The recent legal battle between Cypress Creek Equine and North American Specialty Insurance (NAS) over the denied insurance claim following the death of WinStar stallion Laoban has culminated in a significant court ruling. Laoban, a promising stallion, died unexpectedly in May 2021 after receiving a shot intended to enhance his breeding interest. Cypress Creek Equine had earlier secured a casualty insurance policy from NAS to cover such unforeseen events. However, NAS rejected the mortality insurance claim filed three months later, leading Cypress Creek to seek judicial intervention. The case was presided over by Judge Gregory F. Van Tatenhove of the United States District Court for the Eastern District of Kentucky.
Court’s Justification for Denial
The court’s ruling pointed to several reasons why the claim was denied, focusing on the nature of the shot administered to Laoban and the terms specified in the insurance policy. Two primary factors related to the administration of the shot, which the policy explicitly excluded unless administered under certain conditions. The contentious shot, known as the “Black Shot,” was a combination of Vitamin C, Vitamin B12, Vitamin B Complex, and Iron Hydrogenated Dextran. NAS argued that these ingredients were drugs or medications, regulated by the FDA and possessing National Drug Codes, hence qualifying them as substances governed by the insurance policy. Judge Van Tatenhove upheld NAS’s contention, affirming that the injection didn’t fall under allowable preventive or necessary medical purposes, but was solely aimed at enhancing Laoban’s breeding interest.
A second significant policy exclusion cited by Judge Van Tatenhove was the failure to provide proper care. Cypress Creek’s attempt to narrowly define proper care was dismissed as the court adopted a broader interpretation, grounded in Black’s Law Dictionary. This broader definition was supported by testimonies from experts including Dr. Natanya Nieman, and corroborated by findings related to Dr. Heather Wharton, who administered the shot. Notably, Dr. Wharton later agreed to a settlement that included a fine and suspension. The court concluded that the failure to provide proper care, as broadly defined, represented a clear breach of policy conditions, thereby justifying the denial of the claim.
Implications for Insurance and Equine Management
The recent legal dispute between Cypress Creek Equine and North American Specialty Insurance (NAS) over a denied insurance claim following the death of the promising WinStar stallion Laoban has ended in a pivotal court ruling. Laoban unexpectedly died in May 2021 after receiving an injection intended to boost his breeding potential. Prior to this, Cypress Creek Equine had obtained a casualty insurance policy from NAS to safeguard against such unforeseen incidents. When NAS refused to honor the mortality insurance claim three months later, Cypress Creek was compelled to take the matter to court. The case was overseen by Judge Gregory F. Van Tatenhove in the United States District Court for the Eastern District of Kentucky. The crux of the conflict was whether the policy covered the particular circumstances of Laoban’s death, leading to a complex legal argument. This court ruling now sets an important precedent for how insurance claims related to equine casualties may be handled in the future, particularly when new breeding techniques are involved.
