UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ALABAMA, SOUTHERN DIVISION

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1 Case TOM11 Doc 996 Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Main Document Page 1 of 10 UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ALABAMA, SOUTHERN DIVISION In re: WALTER ENERGY, INC., et al., 1 Debtors. Chapter 11 Case No TOM11 Jointly Administered DEBTORS OPPOSITION TO MOTION FOR RELIEF FROM THE AUTOMATIC STAY BY PERSONAL INJURY UNSECURED CREDITOR BRANDON WILLIAMS Walter Energy, Inc. and its affiliated debtors and debtors-in-possession (each a Debtor and, collectively, the Debtors ) object to the Motion for Relief from the Automatic Stay by Personal Injury Unsecured Creditor Brandon Williams [Docket No. 882] (the Motion ), as follows: INTRODUCTION 1. The Motion rests on a false premise: that the Debtors have liability insurance coverage for Brandon Williams claims. The Debtors have no coverage for these claims or for their defense, and Brandon Williams ( Williams ) offers no evidence to support a contrary conclusion. Williams cannot avoid the automatic stay merely because he allegedly seeks to only collect any judgment from available insurance. Rather, stay relief is appropriate if the equities 1 The Debtors in these cases, along with the last four digits of each Debtor s federal tax identification number, are: Walter Energy, Inc. (9953); Atlantic Development and Capital, LLC (8121); Atlantic Leaseco, LLC (5308); Blue Creek Coal Sales, Inc. (6986); Blue Creek Energy, Inc. (0986); J.W. Walter, Inc. (0648); Jefferson Warrior Railroad Company, Inc. (3200); Jim Walter Homes, LLC (4589); Jim Walter Resources, Inc. (1186); Maple Coal Co., LLC (6791); Sloss-Sheffield Steel & Iron Company (4884); SP Machine, Inc. (9945); Taft Coal Sales & Associates, Inc. (8731); Tuscaloosa Resources, Inc. (4869); V Manufacturing Company (9790); Walter Black Warrior Basin LLC (5973); Walter Coke, Inc. (9791); Walter Energy Holdings, LLC (1596); Walter Exploration & Production LLC (5786); Walter Home Improvement, Inc. (1633); Walter Land Company (7709); Walter Minerals, Inc. (9714); and Walter Natural Gas, LLC (1198). The location of the Debtors corporate headquarters is 3000 Riverchase Galleria, Suite 1700, Birmingham, Alabama

2 Case TOM11 Doc 996 Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Main Document Page 2 of 10 demand such relief. Williams has failed to state even a prima facie case for relief from the automatic stay. The equities weigh in favor of maintaining the automatic stay because the case is in the early stages of discovery, lifting the stay will significantly burden the Debtors estates, and maintaining the stay will not prejudice Williams. There is no cause to modify the automatic stay, and the Motion is due to be denied. FACTUAL BACKGROUND 2. Williams filed his complaint (as amended, the Complaint ) with the Circuit Court of Jefferson County in February 2014, thereby initiating the civil action styled Williams v. Alabama Warrior Railway, LLC, et al., Case No. 01-CV (the Williams Action ). In the Complaint, Williams alleges injuries from falling into a rotary coal dump at Alabama Warrior Railroad ( AWR ) headquarters, where he was employed at the time. See Williams First Amended Complaint AWR leases the headquarters property from Walter Coke, Inc. ( Walter Coke ), see Walter Coke s Answer 18, attached as Exhibit 1, but AWR s business does not intersect with Walter Coke s operations, see Declaration of Scott Castleberry, attached as Exhibit 2. Walter Coke is simply the lessor and its operations have nothing to do with AWR or Williams employment. See id. Further, although Walter Coke is a subsidiary of Walter Energy, Inc. ( Walter Energy ) the entities are separate corporations. See id. Walter Energy has no relationship with AWR or Williams, Walter Energy does not own the leased property, and Walter Energy does not direct Walter Coke s lessor-lessee relationship with AWR. See id.; Walter Energy s Answer 18, attached as Exhibit Williams asserts (1) negligence claims under the Federal Employers Liability Act ( FELA ) against AWR, Watco Companies L.L.C., and Watco Transportation Services L.L.C. (collectively, the Non-Debtors ); and (2) common law negligence and wantonness against Walter 2

3 Case TOM11 Doc 996 Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Main Document Page 3 of 10 Energy, Walter Coke, Watco Companies L.L.C., and Watco Transportation Services L.L.C. See generally Williams First Amended Complaint. 4. The parties are in the early stages of discovery Williams has served interrogatories and requests for production, as have the Non-Debtors. The Non-Debtors have recently scheduled Williams deposition for November 17, To the Debtors knowledge, Williams has not responded to any discovery requests or scheduled any depositions. 5. The Debtors are not named insureds on any policy that provides the Debtors liability or cost of defense coverage for Williams claims. See Declaration of Scott Castleberry. The Debtors only insurance coverage available for Williams claims is a policy with a $2 million self-insured retention which must be exhausted before there is any coverage. See id. Defense costs are paid from the retention, not by the insurer. See id. The Debtors are responsible for funding both the defense costs and any damages assessed until the retention has been exhausted. See id. 6. The Debtors are also additional insureds on liability and excess policies held by Watco Companies L.L.C. However, the Debtors have no knowledge of the current status of these policies or their terms of coverage, the remaining coverage available under the current policy period, or whether the self-insured retention requirements have been met. 7. Since initiation of the Williams Action, the Debtors have paid all of their own attorneys fees and costs. No insurance company has contributed to the cost of the Debtors defense, which to-date totals $7,

4 Case TOM11 Doc 996 Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Main Document Page 4 of 10 OBJECTION A. There is no cause for relief from the automatic stay. 8. The Court may grant relief from the automatic stay for cause. See 11 U.S.C. 362(d). Cause for relief from the stay exists if the equities dictate that a lawsuit should proceed in a forum other than the bankruptcy court for the purpose of liquidating a claim. In re Marvin Johnson s Auto Serv., Inc., 192 B.R. 1008, 1013 (Bankr. N.D. Ala. 1996) (internal quotation marks omitted). 9. The Marvin Johnson s factors apply to stay relief for ongoing litigation where the alternative forum is in the best position to provide an efficient resolution of the dispute, thereby benefiting all parties involved, including the debtor. See id. at ; see also In re Freeman, 2011 WL at *2 (Bankr. M.D. Ala. Aug. 17, 2011) (stay relief granted where lawsuit had been pending for five years and judicial resources would be wasted if process restarted in bankruptcy court). 10. In determining whether cause exists to lift the automatic stay, the Court must balance the hardship to the creditor, if he is not allowed to proceed with his lawsuit, against potential prejudice to the debtor, debtor s estate, and other creditors. In re Carraway Methodist Health Systems, 355 B.R. 853, 854 (Bankr. N.D. Ala. 2006), citing Marvin Johnson s, 192 B.R The factors relevant to balancing the hardships under Marvin Johnson s are: (1) trial readiness; (2) judicial economy; (3) the resolution of preliminary bankruptcy issues; (4) costs of defense or other potential burden to the estate; (5) the creditor s chances of success on the merits; (6) specialized expertise of the non-bankruptcy forum; (7) whether the damages or claim that may result from the non-bankruptcy proceeding may be subject to equitable subordination under 510(c); (8) the extent to which trial of the case in the non-bankruptcy forum will interfere with 4

5 Case TOM11 Doc 996 Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Main Document Page 5 of 10 the progress of the bankruptcy case; (9) the anticipated impact on the movant, or other non-debtors, if the stay is lifted; and (10) the presence of third parties over which the bankruptcy court lack jurisdiction. In re Marvin Johnson s Auto Serv., 192 B.R. at Although the Marvin Johnson s factors are instructive, multi-factor tests to determine cause for stay relief essentially come down to a totality of the circumstances analysis. See In re Jefferson Cnty., Ala., 491 B.R. 277 (Bankr. N.D. Ala. 2013). Here, several factors weigh in favor of denying the requested relief, and collectively, the factors overwhelmingly support that result. Relief from the automatic stay will not advance the interests of judicial economy or otherwise benefit the Debtors and their creditors. a. If the Williams Action continues, the Debtors will incur substantial costs. 12. Williams asks this Court to require the Energy-Coke Debtors to cooperate with their liability insurers. Motion at 1. But as noted above, the Debtors only coverage here is a policy that does not come into play until the retention of $2 million has been exhausted. See Declaration of Scott Castleberry. Thus, regardless of the Debtors cooperat[ion] with [its] liability insurers, there is, as a practical matter, no coverage for Williams claims or the Debtors cost of defense. 13. Williams nevertheless contends that lifting the stay will not burden the Debtors estate because the Non-Debtors insurance will pay for the cost of defense. Williams cites the two Watco insurance policies where the Debtors are listed as additional insureds. See Motion at 3. Williams certainty regarding the Debtors coverage under these policies is unfounded: (1) Williams offers no evidence that the policies provide a defense to the Debtors, (2) Williams offers no evidence of what coverage remains under the aggregate limit for either policy, and (3) Williams 5

6 Case TOM11 Doc 996 Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Main Document Page 6 of 10 offers no evidence to support his belief that the $250,000 self-insured retention amount has been whittled-down. Motion at Williams goes so far as to say that the Energy-Coke Debtors no longer have any need to provide a defense in the State Court action because FELA s non-delegable duty rule gives the [Non-Debtor] Defendants every incentive to defend the actions of the Energy-Coke Debtors in the State Court trial. Motion at In other words, Williams believes that the Non-Debtors and the Debtors would assert identical defenses, and the Debtors should simply cede responsibility for their defense to the Non-Debtors. As outlined below, however, there is little, if any, unity among the issues and defenses applicable to the Debtors versus the Non-Debtors. Moreover, the Debtors will not cede responsibility for their own defense. Of course, maintaining their defense means expending significant resources both financial and otherwise. If the Debtors are forced to defend the Williams Action in state court they will have to pay counsel and divert management s and employees time and attention from the bankruptcy. Accordingly, this factor weighs in favor of maintaining the stay, and the Motion is due to be denied. b. Allowing the Williams Action to go forward will impact the Debtors and their bankruptcy proceedings. 15. As set forth above, lifting the stay in the Williams Action will have a significant effect on the Debtors. Continued litigation will deplete precious time and money that should be spent focusing on this large and complex bankruptcy case. c. The Williams Action is not remotely ready for trial. 16. As Williams admits, [t]he parties have begun discovery in State Court, but discovery is not yet complete. Motion at 9. Discovery is far from complete. Williams has not responded to any discovery or scheduled any depositions. The Non-Debtors have only recently 6

7 Case TOM11 Doc 996 Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Main Document Page 7 of 10 scheduled Williams deposition for November 17. In an effort to conserve resources, the Debtors have not served or responded to any discovery. 17. In contrast, in Marvin Johnson s, the plaintiff had concluded discovery and was ready for trial, and the defendant planned to take only one or two depositions. Marvin Johnson s, 192 B.R. at Moreover, the parties had agreed that if the court lifted the stay, the case would be tried in state court in the next six months. Id. The Williams Action is distinguishable because it involves multiparty discovery that is not even close to complete. Williams has not responded to any discovery requests, no depositions have been taken, and the state court has not scheduled a trial. Quite plainly, the Williams Action is nowhere near ready for trial, and this factor does not favor stay relief. d. Lifting the stay will not further judicial economy. 18. Contrary to Williams assertions, denying the Motion will not result in duplicative trials. See Motion at First, the state court can adjudicate the Non-Debtors FELA liability without examining the Debtors alleged negligence. Williams is correct that FELA makes the Non-Debtors vicariously liable for the Debtors negligence, but Williams argument that such vicarious liability necessitates adjudication of claims against the Debtors is misplaced. See id. at 11. The Non-Debtors duties under FELA are entirely independent of the Debtors; thus, the state court can proceed to trial against the Non-Debtors on the FELA claims irrespective of the automatic stay. See Armstrong v. Kan. City S. Ry. Co., 752 F.2d 1110, 1114 (5th Cir. 1985) ( Under [FELA], a railroad will be liable if its negligence or its agent s negligence played any part, even the slightest, in producing the employee s injury. ). Further, even if Williams 7

8 Case TOM11 Doc 996 Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Main Document Page 8 of 10 allegations against the Non-Debtors and Debtors are somehow intertwined, there will not necessarily be a trial on any claim Williams asserts against the Debtors in the bankruptcy In Marvin Johnson s, lifting the stay avoided duplicate trials because the debtor s vicarious liability for the non-debtor s actions created a complete identity of issues between the defense of the debtor and the defense of [the non-debtor]. That is not the case here. Not only is vicarious liability a non-issue as to the Debtors, no unity of issues or defenses exists at all: (a) most of Williams claims against the Non-Debtors travel under FELA, while his claims against the Debtors are based in common law, and (b) the Non-Debtors duties as an employer are entirely different than Walter Coke s duties as a lessor. Accordingly, lifting the stay will not further judicial economy and this factor weighs in favor of maintaining the stay. e. Williams is not likely to succeed on the merits. 20. Williams is unlikely to succeed against the Debtors because neither Walter Coke nor Walter Energy owes a duty to Williams. 21. Walter Coke owes no duty to Williams because Walter Coke is not responsible for the maintenance of the rotary car dump where Williams was injured. As noted above, Walter Coke is simply the landlord and has no involvement in AWR s operations or business on the property, including at the rotary car dump. See Declaration of Scott Castleberry. 22. Further, Walter Energy owes no duty to Williams because it is a corporation separate from Walter Coke and has no relationship with AWR or Williams. See id. Walter Energy does not own the leased property, and Walter Energy does not direct Walter Coke s lessor-lessee relationship with AWR. See id. Walter Coke and Walter Energy have separate corporate 2 The Debtors reserve all rights, claims, and defenses with respect to any proof of claim Williams has or may file against the Debtors. 8

9 Case TOM11 Doc 996 Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Main Document Page 9 of 10 structures and operations. See id. Neither entity controls the operational or fiscal activities of the other, nor are the businesses conducted as a single enterprise. See id. 23. Williams likely included Walter Coke and Walter Energy in this action in an effort to reach perceived deep pockets. Neither entity owes a duty to Williams, however, and the Debtors should not be required to expend valuable time and resources litigating these claims. CONCLUSION 24. In sum, the balance of the equities does not favor stay relief. Based on the foregoing, the Motion is due to be denied. WHEREFORE, PREMISES CONSIDERED, the Debtors urge that the relief requested in the Motion be denied, and for such further or different relief as is just and proper under the circumstances. [Remainder of page intentionally left blank] 9

10 Case TOM11 Doc 996 Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Main Document Page 10 of 10 Dated: November 5, 2015 Birmingham, Alabama BRADLEY ARANT BOULT CUMMINGS LLP By: /s/ Patrick Darby Patrick Darby Jay Bender Cathleen Moore James Bailey One Federal Place 1819 Fifth Avenue North Birmingham, Alabama Telephone: (205) and - PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP Stephen J. Shimshak (pro hac vice) Kelley A. Cornish (pro hac vice) Claudia R. Tobler (pro hac vice) Ann K. Young (pro hac vice) Michael S. Rudnick (pro hac vice) 1285 Avenue of the Americas New York, New York Telephone: (212) sshimshak@paulweiss.com, kcornish@paulweiss.com, ctobler@paulweiss.com, ayoung@paulweiss.com, mrudnick@paulweiss.com Counsel to the Debtors and Debtors-in-Possession 10

11 Exhibit 1 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 1 Page 1 of 12

12 AlaFile E-Notice 01-CV To: SARAH ELIZABETH MERKLE NOTICE OF ELECTRONIC FILING IN THE CIRCUIT COURT OF JEFFERSON COUNTY, ALABAMA BRANDON J WILLIAM V. ALABAMA WARRIOR RAILWAY, LLC ET AL 01-CV The following answer was FILED on 10/27/2014 4:52:51 PM Notice Date: 10/27/2014 4:52:51 PM ANNE-MARIE ADAMS CIRCUIT COURT CLERK JEFFERSON COUNTY, ALABAMA JEFFERSON COUNTY, ALABAMA 716 N. RICHARD ARRINGTON BLVD. BIRMINGHAM, AL anne-marie.adams@alacourt.gov Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 1 Page 2 of 12

13 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 1 Page 3 of 12 ELECTRONICALLY FILED 10/27/2014 4:53 PM 01-CV CIRCUIT COURT OF IN THE CIRCUIT COURT FOR JEFFERSON COUNTY, ALABAMA JEFFERSON COUNTY, ALABAMA ANNE-MARIE ADAMS, CLERK BIRMINGHAM DIVISION BRANDON J. WILLIAMS, v. Plaintiff, ALABAMA WARRIOR RAILWAY, LLC; WATCO COMPANIES, LLC; WATCO TRANSPORTATION SERVICES, LLC; WALTER ENERGY, INC., WALTER COKE INC. ) ) ) ) ) ) CIVIL ACTION NO: CV ) ) ) Defendants. ANSWER The Defendant named in Plaintiff s First Amended Complaint as Walter Coke, Inc. (hereinafter Walter Coke ), answers Plaintiff s First Amended Complaint as follows: FIRST DEFENSE PARTIES 1. Walter Coke is without information sufficient to admit or deny the allegations as set forth in Paragraph 1 of Plaintiff s First Amended Complaint, and therefore denies said material allegations. 2. Walter Coke is without information sufficient to admit or deny the allegations as set forth in Paragraph 2 of Plaintiff s First Amended Complaint, and therefore denies said material allegations. 3. Walter Coke is without information sufficient to admit or deny the allegations as set forth in Paragraph 3 of Plaintiff s First Amended Complaint, and therefore denies said material allegations.

14 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 1 Page 4 of Walter Coke is without information sufficient to admit or deny the allegations as set forth in Paragraph 4 of Plaintiff s First Amended Complaint, and therefore denies said material allegations. 5. Walter Coke is without information sufficient to admit or deny the allegations as set forth in Paragraph 5 of Plaintiff s First Amended Complaint, and therefore denies said material allegations. 6. Walter Coke is without information sufficient to admit or deny the allegations as set forth in Paragraph 6 of Plaintiff s First Amended Complaint, and therefore denies said material allegations. 6.1 Walter Coke admits the material averments set forth in Paragraph 6.1 of Plaintiff s First Amended Complaint. 6.2 Paragraph 6.2 of Plaintiff s First Amended Complaint does not appear to call for a response from Walter Coke. To the extent, if any, a response is called for, Walter Coke denies the material averments contained in Paragraph 6.2 of Plaintiff s First Amended Complaint. 7. Walter Coke is without information sufficient to admit or deny the allegations as set forth in Paragraph 7 of Plaintiff s First Amended Complaint, and therefore denies said material allegations. 8. Walter Coke is without information sufficient to admit or deny the allegations as set forth in Paragraph 8 of Plaintiff s First Amended Complaint, and therefore denies said material allegations. 9. Walter Coke is without information sufficient to admit or deny the allegations as set forth in Paragraph 9 of Plaintiff s First Amended Complaint, and therefore denies said material allegations. 1/

15 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 1 Page 5 of Walter Coke is without information sufficient to admit or deny the allegations as set forth in Paragraph 10 of Plaintiff s First Amended Complaint, and therefore denies said material allegations. 11. Walter Coke is without information to sufficient to admit or deny the allegations as set forth in Paragraph 11 of Plaintiff s First Amended Complaint, and therefore denies said material allegations. 12. Walter Coke is without information sufficient to admit or deny the allegations as set forth in Paragraph 12 of Plaintiff s First Amended Complaint, and therefore denies said material allegations. 13. Walter Coke is without information sufficient to admit or deny the allegations as set forth in Paragraph 13 of Plaintiff s First Amended Complaint, and therefore denies said material allegations. 14. Walter Coke is without information sufficient to admit or deny the allegations as set forth in Paragraph 14 of Plaintiff s First Amended Complaint, and therefore denies said material allegations. 15. Paragraph 15 of Plaintiff s First Amended Complaint does not appear to call for a response from Walter Coke. To the extent, if any, a response is called for, Walter Coke denies the material averments contained in Paragraph 15 of Plaintiff s First Amended Complaint. 16. Paragraph 16 of Plaintiff s First Amended Complaint does not appear to call for a response from Walter Coke. To the extent, if any, a response is called for, Walter Coke denies the material averments contained in Paragraph 16 of Plaintiff s First Amended Complaint. 17. Walter Coke denies the material averments of Paragraph 17 of Plaintiff s First Amended Complaint. 1/

16 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 1 Page 6 of 12 FACTS 18. Walter Coke admits that AWR s headquarters and the scene of Plaintiff s accident were on property leased by Walter Coke to AWR. Walter Coke admits that the property leased to AWR includes a facility for gypsum and denies the remaining material averments, if any, contained in Paragraph 18 of Plaintiff s First Amended Complaint. 19. Walter Coke admits that Plaintiff was injured on or about October 4, 2012, but denies the remaining material averments contained in Paragraph 19 of Plaintiff s First Amended Complaint. 20. Walter Coke is without information sufficient to form belief as to the truth of the averments contained in Paragraph 20 of Plaintiff s First Amended Complaint, and therefore denies said material averments. 21. Walter Coke is without information sufficient to form belief as to the truth of the averments contained in Paragraph 21 of Plaintiff s First Amended Complaint, and therefore denies said material averments. 1/ CAUSES OF ACTION Count One FELA Negligence Claims Against AWR 22. Walter Coke adopts and incorporates herein by reference its responses to Paragraphs 1-21 above. 23. Paragraph 23 of Plaintiff s First Amended Complaint does not appear to call for a response from Walter Coke. To the extent, if any, to which material allegations referable to Walter Coke are contained in Paragraph 23, they are denied. 24. Walter Coke is without information sufficient to form a belief as to the truth of the material averments contained in Paragraph 24, and therefore denies said material averments. 25. Walter Coke is without information sufficient to form a belief as to the truth of the material averments contained in Paragraph 25, and therefore denies said material averments.

17 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 1 Page 7 of 12 Count Two FELA Negligence Claims Against the Watco-Defendants 26. Walter Coke adopts and incorporates herein by reference its response to Paragraphs 1-25 above. 27. Paragraph 27 of Plaintiff s First Amended Complaint does not appear to call for a response from Walter Coke. To the extent, if any, to which material allegations referable to Walter Coke are contained in Paragraph 27, they are denied. 28. Walter Coke is without information sufficient to form a belief as to the truth of the material averments contained in Paragraph 28, and therefore denies said material averments. 29. Walter Coke is without information sufficient to form a belief as to the truth of the material averments contained in Paragraph 29, and therefore denies said material averments. 30. Walter Coke is without information sufficient to form a belief as to the truth of the material averments contained in Paragraph 30, and therefore denies said material averments. 1/ Count Three Common Law Negligence Claims Against the Watco-Defendants, the Walter-Defendants, and Fictitious Party Defendant No. 1 through No Paragraph 31 of Plaintiff s First Amended Complaint does not appear to call for a response from Walter Coke. To the extent, if any, to which material allegations referable to Walter Coke are contained in Paragraph 31, they are denied. 32. Walter Coke adopts and incorporates herein by references responses to Paragraphs 1-31 above. 33. Walter Coke denies the material averments contained in Paragraph 33 of Plaintiff s First Amended Complaint. 34. Walter Coke denies the material averments contained in Paragraph 34 of Plaintiff s First Amended Complaint.

18 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 1 Page 8 of Walter Coke denies the material averments contained in Paragraph 35 of Plaintiff s First Amended Complaint. 36. Walter Coke denies the material averments contained in Paragraph 36 of Plaintiff s First Amended Complaint. 37. Walter Coke denies the material averments contained in Paragraph 37 of Plaintiff s First Amended Complaint. 38. Walter Coke denies the material averments contained in Paragraph 38 of Plaintiff s First Amended Complaint. 39. Walter Coke denies the material averments contained in Paragraph 39 of Plaintiff s First Amended Complaint. 40. Walter Coke denies the material averments contained in Paragraph 40 of Plaintiff s First Amended Complaint Walter Coke denies the material averments contained in Paragraph 40.1 of Plaintiff s First Amended Complaint. Count Four Common Law Wantonness Claims Against the Watco-Defendants, the Walter-Defendants, and Fictitious Party Defendants No. 1 through No Paragraph 41 of Plaintiff s First Amended Complaint does not appear to call for a response from Walter Coke. To the extent, if any, to which material allegations referable to Walter Coke are contained in Paragraph 41, they are denied. 42. Walter Coke adopts and incorporates herein by references responses to Paragraphs 1-41 above. 43. Walter Coke denies the material averments contained in Paragraph 43 of Plaintiff s First Amended Complaint. 1/

19 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 1 Page 9 of Walter Coke denies the material averments contained in Paragraph 44 of Plaintiff s First Amended Complaint. 45. Walter Coke denies the material averments contained in Paragraph 45 of Plaintiff s First Amended Complaint Walter Coke denies the material averments contained in Paragraph 45.1 of Plaintiff s First Amended Complaint. FIRST DEFENSE Walter Coke is not a common carrier by railroad engaged in interstate commerce and thus is not subject to FELA. SECOND DEFENSE Walter Coke pleads the defenses of contributory negligence and assumption of the risk. THIRD DEFENSE Plaintiff s injuries and damages were caused in whole or in part by the acts or omissions of persons other than Walter Coke, over whom Walter Coke had no control, or by the superseding intervention of causes outside Walter Coke s control. FOURTH DEFENSE Walter Coke denies that Plaintiff is entitled to punitive damages, but in any event an award of punitive damages is subject to all applicable statutory and state and federal constitutional caps and limits. FIFTH DEFENSE Walter Coke adopts by reference the defenses, criteria, limitations, standards and constitutional protections mandated or provided by the United States Supreme Court in BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), Cooper Industries, Inc. v. Leatherman Tool 1/

20 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 1 Page 10 of 12 Group, Inc., 532 U.S. 923 (2001), State Farm Mutual Automobile Insurance Company v. Campbell, 538 U.S. 408 (2003), and Phillip Morris USA v. Williams, 127 S. Ct (2007). SIXTH DEFENSE Walter Coke denies each allegation of the Complaint not specifically admitted. SEVENTH DEFENSE Plaintiff s First Amended Complaint fails to state grounds against Walter Coke on which the requested relief can be granted. EIGHTH DEFENSE Walter Coke reserves the right to amend its answer to assert additional affirmative or supplemental defenses after completion of further investigation and discovery. NINTH DEFENSE Walter Coke did not breach any duty owed to Plaintiff. TENTH DEFENSE The Plaintiff s claims are barred by the doctrines of waiver, estoppel, accord and satisfaction, ratification, consent, settlement and release, acquiescence, laches, and unclean hands, if applicable. ELEVENTH DEFENSE The claims asserted in the Complaint are barred in whole or in part or are subject to offset. TWELFTH DEFENSE The Plaintiffs did not suffer any injury or damage by reason of any act or omission by Walter Coke. 1/

21 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 1 Page 11 of 12 THIRTEENTH DEFENSE The Plaintiff s claims are barred by the doctrine of last clear chance or subsequent negligence. FOURTEENTH DEFENSE There is no proximate causal relation or other causal relation between the acts or omissions of Walter Coke and any injuries or damages sustained by the Plaintiffs. FIFTEENTH DEFENSE Walter Coke did not act willfully or intentionally with regard to the Plaintiffs. SIXTEENTH DEFENSE Walter Coke is entitled to a set-off or credit for any amounts paid to the Plaintiffs by any third party. SEVENTEENTH DEFENSE Walter Coke asserts all applicable punitive damages limitations as found in Ala. Code s/ John D. Watson III John D. Watson III (WAT035) OF COUNSEL Bradley Arant Boult Cummings LLP One Federal Place 1819 Fifth Avenue North Birmingham, AL Telephone: (205) Facsimile: (205) /

22 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 1 Page 12 of 12 CERTIFICATE OF SERVICE I hereby certify that on October 27, 2014, I electronically filed the foregoing with the Clerk of the Court using the AlaFile system which will send notification of such filing to the following: William C. Tucker, Jr., Esq. Samuel Maples, Esq. MAPLES, TUCKER & JACOBS, LLC 2001 Park Place, Suite 501 Birmingham, AL Turner B. Williams, Esq. Kermit L. Kendrick Brett C. Thompson BURR & FORMAN, LLP 3400 Wells Fargo Tower 420 North 20th Street Birmingham, AL s/ John D. Watson III OF COUNSEL 1/

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28 AlaFile E-Notice 01-CV To: JOHN D. WATSON III NOTICE OF ELECTRONIC FILING IN THE CIRCUIT COURT OF JEFFERSON COUNTY, ALABAMA BRANDON J WILLIAM V. ALABAMA WARRIOR RAILWAY, LLC ET AL 01-CV The following answer was FILED on 3/24/2014 4:16:24 PM Notice Date: 3/24/2014 4:16:24 PM ANNE-MARIE ADAMS CIRCUIT COURT CLERK JEFFERSON COUNTY, ALABAMA JEFFERSON COUNTY, ALABAMA 716 N. RICHARD ARRINGTON BLVD. BIRMINGHAM, AL anne-marie.adams@alacourt.gov Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 3 Page 2 of 12

29 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 3 Page 3 of 12 ELECTRONICALLY FILED 3/24/2014 4:16 PM 01-CV CIRCUIT COURT OF JEFFERSON COUNTY, ALABAMA ANNE-MARIE ADAMS, CLERK IN THE CIRCUIT COURT FOR JEFFERSON COUNTY, ALABAMA BIRMINGHAM DIVISION BRANDON J. WILLIAMS, v. Plaintiff, ALABAMA WARRIOR RAILWAY,LLC; WATCO COMPANIES, LLC; WATCO TRANSPORTATION SERVICES, LLC; WALTER ENERGY, INC., ) ) ) ) ) ) ) ) CIVIL ACTION NO: CV Defendants. ANSWER The Defendant named in Plaintiff s Complaint as Walter Energy, Inc. (hereinafter Walter Energy or this Defendant ), answers Plaintiff s Complaint as follows: FIRST DEFENSE PARTIES 1. This Defendant is without information to sufficient to submit or deny the allegations as set forth in Paragraph 1 of Plaintiff s Complaint, and therefore denies said material allegations. 2. This Defendant is without information to sufficient to submit or deny the allegations as set forth in Paragraph 2 of Plaintiff s Complaint, and therefore denies said material allegations. 3. This Defendant is without information to sufficient to submit or deny the allegations as set forth in Paragraph 3 of Plaintiff s Complaint, and therefore denies said material allegations.

30 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 3 Page 4 of This Defendant is without information to sufficient to submit or deny the allegations as set forth in Paragraph 4 of Plaintiff s Complaint, and therefore denies said material allegations. 5. This Defendant is without information to sufficient to submit or deny the allegations as set forth in Paragraph 5 of Plaintiff s Complaint, and therefore denies said material allegations. 6. This Defendant denies that Walter Energy is a Florida corporation, stating that it is instead a Delaware corporation with its corporate headquarters in Alabama, and admits the remaining material averments contained in Paragraph 6 of Plaintiff s Complaint. 7. This Defendant is without information to sufficient to submit or deny the allegations as set forth in Paragraph 7 of Plaintiff s Complaint, and therefore denies said material allegations. 8. This Defendant is without information to sufficient to submit or deny the allegations as set forth in Paragraph 8 of Plaintiff s Complaint, and therefore denies said material allegations. 9. This Defendant is without information to sufficient to submit or deny the allegations as set forth in Paragraph 9 of Plaintiff s Complaint, and therefore denies said material allegations. 10. This Defendant is without information to sufficient to submit or deny the allegations as set forth in Paragraph 10 of Plaintiff s Complaint, and therefore denies said material allegations. 11. This Defendant is without information to sufficient to submit or deny the allegations as set forth in Paragraph 11 of Plaintiff s Complaint, and therefore denies said 1/

31 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 3 Page 5 of 12 material allegations. 12. This Defendant is without information to sufficient to submit or deny the allegations as set forth in Paragraph 12 of Plaintiff s Complaint, and therefore denies said material allegations. 13. This Defendant is without information to sufficient to submit or deny the allegations as set forth in Paragraph 13 of Plaintiff s Complaint, and therefore denies said material allegations. 14. This Defendant is without information to sufficient to submit or deny the allegations as set forth in Paragraph 14 of Plaintiff s Complaint, and therefore denies said material allegations. 15. Paragraph 15 of Plaintiff s Complaint does not appear to call for a response from this Defendant. To the extent, if any, to which a response is called for, this Defendant denies the material averments contained in Paragraph 15 of Plaintiff s Complaint. 16. Paragraph 16 of Plaintiff s Complaint does not appear to call for a response from this Defendant. To the extent, if any, to which a response is called for, this Defendant denies the material averments contained in Paragraph 16 of Plaintiff s Complaint. 17. This Defendant denies the material averments of Paragraph 17 of Plaintiff s Complaint. FACTS 18. Walter Energy denies that AWR s headquarters are located, or that the location of the accident complained of elsewhere in Plaintiff s Complaint is on, property owned by Walter Energy. Walter Energy admits that AWR s headquarters and the scene of Plaintiff s accident were on property leased by one of Walter Energy s subsidiaries, Walter Coke, Inc., to AWR. 1/

32 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 3 Page 6 of 12 Walter Energy admits that the property leased by its subsidiary Walter Coke, Inc. to AWR includes a facility for shipping coal, coke, and other materials, and denies the remaining material averments, if any, contained in Paragraph 18 of Plaintiff s Complaint. 19. Walter Energy admits that Plaintiff was injured on or about October 4, 2012, but denies the remaining material averments contained in Paragraph 19 of Plaintiff s Complaint. 20. Walter Energy is without information sufficient to form belief as to the truth of the averments contained in Paragraph 20 of Plaintiff s Complaint, and therefore denies said material averments. 21. Walter Energy is without information sufficient to form belief as to the truth of the averments contained in Paragraph 21 of Plaintiff s Complaint, and therefore denies said material averments. CAUSES OF ACTION Count One FELA Negligence Claims Against AWR 22. Walter Energy adopts and incorporates herein by reference its responses to Paragraphs 1-21 above. 23. Paragraph 23 of Plaintiff s Complaint does not appear to call for a response from Walter Energy. To the extent, if any, to which material allegations referable to Walter Energy are contained in Paragraph 23, they are denied. 24. Walter Energy is without information sufficient to form belief as to the truth of the material averments contained in Paragraph 24, and therefore denies said material averments. 25. Walter Energy is without information sufficient to form belief as to the truth of the material averments contained in Paragraph 25, and therefore denies said material averments. Count Two FELA Negligence Claims Against the Watco-Defendants 26. Walter Energy adopts and incorporates herein by reference its response to 1/

33 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 3 Page 7 of 12 Paragraphs 1-25 above. 27. Paragraph 27 of Plaintiff s Complaint does not appear to call for a response from Walter Energy. To the extent, if any, to which material allegations referable to Walter Energy are contained in Paragraph 27, they are denied. 28. Walter Energy is without information sufficient to form belief as to the truth of the material averments contained in Paragraph 28, and therefore denies said material averments. 29. Walter Energy is without information sufficient to form belief as to the truth of the material averments contained in Paragraph 29, and therefore denies said material averments. 30. Walter Energy is without information sufficient to form belief as to the truth of the material averments contained in Paragraph 30, and therefore denies said material averments. Count Three Common Law Negligence Claims Against the Watco-Defendants, Walter, and No. 1 through No Paragraph 31 of Plaintiff s Complaint does not appear to call for a response from Walter Energy. To the extent, if any, to which material allegations referable to Walter Energy are contained in Paragraph 31, they are denied 32. Walter Energy adopts and incorporates herein by references responses to Paragraphs 1-31 above. 33. Walter Energy denies the material averments contained in Paragraph 33 of Plaintiff s Complaint. 34. Walter Energy denies the material averments contained in Paragraph 34 of Plaintiff s Complaint. 35. Walter Energy denies the material averments contained in Paragraph 35 of Plaintiff s Complaint. 36. Walter Energy denies the material averments contained in Paragraph 36 of 1/

34 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 3 Page 8 of 12 Plaintiff s Complaint. 37. Walter Energy denies the material averments contained in Paragraph 37 of Plaintiff s Complaint. 38. Walter Energy denies the material averments contained in Paragraph 38 of Plaintiff s Complaint. 39. Walter Energy denies the material averments contained in Paragraph 39 of Plaintiff s Complaint. 40. Walter Energy denies the material averments contained in Paragraph 40 of Plaintiff s Complaint. Count Four Common Law Wantonnes Claims Against the Watco-Defendants, Walter, and No. 1 through No Paragraph 41 of Plaintiff s Complaint does not appear to call for a response from Walter Energy. To the extent, if any, to which material allegations referable to Walter Energy are contained in Paragraph 41, they are denied. 42. Walter Energy adopts and incorporates herein by references responses to Paragraphs 1-41 above. 43. Walter Energy denies the material averments contained in Paragraph 43 of Plaintiff s Complaint. 44. Walter Energy denies the material averments contained in Paragraph 44 of Plaintiff s Complaint. 45. Walter Energy denies the material averments contained in Paragraph 45 of Plaintiff s Complaint. SECOND DEFENSE Walter Energy did not at the time of Plaintiff s accident, and does not now, own the 1/

35 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 3 Page 9 of 12 property where Plaintiff s accident allegedly occurred, and therefore owed no legal duty to Plaintiff. THIRD DEFENSE Walter Energy is not a common carrier by railroad engaged in interstate commerce and thus is not subject to FELA. FOURTH DEFENSE Walter Energy pleads the defenses of contributory negligence and assumption of the risk. FIFTH DEFENSE Plaintiff s injuries and damages were caused in whole or in part by the acts or omissions of persons other than Walter Energy, over whom Walter Energy had no control, or by the superseding intervention of causes outside Walter Energy s control. SIXTH DEFENSE Walter Energy denies that Plaintiff is entitled to punitive damages, but in any event an award of punitive damages is subject to all applicable statutory and state and federal constitutional caps and limits. SEVENTH DEFENSE Walter Energy adopts by reference the defenses, criteria, limitations, standards and constitutional protections mandated or provided by the United States Supreme Court in BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532 U.S. 923 (2001), State Farm Mutual Automobile Insurance Company v. Campbell, 538 U.S. 408 (2003), and Phillip Morris USA v. Williams, 127 S. Ct (2007). 1/

36 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 3 Page 10 of 12 EIGHTH DEFENSE Walter Energy denies each allegation of the Complaint not specifically admitted. NINTH DEFENSE Plaintiff s Complaint fails to state grounds against Walter Energy on which the requested relief can be granted. TENTH DEFENSE Walter Energy reserves the right to amend its answer to assert additional affirmative or supplemental defenses after completion of further investigation and discovery. TENTH DEFENSE This Defendant did not breach any duty owed to Plaintiff. ELEVENTH DEFENSE The Plaintiff s claims are barred by the doctrines of waiver, estoppel, accord and satisfaction, ratification, consent, settlement and release, acquiescence, laches, and unclean hands, if applicable. TWELFTH DEFENSE The claims asserted in the Complaint are barred in whole or in part or are subject to offset. THIRTEENTH DEFENSE The Plaintiffs did not suffer any injury or damage by reason of any act or omission by this Defendant. FOURTEENTH DEFENSE The Plaintiff s claims are barred by the doctrine of last clear chance or subsequent negligence. 1/

37 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 3 Page 11 of 12 FIFTEENTH DEFENSE There is no proximate causal relation or other causal relation between the acts or omissions of this Defendant and any injuries or damages sustained by the Plaintiffs. SIXTEENTH DEFENSE This Defendant did not act willfully or intentionally with regard to the Plaintiffs. SEVENTEENTH DEFENSE This Defendant is entitled to a set-off or credit for any amounts paid to the Plaintiffs by any third party. EIGHTEENTH DEFENSE This Defendant asserts all applicable punitive damages limitations as found in Ala. Code s/ John D. Watson III John D. Watson III (WAT035) OF COUNSEL Bradley Arant Boult Cummings LLP One Federal Place 1819 Fifth Avenue North Birmingham, AL Telephone: (205) Facsimile: (205) /

38 Case TOM11 Doc Filed 11/05/15 Entered 11/05/15 15:13:05 Desc Exhibit 3 Page 12 of 12 CERTIFICATE OF SERVICE I hereby certify that on March 24, 2014, I electronically filed the foregoing with the Clerk of the Court using the AlaFile system which will send notification of such filing to the following: William C. Tucker, Jr., Esq. Samuel Maples, Esq. MAPLES, TUCKER & JACOBS, LLC 2001 Park Place, Suite 501 Birmingham, AL Turner B. Williams, Esq. Kermit L. Kendrick Brett C. Thompson BURR & FORMAN, LLP 3400 Wells Fargo Tower 420 North 20 th Street Birmingham, AL s/ John D. Watson III OF COUNSEL 1/