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Justice, son served by feds in civil suit seeking unpaid attorney fees

A federal court issued writs of execution last week on Gov. Jim Justice and son Jay Justice to collect attorney fees in a $6.8 million judgment against Justice-owned coal suppliers. (Photo Provided)

CHARLESTON — Pressure continues to mount on Gov. Jim Justice and his family owned companies to pay past debts as he sets out for a U.S. Senate run.

In the latest wrinkle, the U.S. District Court for the Southern District of West Virginia issued writs of execution to the U.S. Marshals Service for Gov. James (Jim) Justice II, James (Jay) Justice III, and two Justice-owned companies on May 18 seeking $88,866 in attorney fees awarded to Pennsylvania-based Xcoal Energy and Resources in another federal case last year.

According to court filings, the service of process papers were filed with the U.S. Marshals Service on May 19 for both Justices, Southern Coal Corp., and Bluestone Energy Sales Corp. A request for comment from the Justice Companies was not returned.

The U.S. Court of Appeals for the Third Circuit issued an opinion July 21, 2020, upholding an earlier judgment by the U.S. District Court for the District of Delaware in favor of Xcoal after the Justice-owned companies filed an appeal of that judgment.

According to the Associated Press, Xcoal accused Bluestone and Southern Coal of breaching a 2017 agreement to provide hundreds of thousands of tons of coal to Xcoal for export overseas.

Justice’s companies argued that Xcoal had first breached the contract and tried to show a pattern of companies trying to get out of contracts with Justice-owned companies and then suing them first. A U.S. District Court judge determined that the claims of the Justice companies had no merit and that Xcoal was the injured party, ordering the Justice family to pay Xcoal $6.8 million.

Senior U.S. Circuit Judge Richard Nygaard wrote the opinion for the three-judge panel in the appeal by the Justice-owned companies. In the July 21, 2022 opinion, Nygaard said the appeals court found no error in the lower court’s judgment.

“The Bluestone Parties … now argue it was error for the District Court to conclude the Coal Supply Agreement … between Xcoal and Bluestone was ambiguous, that Bluestone breached said Agreement, and that the liquidated damages provision in the Agreement was enforceable under Delaware law,” Nygaard wrote. “Seeing no error, we will affirm.”

Attorneys for Xcoal requested Jan. 17 that the judgment by the federal Delaware court and the Third Circuit U.S. Court of Appeals be transferred to the U.S. District Court for the Southern District of West Virginia. An application for abstract of judgment was filed with the Southern District court on May 18.

This is just the latest claim against Justice, his family, and his businesses in recent months. Attorneys for Virginia-based Carter Bank and Trust have filed 21 confessed judgments against Gov. Justice, First Lady Cathy Justice, Jay Justice, and multiple Justice-owned companies, seeking more than $301 million plus interest and attorney fees.

Carter Bank filed 11 claims in April nearly two years after the Justices dropped a federal lawsuit against the bank over a dispute over outstanding loan balances. An additional 10 claims were filed last week, this time against individual Justice-owned companies, including the historic Greenbrier Resort in White Sulphur Springs.

Justice’s companies dropped a federal lawsuit against Carter Bank in 2021, with Carter Bank dropping a circuit court lawsuit against Justice’s companies over $368 million in loans that were personally guaranteed by Justice and his family.

In March, Citizens Bank of West Virginia filed an application for suggestee execution with the Randolph County Circuit Court seeking a garnishment of Justice’s salary and wages as governor after the bank was awarded a judgment against Justice-owned Bluestone Resources Inc.

The garnishment would be for one year from the time the court grants the garnishment. Justice personally guaranteed more than $3 million in loans from the bank to purchase heavy machinery, with some equipment already returned to the bank. The circuit court awarded Citizens Bank $861,085, which includes unpaid interest and costs.

Justice is wrapping up his second four-year term as governor. The Democrat-turned-Republican announced his campaign for U.S. Senate at the end of April. Justice’s personal debts are already becoming fodder in the Republican primary race, with U.S. Rep. Alex Mooney, R-W.Va., using Justice’s debts against him.

In a press release Monday morning, Mooney cited Justice’s $850 million loan debt to the now-defunct Greensill Capital, $700 million of which was personally guaranteed by Gov. Justice and First Lady Justice. The Justice family is working with Swiss-based Credit Suisse Group who assumed that debt once Greensill filed bankruptcy.

Bluestone offered Credit Suisse $300 million by refinancing the existing loans through a third-party lender. The company also offered Credit Suisse half of any proceeds from the future sale or initial public offering of Bluestone

“West Virginia can’t afford to send a big-spending liberal like Jim Justice to the Senate,” said John Findlay, campaign manager for Mooney’s U.S. Senate campaign.

Steven Allen Adams can be reached at sadams@newsandsentinel.com

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