My text file import is giving a "utf-8 encoding" error message

Lute can only import utf-8 encoded text files.1

Your file may already be in utf-8 encoding, but if not, you'll need to first convert it.

I don't know of all of the options available, but here are some suggestions:

1

https://en.wikipedia.org/wiki/UTF-8: "UTF-8 is a variable-length character encoding standard used for electronic communication." It defines how characters are actually written to disk, essentially.