Jury awards Abengoa $48.4 million in lawsuit over 2006 mistake

By Holly Jessen | July 20, 2011

In 2006, a mistake by Chicago Title Insurance Co. caused Abengoa Bioenergy to put on hold plans to build a second ethanol plant in Colwich, Kan., and build instead in Madison, Ill. Abengoa says it cost the company $48.4 million because the Colwich plant would have been producing ethanol sooner and cost less to build. On July 14, a jury agreed with Abengoa and issued a $48.4 million judgment against Chicago Title for breach of contract.

It started when Abengoa was working to get the plant site in Colwich rezoned so it could build a 100 MMgy ethanol plant next to the 25 MMgy plant already there. The company hired Chicago Title to find out which property owners were legally required to be notified before a rezoning by the city of Colwich. However, seven property owners were left off the list, Abengoa said.

As a result, some of the property owners sued Colwich, alleging that the city failed to properly consider and award the zoning request, said Chris Standlee, executive vice president of Abengoa. The city ultimately won that case in April, when the Kansas Supreme Court let an earlier decision by the Kansas Court of Appeals stand.

However, in the time the case was moving slowly through the court system, Abengoa put their plans to build in Colwich on hold. As a result, Abengoa instead elected to build the ethanol plant in Madison, which is sometimes also referred to as the Granite City, Ill., plant. Preliminary construction began in late 2009, a difficult economic time for the ethanol industry.

With the necessary zoning change to build in Colwich confirmed by the courts, Abengoa is still considering building a second plant at that location. However, there are no specific plans to break ground at this time.

Chicago Title did not respond to a request for comment.