Northern Beef Packers lien trial nearing resolution

Farm Forum

PIERRE — The trial phase concluded on May 30 in federal bankruptcy court over the claim by Scott Olson Digging Inc. that the Huron contractor is still owed $2.1 million for work done seven years ago while preparing the Northern Beef Packers site at Aberdeen.

Olson’s company did the topsoil stripping and hauled in clay fill at the site in the late fall and winter of 2006 and early 2007. Olson moved his equipment back to Huron when he thought they were done.

Olson said on May 30 that Northern Beef founder Dennis Hellwig telephoned him several times in the spring of 2007 asking that Olson return to the site.

Olson said he told Hellwig he would need $75,000 up front to get his staff and equipment back to Aberdeen. That was the same amount as Hellwig paid Olson in fall 2006 for the similar purpose.

Olson said that after his crew returned in 2007 to the project Hellwig personally approved hundreds of thousands of dollars in additional work for the contractor but was soon behind on payments.

“There was a promise every two weeks he’d get us money,” Olson testified.

He said Northern Beef officials kept telling him they had lost or didn’t receive the bills that he would send.

Olson said he finally stopped sending bills.

“Dennis just gave us lump sums until he run out of money,” Olson said. “I wasn’t getting paid. I didn’t make the invoices out.”

Lori Olson, the contractor’s wife and business manager, said Northern Beef didn’t make a payment between February and August of 2007.

Scott Olson Digging received in excess of $3.1 million for its 2006 and 2007 work. Olson submitted bills in December 2007 for an additional $3 million and then pared the amount to about $2 million.

Hellwig took the stand for a brief rebuttal on May 30 to deny he had called Olson to return in 2007. “I didn’t have any reason to have him come back,” Hellwig testified.

Hellwig also denied that he told Olson to buy sand and said Olson “absolutely” never discussed billing by the truckload for clay fill to be moved to the project site.

Olson said he was “pretty sure” he talked to Hellwig about using truckloads to determine how much fill was hauled from the pit on two neighbors’ properties next to the project site.

Harlan Young, one of the landowners, testified earlier in the trial that he had secretly rigged a camera to shoot photos every few seconds to keep track of the numbers of trucks coming out of the pit.

Young said his numbers were “pretty close” to the numbers that Olson submitted.

Federal bankruptcy Judge Charles Nail Jr. told the two sides’ lawyers they can have 14 days to submit post-trial arguments in writing and he will make his decision after receiving those.

Northern Beef operated for less than a year before shutting down last summer and declaring bankruptcy. The White Oak investment group from San Francisco subsequently purchased it. The plant remains closed.

One of the big disputes throughout the trial was whether Olson was to be paid separately for removing topsoil from the job site.

None of the four written agreements between Olson and Hellwig refer to topsoil removal.

Olson said on May 30 he didn’t know that he was supposed to perform that responsibility until after his crew was on the site in November 2006.

Francis Brink of Aberdeen, a civil engineer and land surveyor who helped Hellwig with the site’s general design, told Olson the topsoil needed to be removed, according to Olson.

Olson later billed Northern Beef specifically for that work but hasn’t been paid.

Olson’s original agreement with Hellwig called for Olson’s company to receive $900,000 for delivering 200,000 cubic yards of fill and performing a variety of small tasks.

Olson and Hellwig later signed another agreement that called for Olson to deliver another 167,000 cubic yards of fill.

The main building’s elevation was raised twice from the original specifications and the main floor eventually sat nine feet above the original terrain.

Hellwig in his rebuttal agreed that he and Olson went to look at a pile of sand but Hellwig denied he told Olson that he wanted it.

Olson said Hellwig specifically told him to purchase it.

But Hellwig described himself as a cattleman without the knowledge to make that decision.

“I would never, ever tell him to buy a big pile of sand that I don’t know nothing about,” Hellwig said.

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