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6. Filing two separate lawsuits against WFC and DRMS on August 23, 2010 demanding in <br />each case payment of $5,134,365 for such alleged damage, for a total combined demand <br />of $10,268,730 (Complaint against WFC attached as Exhibit 7 hereto). <br />WFC responded to the Morgan comment letters on July 2, 2010. DRMS issued a finding that it had <br />good cause for its actions under the Colorado regulatory program on April 23, 2010. OSM reached a <br />determination at the Denver Field Office that the Ten -Day Notice of Violation was not warranted <br />because no violation had occurred on May 5, 2010, and OSM responded to the request for informal <br />review of that decision on June 9, 2010. On September 10, 2010, WFC filed a Motion to Dismiss the <br />Morgan lawsuit in the District Court for Montrose County on the grounds, among others, that the Court <br />lacks jurisdiction until the regulatory agencies have completed their review and reached a final decision <br />concerning the alleged violations of the Colorado regulatory program. <br />WFC's Attempts to Negotiate with the Morgan Family <br />As can be seen from the above chronology, the Morgans did not raise the issue of compensation for past <br />soil resource issues until August of 2010. When they did, these demands were unreasonable and <br />freighted with the threat of immediate litigation, so that WFC had little if any opportunity to negotiate <br />them before the Morgans filed their lawsuit. The parties' primary discussions have concerned activities <br />to be undertaken in future under PR -06, and those discussions, perhaps surprisingly, have resulted in <br />agreement as to all substantive issues relating to such future activities. <br />WFC has completed the following activities in attempts to resolve its dispute with the Morgans, <br />including issues relating to past soil resource management: <br />1. WFC agreed in 2008 with TR57 to treat the remaining topsoil on the Morgan Property as two lift <br />prime farmland soil. Through both TR57 and PR 05, WFC has implemented Prime Farmland <br />requirements on the Morgan Property since 2008, even though these permit actions were not <br />formally approved until 2009. The Morgans were involved in this revision by direct <br />communication with us and they also communicated directly with the NRCS. They did not <br />protest either revision. <br />2. On January 15, 2010 WFC sent correspondence to the Morgan family offering a proposal "to <br />settle the dispute between Mr. & Mrs. Frank Morgan and WFC regarding the manner in which <br />the Post Mine Reclamation and revegetation of the Morgans' land will be carried out." This <br />proposal included converting all the lands within the permit boundary to "Irrigated Alfalfa Crop <br />land" except for lands within a road right of way. Other offers included payment for soil <br />preparation and irrigation of the Property. Letter attached as Exhibit 8 hereto. During this time, <br />WFC was afraid to commit to full irrigation of the Morgan land when it was clear in the lease <br />that the amount of water (50 shares) allocated to WFC was not enough to irrigate the property <br />and still get bond release. <br />3. On April 19, 2010, WFC agreed to irrigate the entire Morgan Property, as requested, using up to <br />62 shares of CCC water (or more if deemed necessary and provided by the Morgans). See, <br />Letter Agreement between Frank Morgan, Mary Lou Morgan, Mike Morgan (as Lessors) and <br />WFC (as Lessee) dated April 19, 2010, attached hereto as Exhibit 9 . Once this agreement was <br />made, PR -06 could now be completed to reflect the accurate reclamation of the Morgan land. <br />