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Compensation hearings begin in pipeline eminent domain process

By Staff | Jul 15, 2016

Ken Anderson, center, talks with his lawyer, Mark Walz, left, cousin Cyndy Coppola, and Calhoun County Sheriff Bill Davis during the compensation hearing for Anderson’s land. The six compensation commission members visited the site in the hearing to determine how much Anderson will be paid for the easement across his land.




ROCKWELL CITY – Compensation hearings are underway in Calhoun County for eminent domain to enable the construction of a crude oil pipeline.

Rejecting the landowner’s arguments that the payment should be higher due to crop loss and a well on the property, the Compensation Commission unanimously voted to approve the appraised amount, $8,500, presented by Dakota Access LLC, for an easement on Ken Anderson’s land Tuesday.

Ken Anderson provided photos of this well, located within the construction easement for a pipeline to be constructed. The well provides water to Anderson's neighbor, even though the well is on Anderson's property, and Anderson is concerned about who will be responsible if it is damaged during construction of an oil pipeline.

Anderson said he was concerned his neighbor, who relies on the well for water to his home, could be adversely affected by the construction.

“I’m sick of Dakota Access not addressing it,” Anderson said. “Nobody cares that this guy is going to be without water if something happens.”

The neighbor was not notified by Dakota Access that the work could affect him, nor told about the proceedings, Anderson said.

Anderson’s attorney also objected to being given a document Tuesday listing $8,500 as the appraised value of the easement – a figure which the commission approved – when before an amount of $13,000 was listed.

Attorney Mark Walz, of Des Moines, accused Dakota Access’s lawyer, Brant Leonard, of being unprofessional and surprising them with new documents.

Leonard, also of Des Moines, in turn said Walz turned over information that’s inadmissible to the commission after he revealed a worksheet that showed a $98,000 offer was once on the table.

The pipeline will cross one corner of a field owned by Anderson south of Somers, near the border of Calhoun and Webster counties.

The Texas-based pipeline company was granted a permit in April by the Iowa Utilities Board, which also gave it the power of eminent domain.

This lets it obtain permanent easements, as well as temporary construction easements, from unwilling landowners.

Dakota Access will build a 30-inch diameter pipeline 346 miles across Iowa, connecting the Bakken oil fields in North Dakota with a distribution hub in Illinois. All four states involved – North Dakota, South Dakota, Iowa and Illinois – have now approved the project.

Compensation Commissions will meet in each county. The commission is made up of six people picked from a pool of landowners and real estate assessors chosen at the beginning of each year. Though the commission serves a fact-finding role similar to a jury, and attorneys for both sides present a case, there is no judge in charge of the proceedings.

Anderson said his neighbors, Homer and Lynn Martz, have had an easement to use the well on Anderson’s property since the 1980s. The well is within the construction easement.

Anderson said the connection from the well to the house could be damaged by construction.

“If they cut this line accidentally, the well is contaminated, because they’ve opened it up,” Anderson said. “Who is going to be responsible for this well if this guy is without water for a month or two?

“Who’s going to protect me from being sued if the well’s contaminated because you bumped into the well and he’s out of water for six months? Or eight months?”

Dakota Access Pipeline Project Manager Jack Edwards said the well is on the side of the easement which will be used for stacking dirt, not where heavy equipment will drive. He said a fence will be placed around the well site to avoid hitting it.

There should be no damage to the well, and the pipeline shouldn’t disturb the pipe feeding the house, Edwards said.

“It is a typical construction method,” he said. “Water lines, electric, we find them and go under them.”

The construction on that parcel should take 45 to 60 days, he said.

The two attorneys disagreed how much compensation should be paid at the start, and how much should be paid later as compensation for damages, under Iowa law.

Leonard said only land values were up for discussion Tuesday.

“I think that’s a good system, because that means this commission doesn’t have to guess about crop damage or well damage,” Leonard said.

Once construction is completed, the landowner can bring claims for damages, he said. If the landowner and Dakota Access cannot reach an agreement, the landowner must bring the claim to a commission similar to the one Tuesday.

Walz said damages should be considered at the Tuesday hearing.

Anderson said it could cost $27,000 or more to dig a new well if needed.

He also said the easement, which would cut across his field diagonally, would prevent him from farming a roughly five-acre triangle piece, leading to more crop losses.

The commission approved a payment of $8,500 for the easement, which totals 1.62 acres for the permanent easement and 3.25 acres for the temporary easement.

The price was recommended by Dakota Access.

The company hired a certified real estate appraiser to appraise the land, which was then double-checked by a second appraiser.

An earlier appraisal had shown $13,000 for the easement. Appraiser Andrew Harris, of Palestine, Texas, said that had to be changed because the law required him to remove that triangle portion from consideration.

“To comply with the statute, we’ve had to take some of those things out of there that were originally appraised,” he said.

“The reason for the number being different is now the landowner is not giving in to whatever you wanted, so now it drops by almost half,” Walz said.

“No, sir, he’s entitled to recover those damages under a separate process,” Harris said.

Harris had explained after Walz questioned why the two documents were different.

“You gave me a copy of this the other day. You unfortunately did not give me a copy of this other document you’ve used as an exhibit today, which I think is very unprofessional,” Walz said. “The appraisal has completely different figures. He said it was $13,000 in the appraisal. Here he is saying it’s $8,500.

“It’s trial by ambush, is all I’m saying, and it’s extremely unprofessional to pull materials out the morning of a proceeding like this. Even if it’s a commission rather than a court case, the same rules of courtesy between lawyers apply.”

Leonard objected when Walz handed out a worksheet he said showed prior negotiations between Anderson and the company.

The commission isn’t allowed to consider such information when making its decision.

“I would note my objection,” Leonard said. “This is not an admissible document.”

Walz said he was only sharing it to show that the company has never offered to pay for items like the well and a fence Anderson said he would have to replace.

The worksheet shows an offer of $43,807 for the right of way. With crop damages and extra adjustments, the total offer was $98,683.

The commission is specifically told not to consider these negotiations by instructions from the Iowa chief justice based on Iowa code, Leonard said.

“I suggest to you there’s a lot of reasons why settlement offers are not admissible,” he said. “The most important of which is, a settlement offer is that. It’s what we would pay if we could settle this dispute and not spend the money and not be here today. That’s not what happened.”

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