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Refinery settles lawsuit with firm
| Monday, Jan 7 2008 10:45 PM
Last Updated: Monday, Jan 7 2008 10:49 PM
A legal settlement was reached last week between owners of the Flying J refinery and an engineering firm that claimed it was owed $3 million for work it performed at the Rosedale Highway facility.
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Irvine-based Applied Utility Systems recorded a lien against the refinery property in September, alleging the refinery hadn't fully paid for air pollution controls the company installed on refining equipment. In November, Applied Utility Systems filed a lawsuit to have a judge validate the lien and issue a judgment against the refinery.
The refinery is owned and operated by Big West of California, a subsidiary of Ogden, Utah-based fuel distributor Flying J. The facility is commonly referred to as the Flying J refinery.
Several subcontractors who supplied materials and labor for the project also sued Applied Utility Systems and Big West seeking payment for materials and labor supplied for the project.
The settlement covered all parties' claims, said Applied Utility Systems' attorney Timothy Pierce. Neither Pierce nor a refinery official specified settlement details.
Of the lawsuit, refinery Health, Safety and Environmental Director Bill Chadick said only that "there was a dispute over the terms of an engineering contract that (Applied Utility Systems) was supposed to fulfill."
Under California law, a contractor that has performed work but not been paid for it can file what's known as a mechanic's lien, a claim on the value of the property. If a judge determines the lien is valid, the contractor could potentially ask to be paid by foreclosure of the property.
Mechanic's liens are common but Pierce said foreclosure rarely occurs because the company being sued usually pays up by that point.