WV Governor’s Coal Company Found in Contempt, Must Pay BrickStreet for Comp Loss *Centurion Insurance AFS*

A coal company owned by West Virginia’s governor has been found in contempt of court and must face fines of $2,500 a day until it pays its contractual obligations to its workers’ compensation insurance carrier, a federal judge decided.

BrickStreet Mutual Insurance Co., which grew out of West Virginia’s formerly state-run workers’ comp carrier, had argued that Southern Coal Corp. had failed to reimburse the insurer’s loss fund, as required by contract. When the coal company, owned by West Virginia Gov. Jim Justice, failed to comply with the resulting court order, BrickStreet asked the U.S. District Court for Western Virginia to find Justice’s company in contempt.

U.S. District Judge Elizabeth Dillon agreed this week, ordering the mining firm to pay $503,985 to the comp insurer and face mounting penalties until the debt was satisfied. The judge dismissed Southern Coal’s arguments that it was out of business and was in no position to pay.

The coal firm representatives had previously testified that “other entities within the Justice framework have paid joint-owed debts of Southern Coal or other debts owed by the corporation.”

It is clear that Southern Coal had violated the previous court order “because it has not paid anything into the loss fund,” the judge wrote in her Feb. 26 opinion. Yet, the mine firm failed to produce evidence that it is unable at the present time to comply, as required by statute and case law.

Southern Coal had argued at a hearing that other companies owned by the governor had seen “numerous judgments” lodged against them and also had no ability to help pay the debt. But the judge dismissed that argument, noting it had not been previously raised or supported with evidence by the coalers.

The judge also ordered Southern Coal to pay BrickStreet’s attorney fees in the case.

The case was initiated by Southern Coal, which contended in 2019 that BrickStreet had underperformed in its workers’ comp and employer liability insurance policies. But coal company representatives later agreed that a court order should be granted over its alleged breach of contract with BrickStreet.

Jim Justice, who is term-limited for another term as governor but is planning a run for the U.S. Senate, and his family have been named in multiple legal actions over his coal and other companies. Justice’s companies also have been cited for being late in paying fines for unsafe working conditions at the coal mines in West Virginia, the Associated Press has reported.

A Virginia bank said this month it had planned to auction off land at Justice’s famed resort, the Greenbrier Sporting Club, in order to recover more than $300 million on defaulted business loans. But that auction has been postponed until a later date.

Topics
Profit Loss
Virginia
West Virginia