Builder Sues Universal


J.V. Industrial sued Universal Lubricants and its mortgage holder for $1.9 million allegedly still owed for building Universals rerefinery last year in Wichita, Kan. J.V. seeks to foreclose and sell the property. Universal called the lawsuit improper, contending it had to fix defects at the facility at significant cost because J.V. Industrials work didnt meet the requirements of their agreement.

Filed Dec. 14 in the District Court of Sedgewick County, Kan., the lawsuit names New York-based Ares Capital Corp. as a co-defendant, saying it may claim an interest in the subject real estate by virtue of its mortgage filed May 2, 2008.

J.V. Industrial of Pasadena, Texas, said it entered into a contract with Universal Lubricants to furnish labor and materials for construction of the API Group II rerefinery, completing it on Sept. 2, 2009. In December 2009, J.V. Industrial filed a lien covering the same property.

The lawsuit seeks $1.9 million with interest from the completion date last year, until paid, plus costs. In the event [Universal Lubricants] fails or refuses to pay the judgment to plaintiff within 10 days, then plaintiff is entitled to have its lien foreclosed and the subject property sold in satisfaction of plaintiffs judgment, the lawsuit asserts.

In a statement provided to Lube Report, Universal Lubricants said it and its engineers retained J.V. Industrial in late 2008 to provide engineering and construction services in connection with the Wichita rerefinery.

By late 2009, it became apparent that the work performed by JVIC failed to conform with the requirements of the parties’ agreement, Universal stated. Universal Lubricants was ultimately forced to remedy many of these defects on its own, at significant cost. The facility is currently operating, producing high quality, Group II base oils. Now it appears that JVIC has commenced an improper lawsuit against Universal Lubricants in an attempt to delay and frustrate Universal Lubricants’ ability to obtain reimbursement for these costs.”

By deadline, Lube Report could not reach J.V. Industrial for comment.

According to Universals web site, the rerefinery processes used motor oil and produces 12 million gallons per year (about 783 barrels per day) of Group II base oil for direct sale or blending into the companys Universal ECO Performance line of products.

Pegasus Capital Advisors invested in Universal Lubricants in 2007 to allow the lubricant manufacturer and marketer to expand in the areas of branded oil distribution and used oil collection. The brands distributed are major brand oils and Universals proprietary brands.

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