United States District Court, D. Oregon
WEST LINN PAPER COMPANY; COLUMBIA RIVER LOGISTICS, INC.; and 6200605 CANADA, INC., Plaintiffs,
ALBERTA-PACIFIC FOREST INDUSTRIES, INC.; CANFOR PULP AND PAPER SALES, LTD.; CARGILL, INC.; MERUBENI AMERICA CORPORATION; and RESOLUTE FP, INC., Defendants. CANFOR PULP AND PAPER SALES LTD., Third-Party Plaintiff,
WELLS FARGO BANK, N.A., and BELGRAVIA PULP HOLDINGS, INC., Third-Party Defendants.
M. VANLEUVEN NICHOLAS A. KAMPARS BLAKE J. ROBINSON DAVIS
WRIGHT TREMAINE LLP ATTORNEYS FOR PLAINTIFF WEST LINN PAPER
COMPANY AND COLUMBIA RIVER LOGISTICS, INC.
J. SCHLEICHER JASON M. AYRES, ROBERT J. KEACH LINDSAY
ZAHRADKA MILNE ADAM R. PRESCOTT BERNSTEIN, SHUR, SAWYER &
NELSON, P.A. ATTORNEYS FOR PLAINTIFF 6200605 CANADA, INC.,
AND THIRD-PARTY DEFENDANT BELGRAVIA PULP HOLDINGS, INC.
CLIFFORD S. DAVIDSON SUSSMAN SHANK, LLP ATTORNEYS FOR
DEFENDANT ALBERTA-PACIFIC FOREST INDUSTRIES, INC.
T. COX, KEITH Y. BOYD ATTORNEYS FOR DEFENDANT/THIRD-PARTY
PLAINTIFF CANFOR PULP AND PAPER SALES, LTD.
OPINION AND ORDER
J. BROWN UNITED STATES SENIOR DISTRICT JUDGE
matter comes before the Court on the Motion (#70) for Summary
Judgment and Revised Motion (#108) for Summary Judgment filed
by Plaintiff 6200605 Canada, Inc. (605 Canada) and the
Cross-Motion (#79) for Summary Judgment filed by Defendant
Canfor Pulp and Paper Sales, Ltd.
and Defendant Alberta-Pacific Forest Industries, Inc.
(Al-Pac) settled their dispute before the Court's
resolution of 605 Canada's Motion, and, therefore, the
Court DENIES as moot that part of 605
Canada's Motion against Al-Pac.
reasons that follow, the Court DENIES 605
Canada's Motion against Canfor and GRANTS in
part and DENIES in part
Canfor's Cross-Motion against 605 Canada.
following facts are taken from the Joint Statements of
Undisputed Material Facts (#100, #101) and the materials
submitted by the parties regarding the Motions and are
undisputed unless otherwise noted. Because the record is
sufficiently developed to resolve these matters, the Court
concludes oral argument is unnecessary.
West Linn Paper Company operated a paper mill in Clackamas
County, Oregon. As part of its mill operations West Linn
purchased wood-pulp products from, among others, Al-Pac and
Columbia River Logistics, Inc. (CRL) is located in Vancouver,
Washington, and provides storage, warehousing,
transportation, and loading/unloading logistical services for
Konen is the president of West Linn; CRL; and Belgravia
Investments, Inc., the parent company of Third-Party
Defendant Belgravia Pulp Holdings, Inc. (BPH).
result of agreements between West Linn, 605 Canada, CRL, BPH,
Wells Fargo, and other entities that are not parties to this
case, 605 Canada obtained and perfected security interests in
all real and personal property belonging to West Linn and BPH
obtained and perfected its security interests in West
January 2016 Canfor executed an agreement (Canfor Agreement)
to sell West Linn 10, 000 metric tons of wood pulp per
calendar year in monthly shipments of 500 metric tons from
January through April 2016 and 1, 000 metric tons for May
through December 2016. Paragraph 5 of the Canfor Agreement
provides: “Invoicing and Method and Place of Delivery:
CPT [West Linn's] Mill in West Linn, OR. . . . Product
will be invoiced upon departure from [CRL], or as
appropriate.” Between August 10, 2017, and October 12,
2017, Canfor shipped wood pulp (Canfor Inventory) to CRL
pursuant to the Canfor Agreement with West Linn.
October 16, 2017, however, West Linn ceased operations.
October 19, 2017, Canfor requested CRL allow removal of the
Canfor Inventory from CRL, but CRL refused and indicated 605
Canada and BPH, as secured creditors of West Linn, asserted
security interests in the Canfor Inventory.
response to notice from West Linn that it would be
discontinuing operations, Canfor sent a letter to West Linn
and CRL on October 20, 2017, in which Canfor stated the
Canfor Inventory was in the process of being delivered or had
been delivered. Canfor demanded delivery of the Canfor
Inventory to be stopped and/or the Canfor Inventory to be
returned to Canfor.
Linn and CRL did not release the Canfor Inventory.
January 2, 2018, the Court authorized the deposit by Canfor
of $1, 200, 000 with the Clerk of Court that represents the
value of the Canfor Inventory as stipulated by the parties,
and the physical goods were released to Canfor by CRL/West
Linn with the approval of 605 Canada and BPH. It is
undisputed that the Canfor Inventory was not physically moved
from CRL until sometime after January 9, 2018.
parties agree during 2016 and 2017 Canfor sold to West Linn
other wood pulp that is not part of the Canfor Inventory. The
parties also agree West Linn is indebted to Canfor for unpaid
invoices (Schedule A - Unpaid Invoices) in the amount of
$621, 660.772 for such wood-pulp shipments.
November 22, 2017, Plaintiffs filed a Complaint (#1) for
Declaratory Judgment. Plaintiffs allege Canfor asserts an
interest in the goods Canfor sold to West Linn that were held
by CRL and that are now in the form of the funds held by the
Clerk of Court. Plaintiffs seek a determination that any of
Canfor's interests therein are inferior to the security
interests of 605 Canada and that West Linn and CRL are
entitled to liquidate the goods and to remit the proceeds to
605 Canada free of any interests of Canfor.
noted, on December 19, 2017, the parties stipulated (#29) the
value of the Canfor Inventory was $1, 200, 000; that Canfor
could deposit funds in that amount with the Clerk of Court;
and that Canfor could take possession of the Canfor Inventory
for sale to other third parties. Thereafter on January 2,
2018, the Court approved (Order #34) the parties'
Stipulation and authorized Canfor to deposit funds with the
Clerk of Court to be held pending resolution of
Plaintiffs' Claims. On January 9, 2018, Canfor ...