07/05/2011 3:08PM

Ready's Image partners sue Walmac Farm


James Scatuorchio has sued Walmac Farm, its managing director John T. L. Jones III, and related companies over Walmac’s management of Ready’s Image, the 6-year-old More Than Ready stallion whom Scatuorchio raced.

Scatuorchio and his family members are seeking unspecified damages for 16 counts, including alleged fraud and breach of fiduciary duty. Walmac issued a statement Tuesday calling the suit “frivolous.”

“We feel the lawsuit is a pre-emptive ploy by Scatuorchio and related parties to obfuscate and to deny their contractual obligations to Walmac and to avoid current and future lease payments owed Walmac and expenses related to our co-ownership,” the statement said. “They owe monies not only to Walmac but to our partner in Australia, Lincoln Farm (where Ready’s Image stands in the Southern Hemisphere).”

Scatuorchio and family members sold a majority interest in Ready’s Image to Walmac, a farm owned by Jones and Bobby Trussell. The colt entered stud at the Lexington, Ky., farm in 2009. Scatuorchio now alleges that Walmac and Jones “did not disclose that Jones and Walmac Stud had a history of litigation in which they had been accused of malfeasance by business associates in the horse breeding community.” Those legal actions, Scatuorchio alleges in court filings, include a 2004 involuntary Chapter 7 case in Texas and a civil suit that Toby Keith’s Dream Walkin’ Farms filed in 2009 over alleged breach of contract concerning management of Cactus Ridge. Cactus Ridge now stands at Vinery.

In a filing entered June 28 in a New Jersey district court, Scatuorchio also alleges Walmac and its affiliates, including Saybrook Advertising, overbilled the Scatuorchios and failed to pay revenues from Ready’s Image’s stud duties. The Scatuorchios retained accountants The Curchin Group to audit the Ready’s Image account. The court filings allege that “billing records were demonstrably erroneous, moneys appropriately due to Ready’s Image had been inexplicably diverted from Ready’s Image’s account,” and that Walmac had overbilled. The suit also alleges that the Ready’s Image co-ownership agreements Walmac and the Scatuorchios signed are illegal under the Internal Revenue Code.

In their own filings, Walmac and Jones counter that “while there are repeated accusations of fraud on the part of John T. L. Jones III, in none of the three certifications of James T. Scatuorchio are there any particular (alleged) misstatements identified, let alone which is actionable as fraud.”

Scatuorchio initially filed the suit in Monmouth County Superior Court, but the defendants removed it to the U.S. District Court for the District of New Jersey on May 24. Walmac, Jones, and affiliates, calling the case “a frivolous abuse of the court system,” have filed a motion to send the case to arbitration or mediation, as set out in the stallion co-ownership agreements, or to transfer the case to the U.S. District Court in Kentucky’s Eastern district.

“We expect the case to be thrown out of court and the arbitrator’s remedy will demand that Scatuorchio parties pay their debts to Walmac,” Walmac’s statement said. “Further, we expect to seek all available remedies for the slander directed toward Walmac and its managing partner in statements made by the so-called ‘plaintiffs’ and their affiliated parties.”