Lance Armstrong Fights $12 Million Demand
DALLAS (CN) - Lance Armstrong asked a Texas state judge to toss a lawsuit from a Dallas insurer that demands $12 million in bonuses Armstrong got for winning Tours de France.
SCA Promotions sued Armstrong, his agent Bill Stapleton and his management company Tailwind Sports in Dallas County Court in February.
Armstrong and Tailwind had sued SCA in 2004 after it refused to pay a $5 million bonus for winning the Tour in 2003 because of doping suspicions.
Armstrong took SCA to arbitration in 2005 and they settled in 2006, with Armstrong paid an arbitration award.
SCA demanded the money back after the Union Cycliste International stripped Armstrong of his seven Tour de France titles and banned him from the sport for life.
The UCI acted after the U.S. Anti-Doping Agency released a "reasoned decision" in 2012, accusing Armstrong of running the most sophisticated doping program in sports history.
Armstrong admitted he used illegal drugs in a January interview with Oprah Winfrey this year: contradicting denials he made under oath during depositions for his lawsuit against SCA.
"By now, everyone knows that Lance Armstrong perpetuated what may well be the most outrageous, cold-hearted and elaborate lie in the history of sports," SCA said in its February complaint this year. "While he lied to everyone, Lance Armstrong lied to SCA in shocking fashion: while testifying under oath in a legal proceeding."
Armstrong et al. filed an answer to the new lawsuit on Friday. They claim SCA's claims are barred because it made a voluntary payment under the settlement agreement. They also say the claims are barred by the statute of limitations.
In an accompanying motion to dismiss, Armstrong claims SCA has not pleaded a cause of action that would allow the arbitration award or settlement agreement to be vacated "as procured by fraud."
"SCA is barred by the settlement agreement from challenging, appealing, or attempting to set aside the award," the motion states. "Thus, SCA's causes of action seeking to do so are all barred as a matter of law. Further, even if SCA were not barred by the settlement agreement, an arbitration award has the same effect as a final judgment from a court of last resort. Grounds for judicial review are 'extraordinarily narrow.'"
Armstrong claims that under Texas common law, an arbitration award is final unless it can be shown that the arbitrator was guilty of fraud, misconduct or a gross mistake that would imply bad faith or failure to exercise good judgment.
"SCA alleges no such conduct by the arbitrators in this case," the motion states.
The defendants also disagree with SCA's request for Armstrong to be held in contempt and sanctioned for giving false testimony during depositions.
"Again, SCA fails to mention that it voluntarily settled the matter expressly acknowledging that it was in no way relying on anything Armstrong ever testified about or said," the motion states. "Not surprisingly, SCA asks for sanctions in an amount equal to the prize money SCA paid out in the arbitration, plus the attorney fees SCA expended in the arbitration."
Armstrong claims that state law does not permit him to be held in contempt or sanctioned, as the Texas Supreme Court recently held that "perjury committed during a deposition does not alone constitute constructive contempt," but, "(t)o constitute contempt, such perjury must actually obstruct a court in the performance of its duties."
"For purposes of this motion, there is no substantive difference between a deposition and the sworn testimony on which SCA relies," the motion states. "Moreover, SCA has not alleged - and indeed cannot argue based on the facts pleaded - that this testimony obstructed any court in the performance of its duties. Under the allegations of plaintiff's original petition, the 'legal proceedings' ended in an award rendered by private arbitrators facilitated by a settlement agreement, not a court's adjudication of the merits."
It its complaint, SCA contrasted Armstrong's previous denials with his admissions to Winfrey, calling the contradictions "stunning."
"Mr. Armstrong, under questioning from his own lawyers, swore under oath during the arbitration trial that he was the 'clear' winner of the 2004 Tour de France race," the SCA complaint states. "As Mr. Armstrong himself testified to the arbitrators in January 2005, 'I race the bike straight up fair and square.'
"He then turned around and told Ms. Winfrey that all of his sworn testimony was completely false: 'I know the truth. The truth isn't what was out there. The truth isn't what I said and now it's gone - this story was so perfect for so long ... I mean it's just this mythic perfect story, and it wasn't true.'"
SCA claimed that Armstrong and his attorneys were "so confident" that his cheating would never be exposed that he agreed that if he were caught and stripped of his Tour titles, he would be legally required to repay SCA.
"'If titles are stripped as a result of official action, then Tailwind agrees to refund any payments made, which is precisely what Tailwind has been saying since this case began,'" Armstrong's attorney Tim Herman said, according to the complaint. "'The tribunal can do nothing to alter the liability of Tailwind, which - which applies immediately upon Armstrong becoming the official winner of the respective events.'"
In March this year, a second insurer, which paid Armstrong $3 million in bonuses for his Tour victories in 1999 to 2001, sued him in Travis County Court.
Acceptance Insurance Co., based in Council Bluffs, Iowa, said Armstrong voided the policy and committed fraud by doping and cheating. It claimed the policy excludes any loss caused by a dishonest or fraudulent act and excludes any claim "arising out of fraud, misrepresentation, collusion or dishonesty."
"At all relevant times, the Tour de France rules and regulations prohibited the use of performance enhancing drugs," Acceptance's complaint states. "Armstrong was never entitled to receive any of the payments, because he cheated in each race and violated the rules and regulations of the events."
Acceptance claimed that Armstrong and Tailwind had to certify that the competition was in accordance with the terms of the policy and rules of the competition.
"Those certifications were lies," the complaint states. "Armstrong's doping-enhanced wins violated the rules of the competition, and of course they knew it."
Acceptance claimed that for 12 years the defendants fraudulently concealed the cheating by lying, filing fraudulent civil lawsuits, tampering with and intimidating witnesses, falsifying documents and committing perjury.
In one instance, Acceptance said, Armstrong denied former U.S Postal team soigneur Emma O'Reilly's allegations of prescription backdating, publicly calling her a whore and alcoholic.
In another case, it claimed, Armstrong denied that he had admitted doping to Tour champion Greg LeMond and said LeMond "has serious drinking and drug problems."