A Superior Court judge on Friday refused to allow two Spokane men to become parties in a bitter 15-month-old legal fight involving dissident shareholders seeking appointment of a receiver to take over operations at Spokane Raceway Park.
Daryl Stokes and Quentin Ratliff, both of Spokane, wanted to become “interpleaders” and intervene in a manner that the dissident shareholders’ legal team said was an unsuccessful attempt by defendant Orville Moe to further delay the litigation.
“There is no necessity or reason why they should be interpleaders in the case,” Judge Robert Austin ruled from the bench at the end of the hearing.
The interests of Stokes and Ratliff, who both claim to be limited partners, are no different than other limited partners who are plaintiffs in the suit against Moe, the judge said, “but their goals are different.”
The next phase in the protracted legal battle is not expected until late February when the judge is scheduled to resume a receivership hearing with testimony from witnesses supporting and opposing appointment of a receiver.
An estimated 500 “limited partners” in Washington Motorsports Ltd., led by Donald Materne and Ed Torrison, both of Spokane, are heading the legal fight to oust Orville Moe, the general partner who controls Spokane Raceway Park Inc., and replace him with a court-appointed receiver.
The limited partners claim they bought more than $2 million worth of stock in the mid-1970s in the drag strip operation, but have seen no return on their investment and have been told their shares are worthless.
The dissidents, led by Moe’s nephew Troy Moe, contend Orville Moe has avoided various state and federal taxes, fraudulently skimmed off profits and pulled in huge amounts of money through various subsidiary companies at the track, including food services.
Orville Moe was on the witness stand after two days of testimony in late December when the receivership hearing was continued until Feb. 22.
After the December hearing, Stokes and Ratliff filed a motion to become “interpleaders” in the case, which would have given them legal standing and likely further protracted the complex proceeding.
Richard Kochansky, a Coeur d’Alene attorney who said he represented Stokes and Ratliff, told the judge at a hearing on Friday that the pair believe their interests aren’t being represented.
They don’t want to see Moe removed as general partner and replaced with a court-appointed receiver, Kochansky told the judge.
If that happens, Kochansky said, the limited partnership agreement drafted in the 1970s provides that Moe could demand an immediate buy-out of his interests in the race track “and my clients don’t want to see that happen.”
Kochansky also said his clients would face “double taxation” if a court-appointed receiver sold assets at the drag strip and oval-track complex, which covers almost a square mile in Airway Heights.
Attorney John Giesa, representing the dissident shareholders, said there was no legal basis this far into the litigation to allow Stokes and Ratliff to intervene. Ratliff also is not a limited partner and, therefore, is further unqualified to join in the legal fight, Giesa said.
“They have no right to come in at this point,” Giesa told Austin before he agreed and tossed out the request.
Allowing the pair to intervene now would cause “undue delay and prejudice” to the original plaintiffs who want to press ahead and get the legal issues resolved, Giesa argued.
Attorney Carl Oreskovich, representing Moe and Spokane Raceway Park, didn’t oppose the motion of the two to join in, noting the suit has been modified at various points, including as recently as November.
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