BELLE FOURCHE –– A civil dispute between two Butte County water companies may leave dozens of families living south of Belle Fourche holding the bag, and without water Wednesday.
The case is set for an emergency hearing this afternoon.
The area in question spans along the south side of Highway 34, east of Highway 85, from the Runnings corner south to the northern boarder of Hat Ranch. Then, the area east to the railroad tracks over False Bottom Creek and across the highway where Wyatt’s Campground is located. There are 130 individual meters in the area and Wyatt’s Hideaway Campground, which has 30 camp spots with water supplied.
Some residents have been notified about the potential outage, but not all.
“It’s a big area and it’s a lot of homes,” Brad Louder, with Black Hills Water Distribution, LLC, told the Pioneer Monday. “It’s probably hundreds of people.”
Louder claims that Black Hills Water is in a 99-year contract with Hay Creek Water Company, LLC.
Louder is a member of Black Hills Water, which is jointly owned by a number of his family members and operated by Tammie Brown.
He said Black Hills Water Distribution holds the rights to the water that is delivered to the area in question through a water distribution system it owns, while using water main lines owned by Hay Creek Water Company, a practice common in the water industry known as “wheeling.”
The system is comprised of two artesian wells that feed into tanks and are dispersed through the distribution system via pumps.
Keith Anderson is the operator of the Hay Creek Water Company.
Louder said that Anderson chooses to believe he is not in a contract and, although Anderson has paid Black Hills Water each month, he has allegedly not paid the full amount due, resulting in arrearages in the amount of $28,535.05 since Jan, 1, 2018, plus the amount for August, which is estimated at over $2,000, according to an affidavit filed by Black Hills Water.
Anderson declined to comment, saying he was in the process of working with his attorneys on the situation.
Louder claims Anderson won’t take his calls to work to resolve the issue and Black Hills Water felt there was no other way than to pursue a civil case against Hay Creek Water.
The majority of the customer that may be affected by the potential shutoff are customers of Hay Creek Water and pay their water bill directly to them. However, Louder said, the Sunrise Edition subdivision, located in the middle of the affected area on Ladera Circle, which pays their bills to Black Hills Water, would also be affected by the shutoff.
Louder said the company feels terrible that the situation got to this point, and doesn’t want people to be without water, but feels there is no other option.
“We’ve fulfilled our contract (to Hay Creek Water Company),” he said. “We have no recourse (to force Anderson to pay). All we want is for him to pay his bill.”
Louder said he was a teenager when the original well was drilled in the late 80s, early 90s.
Louder said it was heartbreaking Monday when he walked door-to-door in some areas where the potential outage is located and explain why they may be without water Wednesday.
“I feel horrible for these people because they pay their bill (to Anderson),” he said.
Civil case filed
On June 7, Black Hills Water Distribution filed a civil suit against Hay Creek Water Company. In the suit, Black Hills Water Distribution, LLC, is listed as the plaintiff in the suit and Hay Creek Water Company LLC, the defendant. Talbot Wieczorek, with Gunderson, Palmer, Nelson & Ashmore, a law firm, out of Rapid City, is the attorney representing Black Hills Water in the case.
According to court documents, the parties have a 99-year contract wherein Black Hills Water provides water to Hay Creek Water’s distribution system. Both parties are successors in interest to the contract with Black Hills Water Distribution being successors of Black Hills Water, and the defendant, Hay Creek Water, being the successor of Jim Emery and Sandstone Water Company.
The six-page contract, signed Aug. 24, 1994, is included as an exhibit in the civil case documentation procured by the Pioneer, is signed by James Emery, owner of Sandstone Water Company, and Joe Graf, Martha Graf, and LeRoy Brown, owners, at that time, of Black Hills Water.
Anderson later purchased the Sandstone Water Company and renamed the company Hay Creek Water. According to the S.D. Secretary of State website, Anderson filed for and received a business license for Hay Creek Water in Feb. 18, 2014.
In its complaint, dated May 29, the Black Hills Water claims that the contract established an initial rate, $2 per 1,000 gallons, charged to the Sandstone Water Company with the ability to raise the rate. The company has since raised the rate but claims that Hay Creek Water has “unilaterally” refused to pay the increased rate even though it is allowable and done pursuant to the contract, according to their claim.
On Nov. 27, 2017, Black Hills Water notified Hay Creek Water that the rate would be increased effective Jan. 1, 2018, to $4.98 per 1,000 gallons. The company subsequently raised the rate again, effective June 1, 2019, however, that documentation was not available in the court file.
In addition to refusing to pay the rate increases, in its complaint, the plaintiff claims that the defendant has continually refused to comply with state and federal requirements concerning delivery of safe drinking water, which it is obligated to do.
“Defendant has the sole and exclusive obligation to maintain its delivery and distribution system,” the complaint states. “Defendant has failed to maintain the distribution system resulting in the loss of water being delivered to Defendant’s system by Plaintiff and Plaintiff has not been compensated for this lost water.”
In July 2017, the water delivery system was running low on water and Hay Creek Water reportedly claimed that this was a result of inadequate production on behalf of Black Hills Water.
“Upon investigation, however, it turned out that Defendant was in breach of its obligations under the contract by allowing James Emery to discharge water unmetered into a stock dam for his horses,” the complaint stated. “This included simply allowing the water to leave a waterline unrestricted and flow out over Emery’s property.”
The plaintiff argues that Hay Creek Water knew, or reasonably should have know, that the activity was ongoing.
“Since the Defendant’s violation of the contract was remedied, only twice has Defendant’s system run out of water and in both cases it was the fault of the Defendant,” the complaint stated. “Defendant claims and has asserted that the Defendant will be terminating the contract pursuant to Section 13 claiming that Plaintiff’s water source is insufficient to meet Defendant’s needs and relying upon the loss of water suffered by Defendant.”
The contract also states that Sandstone Water Company, now Hay Creek Water Company, is required to take water from no other source than Black Hills Water.
Black Hills Water claims that Hay Creek Water Company’s negligence and failures to establish a right to terminate the contract is inappropriate and, therefore, in breach of the contract. Additionally, Black Hills Water claims that if Hay Creek Water Company is allowed to connect to another water system, Black Hills Water would be irreparably harmed as its location is landlocked in such a way as to limit the customers available.
Black Hills Water asked the court to: find that the defendant is in breach of the contract and award Black Hills Water damages as a result; bring a preliminary and permanent injunction preventing the defendant from using another water source to provide water to its distribution system; provide such other just and equitable relief to the extend the court may find; for Black Hills Water costs and disbursements associated with the action; and for interest in the amount as allowed by law.
On July 3, Hay Creek Water Company, represented by Kenneth Barker, of Barker Law Firm, out of Belle Fourche, filed an answer and counterclaim in the case. In its answer, Hay Creek Water Company acknowledged that Black Hills Water raised the water rates, but did so after they had advised them that the supply of water provided by Black Hills Water was inadequate. Additionally, the company denied claims that it failed to comply with state and federal laws concerning delivery of safe drinking water, asserting that it has maintained the distribution system. Hay Creek Water Company also denies that it permitted Emery to discharged unmetered water onto his property and that those actions were Emery’s alone and that when it was discovered to be happening, Hay Creek Water Company ordered Emery to stop.
Hay Creek Water Company denies that it has breached the contract; denies that it is indebted to Black Hills Water; and that if it were allowed to connect to another water system, it denies that it would irreparably harm Black Hills Water.
In its counterclaim, Hay Creek Water Company argues that Black Hills Water has been unable to supply water for the demands of Hay Creek Water Company, requiring it to seek other water sources and incur substantial expense in constructing and establishing another system and has given notice of its intent to terminate the contract because of it.
Hay Creek Water Company asked the court to dismiss Black Hills Water complaint; award a judgment finding and determining that Black Hills Water has breached the contract; find and determine that it is entitled to terminate the contract because of Black Hills Water failure to supply adequate water for the system; and find in favor against Black Hills Water in such amount as reasonable expenses incurred in locating, constructing, and establishing another system with interest.
On July 24, Black Hills Water filed an answer to Hay Creek Water Company’s counterclaim, denying the majority of the claims.
At 2:30 p.m. today, an emergency hearing has been scheduled in the civil case just ahead of the Wednesday deadline before water is cut off. Read about the outcome of that hearing in Wednesday’s Black Hills Pioneer.
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