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☛ Vogels and Dufurrena settle – Alvin Fults purchases Stevie Rey Von 2-10-18

VOGELS  AND ED DUFURRENA AGREE ON A PRIVATE SETTLEMENT OF LAWSUIT 

 

VOGELS RECEIVE AUSPICIOUS CAT, STEVIE REY VON AND CREYZY TRAIN;

AFTER PRIVATE SETTLEMENT, STEVIE REY VON SELLS FOR $2 MILLION

By Glory Ann Kurtz
Feb. 10, 2018

After close to eight years of disagreements and lawsuits, Ed Dufurrena, Gainesville, Texas, on Thursday, Feb. 8, agreed to sign over three horses to Don and Janie Vogel, Saint Jo, Texas, during a private settlement in the Fort Worth office of their lawyer Lew Stevens.

But these weren’t just any horses. They included Auspicious Cat , a 2005 stallion sired by High Brow Cat out of Lenas O Lady by Peppy San Badger, with over $333,000 in lifetime earnings;  Stevie Rey Von, a 2012 son of Metallic Cat out of Miss Ella Rey and the winner of the 2015 NCHA Open Futurity, earning over $340,000 and Creyzy Train, a trained cutting mare that is a 2012 daughter of Auspicious Cat out of Miss Ella Rey by Dual Rey with earnings of close to $14,000.

The venture started on March 29, 2011, when Janie Vogel wrote a check for $105,000 to Ed Dufurrena Cutting Horses for 49 percent of four horses. They included three (3) registered horses including Auspicious Cat for $49,000, Whata Sneaky Cat ($20,000) and Ozzum Cat ($3,500).  Ozzum Man (registration pending) was listed at $2,500.  Two embryos out of Miss Ella Rey by Auspicious Cat and Metallic Cat (which later turned out to be Stevie Rey Von, the winner of the 2014 NCHA Futurity) were listed at $15,000 each.  Also, a 2011 embryo out of Miss Hickory Wheel by Auspicious Cat was included for 100% of reproductive costs.

Among other things, the hand-written contract stated that the purpose of the alliance was to promote cutting horses through training, showing, breeding and sales for a potential profit. The agreement stated that the Vogels had purchased the percentage of those horses and embryos, which would be known as Dos Cats Partners. The owners would share all expenses, including board, vet care, farrier, advertising, training, showing, nominations, hauling, insurance and any other expense incurred in the care and promotion of horses proportionately. The horses would be managed by Ed Dufurrena, including training, showing and advertising.  Diufurrena agreed to use acceptable practices of animal husbandry in the care and condition of the horses – as well as being the stallion manager.

Asked how the couple got involved in the cutting horse business, Janie said, “Our vet got injured badly in an accident loading horses in a trailer on New Year’s Eve. After five months in the hospital, she sold her practice. So when we went to an auction and bought some breedings for stallions, someone gave me Ed’s number and Shona helped me get my three mares bred.”

“I’ve always been fascinated with cutting horse and went to their shows,” continued Janie. “I had some halter horses that I loved to death – but for a long time I really liked cutting horses.”

Her husband, Don, was born in Muenster, Texas and they lived in South Lake, where they owned a swimming pool concrete company.

“When we decided to retire, we sold the company and bought a farm in Saint Jo, Texas,” sad Janie.

VOGEL LAWSUIT:

However, in a lawsuit filed six years later on Sept. 27, 2017, the Vogels (the plaintiffs) sued Dufurrena (the defendant), stating that in the beginning, the partnership owned four horses; however, presently the horses remaining in the partnership were Auspicious Cat, Creyzy Train and Stevie Rey Von (at that time ann embryo by Metallic Cat out of Miss Ella Rey). The rest of the horses in the agreement had been sold by Dufurrena. The terms included all expenses being shared proportionately by the ownership interests of each partner; all earnings from any source were to be shared proportionately according to the ownership interests of each partner and the defendant would manage the horses.

Also, expenses were allegedly incurred in the partnership with Dufurrena  being responsible for sending an invoice to the Vogels, that was prepared by Dufurrena, or at the direction of him, providing a description of the expense and the proportionate share owed by the Plaintiffs.

Stevie Rey Von went on to win the 2015 NCHA Futurity, taking home over $300,000 – without Dufurrena paying the Vogels their proportionate share of the winnings. At that time Stevie Rey Von’s breeding fee was $4,000 plus a $650 chute fee.

The Vogels response was that they had  not received their share of the breeding fees, with Dufurrena responding by sending the Vogels “self-generated” invoices containing expenses. When the Vogels requested the expenses be substantiated, they claimed the defendant never complied. In fact, at the time of the lawsuit, none of the expenses had been substantiated by Dufurrena.

The Vogels also claimed gross misrepresentations of material facts by Dufurrena. For example, the number of breedings of the stallions. The Vogels learned that Dufurrena permitted at least 100 breedings to Stevie Rey Von, during that period. The Vogels anticipated that the same would be true for 2015 and 2017 for Stevie Rey Von as well as Auspicious Cat.

According to the lawsuit, at the time of the agreement, Dufurrena represented to the Vogels that Auspicious Cat had no physical defects, which was untrue as it was later learned he was a cryptorchid (only one testicle) and carried the HERDA gene. They claim Dufurrena also misrepresented expenses of the partnership, claiming expenses for things that had not incurred, as well as inflated expenses and some that were not authorized and/or excessive. They also claim the horses generated income but that the Vogels never received their share.

Also, Dufurrena did not include the Vogels ownership on the AQHA registration papers of the partnership horses in the name of the Partnership nor the name of the Vogels. Auspicious Cat was  not transferred to Dos Cats Partners until Jan. 16, 2008, even though the date on the sale was Dec. 30, 2006 and he alone pocketed the $345,000 paycheck for winning the Open NCHA Futurity.

According to AQHA registration papers, Stevie Rey Von was  bred and owned by Brandon Dufurrena (Ed and Shona Dufurrena’s son), but his AQHA registration shows the stallion was transferred to Edward L. Dufurrena on 12/1/15 – just in time for the pair’s win in the 2015 NCHA Futurity, but the ownership of the horse was not actually recorded by the AQHA until Feb. 4, 2016. Note: Stevie Rey Von had never been transferred into the Vogels’ names.)

Dufurrena represented himself as the sole owner of the stallion, which is a serious violation of the rules and regulations of the National Cutting Horse Association. Also, advertisements of the stallion also indicate that Ed Dufurrena was the sole owner. And when breedings were received due to the advertisements, Dufurrena kept all the money and did not pay the Vogels their proportionate share.

THE LEGAL BATTLE:

The Vogels hired Lisa Bennett, of the law firm of Adams, Bennett, Duncan and Henley in Gainesville, Texas, who on Sept. 27, 2017 filed a lawsuit against Ed Dufurrena.

The lawsuit filed by Bennett, claimed that Dufurrena had committed conversion against the Vogels by selling partnership property without the right to do so and against the benefit of the Plaintiffs. Also Dufurrena had sold partnership property without paying the Plaintiffs their proportional share or permission of the Plaintiffs. This property included breedings from Stevie Rey Von, the prize winnings from the NCHA Futurity (over $340,000)  and by invoicing “paid for” expenses that had not been incurred or were not for the benefit of the partnership.

The suit also included the producing of documentation that Dufurrena had committed forgeries, breached the duty of loyalty owed to the Plaintiffs under the law and terms of the Partnership and using Partnership property for  his own personal gain and to the deprivation of the Plaintiffs, stating that the Vogels were billed expenses to Dufurrena wrongfully – expenses that never existed or were improperly applied or grossly inflated. Also that Dufurrena improperly titled Stevie Rey Von’s ownership with the AQHA in his own name only.

Also, when the Vogels demanded an accounting from Dufurrena, they said Dufurrena refused, breaching his fiduciary duty to the Plaintiffs.

The Vogels sought a dissolution of the Partnership, demanding an accounting from Dufurrena, all monies due them be paid from him and that a receiver be appointed for the sale of all partnership property, including, but not limited to, Steve Rey Von.

The suit claimed that Fraud had been committed on the Plaintiffs and that a points in Vogel’s pleading be filed against Dufurrena within the jurisdiction of the court.

The judgment directed Dufurrena to account for all profits earned on the transactions that are a subject of the suit; prejudgment and post judgment interests as provided by law, an order directing Dufurrena to surrender the records of the Partnership to the Plaintiffs for inspection, appoint a receiver to take custody and control of Partnership property for safekeeping and sale; appoint a receiver to take custody and control of Partnership property for safekeeping and sale; that proceeds from the sale of partnership property be placed in the registry of the court, as well as costs of the suit and any further relief to which the Vogels are entitled.

On Oct. 2, 2017, the Vogels made a motion for the appointment of a receiver, stating that if the assets of the partnership were not immediately placed in a receivership and liquidated, irreparable harm will ensue to Plaintiffs. The present assets of the partnership are the three horses, with Stevie Rey Von being the most valuable since he had won the 2015 NCHA Cutting futurity, giving him a value of $1 million. Auspicious Cat was valued at $160,000 and Creyzy Train at $8,000.

Also the suit claims that Dufurrena has insured the horses, with his and his wife’s names being the beneficiaries and when the Vogels insisted that they be included in the ownership interest in the policy. Dufurrena failed to do so.

The Plaintiffs requested the appointment of a receiver to have authority after the hearing, immediately taking possession of the horses, safe keep and maintain the horses and sell them at public auction. They submitted that Jeremy Barwick of Western Bloodstock Company would be an appropriate person for that since Western Bloodstock put on the big NCHA Futurity sales in December. But since the case was not closed before the NCHA Futurity sales, that never happened.

DUFURRENA FILES COUNTERCLAIM AGAINST VOGELS:

On October 7, 2017, Dufurrena filed a counterclaim suing the Vogels, who were 66 (and considered elderly by the court*) at the time of the partnership agreement, and their company Jandon Ltd., a Texas Limited Partnership, for disclosure, stating that “over the years the Vogels had placed 10 horses with Dufurrena and were not current with their account, accumulating an unpaid balance of approximately $340,000. On Feb. 6, 2017, when the Vogels came back to pick up their horses, it was discovered that Dufurrena had a possessory lien under Texas law as agisters, requiring the person in possession of the horses to retain possession so that it may be sold to apply the prices of the sale to the unpaid balance of the charges subject to the lien.

The lawsuit also claimed Dufurrena had received a $100,000 check from the account of Jandon LLC which was “no good” and did not clear the bank despite multiple requests by the plaintiffs that the check be covered. He claims the defendants have refused to make good on the check and unpaid balance of the invoices. Dufurrena claimed damages of $340,000, exclusive of attorneys’s fees, costs and pre-judgment interest.

Dufurrena was represented by Bryan H. Burg of Siebman, Burg, Phillips & Smith, LLP, Plano, Texas, who also represented him in a previous lawsuit regarding Auspicious Cat. Brandon Dufurrena was represented by Larry Sullivant, a Gainesville, Texas lawyer.

* If a criminal case were filed in this case and the party suing losing are considered “elderly,” the penalty is 3 times the damages.

PLAINTIFF’S RESPONSE TO DUFURRENA:

In an October 20 response to Dufurrena’s counterclaim, the Vogels requested to see Dufurrena’s records of the Partnership, including the bills but Dufurrena failed to comply. Thereafter, through 2017, the Vogels said they requested documentation from Dufurrena and he always had a reason for not complying. As partners, they demanded they be allowed to inspect the records.

What the Vogels saw was a gross misrepresentation of material facts. A number of breedings to Stevie Ray Von were misrepresented by Dufurrena. He said that Stevie Rey Von had 40 breedings in 2016 (foals would be born in 2017), when the Vogels learned that Dufurrena actually had 100 breedings to Stevie Rey Von during the period. The Vogels said in court documents that they anticipate that the same was true for 2015 and 2017 for Stevie Rey Von, as well as for Auspicious Cat. (AQHA does release  the number of breedings to a stallion in a given year; however, they do release the number of foals registered from those breedings.)

The Vogels also claimed that Dufurrena did not title the Partnership horses in the name of the Partnership nor the name of the Vogels, with the exception of Auspicious Cat. Dufurrena titled Stevie Rey Von’s ownership papers originally in the name of his son Brandon and then in his name – never in the name of the partnership. Also, he never informed the Vogels of the ownership papers of Creyzy Train’s ownership papers in the name of his son and never informed the Vogels of his actions.

During the lawsuit, a 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, he has been involved in the private security industry as an entrepreneur and currency is the managing member of the Wind River company. His 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.

He has a total of 47 years experience in his fields of representation and is the author of two books: THE AMERICAN HORSE INDUSTRY, AVOIDING THE PITFALLS AND CROSS TRAINING 101, Reining, Cutting, Cowhorse and is a freelance writer and contributor for AllAboutCutting.com.

Ricks Response 2-10-18

ENTER NEW LAWYER LEW STEVENS:

Lisa Bennett, the lawyer defending the Vogels, felt the case needed to be co-counseled by someone who specialized in horse cases. Rick Dennis, thought Lew Stevens, a Fort Worth lawyer who not only specialized in horse cases, but was also personally involved in the horse industry, and had  a lot of experience in it and the legal aspects of the law, was perfect for the job. Lew then teamed up with Lisa Bennett.

“We had a lot of people and curious friends tell us we ought to go to Lew, which we did,” said Janie Vogel, who suffers from Parkinson’s disease. “We were happy when he said he would help us.”

After seven years had gone by in this case, Stevens, in his first day of a formal appearance by Janie Vogel (that had been set up for her deposition), got the defendants to agree to an out-of-court settlement.

The settlement had just eliminated additional months and possibly years of payments to lawyers by the Vogels but Lew didn’t want to take all the credit. In an interview, he said, “A case is never settled by one person. Everyone has to work toward a common goal.”

“I thought we were going to Lew’s office for depositions,” said Janie Vogel. “All of a sudden I was caught by surprise of a settlement.”

THE PRIVATE SETTLEMENT:

The private settlement included the Vogels receiving Auspicious Cat, Stevie Rey Von and Creyzy Train, who are all at Jo Ellard’s Stallion Station and training facility in  Whitesboro, Texas. Both Auspicious Cat and Stevie Rey Von will be standing at the Ellard facility which has 24 x 14 stalls and an underground tornado shelter for the valuable stallions.

The legal case will show up in court records as “case closed.”

Auspicious Cat (High Brow Cat x Lenas O Lady) will be standing for $3,650, which includes the farm fee and Stevie Rey Von (Metallic Cat x Miss Ella Rey) will stand for $4,650, which includes the farm fee.

Janie Vogel said the plan is to get Creyzy Train, who is a trained cutting mare with close to $15,000 in earnings, to be shown.

She continued, “We’d like to stay in the cutting horse business and ‘dabble’ in it.’ ”

THE VOGELS SELL STEVIE REY VON FOR $2 MILLION:

And “dabble” Don and Janie Vogel can, as less than 24 hours after the settlement, it was announced that Alvin and Becky Fults, Amarillo, Texas, who previously owned Metallic Cat, the sire of Stevie Rey Von, had purchased Stevie Rey Von for $2 million.

Asked about their relationship with Dufurrena, a gracious Janie said, “We’re just going to try to get along with them. I don’t want to be enemies with anyone.”

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