92-173 La.App. 3 Cir. 3/22/95, Simon v. Fasig-Tipton Co.

• Court: Court of Appeal of Louisiana
• Writing for the Court: Gerald Charles deLaunay, J. Minos Simon; MR. PERRET. Only that it was said
• Citation: 92-173 La.App. 3 Cir. 3/22/95, Simon v. Fasig-Tipton Co., 652 So.2d 1351 (La. App. 1995)
• Decision Date: 22 March 1995
• Parties: 92-173 La.App. 3 Cir

Page 1351

652 So.2d 1351

92-173 La.App. 3 Cir. 3/22/95

J. Minos SIMON d/b/a Dixieland Farm, et al., Plaintiffs-Appellees, v. FASIG-TIPTON COMPANY, et al., Defendants-Appellants.

No. 92-173.

Court of Appeal of Louisiana Third Circuit.

March 22, 1995.

Writ Denied June 2, 1995.

Gerald Charles deLaunay, J. Minos Simon, J. Clemille Simon, Lafayette, Donna K. Brown, Homer, for J. Minos Simon Etc.

Henry Camille Perret, Jr., Ian Alexander Macdonald, Boyd Allen Bryan, John Bradley Wartelle, Lafayette, for L.P. Bud Thibodaux.

James Ray McClelland, Franklin, for Mid-South Guar. Bank.

Joseph Beauregard Olinde Jr., Baton Rouge, for Baton Rouge Bank.

Lisa Brener, Lafayette, for Donald Dupuis.

L. Lane Roy, Lafayette, for Fontenot.

Before YELVERTON, COOKS, SAUNDERS, WOODARD and PETERS, JJ.

[92-173 La.App. 3 Cir. 1] COOKS, Judge.

This protracted dispute evolved from the business dealings between J. Minos Simon and L.P. "Bud" Thibodaux. The only fact which the parties readily agree is true and supported by the record, bound in forty-five volumes, is Up The Apalachee was a great Louisiana bred race horse. Louisiana's good fortune to claim and rejoice over the success of this famed horse resulted, in large measure, from the business union of Simon and Thibodaux. This union, though, did not end on a happy note. It spawned, thus far, nearly a decade of litigation and lodging of the present appeal. Exactly what each undertook to perform and uphold during the union, the gentlemen protest, were clearly understood and each insists the other must tender damages for his breach.

THE EARLY YEARS

Simon, a prominent attorney, owned a ranch and dabbled a bit in raising cattle. In 1977, on the advice of a client, he purchased a thoroughbred mare in foal, although he concedes knowing "nothing about thoroughbred horses" at the time. In 1978, the foal was born and named Sir Cajun Ruler. To ready the horse for racing, Simon hired a trainer. As luck foretold, Sir Cajun Ruler won the first race entered. This victory "excited" Simon who, in haste, concluded such occurred "all the time" in the horse industry.

Simon, who had amassed a sizeable fortune practicing law and investing in various ventures, decided to purchase more horses. He converted his ranch into a horse farm by constructing twenty stalls in an existing barn and a five furlong race track on the premises. Simon soon learned, however, Sir Cajun Ruler's first victory was not a sign of "profits to come." Simon's wins were [92-173 La.App. 3 Cir. 2] seldom; and the cost of maintaining the horse farm increased.

From time to time at various tracks during the early years, Simon stated, he became acquainted with a fellow known as "Bud" Thibodaux. Thibodaux, a former board member of the Louisiana Thoroughbred Breeders Association, was experienced in purchasing, raising and breeding horses while Simon was not. Thibodaux, though experienced in these undertakings, possessed limited resources. He was working as a salesperson for a distributor of anti-corrosive agents used in the oil industry. He owned an interest in several horses and involved himself in several joint ventures. None of his "side line" activities, however, netted him substantial profits. On occasions, Thibodaux was employed as an agent.

An agent in the horse industry, we gather from the record, functions much like an agent in the real estate business. As a "middle man," he facilitates the sale between the buyer and seller. For this service, he usually receives a five to ten percent commission from the seller.

Thibodaux was known in racing circles as considerably knowledgeable on the pedigree of horses. Thibodaux explained the information he obtained regarding the pedigree of horses initially was derived from various catalogs collected from horse sales he attended "around the country." In 1976, he accessed (by computer) a source known as Bloodstock research which he then used exclusively to gather pedigree information for himself and others engaged in horse trading. His fee for this service ranged from ten to fifteen dollars. Thibodaux longed for an opportunity to establish himself as a horse breeder. ¹ As a breeder of quality horses, Thibodaux undoubtedly reasoned, his services in the horse industry would be in higher demand.

Simon and Thibodaux chatted on occasions. They began discussing how they might further their mutual interest in the horse business by associating. Exactly what each said to the other when forming this association is not memorialized in writing. Each party maintained he trusted the other. Their recollection of the actual "deals" and dates struck differed greatly.

THIBODAUX'S VERSION OF THE ARRANGEMENT

In 1981, according to Thibodaux, he received a telephone call from Simon inquiring about a horse named Swashbuckle. Simon was interested in purchasing this horse; but he desired [92-173 La.App. 3 Cir. 3] Thibodaux's advice regarding the horse's true value. Ultimately, Thibodaux arranged to purchase the horse for Simon. The owner of Swashbuckle offered Thibodaux $2,000 "if Mr. Simon would buy [the horse]." Thibodaux testified he turned down the owner's offer; but he instructed the owner to deduct it from the $60,000 sale price; and, he purchased the horse in Simon's name for $58,000. The "deal" he made with Simon on this occasion was if Simon followed his verbal instructions to the letter on keeping and breeding Swashbuckle in Thibodaux's words: "We could show this horse with some racing potential, I would show him how to make money in the horse business, and we could both profit from that." Further explaining, Thibodaux stated he acquired the horse "for free" with conditions.

After this purchase, Thibodaux stated he received a telephone call from Simon who expressed interest in acquiring "some nice mares." As Simon's agent, he purchased in September 1981 three mares from Triple D Stables for a total price of $165,000.00. Two of the mares were in foal. From the seller, Thibodaux stated, he received a five percent commission equalling $8,250. At the time of this transaction, Thibodaux admitted he did not tell Simon he received this commission. He explained his failure was just a "slip of the tongue," he "wasn't keeping it a secret."

Again, in 1982, Thibodaux testified Simon contacted him and expressed interest in acquiring a horse named Gundoe. As Simon's agent, Thibodaux stated, he negotiated with the owner who agreed to sell the horse to Simon for $80,000. Thibodaux received a ten percent commission equalling $8,000 from the seller. Thibodaux admits, again, he did not tell Simon he collected a commission on the sale of Gundoe. However, Thibodaux insists he told Simon "[he] could buy the horse for $80,000 and [he] wouldn't have to pay the commission." Thibodaux assumed Simon knew from this revelation, the seller was advancing the commission.

According to Thibodaux, in September 1982, he and Simon "agreed to raise horses together." In exchange for his effort in finding quality horses, breeding them, and overseeing Simon's operation at the ranch, Thibodaux maintained, Simon agreed to recognize him as ten percent owner of all horses acquired during the relationship, including their foals; and, Simon agreed to share with him fifty percent of all breeder's awards collected for horses co-bred by him. Further, he alleged Simon "gratuitously" agreed to include all the horses previously acquired before the "arrangement," even those Thibodaux admitted receiving a commission on at the time of purchase. [92-173 La.App. 3 Cir. 4] Thibodaux stated he agreed to perform the role of a "managing partner." However, the "deal" did not require him to assume liability for any portion of the expenses associated with upkeeping and breeding the horses; and Simon agreed to reimburse all sums expended by him in connection with the horse operation. He likened the arrangement formed with Simon to a "joint venture." ²

During the time he and Simon were "finalizing" this arrangement, according to Thibodaux, Simon expressed an interest in buying one-half interest in Louisiana Bloodstock. This corporation was formed by Thibodaux and Rodney Verret the year prior. As partners, each owned 100 shares of stock in the corporation which owned five horses. Simon offered to buy Verret's stock. Thibodaux testified he pondered over the offer for a few days before deciding not to present it to Verret. Instead, Thibodaux stated he proposed that Simon purchase all the horses belonging to the corporation together with several horses independently owned by Verret. Simon eventually purchased these horses for $333,500.00. ³ When Simon questioned what he wanted out of the deal, Thibodaux testified he responded:

"I will retain ten (10%) percent ownership of the horses, and the subsequent foals, and I want to be co-breeder of the foals. And the, one of the things he said, 'Well, when would you get your money?' When we would sell horses, I would be paid my ten (10%) percent." He said, 'Well, what would happen if we put horses in a sale and we bought them back?' It would establish a price and then, I would get my ten (10%) percent again."

In December 1982, Thibodaux stated, he negotiated for Simon the purchase of three more horses from the Triple D Stables named Claudelle, Party Up and Pondeli's Belle. In 1983, Party Up gave birth to Louisiana's first grade one New York stakes winner: The horse known as Up the Apalachee. Thibodaux admits receiving a ten percent commission at the time of this sale. Unlike the prior Triple D sales in 1981, according to Thibodaux, the owner decided to pay the commission in cash rather than by check. The cash, Thibodaux adamantly proclaimed, he delivered [92-173 La.App. 3 Cir. 5] to Simon at his office; and, Simon handed him $2,000 out of these funds. ⁴

In 1984, Thibodaux stated, the arrangement was modified. In addition to receiving ten percent ownership of all horses owned by Simon and fifty percent of all...