Carter Bank successfully moves a loan case brought by Justice to Virginia | News, sports, jobs

A federal judge on Wednesday transferred a case brought by Governor Jim Justice against Carter Bank and Trust to a neighboring federal court in Virginia. (Photo by Steven Allen Adams)

CHARLESTON – A Virginia-based bank that has lent hundreds of millions of dollars to companies owned by Gov. Jim Justice has successfully filed a lawsuit by the governor to stop debt collection from West Virginia to Virginia. U.S. District Judge Frank W. Volk on Wednesday issued a memorandum opinion and order granting a motion by Carter Bank and Trust and its board of directors to transfer a lawsuit filed last November by attorneys representing Justice, First Lady Cathy Justice and 15 Justice-owned businesses – including the historic Greenbrier Resort. Volk’s order transfers the case from the U.S. District Court for the Southern District of West Virginia to the U.S. District Court for the Western District of Virginia, where Carter Bank is headquartered. Volk also denied a motion by Carter Bank’s board of directors to dismiss the lawsuit. The Justice family filed the lawsuit in federal court in West Virginia on Nov. 13, 2023 — two days before a scheduled hearing in Martinsville Circuit Court in Virginia, where attorneys for Justice and Carter Bank were to make oral arguments on Carter Bank’s attempt to collect on more than $300 million in personal loan guarantees to Carter Bank issued by the judges. According to the ruling, Volk explained that various contract clauses between the Justices and Carter Bank require lawsuits to be filed in Martinsville Circuit Court or in federal courts in Virginia. Volk said the two sides signed 19 agreements, all of which required future lawsuits to be filed in Virginia.
“In each of these release and reaffirmation agreements, (the Justices and Carter Bank) agreed that the exclusive venue for any dispute would be in the Martinsville Circuit Court or the United States District Court for the Western District of Virginia,” Volk wrote. “…The forum selection clauses are mandatory and therefore presumptively enforceable.”
Lawyers for Carter Bank have filed 21 notices of judgment since last April against Justice, Cathy Justice, son Jay Justice and multiple companies owned by Justice, seeking more than $301 million plus interest and attorney fees. Carter’s efforts to collect Justices’ loan guarantees come more than two years after Justice dropped a federal lawsuit against the bank. Carter Bank has filed eleven individual cases – called confessions of judgment – ​​against Jim and Cathy Justice in an attempt to collect on these loan guarantees. In a press release last year, Jay Justice – who manages the Justice family’s coal and agricultural businesses – said the companies tried to reach a deal with Carter Bank officials, offering them $250 million upfront, giving them four outstanding were left with loans totaling $57 million, backed by $325 million in collateral. Justice’s companies dropped a federal lawsuit against Carter Bank in 2021, with Carter Bank dropping a lawsuit against Justice’s companies for more than $368 million in loans that were also personally guaranteed by Justice. According to court records, the portfolio of loans to Justice’s companies grew from a $4.5 million real estate loan in 2001 to more than $740 million among Justice’s various coal, agriculture, hospitality and other businesses. Although all fifteen companies in the lawsuit are based in West Virginia, Jay Justice lives in Roanoke, Virginia, as does Justice’s legal counsel Stephen Ball, as well as other attorneys representing the Justice family and bank officials. And all loan agreements are signed in Virginia and follow Virginia law.
“…The court expects that the majority of witnesses and evidence will be located in the Western District of Virginia,” Volk wrote. “And as Carter Bank’s assets are exposed in this lawsuit, an adverse outcome would deeply impact Virginia’s economy, as Carter Bank’s headquarters, sixty-nine branches and hundreds of employees are located there.”
“Furthermore, the Justice Family has decided to vacate the well-known judgments in Virginia state court for many of the same reasons it now asks this Court to vacate them.” Volk continued. “…The Western District of Virginia has a much more weighty interest than this district.”
Steven Allen Adams can be reached at [email protected]