Arabian Score v. Lasma Arabian Ltd.

Facts

On October 27, 1983, Plaintiff entered an agreement to purchase an Arabian colt named Score from Limited as well as promotional services for Score from Lasma. The total purchase was for $1,000,000, with $250,000 earmarked for the promotional services provided by Lasma. Paragraph 4 of the agreement provided that for a period of five years after the purchase date, Score would be a 2 Star Stallion, as defined by a license agreement with Lasma Star Stallion, Inc., a separate corporation not party to the lawsuit. The result of this 2 Star Stallion status is that all of Score’s foals would be eligible for nomination to Lasma-sponsored sales in the Star Stallion Program. However, if Lasma Star Stallion, Inc., in its sole discretion, determined that Score was not eligible to participate in the Star Stallion Program, Lasma would, at Arabian’s option, replace Score with an eligible stallion or refund to Plaintiff the unused portion of the money Lasma would otherwise be required to spend promoting Score. On February 8, 1984, Plaintiff took out a life insurance policy on Score. Score died later that same year on September 11, 1984. However, the insurance company Plaintiff contracted with had gone bankrupt and could not pay out on Plaintiff’s policy. As Lasma had only spent $52,891.14 of the total $250,000 earmarked for the promotion of Score prior to the horse’s death, Plaintiff brought a lawsuit to recover the remaining amount.