Poughkeepsie hemp company claims $1.7M facility is defective
Hemp Productions Inc., a Poughkeepsie company licensed to grow and process industrial hemp, claims that a maker of custom modular buildings installed deficient structures.
Hemp Productions is demanding nearly $1.7 million from MCC Development Inc. of Asheville, North Carolina, and $1.1 million from the fabricator, Ideal Environmental of Los Banos, California, in a lawsuit filed Nov. 11 in U.S. District Court, White Plains.
“We don”™t think their claim has merit,” Anthony Buffa, MCC”™s CEO, said in an interview. “MCC Development and Ideal went to great lengths and expense to address all of the customer”™s concerns.”
New York state licensed Hemp Productions in 2018, according to the lawsuit, to possess, grow, cultivate and process industrial hemp. The company leased property in LaGrange, contracted with MCC to build and install several modular structures, and planned to start production this fall.
Hemp Productions agreed to buy seven 10-by-50-foot structures to be used for extracting and processing hemp, and one bathroom-locker room, for $1,674,664.
MCC subcontracted with Ideal to fabricate the modules.
The first five units that arrived in July, according to the complaint, were damaged. Hemp Productions says it agreed to pay Ideal directly for the remaining modules to get everything installed for the fall opening.
The last structures, the complaint states, were in worse condition than the first five.
MCC began installing the structures but did not complete the job, according to Hemp Productions.
Poughkeepsie attorney Scott Greer said Ideal will probably file counterclaims against MCC and Hemp Productions, for failure to pay more than $254,000 for its work.
Ideal, he said, was responsible for shipping the modules but not for damages incurred during shipping, unloading and setting them up.
The hemp company claims that the heating and ventilation system was not rated for New York weather, and the modules had leaks, rust, misaligned doors, warped floors and dented walls.
“The defects ”¦ were so substantial,” the complaint states, “that the structures could not be used for their intended purpose and HPI could not begin processing its industrial hemp.”
Buffa said it takes time to properly install modular structures. His crew of three installers was on site for 30 days, “working to resolve all of the customer”™s concerns. Ultimately, they were not prepared to honor their written agreement and pay for their final implementation. So my crew left.”
Hemp Productions paid MCC and Ideal nearly $1.4 million, according to the complaint, but withheld the $295,195 balance.
It accuses MCC and Ideal of breach of contract, unjust enrichment and fraud.
“We”™re trying to do the right thing by these people,” Buffa said, and he is disappointed that the customer sued rather than collaborated on getting the facility into production.
“Our record stands,” he said, “of 37 years of installing modular buildings around the country and for some of the biggest companies on the planet.”