Animal foundation sues two banks over abandoned horses

07/10/2012 12:00 AM

07/09/2012 10:53 PM

An animal rescue foundation says its efforts to assist two major banks by providing shelter for abandoned horses in a foreclosure case has left the organization saddled with debt and on the verge of bankruptcy.

Volunteers with the Grace Foundation of Northern California sought to draw attention to the organization's plight Monday morning as they gathered, with a couple dozen horses in tow, at a Folsom shopping center on Blue Ravine Road that is home to branches of Bank of America and Wells Fargo.

The El Dorado Hills foundation filed a lawsuit Friday in El Dorado Superior Court seeking $2 million in compensatory damages from Bank of America, Wells Fargo, an Orange County law firm that represented the banks in foreclosure proceedings and Dwight Alan Bennett, the owner of a Susanville ranch from which the horses were seized.

Beth DeCaprio, the foundation's executive director, said the suit followed efforts to get the banks to take responsibility for the cost of caring for 48 horses, including 16 foals, that the foundation – at the banks' request – took custody of last August.

"We just hope and pray the banks will do the right thing," a tearful DeCaprio said outside the bank branches Monday.

Corporate representatives for the two banks said they have tried to help the foundation.

Jumana Bauwens, a spokeswoman for Bank of America, said when it came to her attention in May that the Grace Foundation had mounted a campaign on its Facebook page to lobby the banks, she called DeCaprio.

She said DeCaprio told her the foundation needed $400,000, and within days Bank of America responded with an offer of $200,000. A few weeks later, Wells Fargo offered to pay $200,000 over a two-year period.

But Bauwens said DeCaprio then told her that costs could total up to $3 million over 12 years because some of the horses were unadoptable. She said DeCaprio balked at provisions of a settlement agreement that would protect the banks against further liability.

"We didn't stop the negotiations," Bauwens said. "She did with the lawsuit."

The financial problems are a result of legal issues regarding ownership of the horses. The lawsuit accuses the banks and Tim Ryan, an attorney representing the banks, of fraud.

It alleges that when ownership of the horses was conveyed to the Grace Foundation, the banks and Ryan knew that ownership rights could not be transferred to the foundation.

According to the lawsuit, the Grace Foundation assumed custody of the horses when a trustee, appointed by Lassen Superior Court at the banks' request, turned over ownership of 32 horses to Lassen County, which then signed them over to the foundation.

The Grace Foundation took custody of the horses in late August 2011 with the intention of seeking new owners through a nationwide adoption program in October of that year. Each of the banks donated $20,000 and Lassen County was to have contributed $10,000 to cover the estimated cost of caring for the horses for up to six months. To date, Lassen County has provided no funding, according to the lawsuit.

Within days of taking custody of the horses, the foundation was advised by Ryan that Bennett had filed for bankruptcy, listing the horses as assets.

According to the lawsuit, Ryan subsequently instructed the foundation not to take any of the usual steps it might otherwise have taken with respect to the newly rescued horses, including termination of early pregnancies.

Consequently, mares have given birth, many following difficult pregnancies that jeopardized their health, and horses in the foundation's care as a result of the Susanville rescue now number 48.

Bank representatives stress that the banks never had legal ownership of the horses and argue that with the lifting of a stay by the bankruptcy court in January, the foundation can claim ownership of the horses and put them up for adoption.

But Stuart Leviton, attorney for the foundation, said the lifting of the stay allows Bennett to challenge the seizure of the horses in state court. Leviton said he hopes the ownership issue can be cleared up within a few months. In the meantime, the foundation's expenses mount. According to the lawsuit, the foundation has spent at least $870,000 on the horses so far and expects to spend more than $1 million on their care by the end of the first year.

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