Port Authority seeks hearing date in suit against Stinger

After more than two years of legal wrangling, there’s still no end in sight for a lawsuit between the Lincoln County Port Authority and Stinger Welding.

At issue are ownership of the nearly nine acres of land on which Stinger built a 100,000-square-foot construction facility in 2010-2011, along with ownership of seven industrial cranes used at the plant.

Stinger built bridges at the facility for a time before the death of Chief Executive Officer Carl Douglas in December 2012. The company closed the Libby plant in early 2013 and subsequently declared bankruptcy.

Bad blood between the Port Authority and Stinger preceded the company founder’s death. Alleging breach of contract and unfair dealings, the Port Authority filed suit in October 2012 in an attempt to void the transfer of the deed for the property. A second suit, since consolidated with the first, was filed in November 2013 after Stinger began removing the cranes from the facility.

Legal documents in the case now fill 14 files in the Lincoln County Courthouse, while the industrial building in Libby remains empty and the cranes sit unused at the site of Stinger’s parent corporation in Arizona.

With no timeframe for a decision, the continuing uncertainty complicates the management of the Libby industrial park, said Port Authority Director Tina Oliphant.

“As it stands now, we’re unable to pursue collaboration or appropriate planning to attract industry to that building space,” Oliphant said.

The combined case is now in the hands of the district court judge to hear the dispute. Both suits were initially heard by Judge James Wheelis in Libby, but at the request of Stinger’s attorneys judges from outside the area were substituted. Judge Loren Tucker of Dillon was called upon for the first suit, and Judge James Manley of Polson for the second.

Following consolidation in late 2013, retired Judge Douglas Harkin of Missoula took over.

Under the initial agreement for development of the site, reached in 2009, Stinger was to finance construction of a building on land leased from the Port Authority, and the Port Authority would then purchase the finished building and lease it back to Stinger. When Stinger failed to obtain financing for the project, the Port Authority advanced $3.4 million for construction.

In 2011 Stinger received a $17 million financing package through the federal New Market Tax Credits program, which makes funding available to investors in projects aimed at revitalizing low-income areas.

According to the suit filed by the Port Authority, Stinger falsely claimed that the financing plan required the company to hold title to the property underlying its facility, and the title was conveyed to Stinger for $186,000.

The port authority is also seeking the return of the cranes, valued at $1.4 million, based on the argument that they were purchased by Lincoln County using grant money obtained for the project. Stinger’s attorneys counter that the company was always the intended owner of the cranes.

Through several court filings in late 2013 and early 2014, the Port Authority tried but failed to prevent Stinger from removing the cranes from the site. The court gave the company approval to remove the cranes after posting bond last January.

Stinger’s attorneys recently asked Harkin to schedule a conference to review various outstanding motions in the case and to discuss issues including the Port Authority’s request for the return of the cranes. The judge instead issued an order last month directing the legal counsel for both sides to discuss the issues on their own and attempt to reach agreement on a timeline for resolution. If consensus could not be reached, Harkin gave both sides a deadline of Dec. 5 to submit their own proposed schedules.

Stinger submitted its proposal last week, setting June 30, 2015, for completion of the discovery process and Aug. 3 of that year for the exchange of all exhibits and witness lists. A trial date would remain to be determined.

In another filing last week, Port Authority attorney Allan Payne noted that the two sides had been unable to reach agreement on a schedule but declined to submit his own proposal. Instead, Payne asked Harkin to set a date for oral arguments on the Port Authority’s previously submitted motions for summary judgment on the ownership of the building site and the cranes.

A decision by the judge on those motions would do more to bring disputed issues into focus than would a scheduling order, “which serves only to perpetuate the hopeless delays this case has endured,” Payne wrote.