Winona County wind project controversy lands in U.S. District Court

A South Korean wind turbine manufacturer recently filed a lawsuit in U.S. District Court seeking $3.3 million plus damages from those behind a$4.8 million wind project in Altura.

Unison Co. is alleging 16 counts of fraud, breach of contract, tortious interference and unjust unrichment against 10 companies or people involved in the project.

According to the 23-page complaint filed Dec. 5 in St. Paul, Unison Co. LTD entered into a $2.57 million financing agreement with the defendants on April 14, 2010 to fulfill a development agreement between the Winona County Economic Development Authority and Juhl Energy Development Inc.

That loan allowed a 1.5 megawatt, two-turbine project to become operational in 2012, creating enough electricity to power roughly 375 homes.

However, Unison claims that a series of transactions completed shortly after the 2010 agreement was signed changed the project's ownership status that the contract was dependent upon. The financing was approved, Unison argues, on the basis that the Winona County EDA "would remain the long-term owner and operator of the wind farm," which now appears to be in question.

"This intricate web of transactions, beginning just days after the execution of the financing agreement and involving a closely knit group of individuals and a common core of entities represented by the same counsel, demonstrates that defendants Daniel Juhl, John Brand and John Mitola all would have known at the time they made representations to plaintiff regarding (Winona County EDA's) continuing ownership of the wind farm that those representations were false," reads a portion of the lawsuit.

The list of defendants include: Juhl Energy Development, Inc. of Pipestone, Minn.; Juhl Energy, Inc. of Pipestone, Minn.; Winona Wind Holdings, LLC, which is owned and operated by JEDI; Winona County Wind, LLC, which is owned and managed by WWH; Daniel Juhl, CEO of JEDI; John Mitola, President of JEDI; Bartly Loethen, a lawyer from Indiana who has represented JEI, JEDI, WWH and WCW since on or before 2010; Audrey Loethen, the lawyer's wife who is co-owner of WWH; Jeff Bendel, co-owner of WWH and vice president of construction development at JEI.

Unison claims that JEDI owed it $3,347,476.35 for its 2010 loan when it was called it due on Nov. 13. That amount increases daily as additional interest accrues, per the terms of the 2010 loan. JEDI has yet to pay back any portion of its 2010 loan, according to the lawsuit.

Mitola launched an impassioned defense of his business practices when contacted Thursday, calling Unison's lawsuit "an amateur attempt to get around a binding contract." While Mitola says he's used the same LLC business model in all 21 of its wind projects in the Midwest, the defendants have retained Synergy Law Group of Illinois — which was created by Bartly Loethen, who did not respond to request for comment — for the case.

"It's so ridiculous and outrageous that there really is no story here," Mitola said. "We take offense to the flagrant language. That was really bullying."

Unison is being represented by Dorsey & Whitney law firm based in Minneapolis. It also added two attorneys from Seattle, Wash., to the case on Wednesday.

While Unison is seeking more than $75,000 is damages per charge via jury trial, millions could actually be at stake.

JEDI received a $1.4 million grant as part of President Obama's federal stimulus package that promoted wind energy through 30 percent subsidy of a project's total cost. It's unclear if any of that money would be in jeopardy based on the current lawsuit.