Sand and Gravel Property Inverse Condemnation Litigation, Colorado

In 2002, Trevor Ellis was retained by La Plata County, Colorado, as a mineral property appraiser expert for appraisal and testimony pertaining to the mineral property value diminishment due to the inverse condemnation (regulatory taking) of the major portion of an operating sand and gravel property in Southwest Colorado. That portion of the property had been rezoned by the county into an environmentally protective river corridor that disallowed mining.

The owner-operator of the mining property, Animas Valley Sand and Gravel (AVSG), had litigated the claim through a number of courts and appealed to the Colorado Supreme Court. The Supreme Court remanded the case to the Colorado District Court with specific instructions as to how the value of the taking should be determined.

For its new appraisal of the mineral property value taken, AVSG retained a Certified Minerals Appraiser who was widely regarded as being the leading aggregates industry appraiser in North America. He had testified in court in close to 200 aggregates and industrial minerals cases. La Plata County retained Mr. Ellis, who had only conducted a few aggregates industry appraisals and never before testified in court in an aggregates case.

At the opening of the10-day trial, the attorney for AVSG submitted to the court that their minerals appraiser had dramatically modified its ultimate mine plan from that applied in his appraisal report, to one with a mine pit outline, slopes, and depth, that closely resembled what Trevor Ellis had applied in his appraisal report. This modification significantly reduced the takings value claimed by AVSG.

Mr. Ellis argued that there was negligible market for the large majority of material that could be mined from the river island that was the subject property of the regulatory taking. This was because he had found the island was mainly composed of silt and fine grained sand, rather than gravel and coarser sand sought by the regional market. The opinion he presented was that the value of the regulatory taking was zero. The court awarded no damages to AVSG.