The court has thrown out a lawsuit asking Rapid City to pay damages after a city water pipe broke and flooded businesses on Haines Avenue in 2016. The judge said the notice of damage claim wasn’t made within the period required by South Dakota law.
Seventh Circuit Judge Jeff Connolly dismissed the Pennington County case on Feb. 5, about four months after it was filed by Le Mars Insurance Company, the insurer of Clothes Mentor, a clothing store at Haines Station Shopping Center.
Le Mars, based in Iowa, said it wanted to recover from the city government $19,000, which it paid the clothing business for product damage from the flood. The insurance company based its claim on a legal doctrine in which an individual is assumed to have been negligent because the person had exclusive control over the incident that caused the injury or damages.
The City of Rapid City owns and manages the water system that supplies water throughout the city, and it was responsible for the water lines and water that caused the damage to the clothing store, Le Mars’ complaint states.
“Justice therefore demands the City of Rapid City be liable for the damage caused by the water main break,” the insurance company said in a subsequent court document.
Le Mars said timing didn’t bar it from making a claim.
Two other businesses at Haines Station Shopping Center — Dana Rapid City LLC and Mai Lee’s Threading and Beauty Salon — filed claims with the city within the necessary 180-day period. Those served as written notices that the shopping center building, which included Clothing Mentor, suffered property damage from the broken underground water pipe.
The 12-inch pipe burst around 1:30 a.m. Jan. 27, pouring millions of gallons of water through the intersection of Haines Avenue and Disk Drive, the Journal had reported.
It caused severe road damage that disrupted traffic in the area, as well as left businesses and thousands of homes without water for several hours.
A water reservoir connected to the pipe lost about 1.5 million gallons during the leak, said the city’s water authorities, who believed the main-line rupture was due to a mechanical problem.
The City of Rapid City responded to the Le Mars lawsuit by asking the 7th Circuit Court to dismiss the case, saying the insurance company itself didn’t make a claim notice till after the deadline. The city said also that the lawsuit wasn’t based on an appropriate legal basis.
The insurance company’s lawyer, Jonathan McCoy, declined to comment when asked if it would appeal the ruling.
Dana Rapid City LLC, which owns Haines Station Shopping Center, was reimbursed by the city costs for cleanup, according to court records. The amount was unclear, but the shopping center estimated the cost of repairs from the flooding at $17,000.
The company’s co-owner, Jim Stanek, declined to say if any of the money had been given to the shopping center tenants.
Mai Ozbirn, owner of Mai Lee’s Threading and Beauty Salon, said her insurance company refused to pay the $20,000 in damages she incurred from the flood.
Her city claim form listed damage to “floor, cabinets, supplies.”
Ozbirn wanted to file a lawsuit against the city to recover some of her expenses, but said she couldn’t find a Rapid City lawyer to take her case. She spoke to at least four local lawyers, Ozbirn said, but no one wanted to go against the city government.
Ozbirn said she used her savings to repair her store and has given up on receiving any compensation from the City of Rapid City.