Litehouse claims contract breach

SANDPOINT — Litehouse is suing a Kootenai company that was disposing its waste products for overcharging and leaving the retail and commercial food producer in the lurch.

Counsel for the national and international producer is calling on a 1st District Court judge to declare an agreement with Waste Energy Solutions in Kootenai null and void, in addition to seeking damages for breach of contract and the covenant of good faith and fair dealing, according to a lawsuit filed on Tuesday.

Litehouse entered into an agreement with the Idaho limited-liability corporation in 2012 to dispose of residual waste products consisting of solid and liquid byproducts. Under the terms of the agreement and several subsequent codicils, Waste Energy Solutions was required to be engaged in commercial production of oil-based products using byproducts of Litehouse’s manufacturing processes. The agreements also stipulated that materials delivered to Waste Energy Solutions would be subject to processing which would separate water-based liquids from other usable substances, oils and solids, according to court documents.

Moreover, Waste Energy Solutions was to enter into commercial contracts with other companies for the sale of usable substances, oils and solids. Waste Energy was also obligated to pay Litehouse 50 percent of the net profits on fees and compensation in excess of $75,000 per year and open its financial records to Litehouse to ensure there was a proper accounting for the net profits Waste Energy Solutions was making, the suit said.

If Waste Energy Solutions was unable to process Litehouse’s waste and byproducts, it could not handle them in a manner which would prohibit Litehouse from utilizing their current waste disposal stream without increased costs, according to the agreements.

Litehouse contends Waste Energy Solutions ceased operations and failed to process waste according to the terms of the agreement.

“Furthermore, due to WES’s failure to process the waste as stated in the agreement and due to WES’s actions which have prohibited Litehouse from utilizing their current waste disposal stream without incurring increased costs...” Mark Ellingsen, Litehouse’s Boise attorney, said in the complaint.

Ellingsen said Waste Energy was unable to separate water-based liquids from usable substances and failed to enter into contract with other companies, which denied Litehouse of potential income. The company is further accused of overcharging Litehouse more than $45,000, funds it has refused to repay to Litehouse, court documents indicate.

Keith Kinnaird can be reached by email at kkinnaird@bonnercountydailybee.com and follow him on Twitter @KeithDailyBee.