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NATIONAL CUTTING HORSE ASSOCIATION, Plaintiff, v. GLORY ANN KURTZ, Defendant.

 No. 266036-13

PLAINTIFF’S ORIGINAL PETITION

The National Cutting Horse Association (“NCHA”) files this Original Petition
against Defendant Glory Ann Kurtz (“Kurtz”) as follows:
I.


DISCOVERY

1. Discovery in this case will be conducted under Level 2 of Rule 190.3 of
the Texas Rules of Civil Procedure.
2. NCHA does not seek recovery of actual damages, but does seek a
declaratory judgment, equitable relief, an award of attorneys’ fees, costs of court
and judgment interest. Therefore, NCHA pleads that it seeks monetary relief of
$100,000.00 or less and non-monetary relief in accordance with Texas Rule of Civil
Procedure 47(c)(2).
II.
REQUEST FOR ASSIGNMENT
TO 67TH JUDICIAL DISTRICT COURT
3. The issues of fact and law presented here and the parties to this case
are nearly identical or nearly identically situated as those issues and parties before
the Court in Cause No. 067-230415-08 entitled Paula Gaughan vs. National Cutting
Horse Association (the “Controlling Case”). In the Controlling Case, the Honorable
Donald J. Cosby, Judge of the 67th Judicial District Court, entered Final Judgment on
November 17, 2009. This Judgment was affirmed on appeal by the Second Court
of Appeals on July 28, 2011 in Case No. 02-09-00450-CV and Application to the
Texas Supreme Court was denied. True and correct copies of the trial court’s Final
Judgment in the Controlling Case, as well as the Protective Order entered there and
the Opinion of the Court of Appeals, are attached hereto as Exhibits “A,” “B,” and
“C” respectively and incorporated herein by referenced.
4. In the Controlling Case, NCHA members sought to review books and
records of the NCHA pursuant to the statute in issue here which allows members to
review the books and records of a non-profit corporation. The NCHA members in
the Controlling Case challenged the right of the NCHA to treat some business
information and records as confidential and to require a non-disclosure agreement
or a protective order prohibiting the publication or disclosure to third parties of such
confidential business information obtained by members pursuant to statutory
requests for disclosure. The 67th Judicial District Court ruled that a non-profit
corporation is entitled to protect appropriate confidential information obtained by a
member from further disclosure by that member. Kurtz seeks the same type of
information which was sought in the Controlling Case under the same statute at
issue there. Kurtz’s contention that she can publish or disseminate that information
is precluded by the decision of the trial court and appellate courts of the Controlling
Case and is in essence a collateral attack on those judgments.
5. For the foregoing reasons, NCHA requests that this case be assigned to
the 67th Judicial District Court pursuant to Tarrant County Local Rule 1.03(d).
III.
PARTIES
6. NCHA is a non-profit corporation organized and existing under the laws
of the State of Texas, with its headquarters and principal place of business in Fort
Worth, Tarrant County, Texas.
7. Glory Ann Kurtz is an individual resident of Boyd, Wise County, Texas
and may be served with process at 2569 E. Highway 114, Boyd, Wise County,
Texas 76023, or any other place where she may be found.
IV.
JURISDICTION/VENUE
8. This Court has jurisdiction over this action because Kurtz is a Texas
resident and the claims are within the jurisdictional limits of this Court.
9. Venue of this action is proper in Tarrant County, Texas because all or a
substantial part of the obligations at issue are required to be performed by the
NCHA in Tarrant County, Texas.
v.
FACTUAL BACKGROUND
10. The NCHA is a Texas non-profit corporation that promotes and
celebrates the cutting horse and its heritage. The NCHA produces and approves
cutting horse competitions throughout the United States and around the world.
11. The NCHA has thousands of members and operates pursuant to its
Constitution and By-Laws. Pursuant to its Constitution, the NCHA has promulgated
rules, policies and procedures which govern the operation of the organization.
12. On or about June 24, 2004, the NCHA adopted the National Cutting
Horse Association Financial Disclosure Policy and Procedure (the “Financial
Disclosure Policy”), which has been in effect at all times pertinent to this lawsuit.
The Financial Disclosure Policy provides, in pertinent part, that certain employee
and third-party business information is treated as confidential by the NCHA. A true
and correct copy of that policy is attached hereto as Exhibit “D” and incorporated
herein by reference.
13. The NCHA also has adopted an Employee Handbook, which has been in
effect at all times pertinent to this lawsuit, that provides that salary, wage and
personal information of NCHA employees will be treated as confidential by the
NCHA. A true and correct copy of the portions of the NCHA Employee Handbook
containing those provisions is attached hereto as Exhibit “E” and incorporated
herein by reference.
14. Kurtz is a member of the NCHA. As an NCHA member, Kurtz agreed to
abide by and be bound by NCHA rules. Kurtz operates, and on information and
belief owns, a website and related blogs known as “allaboutcutting.com” that
closely follow NCHA activities and “reports” on those activities on the internet. Ms.
Kurtz’s website reported the developments in the Controlling Case as well as a wide
range of NCHA activities and other cases involving the NCHA. She has, in the past,
frequently and extensively reported on and published NCHA financial information
which is publicly available.
15. On or about April 17, 2013, April 24, 2013, April 27, 2013 and April
30, 2013, the NCHA received from Kurtz requests to review books and records of
the NCHA (collectively, the “Requests”). The Requests are expressly made under
Texas Business Organizations Code section 22.351 which affords members of a
non-profit corporation the right to review the books and records of the corporation
upon showing of proper purpose.
16. The Requests seek review of NCHA books and records that contain the
following information:
(a) The manner, means, and methods used to pay the NCHA’s consultant
Jim Short as well as the total payments made to Mr. Short;
(b) The types of depository banking accounts used by the NCHA;
(c) Affidavits filed with regard to the NCHA’s application for Major Event
Fund monies for the 2010 NCHA Futurity, 2011 NCHA Super Stakes
and 2011 Summer Spectacular;
(d) A complete list of any and/or all NCHA (past and present) members
who received negotiable bank checks or any other type of paid
monetary compensation of whatsoever nature or type (funds – paid
compensation), for the type of service(s) provided to the NCHA which
are eligible for monetary compensation for such provided services as
well as the financial records to verify same;
(e) The identity of the NCHA third-party investment advisor; and
(f) All institutions or persons to whom the NCHA pays “Investment
Management fees.”
True and correct copies of those Requests are attached hereto as EXHIBIT “F” and
incorporated herein by reference.
17. On May 6, 2013, the NCHA responded to the Requests (the
“Response”). In the Response the NCHA stated that the Association will require
additional information before responding in detail to the Requests including, but not
limited to, the purpose for the Requests and the time periods for which the
information was being requested. The NCHA also informed Ms. Kurtz that it did not
have the affidavits referenced in the Requests because those forms did not exist at
the time the shows she referenced were held. The NCHA finally stated that the
Association will require Kurtz to enter into a confidentiality agreement before
reviewing some of the additional records of the NCHA requested by Kurtz due to the
NCHA’s obligations to keep certain third party information contained in those
records confidential. A true and correct copy of the Response is attached hereto as
Exhibit “G” and incorporated herein by reference.
18. On May 9, 2013, the NCHA received from Kurtz a reply to the
Response (the “Reply”). In the Reply, Kurtz states that she will not agree to enter
into any confidentiality agreement and again demanded the immediate production
of the requested documents. Kurtz further states that the parties have reached an
impasse on these issues and that she may seek relief from the Texas Attorney
General. A true and correct copy of the Reply is attached hereto as Exhibit “H”
and incorporated herein by reference.
19. Finally, on May 10, 2013, the NCHA received yet another request from
Kurtz for books and records relating to contractual arrangements with a third-party
vendor known as Ride TV. A true and correct copy of that request is attached
hereto as Exhibit “I” and incorporated herein by reference.
20. On May 20, 2013, the NCHA again offered to make all of the requested
records available for inspection upon the execution of an acceptable confidentiality
agreement. A true and correct copy of that May 20, 2013 letter is attached hereto
as Exhibit “l” and incorporated herein by reference.
21. Despite the NCHA’s efforts to try and accommodate the Requests,
Kurtz has failed and refused to enter into any confidentiality agreement prior to
review of the requested NCHA books and records containing the confidential
information. Furthermore, Kurtz has stated that she will not agree to treat any
NCHA information as confidential and proprietary.
VI.
CAUSES OF ACTION
COUNT ONE
(Declaratory Judgment)
22. Paragraphs 1 through 21 are incorporated by reference.
23. Pursuant to Chapter 37 of the Texas Civil Practice & Remedies Code,
NCHA requests the Court to declare that: (i) the NCHA is entitled to relief
protecting the publication or disclosure by Kurtz of any of the confidential employee
and third-party business information; (ii) that a Protective Order is appropriate
under Texas law to protect the Confidential Information of the NCHA; and (iii) the
NCHA acted in accordance with the law in responding to Kurtz’s requests to review
NCHA books and records.
COUNT TWO
(Request for Entry of Protective Order)
24. Paragraphs 1 through 23 are incorporated by reference.
25. As described above, certain information requested by Kurtz relates to
contractual and payment information concerning NCHA employees and third-party
consultants and vendors, which information is maintained as confidential by the
NCHA pursuant to the NCHA Employee Handbook and NCHA Financial Disclosure
Policy. The confidential nature of such types of information also has been
acknowledged, and protected by, the District Court in the Controlling Case and
affirmed by the Court of Appeals and the Texas Supreme Court.
26. The fact that NCHA members may be entitled to review the requested
records under the applicable statute does not mean that they can do so without
maintaining the confidentiality of certain information contained in those documents.
The courts in the Controlling Case recognized that fact and the same treatment
should be applied in this case. This is the only way to reconcile Kurtz’s rights to
review such documents and the NCHA’s duty to maintain as confidential certain
information contained in those documents.
27. The entry of the protective order results in no harm to Kurtz because it
contains a mechanism whereby Kurtz can challenge the confidentiality of any of the
produced documents with this Court in the event that she believes any information
designated as confidential is not in fact confidential. This provision insures that
Kurtz’s rights are not prejudiced by entry of the order.
28. For the foregoing reasons, the NCHA requests that the Court enter a
Protective Order containing substantially the same terms as the Protective Order
contained in Exhibit “B.”
COUNT THREE
(Attorneys’ Fees)
29. Paragraphs 1 through 28 are incorporated by reference.
30. Pursuant to Chapter 39 of the Civil Practice and Remedies Code, the
NCHA requests that it recover its reasonable and necessary, just and equitable
attorneys’ fees and costs incurred in this action from Kurtz, at trial and on any
appeal.
Prayer for Relief
Plaintiff NCHA requests that upon final hearing of this matter, it have
judgment against Defendant Glory Ann Kurtz as follows:
1. Judgment declaring that (i) the NCHA is entitled to protect the
confidentiality of employee and third-party business information from being
disclosed or published by Kurtz; (ii) that entry of a Protective Order is appropriate
under Texas law to protect the Confidential Information; and (iii) the NCHA acted
reasonably and in accordance with the law in responding to Plaintiff’s requests to
review NCHA documents.;
2. Entry of a Protective Order, containing substantially the same terms as
the Protective Order contained in “Exhibit B” hereto, providing protection from
disclosure of the confidential information;
3. For the recovery of attorneys’ fees incurred in the trial court and
conditional awards for any appeal to the Court of Appeals and any petition for
review to the Texas Supreme Court;
4. For recovery of all costs of court;
5. Interest on the judgment from its date of entry until paid in full at the
maximum lawful rate; and
6. Such other and further relief to which Plaintiff may be entitled.
Respectfully submitted,
James W MorrisGOINS, UNDERKOFLER, CRAWFORD
& LANGDON
A Registered Limited Liability Partnership
1201 Elm Street, Suite 4800
Dallas, Texas 75270
214.969.5454
214.969.5902 (Fax) 

Suit Dismissed by Plaintiff

View Complaint 

 

NCHA Sues Cutting Horse Member