NCHA Litigation Update: NCHA Wins Again

On July 28, 2011, the Fort Worth Court of Appeals affirmed the entire judgment in favor of the National Cutting Horse Association in the Paula Gaughan lawsuit. A copy of the Gaughan opinion can be found here. [Note: Westlaw has labeled this case, in error, as a Waco Court of Appeals case. The opinion was issued by the Fort Worth Court of Appeals].

Gaughan Recap: The Gaughan case stemmed from Paula Gaughan’s written requests to NCHA to inspect certain financial data found in the books and records of the NCHA. Gaughan sought the records to make sure the NCHA was “not guilty of waste or mismanagement in its financial affairs and in the administration of the NCHA’s business.” The NCHA produced 89,214 pages of documents to Gaughan under a protective order, but designated 36,556 of those pages as confidential. Gaughan wanted to share all of the documents with other NCHA members, which was one of the points of contention in the case.

A fellow by the name of Dean Sanders was also originally a plaintiff in the case, but he later dropped out. In November 2009, the 67th District Court in Fort Worth granted a motion for summary judgment in favor of the NCHA and ordered Gaughan and Sanders [even though he had dropped out of the case] to pay NCHA’s attorneys’ fees in the amount of $75,000 [NCHA had asked for $84,243].

Both Gaughan and the NCHA have issued public statements about the July 28, 2011 appellate opinion affirming the judgment, and they can be found here.

The Gaughan appellate decision comes on the heels of Lainie Whitmire’s May 13, 2011 appeal of the trial court’s surprising judgment in her case against the NCHA.

Whitmire Recap: In January 2011, the Whitmire case was tried to a jury in the 236th District Court of Tarrant County (Judge Tom Lowe, presiding). The jury found that NCHA officials “falsely imprisoned” Lainie Whitmire during the 2004 NCHA Futurity. According to Whitmire, they had taken her to a room at the Will Rogers Coliseum and allegedly not allowed her to leave while questioning her about her amateur status. The jury also determined that the NCHA breached an oral agreement with Whitmire leading her to believe her suspended NCHA membership and Amateur or Non-Pro status would be restored. The jury awarded no monetary damages on the false imprisonment claim, but it awarded Whitmire $70,000 in mental anguish damages against the NCHA on the claim related to the oral agreement.

In a turn of events that was shocking to many who were following the Whitmire case, the final judgment signed by Judge Lowe on April 15, 2011 overturned the jury verdict and ordered the Whitmires to pay the NCHA $347,000 in attorneys’ fees and court costs. The parties had spent four years and more than $1.6 million in attorneys’ fees and court costs in the Whitmire matter.

Whitmire appealed the case to the Fort Worth Court of Appeals on May 13, 2011. The parties have until August 15 to submit briefs to the court. For more information, see this article in the Quarter Horse News.

Stay tuned for more developments on the Whitmire appeal as they unfold. 

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