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Forum staff reports, Published March 28 2011

Supplier denies DMI’s allegations in lawsuit

FARGO - The steel plate supplier of Fargo-based DMI Industries Inc. denies it breached a contract with the manufacturer and argues the matter shouldn’t be settled in federal court.

Earlier this month, DMI filed a lawsuit against Evraz Inc., alleging the Delaware-based supplier failed to make good on an urgent order in December.

DMI claimed it lost $5.4 million in lost business and higher costs incurred due to Evraz’s actions.

DMI manufactures wind turbine towers and has plants in West Fargo, Tulsa, Okla., and Ontario.

According to an answer to the lawsuit filed Monday in Fargo’s U.S. District Court:

Evraz denies a “clear contract” existed for DMI’s purchase of more than 14,300 tons of steel plate.

“The exchange of quotes, emails and purchase orders did not create a contract obligation” between the companies, Evraz states in its response.

Evraz also argues the civil dispute should be handled through arbitration, not in federal court.

Under a credit agreement all Evraz customers sign, DMI agreed that any disputes would be handled under “binding, mandatory arbitration” in Portland, Ore., Evraz said.

Arbitration is a way to settle disputes outside the court system, where both parties make their case to an impartial referee, whose decision they agree to accept.

In a counterclaim to the lawsuit, Evraz argues DMI owes the company more than $1.5 million for materials DMI was supplied but refused to pay for.

Evraz wants a federal judge to dismiss the lawsuit and refer the matter to arbitration.

The company also wants a judgment for the amount DMI still owes.

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