RICHMOND, Va. — The Virginia Supreme Court has ordered a company owned by West Virginia Democratic gubernatorial candidate Jim Justice’s family to pay more than $1 million to a coal operator.
On Jan. 7, the Supreme Court upheld a previous judgment by the Dickenson County Circuit Court in a case filed by Lambert Coal Company, which had sued Virginia Fuel and James C. Justice Companies Inc. for the balance owed for the acquisition of Dark Hollow Strip Mine and two additional Lambert coal leases.
In 2014, Judge Henry A. Vanover awarded a summary judgment to Lambert of $1,001,706.94, plus court costs. The purchase price for the 2010 deal was $2.5 million. Virginia Fuel and Justice Companies had paid nearly $1.3 million.
By 2013, Virginia Fuel had stopped making the minimum monthly payments of $40,000 to Lambert, according to court documents. When Lambert filed to seek judgment for breach of contract, Virginia Fuel tried unsuccessfully to file a counterclaim alleging breach of contract and constructive fraud.
After the Dickenson County ruling, Virginia Fuel and Justice Companies appealed it to the Virginia Supreme Court. But last week’s ruling favored the earlier ruling.
“No provision of the Agreement excused Virginia Fuel’s payment of the minimum monthly payment if the coal available proved to be less than expected,” Justice Jane Marum Roush wrote. “The provisions of the Security Agreement make clear that Virginia Fuel was required to pay the deferred purchase price regardless of the amount of coal mined.”
Last month, another lawsuit was filed against one of Justice’s companies for failing to pay more than $400,000 in legal fees.
Phelps Dunbar LLP sued James C. Justice Companies Inc. in the U.S. District Court for the Eastern District of Louisiana alleging JJC owes $409,535.35 in legal fees for services rendered since 2011, according to a complaint filed Dec. 7.
On Dec. 20, 2011, JJC retained Phelps to serve as counsel to defend it in a lawsuit in federal court in Louisiana, and Phelps made an appearance on behalf of JJC when the law firm filed its answer to the complaint in the lawsuit on Jan. 4, 2012.
Phelps claims the litigation progressed for a number of years with the firm continuing its representation of JJC throughout the litigation and, as part of its representation, Phelps engaged in extensive discovery, protracted motion practice and, eventually, briefing multiple appeals to the U.S. Court of Appeals for the Fifth Circuit.
In addition and while the lawsuit was pending, a second lawsuit was consolidated with the lawsuit involving one of JJC’s subsidiaries and Phelps invoiced JJC for Phelps’ fees representing the subsidiary against the allegations in the consolidated lawsuit, according to the suit.
Phelps claims on Feb. 29, 2012, it issued an invoice in the amount of $4,873.56; on June 28, 2012, it issued an invoice in the amount of $1,218.07; and on Feb. 28, 2013, Phelps issued an invoice in the amount of $7,455.59. JJC paid the invoices in full and without objection on June 21, 2013.
The plaintiff continued to regularly invoice JJC for its fees and costs that the law firm incurred defending JJC in the lawsuit, however, JJC failed to remit payment to Phelps for services rendered and reflected on the invoices, according to the suit. In total, JJC is indebted to Phelps in the amount o $409,535.35.
Phelps claims JJC is liable for the fees and is in breach of its contract with the law firm by failing to pay the legal fees.
Phelps is seeking for a judgment in favor of the law firm and an award of all legal and/or equitable relief, including interest and attorneys’ fees. It is being represented by attorneys Harry Rosenberg and Tessa Vorhaben.
Justice’s company has been involved in multiple lawsuits during the last few year. In October, a lawsuit was filed against Greenbrier Hotel in federal court in Virginia for failing to pay human resources staffing services.
Previously, Aspen Corp. sued the Greenbrier for $1.275 million, saying it had failed to pay for work performed prior to the inaugural PGA Greenbrier Classic tournament. An architect who oversaw the restoration of the Greenbrier’s Old White Course for the PGA event also sued for $200,000.
Earlier this year, two of Justice’s coal companies were sued for $2 million for not paying landowners for coal that was mined. In 2013, seven of his companies were sued for $1.1 million in unpaid invoices. In 2011, Delta Air Lines sued the Greenbrier for $4 million over failure to meet guaranteed minimum amounts in return for providing flights to the local airport.
Critics say Justice companies also have a reputation for not paying fines or taxes, and they claim Justice uses his business and political connections to secure special deals and tax breaks for his companies.
Also last month, the U.S. Environmental Protection Agency and the West Virginia Department of Environmental Protection filed a settlement with Justice, the James C. Justice Companies, Inc. and High Mountain Living LLC resolving violations of state and federal environmental laws designed to protect the health of wetlands and waterways.
The settlement, announced Dec. 10, will restore and preserve the health and water quality of Turkey Creek, and its tributary, where 20 unauthorized dams were constructed. These waterbodies are located 2 miles from Gap Mills in Monroe County.
In addition to restoring and preserving the areas affected by the dams, Justice and his companies will pay a $220,000 civil fine. High Mountain Living settled with EPA for the same Clean Water Act violations and will pay a $125,000 civil penalty.
Justice, a Democrat, is running for governor. Former U.S. Attorney Booth Goodwin and state Senate Minority Leader Jeff Kessler also are running as Democrats. Current state Senate President Bill Cole is running as a Republican.
