Cushion Track Countersues Santa Anita

Cushion Track and related defendants have filed a counterclaim against the Los Angeles Turf Club and its general counsel in the lawsuit over the troubled former synthetic surface at Santa Anita Park, asking a California federal court to award it at least $1.3 million in damages.

The defendants, which also includes a pair of affiliate Equestrian Surfaces companies, claim in a Nov. 17 filing Los Angeles Turf Club failed to pay a balance of $533,293 on the $5.225 million contract for the installation of the surface, as well as $300,000 in non-contract fees for “remedial efforts” to repair drainage problems that plagued the early part of the 2007-2008 Santa Anita meet.

“Without justification or excuse, LATC breached the contract between the parties by failing to perform its obligation to pay Cushion Track the full purchase price … of the Cushion Track material,” the counter-claim said.

The counterclaim additionally seeks at least $500,000 in damages for the alleged seizure by Los Angeles Turf Club general counsel Frank DeMarco of certain equipment owned by Cushion Track, claiming the attorney “forbade” Cushion Track from removing or attempting to remove any of the machinery.

The filings are the latest legal maneuvers in the lawsuit originally filed in May by the Los Angeles Turf Club, a subsidiary of Magna Entertainment Corp. that operates Santa Anita. The plaintiffs seek damages of at least $8.4 million, which represents the amount the lawsuit claims was paid for 19,375 tons of material, installation costs, and attempted repairs of the Cushion Track surface. The track was later overhauled to a Pro-Ride surface.

An attorney representing the Los Angeles Turf Club called the counterclaim part of a “scorched-earth” defense.

“File a motion to dismiss everything, no matter how weak it is,” said attorney Richard B. Specter, referencing a judge’s decision in October to deny most requests made by the defendants to dismiss the lawsuit. “Then, let’s accuse everyone else of doing something wrong.

“I don’t know why they don’t just acknowledge that the surface didn’t work, and if they want to say it is someone else’s fault, a third party, that’s their choice,” continued Specter, adding counsel for the defendants have suggested they would file third-party complaints by Dec. 1. “The contract clearly said they were going to do everything right, and at the end of the day, give us a product that worked. It is clear it did not work, and now we have a product out there that is working great.”

An attempt to secure additional comments from an attorney affiliated with the Cushion Track defendants wasn’t immediately successful.

Specter said it is likely the Los Angeles Turf Club will file a motion to dismiss the counterclaim. He particularly took umbrage with the formal charge of alleged conversion by DeMarco of the Cushion Track property, which is described in the pleading as three custom mixers and specialized tools and machinery parts, including augers and bearings.

He claims the track legally put a lien on the equipment, but said the defendants have been notified the property is there for the taking.

“I am personally offended that anyone would name a general counsel in a claim,” Specter said, claiming DeMarco is an “extremely well-respected” attorney. “Plus, we have told them they can come get the equipment, and they haven’t.”

The Cushion Track defendants, which also include company directors Philip Bond and Paul Harper, also argue in the counterclaim that the Cushion Track material was “of the highest quality” and “conformed with the specifications set forth in the contract.” It further claimed they complied with the track’s request to use “local California sands,” instead of from the United Kingdom, “which was Cushion Track’s usual practice.”

The defendants also claim the asphalt base of the track was installed by “LATC and its contractors, agents, and employees,” and the track had rejected an offer to replace the synthetic surface with another Cushion Track material. Cushion Track claims it fulfilled all of its obligations, except where prevented “due to the actions or omissions taken by LATC that prevented” the company “from fully performing.”

As is the custom in federal court cases, the parties have been ordered to participate in a pre-trial settlement conference, which is scheduled for Jan. 26, 2009.