Wyoming Hitching Post Owners, Insurer Settle Suit

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An insurance company has reached a confidential settlement agreement with the company that owns The Hitching Post Inn, the landmark Cheyenne, Wyo. hotel that lost its main lodge in an arson fire a few years ago.

U.S. District Judge Nancy Freudenthal of Cheyenne approved a request this week from National Surety Corporation and CJM Hospitality, LLC, to halt action in the lawsuit until October to give them time to perform unspecified obligations in the settlement agreement.

Attempts to reach lawyers on both sides were unsuccessful Wednesday. In their joint request to Freudenthal, they stated they had reached a comprehensive settlement of their claims with the assistance of a federal magistrate judge earlier this month.

The tangled litigation between the insurance company and CJM sprang up soon after investigators pronounced arson was the cause of the September 2010 fire.

Federal prosecutors in Cheyenne eventually charged Ajay Jariwala, a New Mexico hotelier and principal in CJM and two other men in connection with the arson.

Jariwala pleaded guilty in September to conspiracy to commit arson in connection with the fire. Freudenthal sentenced him to serve six years in prison and he’s now appealing that conviction.

National Surety had sued CJM claiming it incurred substantial costs in investigating a fraudulent $13-million claim. CJM had bought the Hitching Post out of a bankruptcy proceeding shortly before the fire for $1 million.

At Jariwala’s sentencing hearing in September, lawyer Pat Murphy representing National Surety told Freudenthal that the company is out more than $1.1 million in expenses from the fire.

Freudenthal ordered Jariwala to reimburse National Surety the $50,000 the company paid immediately after the fire to CJM. She also ordered him to pay a $10,000 fine.

Less than two weeks after sentencing, Jariwala filed a notice of appeal with the 10th U.S. Circuit Court of Appeals in Denver. He has until Jan. 29 to file a brief spelling out grounds for his appeal.

Jeffrey Michael Brandt, a lawyer in Covington, Ky., who is representing Jariwala on appeal, said last month he couldn’t discuss the grounds for the appeal and couldn’t say whether Jariwala will seek to stand trial. Federal prosecutors are likely to oppose the appeal.

For many years, the Hitching Post Inn had been a thriving hotel. With a steakhouse and bar, it was home for many state lawmakers during their winter legislative sessions.

Speaking at Jariwala’s sentencing, Freudenthal told him, “It was the gateway facility to Cheyenne. Now, sadly, we have a field of weeds and a blighted environment. When it was in its heyday, we had a magnificent hotel.”