CHARLESTON, W.Va. — A federal judge has booted a lawsuit by The Greenbrier and related holdings by Gov. Jim Justice out of court because dozens of insurers were never officially notified that they were being sued.
The dismissal is without prejudice, so the lawsuit may be refiled.
Companies owned by Justice and his family filed a federal lawsuit Feb. 15 claiming insurance companies owe at least $100 million to fix damage from an enormous flood that hit the historic Greenbrier Resort and surrounding properties.
“The plaintiffs have since taken no action to prosecute the case. To date, the plaintiffs have failed to serve—or even attempt to serve—any defendant in this matter with process,” U.S. District Judge Joseph Goodwin wrote in an order filed today.
Goodwin warned lawyers for Justice’s companies on May 21 that 90 days had passed without any apparent attempt to notify the insurers of the lawsuit.
There are 50 defendants in the case.
Last week, lawyers for the companies asked for more time, saying that when the lawsuit was filed they hadn’t been aware that negotiations were already under way with some of the insurers.
Those talks started under other counsel, and the plaintiffs wanted to extend the negotiations.
Goodwin didn’t buy that reason.
“Notably absent from the plaintiffs’ response, however, is any mention of the phrase “good cause” or a citation to any other legal standard,” Goodwin wrote today. “The plaintiffs fall far short of demonstrating that an extension of time to effect service of process is warranted in this matter.”
Goodwin named several reasons The Greenbrier and associated companies should have served process or provided a good reason not to:
“It is clear that the plaintiffs have not shown—or even attempted to show— good cause for their failure to timely serve the defendants. As to the first factor, there is no indication that the delay in service was outside of the plaintiffs’ control. To the contrary, the plaintiffs have purposely delayed serving the defendants in this matter in order to conduct settlement negotiations.
“Second, there is no evidence that the defendants have been evasive. Third, the plaintiffs have not acted diligently or made reasonable efforts to effectuate service; instead, their efforts have been directed at avoiding service of process. The plaintiffs admittedly have made no attempt to serve any defendant since the filing of the complaint. Fourth, the plaintiffs are represented by counsel.”
Justice has long complained that insurers for The Greenbrier dragged out payment after the devastating flood of June, 2016.
“I’m a pretty smart business guy. I can tell you that anybody, anybody that you would hire as an insurance consultant, anybody would tell you if they read our insurance policies, they’re really good. It is top of the line insurance. It is the very best money can buy,” Justice said in an interview about the lawsuit in February.
“It is just unfortunate what happens. And it happens every day. It’s a game. It’s a game. They didn’t deny the claims. They just put off, put off, put off and put off and it just keeps going and going and going.”
The lead lawyer for The Greenbrier and related companies is Mike Carey, a former federal prosecutor who has represented Justice in other cases such as a challenge to his residency.
It’s a busy week for Justice and his companies in court.
The residency case is before Kanawha Circuit Judge Charles King this Wednesday. That lawsuit against the Governor’s Office questions whether Justice defies the state Constitution by not residing at the seat of government.
By Thursday, Justice Energy has to meet a deadline imposed by U.S. District Judge Irene Berger to say how it will pay a $1.23 million contempt ruling.
Berger’s order described years of attempts to get that company, owned by Governor Justice and his family, to pay.
“To date, however, Justice Energy has made no payments with respect to a sanction entered more than three years ago,” Berger wrote.
During an interview in February about The Greenbrier lawsuit, Justice referenced cash flow problems that he blamed on the insurers, saying they compounded the other legal and financial tangles.
Justice, on Friday, said the cash flow problems at The Greenbrier affected the other debts and legal entanglements.
“You scrape together enough money to keep The Greenbrier going for another month and you get behind paying somebody or whatever it may be. And then everybody just descends on maybe the bad things,” the governor said.
“Maybe you feel like in Kentucky on something maybe you didn’t really feel like you owed that and you want to contest it, but they don’t want you to contest it so they object. And maybe they file suit or whatever it may be. Maybe it’s $200,000 or $400,000 but you can’t scrape it together and keep the doors open.”