A local builder that had to shut down its operations — leaving dozens of houses under construction in limbo for months — is being sued by a supply company for lack of payment.
Mid Oregon Builders LLC bought nearly $80,000 worth of materials on credit and has not paid for it, according to a complaint filed on Dec. 21 in Douglas County Circuit Court. The complaint was filed by American Builders & Contractors Supply Co., Inc., which does business as ABC Supply Co., Inc.
ABC Supply Co. has locations in Portland, Beaverton and Eugene.
Mid Oregon Builders now owes more than $85,000, according to the complaint. ABC Supply Co. is also asking for attorney’s fees and court costs.
The complaint is not the only problem the company is facing.
Dave Duncan, a co-owner of Mid Oregon Builders, along with Shea Cambridge and Joseph Russi, said the company ran into financial problems dating back to this spring, when a lender cut off their line of credit due to COVID-19.
“When that happened it put us in a cash flow crunch,” Duncan said.
Because of that, Mid Oregon Builders was forced to shut down work on about three dozen houses in the area, he said.
Then in July, Russi filed for personal bankruptcy. That put a further crimp on the company’s finances, and Mid Oregon Builders lost its contractors insurance, Duncan said. Without insurance, Mid Oregon Builders had to stop work on all 85 of its houses under construction in Sutherlin, Winston and Roseburg.
“We don’t have our contractor’s insurance now. That means we can’t work, but we can’t work anyways because we can’t get any money,” Duncan said. “The moment we open up the loans we’ll get back to business, but it’s tied up right now. It’s complicated.”
Duncan said he expects Russi’s bankruptcy issue to be settled in a week or two, which will allow the company to get back to work.
Mid Oregon Builders has also run into problems with the state over its lax worker safety protocols.
The company has a history of failing to implement adequate fall protection systems and exposing workers to potentially dangerous falls, resulting in more than $100,000 in fines, according to Oregon Occupational Safety and Health Administration officials.
In October, Oregon OSHA fined the company $38,390 for multiple job safety violations, including repeatedly failing to follow the minimum requirements to protect workers from fall hazards that could injure them.
Mid Oregon Builders was issued the fine following an inspection prompted by a confidential complaint. The inspection included an examination of work activity at residential construction sites in the region; interviews of employees and a supervisor; and a review of the company’s record-keeping practices, according to OSHA.
At the time, Duncan said the company had appealed the fines and was waiting for an opportunity to explain what happened.
“We’ll just have to tell our story,” Duncan said. “It’s a new inspector and it’s our sixth violation, so he comes in with guns blazing. We’ll get an opportunity to make our presentation, but at this point, it’s the frequency that kills us.”
Duncan also said all employees receive training on the need for safety gear, but some of them resist using it.
“Construction is dangerous and it’s important that everyone wear their safety gear. But sometimes it’s a battle to get these young men to wear their safety gear,” he said.
In November, Oregon OSHA fined Mid Oregon Builders another $42,000 for more job safety violations.
That citation resulted from an inspection that found the company had exposed an employee to a potential fall of about 20 feet. The employee, who was doing a roofing job on a new house in Sutherlin, was not connected to a fall protection lifeline, according to Oregon OSHA.
From just its history of violating the 6-foot trigger height requirements, Mid Oregon Builders has incurred penalties totaling more than $120,000. Under Oregon OSHA’s rules, penalties multiply when employers commit repeat offenses.