CHARLOTTE, N.C. - It had the makings of a storybook Carolina partnership.
In 2010, a distillery co-owned by NASCAR legend Junior Johnson teamed up with one of North Carolina’s most famous moonshine families. Before long, business was booming.
North Wilkesboro resident Brian Call shared family recipes for making fruit-flavored moonshine, and customers snapped up thousands of Mason jars filled with the legal liquor.
But in a lawsuit filed last year, Call alleged that the partnership soured after the handsome royalty checks he had been receiving from Piedmont Distillers stopped coming.
Call contended the makers of the popular Midnight Moon brand breached their contract.
Piedmont Distillers, based in the small town of Madison, north of Greensboro, “disputed the substantive allegations” in Call’s complaint, a company attorney said.
But in December, the company and Call agreed to a confidential settlement.
Call and Piedmont’s president declined to comment on the lawsuit. Johnson could not be reached. But court papers and other sources show how the partnership formed - and unraveled.
Piedmont was founded in 2005 by Joseph Michalek, a now 45-year-old New York native who previously worked as a marketing executive for the RJ Reynolds Tobacco Company. He got his first tastes of moonshine while attending stock car races and other events. Observing the excitement that the white lightning tended to generate, he devised a plan to sell it legally.
In 2007, NASCAR Hall of Famer Junior Johnson became one of the company’s co-owners. Johnson, no stranger to moonshining, got his start in racing by helping his father run white liquor out of the N.C. foothills of Wilkes County.
Many years earlier, Johnson had run moonshine with Brian Call’s father, Clay Call. The Calls had a storied history in the liquor business dating back many generations. The Rev. Daniel Call reportedly taught Jack Daniel how to make whiskey in the 1800s. Years later, the family became known for making fruit-flavored moonshine.
Before 2010, Piedmont’s products were limited to unflavored and spiced moonshine. The company was selling fewer than 30,000 bottles a year in North Carolina - less than a fifth of what it sold last year, data from the state Alcoholic Beverage Control Commission shows.
According to the lawsuit, Junior Johnson persuaded Clay and Brian Call to “entertain discussions” with Michalek. Gradually, a partnership emerged. Piedmont hired Brian Call as its “master distiller” with responsibility for creating new types and flavors of moonshine.
Piedmont drew up a contract in 2010, agreeing to pay royalties - amounting to about $1.50 for a six-bottle case - on sales of all products using Brian Call’s recipes.
Call subsequently provided Piedmont with recipes to make fruit-infused moonshine in various flavors, including strawberry, cherry, blueberry and apple pie. In marketing materials, Call discussed how his family had used trial and error to come up with the “perfect recipe” for making fruit moonshine.
The suit contends that Piedmont’s affiliation with Call was “wildly successful.”
The company reported in 2012 that it expected to sell about 250,000 six-pack cases, a 200 percent increase over the previous year. In 2013, the company said it was on track to sell more than 500,000 cases.
In a press release last year, the company called itself “the unequivocal leader in the moonshine industry,” saying it outpaced the competition 2-to-1.
Data from the North Carolina ABC Commission suggests that the fruit-flavored moonshine has been largely responsible for the company’s success. Last year, the fruit-infused moonshine accounted for more than 80 percent of the company’s North Carolina sales.
“Joe Michalek told people on many occasions - and I heard him - that Brian saved the company,” Brian’s wife, Laura, said in an interview.
As the business grew, so did Brian Call’s royalty checks. The quarterly payments were initially modest, but grew to more than $100,000, according to the lawsuit.
But when the first royalty check of 2013 came due, the suit says, Piedmont refused to pay it. At a meeting, Michalek told Call there would be no further royalties, and the prior checks had been “paid in error,” the suit alleges.
“For the first time, and after years of Royalty Fee payments to Mr. Call, Mr. Michalek then stated that PDI had not used Mr. Call’s recipes, and therefore owed no Royalty Fees,” the suit states. “This statement is false.”
Piedmont officials declined to be interviewed. But through its attorney, the company issued this statement:
“Piedmont Distillers and Brian Call have voluntarily dismissed all pending litigation and amicably resolved their dispute on confidential terms. Piedmont wishes the best to Mr. Call and his family and has no further comment at this time.”
Laura Call said she was not allowed to discuss the terms of the settlement.
Now, she said, she and her husband have their eyes on the future. Brian no longer works for Piedmont, but he’s thinking about starting his own legal moonshine company, she said.
“We’re fine financially,” said Laura Call, who lives with her husband on a road that was once called the Bootlegger Highway. “And there’s no telling what Brian will be up to next.”
But she said the ordeal exacted a personal toll: “I don’t trust people like I used to, especially business people.”
Said Adam Ross, an attorney who represented the Calls:
“They’re two very intelligent people and as honest as you’ll ever find. But they don’t have the years of high-level business experience that would have prepared them for what can go wrong.”
©2014 The Charlotte Observer (Charlotte, N.C.)
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