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Stephon B. Bagne

Member, Clark Hill PLC

Phone: (313) 965-8897

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Stephon B. Bagne’s expertise in representing property owners in condemnation cases is widely recognized. Stephon has represented all types of property owners in a variety of situations including vacant and improved property, partial and total takings, easement and fee acquisitions, involving commercial and residential properties. He has won jury trials in courts throughout the State of Michigan and successfully defended those verdicts before the Michigan Court of Appeals. Stephon has prevailed in challenges of the necessity of takings and negotiated less onerous acquisitions in partial taking matters. He regularly speaks and writes about eminent domain and other real estate law issues for a variety of professional organizations. For a more complete bio, please click here.

 

 

 

 

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Thursday
Apr052018

Nexus Seeking Dewatering Agreements

When acquiring permanent easements, Nexus apparently did not analyze how it would dewater the trench and is requesting that owners sign supplemental agreements with little to no consideration.

I have communicated with a number of clients who I represented when Nexus Gas Transmission acquired pipeline easements. After agreeing to those easements, Nexus is asking some of my clients to sign new Dewatering Agreements.

I have compared a sample Dewatering Agreement to the Grant of Easement that I negotiated. I see no reason for owners to sign the Dewatering Agreement for a number of reasons.

The Dewatering Agreement creates a defined term for “Property.” Property is the entire property, not just the easement. The Agreement allows Nexus to engage in dewatering “on the Property.” That means that their dewatering activity could be anywhere on the entire property and the water could get pumped anywhere.

In exchange, Nexus appears to be offering $1,000. But the offer could be illusory. The $1,000 Dewatering Payment is paid only if the dewatering structure is outside the Easement Area. I am not sure of the equipment that would be used, but I think it is a logical assumption that the dewatering equipment would need to be in or adjacent to the trench where the pipeline is being built. Therefore, it would be in the easement. If that is the case, there would be no $1,000 payment.

There is a crop damage payment of $800 per acre outside the easement. I do not know if $800 per acre is equal to, more than, or less than the damage that could be suffered. The Agreement puts the burden on the property owner to “demonstrate in writing” that damage occurred. The equivalent paragraph in the easement that I negotiated creates a direct obligation on Nexus to pay for crop damage that occurs after the initial construction. Nexus “shall pay Grantor the fair market value for any and all damages to… growing crops” and “cultivated land.” Thus, the Dewatering Agreement applies a worse standard for owners than the easement. While Nexus has paid for crop damage relating to the initial construction, it has no right to go anywhere outside the permanent and temporary easements. The same analysis applies to the Per Acre Property Damage Payment in the Dewatering Agreement.

I see no reason to sign this Agreement, as written. Why would owners allow Nexus to pump water outside the easement in exchange for them having to demonstrate that they suffered damages as opposed to avoiding the damage in the first place?

If you have any questions about the pipeline or other eminent domain issues, please feel free to contact me.

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