Lindemann v. American Horse Shows Ass'n, Inc.

• Citation: 164 Misc.2d 937,624 N.Y.S.2d 723
• Parties: George LINDEMANN, Jr., Marion Hulick and Cellular Farms Inc., Plaintiffs, v. AMERICAN HORSE SHOWS ASSOCIATION, INC., Defendant.
• Decision Date: 01 December 1994
• Court: United States State Supreme Court (New York)

Page 723

624 N.Y.S.2d 723

164 Misc.2d 937

George LINDEMANN, Jr., Marion Hulick and Cellular Farms

Inc., Plaintiffs, v. AMERICAN HORSE SHOWS ASSOCIATION, INC., Defendant.

Supreme Court, New York County,

IAS Part 4.

Dec. 1, 1994.

[164 Misc.2d 938] Jay Goldberg, of Jay Goldberg, P.C. and Duker & Barrett, New York City, for plaintiffs Lindemann and Cellular Farms, Inc.

Judd Burstein, and Saul Rudes, New York City, for plaintiff Marion Hulick.

Tenzer, Greenblatt, Fallon & Kaplan, New York City, for defendant American Horse Shows Ass'n by Ira A. Finkelstein and Fredda L. Plesser.

EDWARD J. GREENFIELD, Justice.

An investigation of the long unsolved murder of an heiress ultimately led to the conclusion that she had been done away with because she knew too much about an ongoing scheme to kill show horses for insurance money. Surveillance then led to the arrest of the alleged horse hit man, one Tommy Burns a/k/a Timmy Ray, known in his circle as "The Sandman." On his arrest, Burns, complaining that his "clients" had failed to rally to his support, named several prominent riders and horse owners as the persons for whom he had performed these nefarious jobs. Those named included persons of considerable wealth and prominence in the equestrian world.

When allegations and rumors as to Burns' revelations became known ¹, the American Horse Shows Association (hereinafter "the Association"), which governs and controls all horse shows, contests and exhibitions in the United States and the persons deemed eligible to perform therein, quickly changed its rules to deal with the growing scandal. The Association already had a rule providing for suspension of a member who was found guilty in a civil or criminal court of actions which involved cruelty to a horse. That rule was amended in April 1993 to provide for suspension or expulsion of any person indicted for any act of cruelty or abuse to a horse, including deliberately killing a horse.

In the late Summer of 1994, a Federal Grand Jury in Illinois, acting largely on the information supplied by Tommy Burns, indicted 23 horse owners, trainers and riders for conspiracy to collect insurance proceeds by arranging for the killing of their horses. Among those indicted, on the basis of the information provided by Burns, was horse owner George Lindemann, Jr., a leading national and international rider in jumping and dressage competitions, and an aspirant for the U.S. Olympic team. Mr. Lindemann was, according to press reports, the son of one of the wealthiest men in America, his father being the developer of cellular telephone technology. He had established a stable and training facilities in Armonk, New York and Greenwich, Connecticut, appropriately named "Cellular Farms." Also indicted with him was Marion Hulick, Lindemann's trainer and manager of operations. They were both accused of conspiring to arrange with Burns for the electrocution of his prize jumper named Charisma, to collect insurance proceeds of $250,000.

All those indicted were immediately notified by the Association that in light of the adverse publicity and the barrage of news stories, they were being charged with a violation of the Association's rules as to equine cruelty, and subject to suspensions following a hearing. They were notified that the hearing would consider the fact of the indictment, the seriousness of the charges, the applicability of the Association's rules and the importance of prompt action. They were also given the names of the Hearing Committee members who would be present at the hearing in New York City.

At the hearing, counsel for Lindemann and Hulick requested an adjournment to prepare their defenses and for the opportunity to present exculpatory evidence. The Hearing Committee denied the application for adjournment unless plaintiffs would accept voluntary suspension. Upon the close of the hearing, anticipating the result, plaintiffs commenced an action against the Association in this court asking for injunctive relief to "... all those charged had the opportunity to be heard. I am proud that the Association has been able to react responsibly to the challenge presented by these unprecedented allegations of horse abuse."

                prevent suspension, and for damages, and sought and obtained at the outset a temporary restraining order barring suspension of the plaintiffs until a motion challenging the hearing could be heard.   That application was, in fact, made before the Hearing Committee had issued any findings or decision.   When the findings were issued the Association issued a press release announcing the suspensions of 22 of its members who had been indicted for equine insurance fraud, including the plaintiffs.   The release quoted Bonnie Jenkins, the Association's Executive Director, to the effect that
                

The Association then promptly applied to the court to vacate the temporary restraining order, and the court heard arguments by both sides as to whether or not to vacate the suspensions.

ISSUES PRESENTED

Without a doubt, having horses electrocuted to collect insurance money is a dirty and despicable business. If done by those professing a love of horses and claiming to uphold the ideals of equestrianism as a sport for ladies and gentlemen, where pecuniary reward is supposedly not a major consideration, it is an act of treason against those cherished beliefs and ideals. However, it must always be borne in mind that the blacker the crime charged, the harder it is to obliterate the stain of accusation. Those concerned with fairness must therefore tread carefully so as not to tar anyone but the guilty with an unsubstantiated accusation of the commission of a heinous crime.

Public reaction to a scandal, especially one involving persons of prominence and leadership, puts to a real test all our vaunted principles about the presumption of innocence, for the stronger the public revulsion, the greater the demand to "do something", even before all the facts can be fully aired.

The question here presented is whether a person charged with a crime can be summarily and indefinitely suspended from his or her position or from the exercise of rights and privileges on the basis of the accusation alone, until a court and a jury has either exonerated that person or found such person to be guilty. It should be noted that ever since the time which has become known as the age of McCarthyism, we have become much more reluctant to act hastily to suspend people based on mere assertion or accusation. Nevertheless, there may be some compelling circumstances where maintenance of the status quo and the retention of accused persons in sensitive positions pending a plenary trial cannot be tolerated. Courts, corporations, and private associations have been painfully groping for a sensible solution which will be fair to all concerned.

PROCEDURAL POSTURE

The complaint in this case alleges that the defendant Association, in exercising its exclusive control over equestrian sport to bar plaintiffs from competition, violated anti-trust provisions of the Donnelly Act (General Business Law § 340 et seq.), violated the due process rights of the plaintiffs and that its acts constituted a breach of contract and a breach of fiduciary duty. Plaintiffs moved for immediate injunctive relief, and the matter came on for hearing shortly thereafter on defendant's application to vacate the temporary restraining order that had been granted to plaintiffs.

While the defendant Association has not sought dismissal of plaintiffs' Donnelly Act claims, the court, on oral argument, indicated it was not impressed by such a claim and that the actions of the Association were more appropriately reviewable in the context of a CPLR Article 78 proceeding.

The fact that a private association totally dominates a sport, and may provide for suspension of a member under certain circumstances, is not in and of itself anti-competitive. See Cooney v. American Horse Shows Association, Inc., 495 F.Supp. 424 (S.D.N.Y.1980). Moreover, the claim of bias or conflict of interest of the Hearing Committee members who might themselves be owners, riders, or trainers was expressly waived by plaintiffs' counsel at the Association hearing. ² Unlike the situation in Blalock v. Ladies Professional Golf Association, 359 F.Supp. 1260 (N.D.Ga.1973), where suspension was imposed in the exercise of completely unfettered subjective discretion by direct competitors of plaintiff who stood to gain financially from plaintiffs' exclusion from the market and was therefore determined to be a per se violation of § 1 of the Sherman Anti-Trust Act, this court would be hard pressed to find any anti-competitive motives behind the Hearing Committee's suspension of plaintiffs. The Hearing Committee members, who were not claimed to be influenced by self-interest, undoubtedly acted to protect the integrity of the sport. There was no "group boycott", as plaintiffs claim. Cooney v. American Horse Shows Assn., supra.

On oral argument, the court suggested and both sides essentially agreed that this matter could best be treated as a CPLR Article 78 proceeding. While plaintiffs' action was commenced before the Association's decision actually was announced, and might otherwise be considered premature, by the time the matter came on for argument, the Association's decision had been made and was available for the court's scrutiny. Accordingly, the court has determined that despite the form of the pleadings, this action should be converted to an Article 78 proceeding. The causes of action for violation of due process rights, breach of contract and breach of fiduciary duty are, in the opinion of the court, adequately comprehended within the scope of review provided by CPLR 7803. See Polizotti v. Polizotti, 305 N.Y. 176, 111 N.E.2d 869; Mohrmann v. Kob, 291 N.Y. 181, 51 N.E.2d 921.

The court therefore invokes its conversion powers under CPLR 103(c), which provides:

"(c) Improper form. If a court has...