DALLAS (CN) - A Dallas County judge has paved the way for the long-awaited deposition of disgraced cyclist Lance Armstrong and an arbitration panel's review of a settlement paying him $12 million in Tour de France race bonuses.
Judge Tonya Parker denied motions by Armstrong and his management company, Tailwind Sports Corp., to stay arbitration proceedings on Tuesday.
The dispute began with a $5 million bonus that Dallas-based SCA Promotions refused
to pay Armstrong for winning the Tour in 2003 due to suspicions that he doped.
The insurer owed the bonuses under a contingent price contract that required indemnification of Tailwind for race bonuses it would owe Armstrong under his employment contract with his race team.
After Armstrong and Tailwind sued SCA in 2004, the matter went to arbitration and ended with a $12 million settlement for Armstrong in 2006.
Under oath, Armstrong vehemently denied doping or cheating in his race victories.
Six years later, however, the U.S. Anti-Doping Agency released a "reasoned decision" that accused Armstrong of running the most sophisticated doping program in sports history.
As Armstrong fought the allegations with a lawsuit against the USADA, the Union Cycliste International stripped him of his seven Tour de France titles and banned him from the sport for life.
The cyclist ultimately admitted he'd cheated in the storied race in a January 2013 televised interview with Oprah Winfrey. Noting that these admissions contradicted the denials Armstrong made under oath during depositions for his lawsuit against SCA, the insurer sued him, his agent Bill Stapleton and Tailwind for reimbursement of the bonuses in 2013.
SCA's attorney, Jeffrey Tillotson told
the Dallas Morning News that Parker's ruling triggers an arbitration hearing on March 17.
"We're happy we'll finally get a chance to ask that the panel hold him accountable," Tillotson told the newspaper. "We always felt we had a right to go back to the panel, and we're pleased the court recognized that right."
Tillotson said Armstrong will be deposed within two weeks. He said his client asked for the arbitration hearing to be open to the public, but the panel declined. Armstrong moved to stop the arbitration in January after two of the panel's three members agreed to reexamine the settlement agreement.
"The payments SCA made were settlement payments or insurance proceeds - they can reasonably be described as prize money," his 22-page motion stated.
"In any event, a claim for forfeiture of prize money does not fall within the scope of the compromise settlement agreement's arbitration clause. The fact that SCA regrets settling the case and wants its money back - and wants to punish Armstrong for his perceived transgressions - does not make this dispute arbitrable."
He argued he is not subject to the arbitration provisions in SCA's policy because he was not a party to the agreement, that the only arbitration agreement that could be enforced him is in the settlement
"This conclusion eliminates SCA's apparent contention that it is entitled to recover from $4.6 million in reimbursements (any interest or other amounts related to those payments) that SCA made to Tailwind following the 2002 and 2003 Tour de France races because those payments were solely pursuant [to] the contingent prize contract," the motion stated. "Without a contractual obligation under [the] contingent prize contract ... Armstong is not obligated to arbitrate those portions of SCA's renewed claim."
Armstrong further argued USADA's reasoned decision provides no basis for reopening the arbitration.
"Contrary to SCA's assertions, the reasoned decision says nothing about forfeiting either prize money or insurance proceeds, nor does it specify the entity any such 'forfeiture' would benefit," the motion stated. "Thus, a forfeiture request based on a USADA publication adds nothing to the arbitrability debate not already addressed as sanctions."