An insurance claim filed after the sudden death of stallion WinStar Laoban has been dismissed by a Kentucky federal court.
Cypress Creek Equine purchased casualty insurance for Laoban through North American Specialty Insurance. In May 2021, the horse suffered an allergic reaction to a shot it received to increase its interest in breeding and died almost immediately. Three months later, NAS refused to pay a casualty insurance claim filed by Cypress, and litigation ensued.
According to a court decision released on September 10 in the U.S. District Court for the Eastern District of Kentucky, and as previously reported by BloodHorse, Cypress alleges that NAS violated multiple terms of its insurance policy by refusing to pay the death claim. After developing undisputed facts in the case, motions for summary judgment were filed by both parties, who briefed the court on the applicable law.
Judge Gregory F. Van Tatenhove decided, as a matter of law, that Laoban’s death was caused by actions that invalidated the insurance for three reasons.
Two of those reasons fit the policy’s exclusion from covered losses resulting from “the administration of drugs or medicines… unless administered by or under the direction of a veterinarian and certified by such veterinarian to be of a preventive nature or necessary as a result of an accident or illness of the horse.”
Cypress argued that the injection could not result in a coverage exclusion because it was not a “drug” or “therapeutic drug.” NAS argued that common usage clearly classified the ingredients in the injection as drugs.
The vitamin cocktail, nicknamed “Black Shot” by veterinarians, was determined to be the cause of Laoban’s anaphylactic shock and near-instant death. It contained Vitamin C, Vitamin B12, Vitamin B complex, and Hydrogenated Iron Dextran. Some of the cocktail came from bottles with expired expiration dates.
Van Tatenhove determined that the injection is a drug or treatment by the generally accepted definition, writing that all of the injection’s components are regulated by the U.S. Food and Drug Administration “and each has its own National Drug Code,” and that the three vitamins all carry a warning label stating that “Federal law restricts the use of this drug to the prescription of a licensed veterinarian.”
In relation to the same policy exclusion language, Van Tatenhove also found that there was no dispute that the injection was not administered for “preventive” reasons or was “necessary due to accident, illness or disease,” thereby excluding the effects of the injection from coverage. It was undisputed that the purpose of the injection was to assist the Laoban in the breeding pen.
A second policy exclusion barred coverage for losses arising from failure to provide proper “care and attention” to the horse. Cypress argued that these terms referred only to neglect, food, and shelter, which Van Tatenhove rejected as unreasonable. Instead, he applied a broader definition found in Black’s Law Dictionary, long considered the go-to source in the legal profession.
DOWNEY: Veterinarian agrees to suspension in Laoban death
“It is clear,” Van Tatenhove wrote, “through the testimony of Dr. (Natanya) Nieman, WinStar’s managing veterinarian, and the settlement agreement between Dr. (Heather) Wharton (who performed “Black Shot”) and the Kentucky Board of Veterinary Examiners, that Dr. Wharton failed to act with due care.”
The judge noted that Dr. Wharton had signed a settlement agreement suspending her medical license and requiring her to pay a fine.
