A ÂÒÂ×ÄÚÉä insurance provider says a coal company owned by U.S. Sen. Jim Justice, R-W.Va., and his family has not complied with a federal court order to pay over $500,000 and has breached a subsequent settlement agreement.
And the ÂÒÂ×ÄÚÉä firm wants the court to step in.
BrickStreet Mutual Insurance Co. told the U.S. District Court for the Western District of Virginia that Southern Coal Corp. hasn’t complied with the court’s 2023 order for Southern Coal to pay $503,985 within 14 days or a settlement accord last year under which the Justice company agreed to make payments to BrickStreet to satisfy its debt.
In a motion filed Friday, BrickStreet asked the court to order Southern Coal to answer a February 2024 request for information and pay BrickStreet’s attorneys’ fees for filing the motion.
The request for information 15 months ago preceded that same month’s order from the court finding Southern Coal in civil contempt of court, requiring Southern Coal to comply with the September 2023 order to pay $503,985 and imposing a fine of $2,500 per day until it did so.
Court found Justice coal firm insolvent
Southern Coal had sued BrickStreet in 2019 regarding its performance under Southern Coal workers’ compensation and employers’ liability insurance policies. But BrickStreet countersued over what it said was a breach of contract resulting from Southern Coal’s failure to reimburse it for claims and expenses under the policies.
The court granted BrickStreet’s summary judgment, ordering Southern Coal to pay $503,985 within 14 days — meaning by Oct. 12, 2023 — into a loss fund it required Southern Coal to maintain as collateral with an initial $1.3 million balance and minimum $500,000 balance.
The court noted in its February 2024 order finding the Justice company in contempt that although Southern Coal corporate representative Stephen Ball said the company wasn’t in a position to replenish the loss fund because it had no income, the company had indicated “[o]ther entities within the Justice framework have paid joint owed debts of Southern Coal or other debts owed by the corporation.â€
Southern Coal had not paid anything into the loss fund or done anything to comply with the 2023 order, the court noted, adding the company hadn’t produced evidence to support its argument that other Justice entities could no longer pay Southern Coal’s debts after judgments against them.
Southern Coal admitted in November 2023 it had failed to reimburse BrickStreet for claim payments since 2017, failed to pay BrickStreet’s invoices from May 2019 through June 2020, wasn’t actively mining coal, had no income or open bank accounts, and lacked assets that can be liquidated.
The court also awarded BrickStreet $245,929 in attorneys’ fees in its September 2023 order.
Justice financial troubles
Justice’s legal and financial woes extend far beyond the BrickStreet case.
Five of Justice’s coal companies again failed to provide retirees health care coverage in violation of a collective bargaining agreement, retirees and the United Mine Workers of America union said in an April 2 court filing.
The reported failures were the latest in a yearslong string of intermittent lapses in contractually promised health care and prescription drug coverage that retirees have said resulted in the loss of critical medications.
In another April 2 court filing, a Kentucky tobacco warehouse company and an affiliated firm said two Justice coal company executives, including Justice’s son, James C. “Jay†Justice, stopped paying a daily contempt fine amid their noncompliance with a court order to share evidence in the case.
The filing alleged the defendants’ tax returns and other documents prepared from a general ledger show Jay Justice owes James C. Justice Companies nearly $32 million for shareholder loans made to him.
The filing cites two April 2022 ledger entries the plaintiffs say show that despite James C. Justice Companies entered a what appeared to be a Virginia land transfer as a total loss in a 2016 asset disposal report, its affiliate sold the property six years later for a $10.1 million profit.
James C. Justice Companies then used the proceeds as its own to pay down Virginia-based Carter Bank and falsely entered a corresponding entry increasing its debt to Sen. Justice by roughly $9.6 million, the filing alleges.
Martinsville, Virginia-based Carter Bankshares Inc., holding company of Carter Bank, reported Justice entities had paid $56.8 million of a $301.9 million debt as of March 31, 2024.
Carter Bank scheduled an auction of Greenbrier Sporting Club property that featured prominently in the Justice business empire last year to help satisfy a nine-figure Justice family debt to the bank. The auction was later canceled, and the Justice family and the bank announced the settlement of the dispute, in which the bank has sought $300 million-plus in debt admitted by the Justices.
BrickStreet previously did business as the West Virginia Employers Mutual Insurance Company before changing its name in 2010, its roots extending back to its 2005 incorporation as a domestic, nonstock mutual insurance company after the state privatized its workers’ compensation market that year.
CLICK HERE to follow the ÂÒÂ×ÄÚÉä Gazette-Mail and receive
