S.D. commission rules for RC,P&E in dispute over price with a Stanley County landowner

Capitol News Bureau
KELO Court Gavel

PIERRE, S.D. (KELO) — The state Transportation Commission decided Tuesday the Rapid City, Pierre & Eastern railroad can use the power of eminent domain to force access across another person’s property so heavy equipment can reach a bridge on its line through Stanley County.

The commission without discussion voted 6-1 to accept the revised findings of fact and conclusions of law that hearing officer David Gienapp of Madison proposed.

Patrick Burns, a Minneapolis lawyer, represented landowner Dena Kinsella. Burns said the railroad didn’t offer any supporting information for its $15,000 offer for approximately one acre of property.

Burns contended that the railroad made the offer the day before the submissions were due and the figure wasn’t made in good faith. ”It’s our position the railroad has acted in bad faith and not in good faith,” he said.

Burns also took issue with the hearing officer’s finding that the railroad doesn’t have access to the bridge without crossing the Kinsella property. Burns said the railroad can reach the bridge and adjacent rail via its line.

Steven Williams, one of the railroad’s attorneys from Billings, Montana, responded that the $15,000 offer was made April 7 in a letter and an email, more than two months before Burns had claimed.

“It was not a last-minute offer,” Williams said. “It was an offer before the filing was even made.”

Williams said landowner Kinsella didn’t contest that the amount was insufficient but instead wanted the railroad to pay for an unrelated matter that now is in arbitration.

Williams also said the definitions of good faith and bad faith definitions that Burns offered Tuesday don’t reflect how those terms apply in South Dakota courts or in eminent domain cases.

As for access, Williams said the railroad needed to bring in heavy equipment through the Kinsella property for the bridge repair because it couldn’t be transported across the rail.

Commissioner Rod Fouberg of Aberdeen made the motion to accept the findings and conclusions of law. The second came from commissioner Mike Vehle of Mitchell. Commissioner Kathy Zander of Pierre cast the no vote. 

Kinsella leased the property in 1987 and purchased it in 1991. Flooding on the Bad River in 2019 damaged the bridge and adjoining track. The railroad reached an agreement to build a 1,900-foot road across the Kinsella property to reach the bridge.

The railroad now wants to use eminent domain to take title to the road and an area 50 by 100 feet adjacent to the bridge. The railroad’s $15,000 offer was above the $12,000 per acre value of the land.

The railroad, during the contract dispute, shut down for three weeks between Fort Pierre and the Rapid City and Colony, Wyoming, areas. The railroad and commercial customers, such as the GCC Dakota cement plant in Rapid City and Bentonite Performance Minerals LLC, suffered losses during the interruption.

The 2019 contract between the railroad and Kinsella goes to arbitration in October.

A transcript of the hearing conducted by Gienapp is here.

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