South Dakota landowners hit with $1 million in liens during Keystone XL road dispute
RAPID CITY, S.D. - Brandenburg Drainage filed 23 mechanic's liens totaling $1.01 million against Meade County landowners in mid-March, leaving recipients shocked and upset.
Seven of the liens were released Wednesday, March 27, without any public explanation, after a flurry of communications during preceding days among landowners, lawyers and the three companies involved in the situation. The three companies are Brandenburg Drainage; Diamond Willow Energy in New Town, North Dakota; and TransCanada in Alberta.
TransCanada has an agreement with Meade County to improve and maintain county roads that would be subjected to truck and equipment traffic during the construction of TransCanada's proposed Keystone XL crude-oil pipeline. The controversial pipeline, which has been in pre-construction limbo because of litigation brought by its opponents, would pass through western South Dakota en route from Canada to Nebraska.
When Rod Ingalls opened his letter in early March, he “just about fainted.” When Lyle Weiss opened his, he “couldn’t believe it.” JT Vig got “fuming mad.”
“It’s a good thing they weren’t standing there,” Vig said of the letter’s senders, “because I might’ve clocked them.”
Additional landowners, all of them in rural Meade County, also got the letters.
The lien amounts ranged from $3,580.57 to $243,478.76.
TransCanada hired Diamond Willow Energy to improve segments of gravel roads near the western South Dakota map dots of Opal and Marcus, both in Meade County about 30-40 miles southwest of Faith. The roads — Maurine Road, Opal Road and Avance Road — are in the vicinity of a planned Keystone XL pump station, workforce camp and pipe yards.
Diamond Willow subcontracted the work to Brandenburg Drainage, of Maquoketa, Iowa, which performed some of the work last fall before a dispute arose between the two companies. Brandenburg Drainage claimed it was owed money by Diamond Willow.
To recover the money, Brandenburg Drainage filed mechanic’s liens against the owners of the land abutting the roads.
Mechanic’s liens are a product of state laws that date to the territorial days of the 1870s. The laws are based on an old definition of a “mechanic” as virtually any kind of skilled worker.
An example of a typical mechanic’s lien is one filed at a county courthouse after a home construction project, when a subcontractor has been stiffed by a contractor.
The subcontractor may file a lien against the home for the amount the subcontractor is owed. The lien, if legitimate, remains in place until somebody pays the subcontractor to release it. Meanwhile, the lien remains attached to the property and may complicate the owner’s efforts to sell the property or use it as collateral for a loan.
In most mechanic’s lien scenarios, the lien is placed on property owned by the person who ordered the work. The 23 liens filed by Brandenburg Drainage in Meade County are unusual because the landowners had no role in the road projects, except as bystanders.
To make matters worse, some of the landowners said the Maurine Road job was botched. Weiss said he suffered several blown semitruck tires because of inappropriate rock and gravel that was used on the road.
“It was like arrowheads in sand and river silt,” Weiss said.
JC Johnson, of Diamond Willow, said his company plans to fix the road, and he is working with an attorney on a plan to get the liens released. He said Brandenburg Drainage underbid, overspent and under-performed on the job, and is now trying to use the liens to cover its losses.
“It’s not by our doing that they’re trying this,” Johnson said. “They didn’t bid the job right and they’re losing money. It’s plain and simple.”
Brandenburg Drainage was unresponsive to a message from the Journal, and its attorney declined to answer questions.
Several of the affected landowners, including some who have granted pipeline easements to TransCanada, said they have been assured by TransCanada that the matter will be resolved quickly. Some or perhaps all of the seven liens that have already been released appear to be along sections of road that were intended to undergo construction work but never actually did, according to several landowners and others involved in the controversy.
“The landowners impacted by this unfortunate situation are our top priority,” a TransCanada statement said, in part. “TransCanada is committed to working with and keeping all impacted landowners informed as we seek a resolution to this issue.”
Frank Falen, an attorney from Cheyenne, Wyoming, who is working with some of the landowners, said if TransCanada or the landowners think the liens were filed improperly, they could take legal action against Brandenburg Drainage.
“We’re not convinced that what the subcontractor has done in this instance is appropriate,” Falen said.
The biggest lien, for nearly $244,000, is against Lyle Weiss, who happens to own the biggest stretches of land along Maurine Road.
His lien was not among the seven that were released Wednesday, and his patience was growing thin as he speculated about the potential impact of the lien on the operating note for his ranch.
"They're messing with our livelihood," Weiss said.