A federal judge in Beckley on Friday ruled against two of Democratic gubernatorial candidate Jim Justice’s companies in a $2 million dispute over royalties related to the sale of a Raleigh County coal mine.
U.S. District Judge Irene C. Berger granted a summary judgment motion sought by Thomas K. Lampert in a suit Lampert filed last year against two Justice affiliated companies, Tams Management Inc. and Southern Coal Corp.
Lampert had sued Tams and Southern in May 2015, alleging that the companies owed him $2 million in royalty payments after missing a deadline to accomplish a formal permit transfer when Tams bought Newgate Development of Beckley LLC from Lampert.
“The parties negotiated a straightforward royalty provision as part of a mining contract, and Tams agreed that if it was unable to obtain certain essential permits within 90 days of the execution of the agreement, and it would be immediately liable to the plaintiff for a significant percentage of the total royalty amount: $2,000,000,” Berger wrote in a 14-page opinion.
“Southern Coal agreed to guarantee Tams’ adherence to these provisions, Tams breached this obligation by failing to obtain the permits within 90 days. Tams and Southern Coal are thereby liable to the plaintiff under the overriding royalty agreement and the unambiguous acceleration clause contained therein.”
Isaac Forman, a lawyer for Lampert, said on Friday, “We are very pleased that the court, by granting our motion for summary judgment, is enforcing the clear and plain language of the contract.”
In a statement issued by Justice’s gubernatorial campaign spokesman, Tams and Southern’s lawyer, Jody Wooten, said, “It’s a contractual dispute and we are looking at our options.”
The ruling by Berger comes just two weeks after Berger fined another of Justice’s companies, Justice Energy Company, $1.23 million after finding the firm in contempt of court in a lawsuit in which an equipment company sued over allegations that Justice Energy didn’t pay its bills and then missed several court appearances.
Justice, who also owns The Greenbrier resort and is the state’s richest man, is running for governor as a Democrat. He faces state Senate Minority Leader Jeff Kessler and former U.S. Attorney Booth Goodwin in the May primary.
Last December, several Justice companies reached an agreement with federal authorities to pay $200,000 to resolve allegations that the firms illegally built 20 dams on a Monroe County hunting and fishing preserve without first obtaining required Clean Water Act permits.
In the case Berger ruled on Friday, the permit transfer was for the Three Marie Mine in Raleigh County, and the sales agreement required the permit transfer within 90 days and included language for Lampert to received royalties on coal mined there. Lampert was to received accelerated payments if two state mining permits were not transferred by June 15, 2013.
One permit was not transferred until July 15 and another not until Aug. 12, Berger said in her ruling.
Justice’s lawyers had argued that Tams “promptly and diligently pursued approval” of the permit transfers by the state Department of Environmental Protection, but that they were not transferred by the contractual deadline “due to circumstances beyond the control of Tams.”
Reach Ken Ward Jr. at
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