The latest jousting over control of The Greenbrier Hotel is over whether local court in Greenbrier County is the right ground for the fight.
The longtime banker being sued by Senator Jim Justice’s family business network is asking a judge to dismiss a lawsuit about The Greenbrier Hotel in a local courtroom because the location violates venue clauses in legally binding financial agreements signed by the Justices.
Lawyers for Carter Bank wrote that the Justices and their attorneys knew this:
“Over the past five years, Plaintiffs, who are highly sophisticated business people and companies, and Carter Bank entered close to two dozen release and reaffirmation agreements expressly providing that all disputes between the parties related to the matters at issue in this litigation would be litigated exclusively in the Circuit Court of the City of Martinsville, Virginia, or the United States District Court for the Western District of Virginia.”
Bottom line: Lawyers for Carter Bank are trying to leverage contracts signed by the Justices to get out of Greenbrier Circuit Court — where the hotel employs hundreds of people and where the senator still lives — and into the courtroom in Martinsville, Virginia, where the bank is headquartered.
The language of the venue clause in documents signed by the Justices is this:
“Each of the Justice Entities hereby irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement or any of the Loan Documents shall be instituted in the Circuit Court of the City of Martinsville, Virginia, or the United States District Court for the Western District of Virginia, or in such other appropriate court and venue as the Bank may choose in its sole discretion.”
The conflict between the Justices, Carter Bank & Trust and the owners of Omni Hotels & Resorts is a big tangle that weaves across both local and federal court cases.
The Justices bought The Greenbrier out of bankruptcy in 2009. Their lender was Carter Bank & Trust, which went through periods of conflict with the Justices, particularly after the overall debt ballooned to hundreds of millions of dollars.
Over a decade, bank representatives and the Justices agreed to a series of forbearance agreements, which essentially allow breathing room when conditions for default have already occurred. The latest, signed earlier this year, was the 14th.
Much of the crushing debt did get paid down over the past several years, but much remained. In the latest filing, lawyers for Carter Bank noted, “Notwithstanding Carter Bank’s repeated willingness to forbear from executing on its judgments, the Justice Entities never made any offer to pay off their debts in full nor did they have the means.”
This past March, the Omni Hotels associate White Sulphur Springs Holdings bought nearly $300 million in first-lien debt on The Greenbrier and related properties from Carter Bank. The holding company does not own the hotel but does own the debt.
Shortly after that, White Sulphur Springs Holdings asked for receivership for the hotel, contending the Justices have been diverting profits to other interests while building up deferred maintenance, putting the collateral at risk. The holding company is also asking for a temporary injunction order that would push the Justices out of hotel control.
The Justices responded by filing the local lawsuit in Greenbrier County, contending that Carter Bank and the owners of White Sulphur Springs Holdings, Texas billionaires Robert and Blake Rowling, had colluded and improperly used insider information to gain control of the Greenbrier Hotel debt.
It’s sort of an original sin argument, where the Justices are saying that their local court allegation against Carter and the Rowlings represents rot that should make the bottom drop out of the federal court lawsuit. Last week, they asked the federal judge to pause that case while the local arguments are heard.
A subplot of the federal court case alleges that at an early April meeting between the Rowlings and Jim Justice at The Greenbrier, Justice boasted that he’d had so much sway over courtrooms in West Virginia that the Texas hotel chain owners would never stand a chance in local court.
“At that meeting, the Senator and his counsel threatened WSSH if it continued collection efforts, informing WSSH that the Justice Defendants had influence over or appointed all the state court judges in West Virginia and that WSSH could not get a fair trial in West Virginia,” wrote the lawyers for the holding company in a complaint filed in federal court.
The Justices and their attorney have denied this. The original filing by the Justices in the Greenbrier Circuit Court lawsuit says the venue is proper because that’s the location of The Greenbrier Resort and that’s where Senator Justice lives. The Justices are demanding a jury trial, presumably of Greenbrier County residents.
The local case has been assigned to Greenbrier Circuit Judge Robert E. Richardson, who was appointed in 2014, prior to Justice becoming governor. Richardson, who serves Greenbrier and Pocahontas Counties was re-elected in 2016 and 2024.
Carter Bank, which was among the entities sued by the Justices in the local court, is now saying the Justices should know that they repeatedly and regularly signed agreements containing a mandatory forum selection clause requiring all legal disputes to be litigated exclusively in specific Virginia courts, not Greenbrier County, West Virginia:
“Given their business sophistication and first-class legal representation, Plaintiffs’ repeated and intentional violation of these forum selection clauses evidences both a misplaced belief that they are not bound by the contracts they sign and a willingness to misuse the judicial process to obtain leverage over and increase the legal costs of their contracting counterparties. Neither should be tolerated by this Court.”
The lawyer for Carter Bank in the West Virginia court case is Booth Goodwin, who ran against Jim Justice in the 2016 primary election for governor when Justice was a Democrat. Goodwin, now in private practice in Charleston, is a former U.S. attorney for the Southern District of West Virginia.
The main lawyer for the Justices in these cases is Steve Ruby, who led white collar criminal prosecutions during Goodwin’s time as U.S. attorney in the southern district.
In response to the latest filing by Carter Bank, Ruby said it’s clear “the defendants who filed this motion apparently don’t want to face the people of Greenbrier County, whose jobs and livelihoods they’re putting at risk.
“The Justice Family will fight any attempt to remove this case from the local community and will continue to protect The Greenbrier, its employees, and West Virginia from exploitation by out-of-state companies.”