FRONT ROYAL — Lawyers representing Donald Poe and Justin Appleton — two of the nine defendants in a $17.6 million lawsuit filed by the Front Royal-Warren County Economic Development Authority — state in court documents that the EDA is engaged in a “shock and awe campaign” that has failed to illustrate wrongdoings by their clients.
The lawsuit — which alleges a series of embezzlement offenses and financial misappropriations — includes Poe and Appleton as defendants for their association with the limited liability company Earth Right Energy Solar-Commercial.
The lawsuit alleges that former EDA executive director Jennifer McDonald used credit lines reserved for the town and county to enter into an agreement with the company for a series of services, including the installation of solar equipment. The complaint states the agreement included a $1.2 million contract that was entered into without the EDA board’s approval. Of that money, the complaint states, $840,000-plus was for work not performed.
The complaint further alleges that McDonald entered a $27 million contract with the company to install solar equipment at local schools, despite Poe and Appleton having been told by Warren County Public Schools Superintendent and former EDA chairman Greg Drescher that the School Board had not approved the project.
William Ashwell, Poe’s lawyer and Christopher Whelan, Appleton’s lawyer, both requested that the case against their clients be dismissed and noted that a special grand jury was formed shortly after the lawsuit was filed to investigate the matter.
Using identical language, both lawyers state that there seems to be a coordinated effort between law enforcement agencies and the EDA’s legal counsel to form “shock and awe campaign to use the broad tools of civil discovery to enhance a criminal investigation and allow it access to information that would otherwise be unavailable.”
Both Whelan and Ashwell requested in court documents that any discovery be suspended pending the court’s ruling on their arguments and “based on the existence of a parallel criminal investigation.”
Whelan states that both the civil and criminal matters are regarding identical matters with the same goals of recovering “the allegedly diverted public funds.” He adds that “law enforcement agencies investigate and prosecute complex financial crimes” every day without filing “sham civil cases in order to expedite the process.”
Ryan Huttar, a lawyer representing Earth Right Energy Solar-Commercial, states in court documents that the items requested in the civil case discovery process will also likely be requested by the special grand jury. He states this would place “undue burden and expense” upon defendants by having to respond multiple times to the discovery of identical facts.
Ashwell states that the lawsuit is an “unfortunate attempt” by the EDA and county “to impugn the names and reputations” of the defendants “to try and otherwise rectify the EDA’s “unfortunate dysfunction.”
All three lawyers agree that the EDA’s lawsuit fails to show any wrongdoing by their clients.
Huttar states in court documents that because the EDA’s complaint is “virtually devoid of any factual allegations” relating to Earth Right Energy Solar-Commercial, elements of the lawsuit against the company likely will be dismissed.
Whelan states that fraud, conversion, conspiracy and unjust enrichment are alleged against all nine defendants “notwithstanding the significant factual differences between the respective projects and the wide variety of allegedly fraudulent devices employed by McDonald.”
Ashwell and Whelan also state that the EDA failed to prove that all of the defendants acted in a conspiracy to carry out any of the alleged fraudulent activity. They also state that there is no proof the defendants “induced the EDA” to enter into the contracts.
Whelan also laments the fact that the $17 million damages claim is imposed jointly upon all nine defendants “despite failing to make a single factual allegation to support such a broad theory of joint liability.”
Whelan adds that the EDA does not allege that Appleton received any public funds. Ashwell also states there is no proof that Poe “took possession of EDA property and converted the same for his personal benefit.”
Ashwell and Whelan further state that members of a limited liability company are protected from being responsible for liabilities of the company. They also both state that there is no proof that their clients personally benefited from the contracts.
Ashwell notes that the allegations levied against McDonald “do not circumvent or otherwise replace the express authority she had” to enter into contracts on behalf of the EDA.
Huttar states that none of the allegations against Earth Right Energy Solar-Commercial illustrate wrongdoing and that the company has no “common law duties” to make sure the EDA followed its procurement procedures.