Sean C. Morgan
Of The New Era
For defaulting on a $1.3 million loan, Umpqua Bank is suing Western Renewable Resources and attempting to recover payment and collateral on the loan.
Named in the lawsuit filed Sept. 16 are WRR, Dan Desler, Jeremy Totman, Western Bio-Fiber, Totman Land Clearing, Western Trucking, CNH Capital America, Caterpillar Financial Services Corporation, the IRS, Duane Schrock doing business as Schrock Transportation and David Walters.
Western Renewable Resources, formerly known as Totman Renewable Resources, before being mostly shut down by a Department of Environmental Quality ruling, took waste fiber from Weyerhaeuser to sell as animal bedding and industrial fuel, owner and manager Dan Desler said. It is currently developing an Asian market for burning the fiber, mixed with plastics, to provide energy.
Counting interest, late fees and the principal, Umpqua Bank contends that WRR owes nearly $1.1 million. The bank is attempting to repossess collateral listed on the loan, including 18 vehicles and pieces of equipment.
Umpqua Bank alleges that WRR leased and transferred various vehicles to Schrock and Walters without its consent in direct violation of the prohibitions on transfer of the collateral.
The defendants Desler and WRR have failed to provide the locations and condition of the collateral, according to the bank.
In the lawsuit, the bank claims that WRR told the bank that Totman has possession and control of some of the collateral, while Totman has denied it, saying that Desler has exercised complete control of the collateral.
CNH Capital and Caterpillar each filed UCC financing statements on one piece of the collateral, while the IRS has filed a notice of federal tax lien of $18,700 for unpaid taxes.
The bank has been unable to determine the present location of the collateral, and the defendants have not surrendered possession of the collateral upon demand, Umpqua alleges.
The bank believes that one or more defendants may assert that the collateral also includes “piles of debris containing hazardous materials” located on property in or around Sweet Home, but it denies accepting it as collateral
The bank is requesting a restraining order to prevent the sale or transfer of the collateral, and it also requests that its claim to collateral be superior to any claim or lien by any defendant, such as CNH Capital, Caterpillar and the IRS.
The bank is requesting a judgment of nearly $1.1 million against Totman, Desler, WRR, Western Bio-Fiber, Totman Lad Clearing and Western Trucking, with the proceeds from the sale of the collateral be applied toward the satisfaction of a judgment against WRR.
Based on legal advice, Totman did not wish to comment except to say that he has not been in control of the company since August 2006.
Totman was manager of then-Totman Renewable Resources when the company received the Umpqua loan in 2005.
He resigned as manager on Aug. 18, 2006, he said, but he retains 50-percent interest in the company.
Totman produced a letter dated Aug. 21, 2006 in which Desler confirmed that he had assumed the responsibility of manager.
“I am not responsible for anything going forward,” Totman said. “I literally have not been there.”
Since then, WRR filed a lawsuit against Jeremy Totman, Trish Totman, Russell Totman and Steve Lawn in 2007. Lawn and Russell Totman were dismissed from the case, which remains open. In the suit, WRR alleged that the defendants owed WRR money and that Jeremy Totman had started a company to compete with WRR, violating his duty of loyalty as a member of WRR.
Totman denied starting the new company.
A summary judgment dated in July dismissing most of the claims in the lawsuit remains unsigned by a judge while notes in the court record indicated an attorney for one of the parties called Linn County Circuit Court saying settlement documents would be forthcoming in a few weeks.
In the meantime, Desler and WRR are proceeding with a lawsuit against the Department of Environmental Quality to have piles of cardboard fibers, with some plastic content, declared “inventory,” something Desler insists is among the collateral for the Umpqua loan. The lawsuit was filed on Sept. 3. DEQ has not responded nor have any court dates been set.
Desler, Totman and WRR are named in additional lawsuits.
Moose Creek Machine Repair filed a lawsuit against Kevin Caldwell, Desler, Totman, Totman Land Clearing and WRR on May 23, 2007. The case file was unavailable for review at Linn County Courthouse last week. Totman has been dismissed from the lawsuit.
S&H Logging won a $37,000 judgment against WRR on June 8 for failing to pay debts dating back to April 2007.
MS2 Express Personnel won a $39,000 judgment against WRR and Western Trucking on Sept. 6 for not paying for its services. MS2 provided staffing services for the two companies.
Vermeer Pacific and RDO Equipment is suing for $170,000 they claim is owed for the purchase of a tub grinder and parts.
On behalf of Udell Engineering, Credit Services of Oregon is seeking $15,500 for alleged unpaid debts against Western States Land Reliance Trust. Credit Services filed the lawsuit on April 23.
Western States Land Reliance Trust owns the land used by WRR, former Willamette Industries property at the north end of 24th Avenue. Desler is the managing trustee for WSLRT, which is part of a proposed large-scale residential-commercial development on property located north of Highway 20 between 18th Avenue and Clark Mill Road.
WSLRT is currently in the redemption period of the foreclosure process for not paying property taxes. Taxes remain unpaid on 21 lots for the last four years. It has two years to pay off the taxes and redeem the property before Linn County takes possession.