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More than 117 Hideaway Hills residents file $75.5M lawsuit against state, county, developers
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More than 117 Hideaway Hills residents file $75.5M lawsuit against state, county, developers

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Blackhawk Sinkhole 20200519 (copy)

A sinkhole on East Daisy Lane in Black Hawk exposed that part of the Hideaway Hills community was built over an abandoned gypsum mine. 

Residents of a Black Hawk community dealing with forced evacuations, fear of home collapses, building damages and mysterious illnesses can blame the negligence of government and private entities, according to a $75.5 million lawsuit filed Sunday in Meade County Court. 

It’s “unbelievable” to think the state, county and everyone involved in developing the Hideaway Hills community didn’t know it was built on top of an abandoned gypsum mine, John Fitzgerald, the attorney representing more than 117 residents, said Tuesday.

More than 40 of those residents have been evacuated and dozens more are afraid their homes could collapse after an April 27 sinkhole exposed that part of the neighborhood was built over a shallow and mostly hollow gypsum mine.

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A map of the exploreable parts of the abandoned mine and the homes built on top of it on East Daisy Drive 

But the mine presents dangers beyond the risk of collapse, the lawsuit says. 

It says four streets were built on top of mine waste rock, causing “extreme sinkage” to home foundations, cracked walls and clogged sewer lines due to shifting earth. Four other streets have homes experiencing the same issues after they were built on top of tailing ponds and/or sewage lagoons.

Some residents on the four other streets have also reported “extreme and unexplainable health problems,” the lawsuit said. Several residents reported losing multiple dogs to cancer while one resident has to take numerous medications for an undiagnosed health condition.

The complaint points to a preliminary plan for the development sent to the Meade County planning board, commissioners and planning staff in 2000 that mentions the existence of an underground mine and that field boring may be needed to identify any hazardous cavities. It’s unclear if that testing ever took place. It also points to an acknowledgment of the mine that Fitzgerald said the developers shared with contractors and realtors but not with the families and the county’s Register of Deeds.

But even if there aren’t documents that show all defendants were warned about the mine in writing, Fitzgerald said, there’s no way they wouldn’t have known about it.

The old underground mine is “well known by people in the community” and everyone working on the project would have physically discovered or been told about it, Fitzgerald said.

Doug Huntrods, director of emergency management for Meade County, previously told the Journal that older people in the county knew about the mine.

The complaint contains 14 counts —most dealing with negligence, breach of warrant and failure to warn — against dozens of entities and individuals.

The defendants include the state of South Dakota, Meade County and its commissioners and the equalization director at the time the development was approved. Title, engineering and real estate companies, plus developers, engineers and lawyers who worked on the project are also being sued.

New evidence 

Everyone involved in approving and building the project was negligent to allow the use of heavy equipment and build on top of the gypsum mine since those kinds of mines are water soluble and typically built close to the surface, the complaint says. They were also negligent in not telling buyers about the “ultrahazardous” property.

The mine floor underneath Hideaway Hills is between 25-30 feet below the pavement, caver Adam Weaver previously told the Journal. But the ceiling of the mine is less than five feet below the pavement in two spots.

A new piece of evidence in the lawsuit is a disclaimer that Fitzgerald obtained from Aaron Eiesland, an attorney who represented a Hideaway Hills family in a previous lawsuit. 

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This disclaimer was shared by the developers with contractors and realtors, but not with the Meade County Register of Deeds, according to the lawsuit. 

The warning mentions that the property was previously mined underground and on the surface for gypsum, and the surface was reclaimed according to state standards. But “it will be the buyer’s responsibility to remediate any subsurface conditions that exist on the property, including but not limited to fissures or cavities that may be as a result of the mining operations,” the disclaimer says.

Eiesland told the Journal that he discovered the warning after he filed a now-settled lawsuit in 2010. The family had accused the developers and a construction company of negligently building their home given the type of soil underneath the house. 

He said an attorney drafted the disclaimer for the developers, Keith and Linda Kuchenbecker, who gave it to realtors Ronald and Vivian Sjodin — all of whom are named in Fitzgerald's lawsuit. Eiesland said the Sjodins were supposed to pass the warning onto buyers, whether they be construction companies or families. But he said the family he represented never saw the document. 

Fitzgerald said this document was never shared with families or the Register of Deeds, which would have allowed title companies and real estate agents to discover it.

“Nobody would have purchased (the land) if it had come back in the title report,” Fitzgerald said of the disclaimer. 

Lawyer, state’s roles

Doyle Estes, a Rapid City lawyer, drafted nearly all of the deeds warranting the property from developers to construction companies, the lawsuit says.

Estes, also a former assistant attorney general, did not return messages from the Journal.

After speaking with Hideaway Hills residents, Gov. Kristi Noem acknowledged during a news conference last Thursday that the state reclaimed the area after conducting surface mining in the mid-1980s.

But “the state had no knowledge at any time that this (older, underground) mine was in place, it’s not in our records,” Noem said, adding that the state drilled into the earth but never hit mine cavities.

Fitzgerald said its unlikely the state didn’t physically run into the underground mine while using heavy equipment to excavate the surface or learn about it from a community member.

And “once (the state) bought it for mining purposes, they had a duty to reclaim all of the parts of it that were used for mining purposes,” he said. 

The Department of Environment and Natural Resources did not return questions from the Journal asking about the reclamation and drilling in the mid-1980s. 

— Contact Arielle Zionts at arielle.zionts@rapidcityjournal.com

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