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South Dakota Public Utilities Commission Meeting
Thursday, March 28, 2002; 3:00 P.M.
State Capitol Building, Room 412
Pierre, South Dakota
MINUTES OF THE COMMISSION MEETING
Chairman Jim Burg called the meeting to order at 3:45 P.M. Present were Commissioner Pam Nelson; Commissioner Bob Sahr; Executive Director Deb Elofson; Deputy Executive Director Sue Cichos; Commission Advisor Greg Rislov; Commission Counsels Rolayne Ailts Wiest and John J. Smith; Staff Attorney Karen Cremer; Transportation/Warehouse Division Director Bob Knadle; Staff Analyst Keith Senger; and Administrative Secretary Mary Giddings.
Joining the meeting by telephone were Diane Schurr, Sam Schauer, Jonathan Van Patten and Steve Hegge.
Warehouse
Ms. Wiest recommended that the record be reopened.
Chairman Burg moved that the Commission grant Staff's motion to reopen the record and receive into evidence the claim of Harlan Eisenbraun and the additional documentation submitted by Staff. Commissioner Sahr seconded and Commissioner Nelson concurred. Motion passed 3-0.
Chairman Burg moved that the Commission make the following recommendations to circuit court:
1) The Commission does not have jurisdiction to consider the four claims received against the bonds covering July 1, 1995, through June 30, 1998. The Commission only received permission from the Court to act as a receiver for the bonds covering July 1, 1998, through June 30, 2001. However, the Commission also notes that Commission Staff reviewed the claims for the earlier bonds and determined that none of the claims would have been valid claims under the bonds in question because the grain concerned deferred payment contracts which are not covered by the bond or the product involved did not fall under the definition of grain. If the claimants disagree with the Commission Staff's review, the Commission points out that any of these claimants may bring an action in circuit court and sue under the bond pursuant to SDCL 49-45-17;
2) The Commission disagrees with Staff's position that the claimants who entered into stock Subscription Agreements with Wheetco do not have valid claims against the bond for the amount listed in each Subscription Agreement. The Commission finds that the evidence does not support a finding that these claimants converted their grain payables into common stock. No evidence was presented that, after the parties signed the Subscription Agreement, Wheetco accepted the Agreements and actually issued common stock to the claimants;
3) The Commission also disagrees with the bonding company's argument that D & M Grain is limited to the amount of its written claim submitted prior to the hearing. The Commission finds that the evidence presented at the hearing demonstrates that company records show that D & M Grain is entitled to $1,887.33. The statute cited by the bonding company does not provide that a claim is limited to the written claim submitted prior to the hearing, especially when the evidence presented to the Commission at the hearing shows that the written claim is incorrect;
4) The Commission further disagrees with the bonding company's argument that all of the interest earned on the bonds is the property of the bonding company and must be returned to the company. The Commission finds that when the bond is not sufficient to cover 100% of the claims, the interest earned on the bond money should be distributed on a pro rata basis to the claimants. Thus, the Commission finds that for the bond periods covering July 1, 1999, through June 30, 2001, all interest earned should be distributed on a pro rata basis to the claimants. For the bond period covering July 1, 1998, through June 30, 1999, the interest earned on the bond money shall be distributed to the bonding company since the claimants received 100% of their claims for that bonding period;
5) Except for its position on the stock Subscription Agreements as stated earlier, the Commission agrees with Staff's recommendations concerning the amount of each claim and the distribution of the bond proceeds. Therefore, the Commission finds that the claims against the bond covering July 1, 1998, through June 30, 1999, should be distributed based on Staff's recommendations regarding the amount and validity of each claim, with all interest earned on that bond returned to the bonding company. For the bond covering July 1, 1999, through June 30, 2000, the Commission first finds that the claim submitted by Harlan Eisenbraun after the hearing is a valid claim. The Commission further finds that the bond money should be distributed based on Staff''s recommendations (except for its position on the stock Subscription Agreements as explained earlier) regarding the amount and validity of each claim, on a pro rata basis, including accrued interest. For the bond covering July 1, 2000, through June 30, 2001, the Commission finds that the bond money should be distributed based on Staff's recommendations regarding the amount and validity of each claim, on a pro rata basis, including accrued interest.
Commissioner Nelson seconded and Commissioner Sahr concurred. Motion passed 3-0.
Meeting adjourned.
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Mary R. Giddings
Administrative Secretary
