By JOHN M. WYLIE II, Editor
A newly-filed lawsuit claims Rogers State University and its Foundation used threats of “slaughtering” the horses as part of a fraudulent land and donation grab involving millions of dollars at the Bit by Bit Therapeutic Riding Center near Oologah.
The suit, filed March 1, also contends an RSU vice president made an unspecified threat against Bit-by-Bit director Linda Barron during an uninvited visit to her home just over a month after the funeral for her husband, Brad Barron, following a long battle with cancer.
“In the light of the time, place and circumstances of this threat, Ms. Barron was justifiably distraught,” the lawsuit, filed in Rogers County District Court by prominent Tulsa attorney Joel Wohlgemuth, contends.
It names the RSU Foundation, the State of Oklahoma and the Board of Regents of the University of Oklahoma (which governs several colleges including Rogers State) as defendants.
It alleges breach of contract, breach of good faith, unjust enrichment, tortious interference, negligent misrepresentation/constructive fraud, breach of fiduciary duty, actual fraud, and seeks a complete accounting of all land and other financial transactions in which the foundation or university have been involved with Bit by Bit.
It seeks both actual and punitive damages which, while not fully specified, could involve millions of dollars depending on how the case develops.
Dr. Larry Rice, RSU president, on Friday declined on behalf of all defendants a written request to explain or deny any allegations involving the lawsuit, saying “my response is ‘no comment’.”
The suit is based on a complex series of land and financial transactions stemming from Oologah civic leader Wanda Sanders’ donation of the 60 acres on which the Bit-by-Bit complex now operates.
According to on-line archives maintained by Google, Rogers State on Jan. 27, 2004 issued a news release announcing a $2-million fundraising campaign.
“The campaign intends to raise $1 million to acquire land and construct modern, off-campus equestrian facilities, with another $1 million placed in an endowment to fund operating expenses for the RSU Equestrian Center and the Bit by Bit Therapeutic Riding Center at RSU,” the release said.
It described Bit by Bit as “a cooperative effort between RSU and Oologah-Talala Public Schools.”
Under the latest contract between Bit by Bit (now an independent 501-c-3 organization) and the school district, O-T pays the program $15 per riding session per eligible student for services provided at the center, which was built facing US 169 on the south edge of Oologah and just north of the Caney River bridges, O-T records show.
Lawsuit claims
According to the lawsuit Mrs. Barron founded Bit by Bit and is still its director.
Mrs. Sanders (a local businesswoman and architect of the redevelopment of Historic Downtown Oologah) also serves as a Bit by Bit board member.
The lawsuit notes that she donated 20 acres for the Bit by Bit (BbB) project on Nov. 29, 2004 and another 40 acres in August 2008.
Both donations were conditioned on the land being used “to continue and further the purpose for which the Equestrian Center was established, to enhance the area around the Equestrian Center and the caretaker’s housing, and to otherwise utilize the Donated Property for broader agrarian and agricultural purposes.”
They allowed the President of the University to determine an alternate application but only if the “purposes and objectives of the agreement are no longer capable of being obtained.”
The suit contended that although started as an “RSU department, BbB was required to cover its own expenses and development costs without any form of subsidy from the University” although its “funds were managed by RSUF (the Rogers State University Foundation.
“Between 2004 and 2012, BbB independently raised over $300,000, which was used to pay for development of the donated property. This included the construction of horse stalls, barns and other facilities.”
BbB, at the university’s insistence, became an independent 501-c-3 within a year of a notice in 2012, and it did so on Feb. 23, 2013, the lawsuit says.
“In 2014, and unbeknownst to BbB, RSU was in the process of selling off the donated BbB property to obtain funds for parking and road repairs and improvements” [on the RSU Claremore campus]. This was pursued without any regard to the discrete harm and damage to the BbB program by having its facility surreptitiously sold out from under it.
“On January 29, 2014, Larry Rice, President of RSU, made a request to the Board of Regents to sell the BbB Property…There was no suggestion (nor could there have been) that the BbB program had been discontinued or that it was no longer feasible for the donated program to be used in furtherance of that program. The Board, based on President Rice’s presentation, approved the sale of the BbB Property,” the suit continues.
The land was donated in two parcels with the second 40-acre parcel, deeded to RSU on July 25, 2008, conditioned on the right of Oologah-Talala schools to use up to 10 acres of it to build an elementary school if it committed to the project within five years.
(That deadline would have expired by its own terms on or about July 28, 2013, almost precisely six months before Rice made his proposal to sell all the land but not until well after RSU’s alleged insistence that Bit by Bit become an independent 501-c-3 entity).
Regents approved the sale at their March meeting and it was completed April 16, 2014 by RSU to the RSU Foundation for just over $1.1 million, which used its funds plus a line of credit from Arvest Bank to finance the deal.
“RSUF, through repeated and intentional misrepresentation, induced BbB to agree to ‘purchase’ the BbB Equestrian Center from RSUF for $1.3 million. This is the very same property that was donated by Ms. Sanders to BbB, and that was improved with funds raised by BbB and its donors…
“BbB was erroneously informed by Maynard Phillips, the vice president of Development and Foundation for RSU, that the Board of Regents was ‘forcing’ RSU to sell…[although] There is no record in any minutes of the Board of Regents that any such direction was given,” the suit says.
Phillips told BbB of a plan to “save BbB.” If it raised the $1.3 million through a “Capital Campaign” it would be allowed to stay and use the facility, to which BbB agreed “based upon the representation of Phillips, who Ms. Barron trusted.
“Phillips deliberately made the egregious and reprehensible representation to Ms. Barron that BbB was actually ‘lucky’ that this was the course of action decided upon, because an OU Regent had suggested ‘slaughtering the horses and being done with the place’.”
Thus, the suit continued, BbB was forced by false representations to not only try to raise the money the foundation had paid for the property but an extra $200,000 premium about which it was never informed.
To date, over $900,000 has been raised by BbB from local donors and major charitable organizations including the Amos & Henry Zarrow, Oxley, Kaiser and Hille foundations and turned it over to RSUF, but RSUF never honored its commitment to also assist in fundraising and without explanation “has not raised the promised funds.”
But on Feb. 3, 2015, Phillips told the BbB board that it would be required to raise another $2.5 million for “Phase 2” of the capital campaign despite there being no agreement by BbB to do so, no need by BbB for the funds, and indications that “the so-called ‘endowment’ was for the benefit of RSUF, not BbB.”
Mrs. Barron became concerned about the future of BbB and the way RSUF was managing its funds. She became even more concerned after receiving an accountant’s report on the balances in two accounts and an explanation from Phillips that one was not an actual account balance but “a summation of the ‘Assets maintained by Bit by Bit’. This statement raised serious concerns that the BbB funds held by RSUF were being misused or misappropriated by the Foundation.”
BbB immediately began making all its deposits into its own account at Valley National Bank in Oologah.
“On October 5, 2016, shortly after the death of Ms. Barron’s husband, Phillips arrived unannounced at Ms. Barron’s residence to ostensibly offer emotional support. Instead, Phillips came to Ms. Barron’s home to tell her that BbB’s deposit of its funds into its own bank account was not acceptable. Phillips told Ms. Barron he had two Board Members questioning why there was no flow of funds from BbB to the Foundation. Phillips suggested that BbB would suffer from continuing to deposit its money into its own account. In light of the time, place and circumstances of this threat, Ms. Barron was justifiably distraught” but has nonetheless not resumed making deposits to RSUF accounts.
On Jan. 30, Phillips and the chair of the RSUF board both denied having ever seen or knowing about the donation agreement with Wanda Sanders.
The lawsuit does not calculate the total amount of damages it is seeking but in one count alone of the nine-count complaint estimates unjustful enrichment of RSU and RSUF at hundreds of thousands of dollars.
At another point it suggested it is entitled to actual damages for each of the nine counts, plus punitive damages equal to the total actual damages, plus the largest additional punitive damages of $500,000 or twice the amount of actual damages or “the increased financial benefit derived by RSUF as a direct result of the conduct causing the injury to BbB.
It also seeks attorney fees, all costs incurred by BbB in pursuing the action and restitution on top of other damages.
The case has initially been assigned to Rogers County District Judge Sheila J. Condren.
Built by hope
According to Bit by Bit’s social media sites, Mrs. Barron holds a master’s degree in special education and has over three decades of experience as a classroom teacher and special services director.
She founded Bit by Bit on the Rogers State campus in 1997 and it grew, serving as many as 75 students with as many as almost 20 horses and up to 125 volunteers.
It says its program, called therapeutic horseback riding, can be used as part of therapy in both cases of physical and mental or emotional disabilities.
“Because the horse gently and rhythmically moves the rider’s body in a manner similar to a human gait, riders with physical disabilities often show improvement in flexibility, balance, and muscle strength. For the individuals with mental or emotional disabilities, the unique relationship formed with the horse can lead to increased confidence, patience and self-esteem. Educational goals like letter and color recognition can be incorporated into riding activities. Lessons also provide a positive social experience for students as they interact with volunteers, staff members, other riders and horses. Research shows that individuals of all ages who participate in equine-assisted activities and therapies can experience physical and emotional rewards.”