A ruling in the case of a troubled show horse, a dissatisfied buyer and the particulars of equestrian sports may have implications beyond the federal court where it was issued.
U.S. District Judge Kenneth Marra in West Palm Beach issued a post-verdict order Sept. 25 in Zendejas v. Redman and Syquia denying a plaintiff’s motion for judgment as a matter of law and alternative motion for a new trial while granting defense motions for entitlement to attorney fees and costs.
In August 2017, a federal jury ruled against Mexican businessman Alejandro Zendejas in his lawsuit against Wellington horse trainer Eugenie Redman and horse broker Colin Syquia. Zendejas sued Redman and Syquia after growing frustrated after buying a jumper named Vorst for $250,000.
Zendejas filed a 12-count complaint claiming breach of contract, fraud and negligent misrepresentation, claiming Vorst was a “dirty stopper” — a horse that reels back at obstacles.
Although a federal jury cleared Redman and Syquia of all claims and awarded no damages to end a two-week trial, a dispute over attorney fees continued.
Before discovery, Syquia served Zendejas with a proposed settlement of $500. Zendejas declined, then passed on a proposed settlement of $5,000. In response to defense motions for fees following the jury verdict, Zendejas’ counsel contended that because the offers of judgment were for “nominal” sums and well below the $1 million in damages Zendejas sought, they could not possibly have been made in good faith.
If a proposed settlement is deemed in bad faith, it is one of the few exceptions from entitlement to attorney fees.
Besides granting the defense motions for fees in his order, Marra also articulated a standard for determining when nominal offers have been made in good faith.
Read Marra’s order on nominal offers of judgment:
Redman and Syquia’s “offers were based upon a reasonable evaluation of potential liability and damages, and, as indicated in the case law, the nominal nature of the offers is not sufficient to show bad faith,” Marra wrote. “The correct standard under Florida law is whether the offerors had ‘a reasonable basis at the time of the offer to conclude that their exposure [to liability] was nominal.’ ”
Shutts & Bowen partner Patricia A. Leonard, who represented Syquia, told the Daily Business Review that Marra’s order set “an appropriate standard with regard to nominal offers of judgment.”
“This order is going to be very useful to litigants on nominal offers of judgment,” Leonard said. “The court made clear that the correct standard is whether the offer had a reasonable foundation based on the facts and circumstances that were known at the time of the offer.”
Leonard also noted Marra’s order noted there is no requirement for a sworn affidavit to explain the reasoning behind a settlement proposal.
“Just because an offer is low in comparison with the amount of damages sought does not mean that it was not made in good faith; that’s not correct,” Leonard said. “The order also says the fact that the plaintiff may have been unlikely to accept the offer does mean it was not made in good faith.”
Leonard’s enthusiasm for the order is shared by Carlton Fields attorney Sarah Cortvriend, who represented Redman. He was “very pleased” with Marra’s “very thorough” order. ”It comports with Florida law but maybe adds a few things that haven’t been articulated in one place before,” Cortvriend said.
John R. Hart, who also represented Redman, said plaintiffs made their ”reasonable offer” to Zendejas based on their interpretation of the facts at hand.
“Once the case was filed and we had completed initial investigation … we didn’t believe it was well-founded,” Hart said. “We sent an offer of $5,000 so we could end this and not spend the extensive amount that was spent.”
Even with the latest order, Cortvriend and Hart emphasized their client is still upset about the circumstances. Hart told the DBR that Vorst “was really belittled by Mr. Zendejas in court,” something that disturbed his client a great deal.
“Ms. Redman loves horses, she has a long history with them, and she treats them really well,” Cortvriend said. She added her client “really felt like she needed to defend the honor of the horse” and maintained Vorst’s dirty-stopper condition was due to injuries suffered after the purchase.
Zendejas’ lawyer, Los Angeles equine attorney David Yoshida, told the DBR that he and his client’s legal team believe Marra’s reasoning “was consistent with the law” but are nonetheless disappointed with the outcome.
“We do intend on appealing his decisions. We have retained a certified appellate specialist,” Yoshida said. Fort Lauderdale appellate attorney Donna Solomon, who has been hired, declined to comment.
Yoshida described his client and co-counsel as “optimistic” about their chances on appeal.
“We strongly believe in our client’s position, and we do believe he was defrauded,” Yoshida said. “We’re hoping with this case to signal to the horse world that it’s not OK to be misleading in horse deals. We weren’t able to prevail in this matter and send that signal out loud and clear, but we’re hoping that time will change that.”