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☛ Ed Dufurrena in court again!

LIGHTNING STRIKES DUFURRENA TWICE

ALLEGATIONS OF FRAUD RESURFACE IN FILED COURT DOCUMENTS BY EUGENE AND JANIE VOGEL

By Glory Ann Kurtz
Oct. 10, 2017

Ed Dufurrena from his website.

Edward L. Dufurrena, the owner of Dufurrena Cutting Horses LLC, Gainesville, Texas, is headed back to court in yet another civil lawsuit.The latest lawsuit filed against Dufurrena is entitled Donald Eugene Vogel and Janie S. Vogel vs Edward L. Dufurrena (CV17-00588). The lawsuit was filed in The State of Texas, County of Cooke, 235th District Court on Oct. 2, 2017 at 11:58 a.m. by the Vogels’ attorney Lisa C. Bennett of Adams, Bennett, Duncan & Henley, located at 100 East Broadway, Gainesville, Texas. For the record, the Vogels are the Plaintiffs and Edward L. Dufurrena is the Defendant. The Vogels are senior citizens, who were 66 at the time of the agreement.

As you may remember in a previous article regarding Dufurrena, included a seven-day trial held in April of this year, in the United States District Court for the Eastern District of Texas, in Sherman, Texas, to determine who was guilty for a HERDA positive foal, sired by Auspicious Cat, that was born to Canadians Shawn, Lisa and Lauren Minshall’s mare. The eight-member jury’s determined that Edward and Shona Dufurrena, Gainesville, Texas, who headed up the Dos Cats Partners, the owners of Auspicious Cat, were 60 percent responsible for their foal being born with full-blown HERDA, the Minshalls were 30 percent responsible and David Hartman, DVM’s Hartman Equine Reproduction Center, P.A., the veterinarian that collected the semen and shipped it to the Minshalls, was 10 percent responsible.

The suit alleged advertising fraud. Dufurrena, the Defendant, willfully and knowingly advertised his stallion Auspicious Cat, as HERDA negative (HN) when court documents revealed the stallion carried the (HN) designation on his AQHA registration papers, meaning he carried the HERDA gene, which can result in a disease that make a horse lose their skin, leaving huge sores on their body, making them unridable and they usually have to be put down. This court case resulted in out-of-court settlements and assignments of responsibility by a jury trial which I covered in length.  Essentially, the Minshalls bred a mare to Auspicious Cat that produced a HERDA foal.

Click on link below for copy of HERDA trial>>

http://allaboutcutting.net/?p=10092

 

DOS CAT PARTNERS RECENT LAWSUIT
In the most recent lawsuit filed by the Vogels, I reviewed Legal documents that indicate the subject of the lawsuit is a Partnership named Dos Cat Partners (herein after referred to as the  “Partnership”.  The Partnership was formed by written agreement on March 29, 2011 by and between Donald Eugene and Janie Vogel and Edward L. Dufurrena.  The Vogel’s invested $105,000 in the Partnership for a 49 pecent share with 51 percent of the Partnership belonging to Ed Dufurrena, also the defendant in this case.

The purpose of the Partnership was operating a business for profit. The principal business of the Partnership is to promote cutting horses through training, showing, breeding and sales for profit. The partnership was, at all times mentioned in this petition, in operation.

Court documents state that at the beginning, the Partnership owned four horses: Auspicious Cat, Ozzum Man, Ozzum Cat and Whata Sneaky Cat, as well as three embryos: one from Miss Ella Ray sired by Auspicious Cat, one from Miss Ella Ray sired by Metallic Cat and one out of Hickory Wheel sired by Auspicious Cat. Presently the horses remaining in the Partnership are the stallion Auspicious Cat, Crezy Train and Stevie Rey Von, also a stallion.  Stevie is the embryo of Miss Ella Rey sired by Metallic Cat.

2-Stevie Rey Von

3-Auspicious Cat

The terms of the Partnership were as follows: (1) all expenses are shared proportionately by owners according to ownership interest of each partner; (2) all earnings from any source are shared proportionately according to the ownership interests of each partner and (3) Ed Dufurrena, the Defendant, was to manage the horses.

4-copy of new lawsuit

 

2-PARTNERSHIP HORSE VALUES
Stevie Rey Von, considered as a “very valuable horse,” is owned by the Partnership and is an embryo offspring of Miss Ella Rey sired by Metallic Cat as indicated in the Partnership Agreement. In December 2015, Stevie Rey Von, ridden by Dufurrena, won the NCHA Cutting Horse Futurity for 3-year-olds. The winnings were substantial, consisting of $341,570. According to court papers, Dufurrena, the Defendant, collected all of the winnings, never sharing with the Vogels for their 49 percent. However, the win made the horse a substantial asset for the Partnership.

As of June 10, 2017, Stevie Rey Von has a total lifetime NCHA earnings of $341,570. Stevie Rey Von is currently advertised by Dufurrena (Defendant), standing at stud for a breeding fee of $4,000 plus a $650 chute fee.  Auspicious Cat is the second most valuable horse owned by the Partnership and stands at stud for $3,650 per breeding.

FAILURE TO PAY
Filed court documents state, ”After the large winnings, Dufurrena, the Defendant, did not pay the Vogels (Plaintiffs) their proportionate share. The Vogels requested that they be paid according to the partnership agreement; however, Dufurrena responded to the Plaintiff’s) by sending them self-generated invoices. The Vogels examined the invoices containing expense,  questioning the expenses and requesting that the expenses be substantiated. Dufurrena never complied and to date, Dufurrena has not substantiated those questioned expenses.

INSPECT THE PARTNERSHIP RECORDS
The lawsuit went on to say that the Plaintiff’s have requested to see the records of the Partnership. Beginning, January 2016, the Vogels contacted Dufurrena, advising him that they wanted to see the bills. Again, Dufurrena failed to comply. Thereafter, week after week and continuing through 2017, the Vogels said they requested documentation from Dufurrena and he always had a reason for not complying. They state that To date, Dufurrena has not complied.  In the suit, the Vogels also demand they should be allowed to inspect all the records of the Partnership.

GROSS MISREPRESENTATION OF MATERIAL FACTS
A. Number of breedings: A number of breedings of Stevie Ray Von were misrepresented by Dufurrena to the Vogels. Dufurrena represented to the Vogels that Stevie Rey Von had 40 breeding’s in 2016 (foals would be born in 2017);however, the Vogels recently learned that Dufurrena had permitted at least 100 breedings to Stevie Rey Von during that period. (This information is not yet available from the AQHA; however, 40 breedings would be worth $160,000, while 100 breedings would be worth $400,000, a different of $240,000.) The Vogels said in the court documents that they anticipate that the same will be true for 2015 and 2017 for Stevie Rey Von, as well as for Auspicious Cat. AQHA does not release the number of breedings by a stallion in given year; however, they do release the number of foals registered from those breedings.
Click for number of foals registered in 2016>>

B. Condition of Auspicious Cat: Dufurrena represented to the Vogels that Auspicious Cat had no physical defects.  However, since then the Plaintiff’s have learned that the horse is a cryptorchid (only has one testicle), a genetic condition which is very serious for a breeding sire and also has the genetic condition HERDA H/N, meaning he carries the HERDA gene and could pass it on. Both of these conditions greatly affect the horse’s value.

C. Expenses and Income: The Vogels claim that Dufurrena has misrepresented the expenses of the Partnership. They claim that Dufurrena has claimed expenses for things that were not incurred, as well as expenses that were inflated. They also claim that Dufurrena has claimed expenses that were not authorized and expenses that were excessive.  The Vogels previously questioned the expenses and requested that the expenses be substantiated; however,  Dufurrena provided little or no substantiation documents for the expenses.

D. Horse Ownership Papers: Court documents state that Dufurrena did not title the Partnership horses in the name of the Partnership nor did he include the name of the Vogels on the ownership papers, with the exception or Auspicious Cat. Dufurrena titled Stevie Rey Von’s ownership papers originally in the name of his son  (who showed the horse and won money in major NCHA events) and then in his name only – never in the name of the partnership. He also titled Crezy Train’s ownership papers in the name of his son and never informed the Vogels of his actions.

E. Representation to the Public: Court papers also state that Dufurrena has misrepresented the ownership of the horses not only to the Vogels, but also the public – namely the National Cutting Horse Association. Unknown to the Vogels at the time, Dufurrena showed Stevie Rey Von at the 2015 National Cutting Horse Association Futurity and represented himself as the sole owner, which if proven, is a serious violation of the rules and regulations of the National Cutting Horse Association. Also, advertisements for the horse indicated that Ed Dufurrena was the sole owner.

F. Conversion.  If the foregoing facts above are proven to be true,Dufurrena has committed conversion against the Plaintiffs.  Dufurrena has sold Partnership property without the right to do so  and against the benefit of the Plaintiffs.  Dufurrena has sold Partnership property without paying the Vogels their proportionate share or without their permission, including but not limited to: Dufurrena has received money for breedings from Stevie Rey Von, and has not paid to the Partnership or Plaintiff’s proportionate share. Dufurrena has received prize winnings that he has not paid to the Partnership or paid to the Plaintiff’s proportionate share. Dufurrena has invoiced and been paid for expenses that have not been incurred or were not for the benefit of the Partnership property. Those amounts due the Vogels have reached hundreds of thousands of dollars.

G. Fraud.  The Vogels have hired an attorney to assist them in enforcing their rights under the Partnership Agreement.  According to court documents, Dufurrena provided some documentation to the Vogels, through his attorneys and as such, the Vogels have  discovered in the documents that Dufurrena has committed forgeries.  If such action by Dufurrena is true, that would  constitute fraud.

H. Breach of Fiduciary Duty of Loyalty.  Based on the foregoing facts, Dufurrena has breached the duty of loyalty owed to the Vogels under the law and under the terms of the Partnership. He has used Partnership property for his own personal gain and to the deprivation of the Plaintiffs. The Vogels  claim Dufurrena has billed expenses to them  wrongfully, including expenses that never existed, were improperly applied or grossly inflated. The Vogels also claim that Dufurrena improperly titled Partnership property in his own name.

I. Dissolution of Property.  The Vogels seek a dissolution of the Partnership, and demand an accounting from Dufurrena. The Plaintiffs are requesting to be paid all monies due to them from Dufurrena. The Plaintiffs also demand that a receiver be appointed for the sale of all Partnership property including, but not limited to, Stevie Rey Von.

J. Fraud.  Based on the foregoing facts set out above, if proven to be true, Dufurrena has committed fraud on the Vogels and according to the court documents, to date, he has continued the fraud against the Vogels.

Risk Assessment
At my request, the following Risk Assessment/Risk Analysis was performed by Richard E. “Rick” Dennis in this matter.  Rick is a former Professional Drug Enforcement Agent and a Law Enforcement Officer.  Since 1986, Rick has been involved in the private security industry as an entrepreneur and currently is the Managing Member of the Wind River Company LLC.

Rick’s company specializes in providing Private Security, Personal Protection, Security Consultation, as well as Employee Drug and Alcohol Testing, and Risk Management Services to the private sector including Risk Assessment and Risk Analysis. Rick has a total of 47 years experience in his fields of representation.

In addition to the above, Rick is the author of two books: THE AMERICAN HORSE INDUSTRY, Avoiding The Pitfalls as well as CROSS TRAINING 101, Reining, Cutting, Cowhorse, a freelance writer and contributing writer to allaboutcutting.com.

In Rick’s opinion, “If all of the allegations included in this petition are proven true, it may produce a domino effect for the Defendants.  It will not only produce a civil lawsuit, as it already has, but it may also invoke a litany of criminal investigations into this matter as well.  These crimes could include: 1) Fraud, 2) Forgery, 3) Theft, 4) Violations of the Texas Deceptive Trade Practices act which pays out three times the damage award if proven true, 5) taking advantage of the elderly, and 6) mail fraud — to name a few. However; as in all cases, each individual is innocent until proven guilty. Therefore, only law enforcement authorities, after a careful review, will be able to determine if criminal actions are warranted in this matter.

However, the Vogels are not the only ones that may be impacted by Dufurrena’s  actions. Again if proven true, the American Quarter Horse Association may be impacted by the misrepresentation of ownership of a specific horse, as well as all of the data in their cumulative records. The National Cutting Horse Association may certainly be impacted by the improper disbursement of horse earnings as well asthe data in the horse and rider earnings that they keep and publish. For example, accompanying a disbursement of funds above $600, the NCHA is required by IRS law to disburse a 1099 to the winner.

If fraud in this matter is proven true, the NCHA earnings checks should have been disbursed to Dos Cat Partners, who in turn should have disbursed a proportionate share of the earnings to the Vogels, along with an appropriate 1099. In this case, the NCHA may have to amend previously filed State or Federal Tax returns which cost money and, in turn, may affect the Vogel’s tax filings in this matter – adding further damages to them by Dufurrena’s actions.

Then there are also rule violations (where warranted) to take into account for either/and/or the American Quarter Horse Association and the National Cutting Horse Association. Overall, this legal filing is going to produce a lot of paper slinging on both sides and a big headache for the AQHA and the NCHA.

Note: a First Amended Petition was filed in court today (Monday, Oct. 9), by the Vogel’s attorney at 3:04 p.m. correcting a statement in the original filed petition which states “Stevie Rey Von won the American Cutting Horse Association Futurity” with a correction stating “Stevie Rey Von won the National Cutting Horse Association 2015 Futurity.”

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One Comment

  1. Suspend the whole family!!!

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