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Big Island recycler sues Hawaii County over contract dispute

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HILO >> A Big Island recycling company has filed a lawsuit that seeks $5.4 million from Hawaii County and alleges a contract breach over scrap metal at landfills in Kona and Hilo.

The lawsuit was filed Wednesday by attorneys on behalf of Big Island Scrap Metal LLC, the parent company of Atlas Recycling Centers and Island Recycling, the Hawaii Tribune-Herald reported.

The plaintiffs say they are owed $3.6 million in unpaid fees. The lawsuit also seeks $1.8 million in interest.

According to the lawsuit, a written agreement was violated by a county-imposed cap on the amount of metal removed from the landfills and the county’s refusal to pay for metal already recovered.

County environmental management director Bobby Jean Leithead Todd said the legal action stems from an old contract dispute.

In 2003, Big Island Scrap Metal entered into a 10-year contract with the solid waste division of the county Department of Environmental Management to remove scrap metal from the landfills.

The contract followed a 2002 order to the county by the federal Environmental Protection Agency to clean up the two landfills.

Big Island Scrap Metal was required under the contract to remove scrap metal from the sites “so long as (the county) had certified funds that were available for payment,” the lawsuit states.

Plaintiffs say the county’s first notification of its intent to not pay was in the form of a January 2012 letter that said it was not responsible for paying for scrap metal collected by the company that exceeded a cap amount set in February 2010.

Steve Tannenbaum, one of the lawyers who filed the lawsuit, said the company had a contract calling for the work before receiving a brief notice that the county wanted to cap it at a set amount.

The county disagrees that the cap was a breach of contract, according to Leithead Todd.

The county position is that Big Island Scrap Metal acknowledged there was a processing cap and affirmed its intent to follow it, Leithead Todd said.

Even beyond that, payments due were limited to the amount of certified funds, she added.

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