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DAYTON–Columbia Pulp I, LLC, which announced February 11 that operations at its innovative straw-pulp plant near Lyons Ferry would go "idle" on February 18, was handed a $758,490 default judgment in Columbia County Superior Court on December 16, 2021.
Questions concerning the circumstances that lead or contributed to the two contractors not receiving payment, and why Columbia Pulp I, LLC (CPI) did not appear or have an attorney appear in answer to the lawsuit were not responded to by Interim CEO Terry Ryan.
According to court records, construction contractor DKB, Inc. of Pasco, and electrical contractor Power City Electric, Inc. of Spokane, filed a lawsuit in December, 2020, seeking a lien foreclosure, and alleging breach of contract and unjust enrichment due to unpaid compensation for their services and materials. A third company was named as a defendant in the lawsuit, however, its lien documentation was not "perfected" in the required time and its claim was dismissed.
Columbia Pulp I, LLC failed to appear, plead or otherwise respond to DKB Inc.'s complaint and Power City's crossclaim, court documents indicate. At an October 21, 2021 hearing on the matter, the judgment debtor did not appear in person or by counsel.
Superior Court Judge Brooke J. Burns ordered the sale of Columbia Pulp I, LLC's real property at 1351 Highway 261, Dayton, Wash., through a Sheriff's Sale. The legal notice pertaining to the ordered Sheriff's Sale begins publication this week in the Dayton Chronicle.
The Dayton Chronicle directed several questions to Interim CEO Ryan, including the question of the company's immediate plans. "As it relates to the foreclosure questions, we don't normally respond to legal matters," Ryan replied in an email. "However, we would note that we continue to work with our primary senior secured creditors on options for the business going forward."
When the company announced plans to idle production in February, they estimated approximately 80 employees at the Dayton headquarters and Starbuck-area plant would be affected. "The Company continues to maintain a staff at its Lyons Ferry site, and we expect to maintain our Dayton office," Ryan said this week. "With our current staff levels, we anticipate continuing to manufacture products used in customer trials in an effort to develop alternative fiber grades in this market while we evaluate our strategic options."
Ryan stated that CPI has no plans to exit the Port of Garfield facility in Pomeroy. "We will continue to evaluate opportunities to support our customers with that space," Ryan said.
Columbia Pulp I, LLC's responsibility for unprocessed straw or obligations to companies or individuals in Columbia County and neighboring counties who sell straw to the pulp plant were touched on by Ryan. "In light of our current production levels," he replied, "we may or may not opt to sell our wheat straw material. This is based on the needs of the facility, the harvest year of the straw and the market dynamic of wheat straw demand."
From the proceeds of the sale, DKB, Inc. is to receive $660,200.21 in the principal judgement amount, $8,010 in attorney's fees, $1,995.84 for costs, for a total of $670,206.05. Post-judgment interest was ordered to be 12% on the Principal Judgment and a like percentage on Attorney's Fees and Costs. DKB, Inc., is represented by Spokane attorney John H. Guin.
Power City Electric, Inc., is to receive $70,193.30 in principal judgment, $13,760.18 in interest to the date of judgment, $3,964.50 in attorney's fees and $366.94 in costs, for a total of $88,284.92. Richard D. Campbell of Campbell & Bissell, PLLC of Spokane represented Power City Electric.
DKB, Inc., recorded a Claim of Lien on April 24, 2020, the last day services, labor, materials and supplies were furnished to Columbia Pulp I, LLC. In its suit filed later in December, 2020, DKB, Inc. asserted that Columbia Pulp I, LLC breached its contractual obligations by failing to pay for work performed, and that CPI was allegedly unjustly enriched by the "fruits of DKB's services, labor and materials without fully compensating" DKB, Inc.
Pacific Civil & Infrastructure, Inc., of Tacoma was also named in court documents as recording a lien against CPI on November 23, 2020, but Pacific Civil & Infrastructure did not perfect its claim in the required time and its lien no longer bound the property.
Proceeds of the Sheriff's Sale shall be distributed on a pro rata basis to DKB and Power City until Power City's total judgment is satisfied, the court ordered. After that, remaining proceeds shall be remitted to DKB until its total judgment is satisfied. Any deficiency in remittances shall remain as a judgment against CPI, the court document indicated.
Power City and Pacific Civil were both listed as defendants in initial court filings. Power City filed a cross claim.
The court document also named John Does 1-10 as defendants.
The company's corporate offices are located at 115 E. Main Street in Dayton, and also leases property from the Port of Garfield where small-scale processing equipment is housed.
