FARMINGTON, Maine (From news reports) -- Pixelle Specialty Solutions, owner of the Androscoggin Mill in Jay, has filed a lawsuit against contractors responsible for inspecting and providing maintenance on the pulp digesters in the years preceding the equipment's rupture on April 15, 2020.
One of two pulp digesters, known as digester A, ruptured and fell on the second digester, digester B, destroying both in the process. The loss resulted in the mill shutting down one paper machine and not rebuilding its pulp mill.
Pixelle and two of its entities, Pixelle Androscoggin LLC and Pixelle Specialty Solutions Intermediate LLC filed the subrogation action and complaint on April 15 in Franklin County Superior Court. The companies headquartered in Pennsylvania are suing Trico Mechanical Contractors, Inc. based in Florida.
"This event substantially damaged the mill and significantly interrupted Pixelle's business activities. Pixelle brings this lawsuit to recover losses and damages sustained due to defendant Trico's wrongful acts and omissions and pursuant to applicable contractual agreements," according to the court document.
A trial has been requested in the case. The suit asks that the court enter a judgment in the plaintiff's favor and against Trico on all counts and award Pixelle: all recoverable damages to be proved at trial including compensatory and contractual damages; pre-judgement and post-judgement interest; reasonable fees, costs and disbursements incurred; and for such additional relief as available by law or statute, and as the court may deem just and proper.
"Pixelle has settled its insurance claim relating to the digester rupture and relating property damage with its insurance carrier. This litigation seeks to recover damages from the contractors responsible for inspecting and providing maintenance on the digesters in the years preceding the rupture," Pixelle spokesperson Alan Ulman wrote in an email.
Pixelle Androscoggin, formerly known as Verso Androscoggin, bought the fully-integrated pulp and paper mill in February 2020 from Verso Corp. It produces coated, uncoated, and specialty paper products, as well as brownstock linerboard used for corrugated boxes and grocery bags.
The company also acquired a master services contract that was entered into between Verso and Trico. A woman who answered the phone at Trico's headquarters said Monday there was no one there to comment on the lawsuit.
In August 2018, Trico inspected, serviced, maintained and repaired digester, including the repair of certain welds and seams, as part of the planned maintenance outage at the Androscoggin Mill, according to the complaint.
"In November 2018, the Androscoggin Mill was told that the August 2018 inspections and repairs had returned digester A to an acceptable condition," according to the lawsuit.
In September 2019, Pixelle claims Trico inspected, serviced, maintained and repaired digester A, including the repair of certain welds, as part of the planned maintenance outage at the Jay mill. Following the work and inspection, Trico had no recommendations for the digester that would prevent return to service. Three months later, the mill was told that the work had returned the digester to an acceptable condition.
Pixelle also claims that on April 15, 2020 at about 12 p.m., digester A failed "catastrophically" when one or more of the welds that were inspected, maintained, serviced and repaired by Trico failed, resulting in pressure releases and the rupture of digester A. The more than 150-f00t digester ejected large amounts of debris into the air.
The failure also caused portions of the digester to "impact the second digester causing it to fall and land on its side," the court document states.
Pixelle and prior owners of the mill relied on Trico's skill and expertise to inspect and complete repairs for digester A and to make sure it was safe for use, it says.
As a result of the digester rupture, there was substantial property damage to the mill, including damage to buildings, equipment and inventory, as well as a significant interruption of Pixelle's business activities. The associated damage to both digesters forced Pixelle to stop all pulp operations. The mill now uses purchased pulp materials.
As a result of the failure of digester A, the company's insurance provider, Factory Mutual Insurance Co., has paid $350 million to Pixelle, which has a $5 million deductible on the policy. Factory Mutual sent attorneys for Pixelle a letter on April 5 in accordance to Maine rules informing them Factory Mutual Global intended to file suit and assert its subrogated claims for loss and damage arising from the explosion. The Pixelle lawsuit is filed by attorneys for the insurance company. Subrograted action means an insurance carrier has a right to legally pursue action against a third party that caused an insurance loss to the insured in order to recover the amount of the claim paid by the insurance carrier to the insured for the loss.
Pixelle's complaint claim's Trico was negligent when it failed to exercise reasonable care and breached its duty by, among other things failing to follow industry codes and standards, procedures and practices for the inspection, maintenance service, and repair of seams, cracks and welds for equipment such.
It also claims Trico's conduct was "deficient, negligent and failed to meet industry standards," that Trico has not indemnified Pixelle for the damages and losses sustained at the mill because of failure and rupture of the digester. It claims breach of express warranty, in which Trico allegedly expressly warranted that all equipment and services provided in connection with the master services contract, purchase orders and all revisions, and Verso's terms and conditions, would comply with the requirements of the contract.
According to the lawsuit, Pixelle has sustained damages to buildings, assets, equipment and property at the Androscoggin Mill. It also claims it incurred costs and expenses for demolition, hauling, disposal and cleanup; costs and expenses related to product manufacturing; lost sales and profits, and opportunities; and additional damages as may be revealed through discovery.