearing.”

Judge Marsh concluded the hearing with the promise to deliver a judgment, but she sealed the documents that appear to include the outcome. [Emphasis added]

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