Brant Lake Sanitary District asks Supreme Court to overturn $1.5 million verdict

A judge who oversaw a lawsuit between the Brant Lake Sanitary District and an ex-contractor erred on two rulings and two jury instructions, a lawyer for the district argued at the South Dakota Supreme Court on Wednesday.

Those errors led to a jury verdict of more than $1.5 million against the district, attorney Elizabeth Hertz told the justices in arguing the verdict should be reversed.

The district is appealing the verdict, which was rendered after 45 minutes of deliberation last year, capping a nine-day trial in Madison. Following the verdict, the district asked Judge Patrick Pardy for a new trial, but Pardy refused. The district then appealed to the Supreme Court.

Excel Underground, a Sioux Falls excavating company, won a contract in 2012 to install the sanitary sewer system to about 230 properties on the scenic lake 35 miles northwest of Sioux Falls. But after problems occurred, the district fired Excel and made a claim on its bond.

During the trial, Dan Brendtro, a lawyer representing Excel, convinced the jury that Excel wasn’t to blame for flaws in the system. Instead, the blame rested with the project engineer and the district.

More:On eve of appeal, Brant Lake Sanitary District loses insurance case

The stakes are high for homeowners in the district, some of whom didn’t even know about the lawsuit until after the jury verdict. District board members said last year that the district doesn’t have the money to pay the verdict, which with interest is more than $2 million. Last week, in a separate lawsuit, a federal judge ruled that the district’s insurer was not obligated to pay for the district’s appeal or some of the damages awarded by the jury.

If it loses the appeal, the district might have to issue a bond, which would allow it to pay the verdict over the course of many years.

Included in the $1.5 million award was $800,000 in lost profits because Excel was unable to secure additional work after the district put a claim on its bond. Hertz argued that the jury shouldn’t have awarded money for lost profits because it had no way to

“It doesn’t matter what you call them, your honor, speculative damages are still speculative damages,” she said.

But Brendtro argued the jury relied on economic studies to make its determination, and that the district’s claim on Excel’s bond was still in place, costing it business and lost profits. The company had to sell equipment and borrow money in order to remain in business.

The court could issue a decision by this spring.