'All hell broke loose': Contractor has numerous judgments against him that have not been paid

A court ruling judgment against defendant Black Hills Construction LLC.

A collection of court documents, photographs, contract agreements, building permits and text messages provided to the Journal about work involving Black Hills Construction LLC.

A collection of court documents, photographs, contract agreements, building permits and text messages provided to the Journal about work involving Black Hills Construction LLC.

A collection of court documents, photographs, contract agreements, building permits, text messages provided to the Journal about work involving Black Hills Construction LLC.

A collection of court documents, photographs, contract agreements, building permits, text messages provided to the Journal about work involving Black Hills Construction LLC.

A collection of court documents, photographs, contract agreements, building permits, text messages provided to the Journal about work involving Black Hills Construction LLC.

The siding of Kenneth Giesbrecht's home.

Kenneth Giesbrecht took emergency days off of work to enclose the rest of his house after a contractor left him and his wife freezing during winter.

"We had nothing to protect us, he took all the insulation out and just shred it and threw it up in the attic," Giesbrecht said. "It was maybe 30 degrees, the heater was blowing wide open. … I had to leave work and come home. One night my wife was just panic stricken."

He said he got insulation and placed it between the two-by-fours in the uncovered wall. Giesbrecht said he called the contractor one or two more times. He said the contractor told him there was one day's work left but it was going to cost him more on top of the already paid $27,890 — after he didn't show, Giesbrecht hired four contractors to complete the work. It took about a month and an additional $27,000.

"He really stuck it to me," Giesbrecht said.

The roof of Kenneth Giesbrecht's home in the winter following work from Black Hills Construction in summer 2021.

Giesbrecht and his wife were out of their savings after hiring Black Hills Construction and working with Bernard "Bernie" Haag. Giesbrecht said Haag made the low bid of about $40,000 on his kitchen remodel and expansion on their Rapid Valley home.

It wasn't until Giesbrecht filed, and won, a small claims court case against Haag that he discovered he was not the only victim.

According to South Dakota court records, Haag has 33 court cases containing his name, 12 of which are associated with Black Hills Construction and 27 of which are small claims filings. One of the cases is a simple assault criminal case against Haag. According to court documents, Haag pushed Giesbrecht in the Pennington County Courthouse. Giesbrecht, his wife and five sheriff's deputies are witnesses.

According to federal court records, Haag was convicted of failure to withhold, properly account for and pay over tax; and concealment of bankruptcy assets in regards to a daycare business in Piedmont which was operated by Haag's companies Big Dog Industries and Concept Development. According to the Factual Basis Statement, he failed to pay taxes on employees’ wages between 2005 and 2011, as well as 2012. In 2016, Haag was ordered to serve 18 months in custody with three years of supervised release, pay $230,854.85 in restitution to the IRS, pay $70,000 to bankruptcy creditors and $100 to the victims fund for both counts, which ran concurrently.

Giesbrecht won his small claims case against Haag — a Pennington County judge ruled that Haag was to pay Giesbrecht $12,095 June 13. Giesbrecht said he has not received the money he is owed, which according to court documents and a former Black Hills Construction client is not out of the ordinary for Haag.

Rapid Valley remodel

Giesbrecht and his wife live in a 2,400-square-foot home. Giesbrecht said he wanted to retire in a couple years and wanted to downsize.

"This is just too much for my wife, so I thought well, if we build this kitchen… and I put a lot of money (into it), I figured I’d get that back when I sell the house," he said.

In 2020 Giesbrecht redid his fence, tried his hand at landscaping and rock work, and put gates on the fence.

For the kitchen, though, he would need a contractor. He advertised on Home Advisory and that's when he was introduced to Haag and Black Hills Construction.

Giesbrecht said the two talked about the project. He wanted to push the wall out by 10 feet and have wraparound countertops.

"He said, ‘Yeah, we can do that, no problem,’" Giesbrecht said.

According to the contract between Giesbrecht and Haag effective Oct. 23, 2020, the contractor agreed to provide materials and labors, prep the ground for new foundation, excavate the area for footing and foundation walls, all foundations would be built to meet code, re-bar and concrete to code, use the same floor joist as the existing floor, exterior walls to match the existing structure, siding to be used would be a textured hardy board type siding and painted to match the existing structure, insulation would be std R-19 batts in walls and R-19 in the ceiling, rafters, shingles would be matched as close as possible, an $8,500 allowance for the cabinets including counter top and new sink and faucet, flooring allowance at $1.70 per square foot, all permits included and more.

The total came to $39,950.10 after a 10% military discount. The contract also stated once the crew started, it would be 4-8 weeks, give or take, to order material, but no exact time date or time would be given to complete it.

Giesbrecht gave Haag a 10% down payment of $4,000 on Oct. 22, 2020, with intentions to start the project spring 2021.

"He never showed, never showed, never showed," he said. "Finally I called him and I said, ‘You can't just take my $4,000 and walk,’ which he can do. He's done it before."

Haag responded and had a crew out the next day. Giesbrecht said they carried rocks in and out, and then it became about when Haag was getting paid.

The Giesbrechts then paid Black Hills Construction April 14 and 29; May 10, 18, 25 and 31; June 15 and Aug. 2 to total $31,433.74.

Giesbrecht said he and his wife found a $745 discrepancy in their payments, which he said Haag told him was a mathematical error and took it off of his next payment. Giesbrecht requested everything be invoiced: the number of hours and the parts.

"He wouldn't do it. ‘I just I don't do that, I’ve never done that,’" he said. "That right there to me is a con, but he had the back of my house. I was kind of at his mercy at that point. I didn't have a lot of choice."

On May 24, a representative with Pennington County came to the house stating they had been notified there was an addition to the house without a building permit being issued. On June 2, the Giesbrechts received their first notice from the Pennington County Planning Department stating the same.

"That's when all hell broke loose," Giesbrecht said. "The building inspectors came and they said cease and desist. You cannot build anymore."

According to texts between Giesbrecht and Haag, Haag responded stating to let Giesbrecht's wife know he would swing by and pick up a copy of the permit as the county did not mail it out. On June 4, Haag sent a photo of the building permit purchased. On June 14, Giesbrecht texted Haag that someone else from the county showed up at the house and had Giesbrecht's wife pay $93 for a fine for not having the building permit. Haag said the money would be taken out of the payment as a deduction.

Texts also reflect that the kitchen was scheduled to be completed by the end of July and the Giesbrechts needed to purchase cabinets. Haag followed up and said July is a proposed date. June 27, Giesbrecht asked if the project would be completed by the time the cabinets arrived — Haag said the project should "be way finished" by the delivery date.

Giesbrecht then asked about material for the outside of the house. Texts from mid-July between Giesbrecht and Haag state the price kept increasing for the project and went $6,000 over the original bid.

A July 20 text states Giesbrecht had paid Haag $27,890 plus the $8,500 allowance for cabinets leaving $3,560 owed, but the flooring had not been completed and old material was being used which was a violation of the contract.

Haag said with the cost of everything, they would not be able to finish the project unless a change order was signed.

Giesbrecht said he tried to cancel the job in March before Black Hills Construction got started.

Haag said they needed to work on the drywall flooring and had the installation ready as well as the labor.

"It's not a large amount but it is an additional cost which I’m sorry I have to do that," he said in the text.

Giesbrecht said in a text that he received an invoice that stated the crew could finish the job for $4,500. Giesbrecht said if that was correct, he could pay it. Haag said they could once the last invoice was paid and a change order was signed. He then said he could pick up the last payment.

On Aug. 17, Giesbrecht asked Haag if they were going to work on the house more before the cabinets arrived. Haag said there wasn't enough for a full day's work.

The next texts are from September when Giesbrecht asked what Haag and the crew was going to do with the roofing that was left. He said there was a lot of work left to do but no one had been working on it. He asked if the gas line and electrical could be completed in one day. Haag replied that it could.

"I don't wanna run in electrical till we make sure we got the cabinets there cause it's crucial we put the boxes same with the gas line," Haag said in his text.

Giesbrecht told the Journal and the Pennington County Sheriff's Office that there was no further communication after that.

Texts between Kenneth Giesbrecht and Bernard Haag of Black Hills Construction.

With each portion of the house, Giesbrecht was charged more than anticipated. He said he was charged $1,500 for one window.

Giesbrecht said there was a large coil of wire, electrical boxes set up but not working, a door out of square that couldn't be latched, a piece of plywood for a window and no insulation. Instead of galvanized steel in the ground, it was two-by-fours, there were metal nails exposed on the flashing, an eyebrow of a trim from the roof still sits on the wall facing the street.

According to the Pennington County Sheriff's Office report completed in 2022, an officer interviewed three people — Giesbrecht, a former Black Hills Construction client who told the Journal they did not want to be named out of fear of retaliation from Haag, and Haag.

The officer said in his report that he spoke with Haag on March 7. He wrote that Haag said he was almost done with the project in summer 2021 and had put in the foundation, and was not able to get the roof flashed or put the shingles on.

The officer wrote Haag told him Giesbrecht was unhappy because the crew stopped work waiting on the cabinets.

Haag's history

Black Hills Construction isn't the first business in Haag's name.

He previously was the agent for Haag Construction Inc., which had its ID canceled in 2000, and Haag Construction that was filed in 2012 and dissolved in 2018. He was the agent for Big Dog Industries Inc., which filed in 2004 but dissolved in 2018.

According to initial filing paperwork with the South Dakota Secretary of State's office, Haag was listed as the agent for Concept Development in 2008. It is now in good standing with the agent Marshal B. Haag.

According to the South Dakota Secretary of State, Black Hills Construction initially filed for its LLC name in 2013 and is in good standing. Haag is also listed as the president of the company.

Black Hills Construction had one of its first court cases filed against it in 2018 for work Black Hills Construction bid on in 2014 in Spearfish.

According to court records, the plaintiff and Haag entered into a contract where the plaintiff agreed to pay for supplies and labor necessary for renovation and roofing. The bid was for $29,879.56. Under the contract, work was to be completed within 45-60 days. The plans were approved by the city of Spearfish and work began on the property.

According to the complaint, the plaintiff discovered Haag did not have a contractor's license in Spearfish nor did he have a building permit. Construction resumed between November 2014 and February 2015, but not to the agreed upon standards.

The plaintiff attempted to sue Haag in civil court for breach of contract, breach of implied warranty and negligence. According to court records, there was an order for staying proceedings pending arbitration in 2018. The case was later dismissed with prejudice in 2022.

A separate case filed in 2018 in Campbell, Wyoming, and filed in Meade County in 2021, included a judgment against Haag and Black Hills Construction stating both owed a couple $25,000, plus pre-judgment interest at the statutory rate of 7% per year from June 15, 2018 to Oct. 17, 2018, plus post judgment interest at the statutory rate of 10% per year from Oct. 17, 2018, and the reasonable costs of collection including attorney's fees. A writ of execution occurred Feb. 4, 2022.

In a Pennington County small claims case, a couple stated Black Hills Construction took funds from the plaintiff and did not complete the job or provide "agreed upon services or materials." According to documents, the couple paid Haag $7,400 out of the entire project of $15,370 for a bathroom remodel. The couple reported that the tub that was brought in was the wrong size and didn't include the features that had been discussed. A new tub was supposed to be ordered and the wrong one sent back, but court documents state that never occurred.

"The construction company requested (additional) funds to cover the new tub and the owners had already paid over $7,400 towards the project and didn't think any (additional) needed to be paid at that time," documents state. The couple requested $4,989.40 in small claims.

The judge ruled in favor of the couple. According to court records, a return of execution was not satisfied against Black Hills Construction July 30, 2020.

In a separate Pennington County 2020 small claims case, a couple requested $1,415.50 from Black Hills Construction after failure to complete a remodeling project and refusal to return a deposit. The judge ruled in favor of the couple with a judgment total of $1,415.50. The couple, who asked not to be named out of fear of retaliation, told the Journal they have not received the money.

Giesbrecht and Haag

After Giesbrecht won his small claims case against Haag, he said Haag pushed him in the courtroom. Giesbrecht said he told sheriff's deputies in the courthouse and Haag was charged with simple assault.

According to court documents, Haag pleaded guilty to the crime and was sentenced to 360 days in jail with 300 days suspended. He was also eligible for work release with conditions including attending and completing anger management classes and providing proof of completion to the court.

In a phone call with the Journal this week, Haag said it would not benefit him to explain it to anyone.

"It seems like contractors are always wrong, it doesn't even pay to go to court," he said.

Haag said Giesbrecht slandered him and that Black Hills Construction completed the project.

"We didn't just leave him sitting high and dry like he's claiming, but when you start talking irrational, I’m sorry, there's just no way of fixing it," he said.

Haag said the company would not admit to anything and that his company has been in its line of work for a long time.

"We’ve been trying our damnedest to keep everybody happy and stuff, but once in a while you run into clients that just think they should be getting a Cadillac for a Chevy price," he said. "Any time the contractor goes to court, 99% of the time he loses because the judge has to award them what they’re asking for. You talk to any contractor out there, that's where they end up."

Haag told the Journal he would not be willing to discuss the matter further.

— Contact Siandhara Bonnet at [email protected] —

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