A lawsuit brought by the Jockeys' Guild against former chief executive officer Wayne Gertmenian and others has been dismissed by a Los Angeles federal court judge, but a California state court trial dealing with similar matters is still on schedule for mid-October.
U.S. District Court Judge Otis Wright ruled Aug. 13 that the Guild could not sue Gertmenian under the Labor Management Reporting & Disclosure Act because they are independent contractors and not members of a labor union.
The lawsuit, filed in February, 2006, claimed Gertmenian breached his fiduciary duty to the Guild by mishandling funds for the benefit of himself and others. Gertmenian was ousted from his Guild position in November, 2005.
“It was a bizarre ruling,” said Tom Kennedy, an attorney for the Jockeys’ Guild, in a statement. “We were ready to begin the trial (on Aug. 14). There was no motion pending before Judge Wright, and he previously denied a motion by Gertmenian seeking a dismissal. Judge Wright made the decision only after he learned the Guild had a lawsuit against Gertmenian pending in state court.”
A trial in Los Angeles County Superior Court is scheduled to begin Oct. 16.
“Obviously, we can’t jump up and down and clap our hands, because the controversy is still pending in the state court,” said David Read, a Los Angeles attorney representing Gertmenian. “The dismissal of the federal suit was a victory for Dr. Gertmenian, but the bulk of the controversy has yet to be decided. Our position is that all of the claims have no merit.”
Gertmenian has counterclaims at the state level for breach of contract on his employment agreements, as does codefendant Albert Fiss, a former Guild vice president. A defamation of character counterclaim against the Jockeys’ Guild will also be determined at the state trial.
Darrell Haire, western regional manager for the Jockey’s Guild, said he couldn’t comment much on the federal judge’s decision.
“I’m disappointed,” said Haire, who was listed in the original complaint as fiduciary of the Jockeys’ Guild Health Systems Plan. “I hope we take it to the next level.”
In a news release, Kennedy said officials of the Jockeys’ Guild are considering appealing the federal court’s ruling.
A Guild-affiliated attorney, Barry Broad, told members in 2006 that when Gertmenian took his leadership role, the Guild had net assets of up to $5 million, but that when he was fired, the Guild had "a substantial negative net worth position, including 200 bounced checks.”
The federal suit claimed Gertmenian took more than $1 million from the Guild, according to the release.
The federal lawsuit also included Gertmenian’s consulting company, Matrix Capital Associates; his daughter, Farrell, and her consulting company, Scoop Inc.; and former Guild chief financial officer Gevork Asatryan.