Earth Right Energy countersues EDA for $20 million in damages

According to a November 7 filing with the Warren County Circuit Court Clerk’s Office Earth Right Energy (ERE) has joined in countersuing the Front Royal-Warren County Economic Development Authority for damages it claims the company incurred as a result of cancellation of a contract it asserts was validly put in place during the tenure of former EDA Executive Director Jennifer McDonald.

As previously reported attorneys for EDA civil defendant ITFederal and its principal Truc “Curt” Tran filed $13.5 million countersuit against the EDA on October 9. The EDA is seeking recovery of as much as $12 million in EDA assets from Tran and ITFederal.

Along with Tran and his company, Earth Right Energy and its principal Donald Poe and Managing Partner Justin Appleton were among defendants named in both the original EDA civil litigation of March 26 and the Amended EDA civil complaint of October 4.

The EDA is seeking recovery of a total of $21.3 million from what has climbed to a total of 15 defendants alleged to have been involved in, or beneficiaries of fraudulent financial schemes surrounding the former EDA executive director. McDonald is now facing 32 criminal felony financial fraud indictments related to the EDA civil litigation and the County and EDA-contracted Cherry Bekaert public accounting investigation of EDA finances at the base of that litigation. Poe is scheduled for a three-day trial January 22 to 24 on three criminal felony charges – two “obtaining money by false pretenses” and one “perjury” – related to the EDA litigation.

Earth Right Energy principal Donald Poe outside the Warren County Courthouse following a recent hearing – Royal Examiner File Photos/Roger Bianchini

The Amended EDA complaint states that ERE, Poe, Appleton “and others, entered into multiple agreements with Defendant McDonald purporting to oblige the Warren EDA to pay for solar installation at Warren County Public Schools, even though Defendant Poe knew, that the Warren County Public Schools did not approve of any agreement to purchase and install solar power equipment from Defendant Earth Right Energy for any Warren County Public School properties.”

While that $27.3 million dollar solar contract for the schools was never acted upon the EDA civil suit cites payments authorized by McDonald to ERE “without permission or authorization by the Warren EDA” totaling $1,279,888. The EDA litigation notes an August 27, 2018 reimbursement payment made by ERE at McDonald’s request to the EDA of $334,851, reducing the total sought for recovery from ERE to “at least $945,037”.

However in its countersuit, ERE attorneys allege that the public schools solar contract was legitimately negotiated and confirmed at some levels in a mid-August 2018 phone conversation witnessed by “Earth Right’s representatives and Mrs. Michelle Henry”. Henry is also facing criminal charges and civil liability in the EDA case.

“Earth Right extended a formal offer in August in the form of an unexecuted written agreement memorializing the terms of the offer.

“In mid-August (2018), representatives from Earth Right, met in person with Jennifer McDonald, then the Executive Director of the EDA, to inquire as to (1) whether the EDA had approved and agreed to the terms in the Offer, and (2) whether the Warren County School Board was amenable to being a third-party beneficiary of the agreement and would endeavor to aid Earth Right and EDA in fulfilling the terms of therein.

“Jennifer McDonald, as Executive Director and in the presence of Earth Right’s representatives and Ms. Michelle Henry, telephoned Mr. Greg Drescher, then Chairman of both the EDA and the Warren County Public School Board (writer’s note: actually Drescher was superintendent of schools, not a member of the School Board).

Jennifer McDonald and Greg Drescher during signing of authorization of the purchase of the Workforce Housing property once believed to be a $10 ‘gift’ at a cost of $445,000. That expenditure has also come under question in the EDA civil litigation.

“Mr. Drescher confirmed to Jennifer McDonald during the above-mentioned telephone conversation that the EDA had approved the agreement and that the Warren County School Board would endeavor to take whatever reasonable steps the EDA and Earth Right needed to have solar installed on the Roofs of the schools subject to the agreement,” four consecutive paragraphs of the ERE counterclaim contend, adding that “on September 4, 2018, Jennifer McDonald … on behalf of the EDA, formally executed the agreement with Earth Right …”

Of the agreement the ERE Counterclaim states, “The intent of EDA and Earth Right though not written was to secure third-party grants and other sources of funding such that the EDA either did not have to make any capital outlays required by the School Solar Agreements or such that the EDA would be recoop all monies paid (grammar in context).”

As a consequence of what it claims was a legitimately enacted contract, Earth Right Energy asks the court for a judgment of $20 million in damages; court costs; “and any other relief deemed just and appropriate.”

And so the legal wheels continue to spin around EDA civil and criminal litigation now estimated to have generated between 700,000 and a million pages of related materials being accumulated by the Warren County Circuit Court Clerk’s Office.

Good thing there is such a thing as ‘digitization’ of paperwork in the 21st Century or court files would be spilling out of all the Courthouse windows.