In its reply filed this month, Ocean City offered to pay for the wood it's already used and return the rest.
But they also claim Grasmick violated its contract in several ways.
The dispute stems from the City Council's decision to break a decade-old pledge not to use rainforest wood to repair its boardwalk.
City officials say they were swayed by the promise that the wood they would be buying from Grasmick would be certified as having been harvested responsibly.
But numerous delays occurred.
And the city terminated the contract in January, claiming Grasmick had defaulted on it.
