Litigation over a $5 million insurance claim following the sudden death of Kentucky stallion Laoban is coming to a head in a Kentucky federal court.
According to court records, competing motions for summary judgment on the claim have been filed by Cypress Creek Equine and North American Specialty Insurance Company. The most recent filing on the issue occurred Jan. 26.
Two policies of horse mortality insurance were issued by NAS to Cypress Creek and Southern Equine Stables on Laoban, a son of Uncle Mo who stood at WinStar Farm. On May 24, 2021, Laoban succumbed to an allergic reaction called anaphylaxis after being administered an intravenous injection by a WinStar veterinarian.
According to court records, after Laoban was found to be lacking in energy and having issues covering mares, WinStar general manager David Hanley suggested to Dr. Heather Wharton that the stallion receive an injection of vitamin B12. Instead, Wharton intravenously administered an injection of B12, Vitamin C, Vitamin B Complex, and Iron Hydrogenated Dextran, a concoction Wharton called the “Black Shot.” Within a minute Laoban started to decline; within six minutes he was showing what were described as “major signs” of anaphylactic shock; and soon he was dead.
Among other things, an investigation found the Vitamin B Complex expired in April 2019; the Iron Hydrogenated Dextran expired in July 2012; and the Vitamin B12 expired in February 2020. The Vitamin B Complex label, which contains Thiamine, expressly warned that administration by injection or infusion “has resulted in anaphylactic shock” and stated other precautions; the Iron Hydrogenated Dextran was indicated as a treatment for anemia in baby pigs; and all three vitamins were indicated as supplements to treat vitamin deficiencies. Wharton was suspended from practice for 90 days and other sanctions by state regulators after waiving a defense to charges.
A provision in the insurance policy contains an “unauthorized medication exclusion” from coverage for a death resulting from “administration of drugs or medication . . . unless done by or under the direction of a veterinarian and certified by him/her to have been of a preventative nature or necessitated by accident, sickness or disease of the horse.”
There is apparently no disagreement the “Black Shot” was not “of a preventative nature or necessitated by accident, sickness or disease.” However, Cypress Creek contends the “Black Shot” was not a “medication” or “drug.” NAS argues that the ingredients meet the ordinary meaning of those terms, which are not defined in the policy itself.
There is also a “proper care exclusion” from coverage that bars payment of claims resulting from “failure to provide proper care and attention for the horse.” NAS says this unambiguously bars any obligation to pay the claim, but Cypress Creek maintains the clause only applies when “a horse was neglected, such as not fed or sheltered.”
There are other issues, such as whether failing to identity the actual ownership of Laoban in the insurance application could bar coverage. The application was made for both Cypress Creek and Southern Equine, but there is evidence Southern Equine sold its shares to Cypress Creek months beforehand. NSA also says there is no coverage because Laoban was not free from a breeding or physical disability, which would contradict an assertion to his soundness made in the application.
Summary judgment is appropriate when there is no genuine issue as to any material fact and a party is entitled to a judgment as a matter of law. If the facts of record in the Laoban case are undisputed; application of the law would be made by Judge Gregory VanTatenhove.
