Decade-long case piles up $1.4M in fees for Aurora Co.

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PLANKINTON — A decade-long dispute over a zoning ordinance limiting dairy cow numbers has cost Aurora County more than $1 million in legal fees.

Aurora County has paid $1,030,742.23 in expenses directly related to the lawsuit brought against it by Thompson Farms, according to Auditor Susan Urban. The cost includes attorney’s fees, expert witness fees and consulting services.

Aurora County paid another $365,638.42 to litigate another lawsuit with its insurer, the South Dakota Public Assurance Alliance, which arose from the Thompson Farms case.

After adding jury fees from two trials, the total cost of all the litigation is $1,407,358.61.

In addition to the legal costs, there was a settlement. The county settled the case earlier this year by agreeing to pay Thompson Farms $1.2 million, an amount the county will raise by issuing bonds. That amount will not be covered by insurance, because the county failed to notify its insurer of the Thompson Farms litigation in a timely fashion.

The legal expenses have already been paid for with money from the county’s general fund, Urban said in an email response to The Daily Republic.

Aurora County commissioners Pat Cranny, John Steichen and Oscar Thompson declined to comment on the matter. Calls made by The Daily Republic to commissioners Del Persson and Johnnie “Skip” Guindon were not immediately returned.

Thompson Farms, a now-defunct dairy located about three miles north of Storla, and its owners, Keith and Paul Thompson, sued the county in 2002 claiming a 1998 county zoning ordinance capping dairy cow numbers forced the dairy out of business. The Thompsons had invested money into expansion plans before the ordinance was enacted.

In 2009, a judge ruled the ordinance had forced Thompson Farms out of business, but a trial to determine the damages owed to the dairy was delayed while the county litigated a separate but related lawsuit with its insurer.

After a January trial in Mitchell, a jury found Aurora County failed to give timely notice of the Thompson Farms lawsuit to its insurer, putting the county on the hook to pay any damages assessed in the case.

Finally, after a seven-day damages trial in July in Yankton, a jury found Aurora County should pay $600,000 to Thompson Farms.

With an appeal potentially looming after the damages trial, the two sides reached a settlement in October. Aurora County agreed to pay Thompsons Farms and its owners $1.2 million to forgo appeals and end the lawsuit.

Aurora County issued bonds to pay off the settlement, and will pay those bonds off over a seven-year period, Urban said.

“As of right now, we are not planning on increasing our tax levy to pay for the bond payments,” Urban said.

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