Spencer Quarries files $48,000 lawsuit

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SPENCER -- Spencer Quarries has filed a lawsuit seeking more than $48,000 in allegedly unpaid fees from the prime contractor on a state railroad rehabilitation project between Mitchell and Chamberlain.

In a complaint filed Monday, Spencer Quarries says Kanza Construction -- a Topeka, Kan., based construction company -- has not paid $48,213.98 owed to Spencer Quarries for materials supplied and work performed between Aug. 9, 2011, and Nov. 9, 2012, on a project to repair and improve a rail line between Mitchell and Chamberlain.

The $28 million rail rehab project was completed late last year through a combination of a $16 million federal grant, state funds, investment by Dakota Southern Railroad and other sources. The state railroad board has leased the route, known as the MRC line, to Dakota Southern.

Spencer Quarries has filed a corporate lien with the South Dakota Department of Transportation -- also a defendant in the lawsuit -- and claims that Spencer Quarries “properly brings this action to enforce its lien against (Kanza Construction) from the public funds held by the DOT.”

Spencer Quarries then requests a court order that $48,213.98 plus interest the company claims it is owed be paid out of public funds held by the DOT, the complaint says.

Another company, Guest Plumbing, Heating & A/C, has filed a cross claim, which states it provided Kanza Construction with portable toilets, supplies and services for the rail rehab project at a cost of $1,924.13, which Kanza Construction has allegedly failed to pay.

Guest is also named as a defendant in Spencer Quarries’ complaint.

Guest, like Spencer Quarries, has filed a lien against Kanza Construction for the unpaid fees, court documents say, but still hasn’t received payments.

The state DOT is also named as a defendant in Guest’s cross claim, but says “no claim is made against the (DOT) other than the (DOT) continue to withhold an amount sufficient to satisfy (Guest’s) lien.”

In the DOT’s answers to the Spencer Quarries complaint and Guest’s cross claim, the DOT says it has withheld more than $50,000 from contract payments on the rail rehab project as a result of both companies’ liens. However, in both cases, the DOT says “it is without sufficient information to admit or deny the validity” of the liens, or to judge whether either company is entitled to public funds.

Kanza Construction has yet to file a response to any of the allegations.

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