As a result of the dispute and Seabold's shutdown, the projects stalled and several subcontractors have filed liens claiming they are owed hundreds of thousands of dollars, according to a February story in the local website Willamette Week.

The dispute has an especially bitter tinge. The developer, Seattle-based Solterra Strata, also known as Vibrant Cities, filed a breach-of-contract and unjust enrichment lawsuit in federal court in Portland against Seabold Construction and Harry Seabold's daughter and son-in-law, Hailey and Kevin Owens. They inherited 10% of the contractor's stock and operated the company in the year since Harry Seabold died. 

Unlike most pay disputes between developers and contractors, Solterra Strata claims Hailey and Kevin Owens "misappropriated" money from the project and that it now seeks to recover some of its claim of $17 million from their personal assets.

Seabold terminated its contracts with Solterra in November, and the developer responded with its own termination notice three weeks later. Solterra says Seabold in its contract indemnified Solterra for any money owed to subcontractors.

The two projects are side-by-side apartment buildings. Work on the first one, the 251-unit Zeal, started in 2021, and work on the second, the 100-unit Fargo with retail space on the ground floor, began in early 2022. Solterra claims that to complete the Zeal and Fargo projects requires another $7.3 million and $7.7 million, respectively. 

The developer also claims that $2.5 million of money it paid Seabold was for amounts owed to subs and suppliers and that "Seabold misappropriated" the funds, cheating not only subs and suppliers but depriving Seabold the corporation of funds that subcontractors seek from Solterra.

Solterra says Seabold did not make timely notice prior to terminating the contracts.

The protection of Seabold's corporate firm should be disregarded and Hailey Owens and Kevin Owens should be held personally liable to Solterra for about $8.8 million on each of the two projects, the developer claimed.

Hailey Owens had been a financial manager at the company and Kevin Owens, who recently joined contractor Kirby Nagelhout Construction Co. as a project executive, had worked at Seabold for 23 years and had served as president after Harry Seabold died. He started the company with his father, who died not long after the company began, and a brother, who retired in 2015.

Owens, in an interview, says the "real true situation was that there were design problems and permitting delays" on the projects that were out of Seabold's control and "the developer did not want to continue to pay Seabold general conditions" to finish the project. "When I terminated the contract with the owner, the owner went ahead and hired my former employees to finish the project," Owens says.

Solterra could not be reached immediately to confirm the hirings.

Owens says he and his wife did not steal any money and that since his father-in-law's sudden death last year, the couple has been operating the company "under legal guidance."

Since its founding in 2008, Solterra was known for developing sustainable apartment projects in Portland and Seattle. In 2017, its founding partners split the company into two different businesses—one that retained the apartment development company now operating under the name Vibrant Cities.

The unjust enrichment claims and attempts to collect from the Owens' personal assets are a means to deflect attention from the developer's own failings, Seabold's attorneys told a federal judge in a motion to dismiss Solterra's claims.

"In reality, the snake-bitten construction projects that this lawsuit concerns arise from two sources: design errors and permit delays that were plaintiffs’ sole responsibility," the motion states.