Equine Legal Solutions Horse Law

At Equine Legal Solutions, boarding stables, trainers, riding instructors and other callers often ask us if they still need insurance if they have liability releases, and vice versa. The answer is, "Absolutely!" Insurance and liability releases play very different protective roles.

What Liability Releases Do

A well-drafted, properly executed liability release serves two very important functions. It can discourge potential plaintiffs from suing you, and by providing valid legal defenses, reduce the possibility they'll be successful if they do sue. If the liability release also contains an indemnification clause, as Equine Legal Solutions' forms do, you can also recover attorneys' fees and court costs from the plaintiff if you win the lawsuit.

What Liability Releases Don't Do

While liability releases may discourage potential plaintiffs, they don't guarantee you won't be sued. And, there's no such thing as the "bulletproof" liability release that's often requested. Some types of liability, such as intentional misconduct, can't be successfully disclaimed in a liability release. Furthermore, if the liability release doesn't include an indemnification clause and you are sued, you will likely pay tens of thousands of dollars to defend yourself and not be able to get those costs back from the plaintiff - even if you ultimately win.

What Insurance Does

If your liability insurance provides coverage for a liability situation, your insurer will take over your defense. That means the insurer will hire an attorney for you, defend your lawsuit, and if appropriate, negotiate a settlement on your behalf. If the insurer negotiates a settlement, the insurer pays the settlement amount. If you lose the lawsuit, the insurer pays the judgment. All of these payments, of course, are subject to the limits of your policy.

What Insurance Doesn't Do

Insurance doesn't discourage potential plaintiffs from suing you. In fact, the availaiblity of insurance often serves to encourage potential plaintiffs who think the insurer may just pay them to go away. The presence of insurance often represents a "deep pocket" and therefore an incentive for plaintiffs' attorneys to take cases on contingency.

While insurance may help pay for your defense, it doesn't provide a legal basis for defending the lawsuit. In contrast, when a plaintiff has signed a liability release, it provides the legal basis for assumption of the risk and other legal defenses.

Labels: equine insurance, equine liability

Happily, there are a lot of minors (persons under 18 years of age) involved in the horse industry. At Equine Legal Solutions, we're often asked whether a minor can sign a boarding contract, horse lease agreement or horse purchase agreement. The short answer is yes. But, there are reasons why you may not want to enter into a contract with a minor.

Minors Can Back Out of Contracts

In the horse context and in most U.S. jurisdictions, almost all contracts will be voidable by the minor. At any time, the minor can choose to back out of the contract, with no penalty. For example, if a minor signs a boarding contract with a boarding stable, the boarding stable can't hold the minor to the contract. Even if the stable honors its obligations and provides wonderful care for the minor's horse, it won't be able to require the minor to pay board or honor a 30-day termination notice provision. This seems like a very unfair result, especially when the minor has received the benefits of the contract. However, the prevailing legal theory is that minors are particularly susceptible to being taken advantage of, and therefore the law must protect minors who enter into contracts with adults. By making it rather disadvantageous to enter into a contract with a minor, the law effectively protects minors by preventing adults from contracting with them.

Minors Can Enforce Contracts

In contrast, a minor can enforce the provisions of a contract against an adult. So, if an adult enters into a contract with a minor to sell the minor a horse, the adult can't change their mind if they get a better offer. If they do, the minor could sue the adult for damages or for "specific performance" - i.e., legally force the adult to sell the horse to the minor. Again, the legal theory is to discourage adults from entering into contracts with minors, thereby protecting minors from contractual exploitation by adults.

If the Minor Owns the Horse

Often, a minor is the registered owner of their horse. How, then, should trainers, boarding stable owners and other equine service providers handle that situation? The answer is fairly simple: Have the minor's parent or guardian sign the boarding or training contract. Like service provider situations involving leased horses, if the parent or guardian isn't listed on the horse's papers as a registered owner, this fact won't affect the trainer's or boarding stable's ability to enforce the contract.

Minors and Liability Releases

A liability release is essentially a contract. Therefore, if a minor signs a liability release, that signature is pretty much worthless because the minor can void the contract at any time. How, then, can boarding stables, riding instructors and other parties protect themselves against legal claims brought by minors. The short answer is to have the minor's parent or guardian enter into a liability release on behalf of the minor. For added protection, the liability release should include an indemnification clause stating that if any claims are later brought by the minor or on the minor's behalf, the person signing the liability release agrees to pay to defend the person being sued, and to pay the cost of any legal judgment. Equine Legal Solutions offers a wide range of liability releases meeting these requirements, including liability releases specifically designed for situations involving minors.

Labels: equine liability, horse boarding, horse leasing, horse sales, horse training

Some states have reacted to the burgeoning equine health care industry by seeking to regulate certain types of care and limit their practice to licensed veterinarians. As discussed previously in the context of the Maryland battle over equine massage, both sides of the debate present logical arguments.

In the latest chapter, a well-respected equine dentist won the right to keep practicing in New York.

Labels: equine liability, other equine topics

We've received a number of questions about our January 17 post, so many that we can't answer them all individually. However, the subject matter of the questions falls into some general categories, which we'll address here.

What if the Negative Information is True?

Truth is a defense to defamation suits. Practically, that means you can still be sued for publishing negative information, even if it is true. And even if you prevail as a defendant in a defamation action, what have you won? Your name has been vindicated, perhaps, but that vindication has a big price tag. Defending a lawsuit is expensive - you can expect to spend $10,000 or more just to retain an attorney, and expenses well into six figures if your case is complicated and goes to trial. Note that you probably won't recoup these expenses if you win, because the law only provides for the award of attorneys' fees and court costs in very specific instances.

Defamation is just one cause of action available to someone who has had their professional reputation injured by the publication of negative information. Tortious interference with contract, tortious interference with business relationships, and tortious interference with prospective business advantage are three others. Note that truth is not a complete defense for those causes of action.

What is "Truth", Anyway?

If you are a defendant in a defamation lawsuit, you have the burden of proving that the negative information you published was true. All of it. At the same time, the plaintiff will be trying to undermine your truth defense by showing that the information, or at least some of it, was false. If you can't prove that all of the negative information was true, your defense will have holes, and you will have some potential liability.

"Where there's smoke, there's fire" doesn't apply to defamation lawsuits. If the subject of the negative information has a reputation for taking part in the types of activities described in the negative information, that doesn't mean that these particular allegations are true. And if these particular allegations are inaccurate, the publisher can be held accountable, even if there's a lot of factual support for other similar allegations.

The mere fact that negative information is consistent with what's already known doesn't make it true. What better way to discredit someone than to capitalize on existing rumors? Consistency might just mean the defamer is clever.

Due Diligence, and Why Advice from a Paralegal Friend is Not a Legal Opinion

If you operate a website and have some concerns about posting some information you've obtained, the most advisable course of action is to ask your lawyer for advice before publishing it. Sure, it might cost you, but the benefits will far outweigh the costs. First of all, your lawyer can advise you on what the risks are, and how to mitigate them. Your lawyer can provide you with tools to avoid getting sued, such as minor wording adjustments, qualifications and the like. Before you have a lawsuit filing deadline looming, you can find out if your lawyer would be the right person to defend you. If you ask for one, your lawyer can also provide you with a written legal opinion that what you're about to do is lawful. And if your lawyer turns out to be wrong, you can hold them (and their malpractice insurance) accountable. Unlike advice you might get from a friend, your lawyer's legal advice is completely confidential. So, if you elect not to follow all of your lawyer's recommendations, it won't provide the plaintiff with evidence you were negligent, because no one will know what your lawyer's advice was (unless you waive your attorney-client privilege).

If you need a lawyer, look for one licensed to practice in your state who has expertise in the area you need. Here's some suggestions for When and How to Hire an Attorney.

We note here that only lawyers can give legal advice. Paralegals, no matter how experienced/accomplished/knowledgeable, are not lawyers and therefore they can't lawfully provide legal advice. Advice from a paralegal, unless given in the context of an existing attorney-client relationship, is not confidential. Therefore, relying upon a paralegal's advice is very risky. Asking your paralegal friend for legal advice also puts him or her at risk. If a paralegal provides legal advice, whether or not they are paid for that advice, they are violating their state's unauthorized practice of law statute, which can have serious legal consequences for them. In addition, if the paralegal's employer finds out they've provided legal advice, even outside the office, they could get fired, and have a lot of trouble finding another job.

Won't Your Insurance Company Defend You?

If you operate a commercial website, you most likely have commercial liaiblity insurance. But will that insurance pay to defend your website in a defamation lawsuit? Your commercial liablity policy may specifically exclude coverage for defamation, or it may limit the amount of coverage. So, it's best to read your policy before posting negative information. If your policy doesn't provide sufficient coverage, it's best to know that (and go get appropriate coverage) before your website is sued.

So You're Saying No One Should Ever Publish Negative Information about Anyone?

No. However, before publishing negative information, the publisher should be aware of the significant risks associated with doing so. That means (honestly) assessing what the publisher hopes to accomplish by publishing the negative information, and deciding that it's worth the risks. Included in the decision should be an analysis of whether publication is the best means of accomplishing the goals.

Labels: equine liability, other equine topics

As previously discussed in You Cant Say That! What Horse People Need to Know about Libel, Slander and Defamation, claims of horse industry defamation are frequent, but successful lawsuits are rare. However, a recent situation has highlighted an area of great potential liability for both individuals and equine websites. Equine Legal Solutions certainly doesn't condone abusive training practices. However, we feel a responsibility to outline the legal risks of publishing animal abuse allegations.

Popular websites such as GoHorseShow.com and HorsemansLibrary.com have published accusations of abuse allegedly committed by multiple world champion Western Pleasure trainer Cleve Wells. The accusations concern a horse allegedly discovered at Mr. Wells' property with infected spur wounds and fractured bone in the bars of its mouth. The accusations are detailed, and they include graphic color photos of the alleged wounds. In some published accounts, the allegations include written statements that appear to have been made by the horse owner, another witness and two veterinarians. All of that information tends to make the accusations look more credible.

As a result, concerned horse people are reading these allegations, believing them, and spreading them like wildfire. To date, Equine Legal Solutions has received three separate emails and two telephone calls about these allegations, all from folks with no firsthand knowledge who are simply passing on what they have read and commenting upon it. Equine chat boards are live with commentary on the situation. Obviously, these allegations have reached a very wide audience and, presumably, have negatively affected public opinion about Mr. Wells.

Each "publication" and "republication" of a defamatory statement can be counted for the purpose of determining liability. What is a "publication"? The written statements were "published" when they were given to another person, whether that exchange took place by email, hand delivery, or otherwise. So, the horse owner published her statement each time she sent it to a website or emailed it to a friend. Each time those statements were then passed on, whether posted to a website, emailed or otherwise, they were "republished". So, in situations like this one, there are usually many, many republications. Note that the republications are typically beyond the control of the original publisher, yet the original publisher can have liability for them. So here, the horse owner appears to be the original publisher, and therefore she may have liability for all of the republications.

While equine websites republishing defamatory statements might argue that they are simply reporting news (and therefore should be immune from liability), there are potential problems with that defense. If the websites don't make appropriate efforts to verify facts before publishing defamatory statements, i.e., if they are negligent, that can lead to liability. In addition, when websites make decisions about what materials to publish, such as in the case of chat forums where some negative threads are removed and others left intact, that exercise of discretion can lead to liability. The publishing website is in effect helping its readers decide which statements are credible.

Unless the subject of the defamatory statements is a "public figure," mere negligence is sufficient to defeat a fair report privilege defense. Here, while Mr. Wells may be well-known in certain segments of the horse industry, he is arguably not well-known outside the horse industry. Therefore, it's highly debatable whether he is a "public figure". If he is, he would almost certainly be a "limited public figure" - that is, a public figure only to a certain narrow audience.

If a court were to determine that Mr. Wells is a limited public figure, that may provide the equine websites with a viable defense, but that defense won't likely help the horse owner and other parties. Public figures are expected to endure a certain amount of public criticism and therefore, a public figure bringing a defamation case must show that the publisher of the defamatory statement acted wtih "actual malice" - that is, that they meant to the cause the public figure harm. Here, the witness statement allegedly made by Gary Russ looks like it was made with actual malice, because it calls for AQHA to take disciplinary action against Mr. Wells. On the other hand, in the absence of evidence to the contrary, the websites and individuals republishing Mr. Russ' statement likely meant no harm to Mr. Wells. (This is a situation where emails could provide evidence of actual malice, such as "I'm going to post this on my website and destroy this guy!" So, website managers, take heed of what you say when deciding to publish negative materials!)

On casual examination, there are some notable issues with the alleged evidence being published, perhaps enough to support a claim that those publishing and republishing the allegations were negligent in doing so. The typewritten statement allegedly made by the horse owner is not signed, nor is it dated. This statement alleges that the horse in question, Slow Lopin Scotch, is co-owned by Nicole Marrs (the alleged author of the statement) and Wayne Holley, her father. However, there are no published statements that appear to have been made by Mr. Holley. The statement allegedly made by veterinarian Larry McConnell is not dated. Neither Dr. McConnell's alleged statement nor Dr. Karen Adler's alleged statement is printed on clinic letterhead - rather, these letters simply have a typewritten clinic name and address at the top. In Equine Legal Solutions' experience, veterinarians' statements usually appear on clinic letterhead, particularly if they are made in anticipation of a lawsuit. There are no copies posted of the actual veterinary records with the original notes made by the examining veterinarians, or copies of the radiographs showing the bone fragments in the bars of the horse's mouth. The photos of the wounds are not time- and date-stamped. They also do not show any details that uniquely identify the horse in the pictures. Slow Lopin Scotch appears to be a bay with no white markings or brands, so the photos could theoretically be of any bay horse, taken at any time. If the evidence and allegations are in fact truthful, the defendants, not Mr. Wells, would bear the burden of proving truth.

While most opinions posted by persons commenting on the allegations are likely protected by the First Amendment, some are not. For example, if a chat board poster were to opine, "I used to work for Cleve and I'm not surprised," they are implying that they have special knowledge and therefore their opinion has a basis in fact. As a result, that poster could be liable for their defamatory statement.

Unlike most horse industry Internet defamation claims, Mr. Wells should have ample evidence to support damages claims. Given that Mr. Wells not only trains for private clients, but also sells training videos and tack to the general public, these horrific accusations are sure to have a measureable negative impact on his business. However, because the allegations impugn his professional reputation, Mr. Wells may not even have to prove damages. The court may consider the allegations to be per se defamation.

All things considered, this situation should be a cautionary tale for the horse industry - whether the allegations are true or not. Horse trainers should be aware that what happens in their barn may not stay in their barn. Training clients should check in on their horses. Equine website managers should be aware that evidence may not always be what it seems, and that if they publish juicy materials without proper due diligence, they could be liable. And finally, individual horse owners should be careful about what they say when they pass along negative information.

Labels: equine liability, horse training, other equine topics

At Equine Legal Solutions, our boarding stable clients often ask about parents dropping off their children and leaving them for hours at a time. As one of our clients remarked with some frustration, "I'm running a boarding stable, not a daycare!"

What is the risk of having unattended minors (e.g., persons under 18) at your facility? The primary risk is that the child or teen could be involved in an accident. As a boarding stable owner, of course you don't want anyone to get hurt, human or equine. In addition to that, you also don't want to get sued. If a child or teen is hurt in an accident, and the parent isn't present, there's a risk that the parent could bring a negligence claim. The negligence claim would likely allege that the stable was aware that the child or teen was there alone, and therefore the stable had a duty to supervise the child's activities.

There's also a secondary risk to having unattended minors on the premises, which is that they can cause someone else to have an accident. Even the most innocent activities can easily spook a horse, such as a rambunctious game of tag or hide-and-go-seek. Kids like to pet horses and feed them treats, which can cause big problems if they choose the wrong horses to pet and/or feed. If kids don't have something to do, they will find something to do, and what they choose to do won't always be suitable for a boarding stable environment.

Having unattended minors on the premises can be bad for business, too. If a serious rider is in the arena, and kids are out there playing around, it can be really annoying to the rider who's trying to accomplish something. It's helpful to have an adult there to intervene before the kids get too disruptive. If the boarding stable staff are the ones who have to play traffic cop, it takes them away from their regular jobs, and it's also frustrating for them.

What if the child or teen is at the barn to take a lesson? During the lesson, the child will of course be under the instructor's supervision. But before and after the lesson, the child will still be unsupervised unless a parent is present. And, accidents can easily occur on the ground, such as during tacking and untacking.

For these reasons, Equine Legal Solutions recommends that boarding stables require that persons under 18 be accompanied by a parent or responsible adult. In fact, it's one of the suggested barn rules in the boarding contract that Equine Legal Solutions offers as part of its Boarding Stable Agreement forms package.

Labels: equine liability, horse boarding

When the State of Florida enacted Section 535.16 of the Florida Statutes tasking the Florida Department of Agriculture and Consumer Services with adopting rules to "prevent unfair or deceptive trade practices" in horse sales, the equine community waited with great anticipation (and a fair bit of scoffing). There was widespread speculation that the horse sale rules would never be promulgated, or that when they were, they'd be toothless or poorly written, and it would be business as usual for the horse industry. However, the new Florida equine sale rules go a long way toward leveling the playing field for both horse buyers and horse sellers. In this article, we'll discuss the new disclosure requirements for horse sales agents (and horse purchase agents), in Part II, we'll discuss the new horse sales disclosure requirements, and in Part III, we'll discuss the new horse sale requirements as applied to auctions.

Florida Requirements for Dual Agents in Horse Sales

Horse Sale #1: Big Name Trainer has two clients, Clara Clueless and Nona Knownothing. Clara has a horse, Money Pit, that she wants to sell. BNT agrees to help Clara sell her horse in exchange for a 10% commission. Nona wants to buy a horse and BNT agrees to help her find a horse in exchange for his customary 10% finder's fee. BNT shows Money Pit to Nona, who loves him and immediately agrees to buy him. BNT arranges for the sale of Money Pit to Nona, and collects a 10% commission on the sale price of Money Pit from each of Clara and Nona. BNT does not talk to Clara about the commission that Nona paid him, and likewise, he doesn't discussion Clara's commission payment with Nona. BNT has heard about the Florida equine sale rules, but figures they don't apply to him because that's the way he's always done business, and after all, he is a big name trainer.

Under Florida Rule 5H-26.002, BNT served as a "dual agent" because he represented both the horse owner (Clara) and the horse purchaser (Nona) in the horse sale transaction. Florida Rule 5H-26.003(2) prohibits dual agency in horse sale transactions unless the horse buyer and the horse owner know in advance and agree to the dual representation in writing. Here, BNT violated Florida rule 5H-26.003 because there is no indication that Clara and Nona both knew in advance of the sale that BNT was representing both of them and they certainly did not agree in writing to the dual representation.

Florida Horse Sale Commission Disclosure Requirements

Horse Sale #2. After the purchase of Money Pit, Clara decides she needs to sell another of her horses, Always Lame. Clara approaches BNT and asks him to sell Always Lame, telling him that she wants to "get at least $25,000" for him. BNT doesn't have a client in his barn who would be interested in Always Lame, so he calls up a trainer buddy of his, Dewey Cheatem. Dewey tells BNT that he does have a client who's horse shopping, Nancy Naive, and Nancy is willing to spend up to $50,000 for a new horse. Dewey and BNT show Always Lame to Nancy, telling her that the asking price is $50,000. Nancy falls in love with Always Lame (and on Dewey's expert advice, decides to forgo a vet check). Nancy pays $50,000 to BNT, who provides her with Always Lame's registration papers (and of course, the parties do not use a bill of sale). BNT tells Clara that Nancy has agreed to pay $25,000 for Always Lame, and Clara is thrilled to get her asking price. BNT had agreed with Dewey that they would split any amount over $25,000 that they could get Nancy to pay for Always Lame, so BNT pays $12,500 to Dewey, $25,000 to Clara and pockets the remaining $12,500. BNT also receives a commission of $2,500 from Clara, and Dewey receives a commission of $5,000 from Nancy. BNT and Dewey shake their heads at the cluelessness of Florida legislators, noting it would ruin their business if they complied with the new Florida rules. Fortunately, they decide, the rules don't apply to industry scions like themselves.

If an agent for a horse purchaser or a horse owner receives more than $500 of compensation in connection with a horse sale, Florida Rule 5H-26.003(3) requires certain disclosures. The agent who receives the commission and the person who pays it must provide written disclosure to both the horse purchaser and the horse owner. And, the horse owner and purchaser must consent to the payments in writing. So, in Horse Sale #2, BNT and Dewey would have to disclose in writing to both Clara and Nancy that they would each receive $12,500 in connection with the sale, and Clara and Nancy would both have to consent in writing. As you might imagine, Florida Rule 5H-26.003(3) is designed to thwart exactly the type of "secret commission" sales described in Horse Sale #2.

Florida Horse Ownership Interest Disclosure Requirements

Horse Sale #3: BNT has worked out a deal with Clara whereby he will train Clara's horse Pig in a Poke in exchange for 50% of the sale proceeds when Pig in a Poke sells. No one knows about the particulars of this arrangement except Clara and BNT. One of BNT's other clients, Farah Fearless, tells BNT that she wants to buy a new horse. BNT agrees to help Farah buy a new horse and Farah agrees to pay him a 10% commission. BNT just happens to mention to Farah that Clara is planning to sell Pig in a Poke. Clara loves Pig in a Poke and jumps at the chance to buy him for $40,000. BNT never mentions to Clara that he owns 50% of Pig in a Poke, and only Clara's name is on Pig in a Poke's registration papers. Farah pays Clara $40,000, and Clara delivers $20,000 to BNT. Farah also pays BNT a commission of $4,000.

BNT has just violated Florida Rule 5H-26.003(5), which provides that an agent or trainer can't recommend that their client purchase a horse in which the agent/trainer has an ownership interest unless the client is aware of the ownership interest prior to the sale. Interestingly, Rule 5H-26.003(5) does not require the client's written consent unless it is "practicable."

Horse Sale #4
Anna Amateur is a very successful rider and spends a lot of time training her horses for competition. Anna co-owns a horse, Expensive Hobby, with Nona Knownothing. Expensive Hobby is registered in Nona's name only and stabled with Nona's trainer. Clara Clueless is a friend of Anna's, and she admires Anna's taste in horses. After having been burned a few times by BNT, Clara decides that she'd much rather have Anna help her select a horse. Anna steers Clara toward Expensive Hobby, but never mentions that she is a part owner. Clara buys Expensive Hobby and pays the purchase price to Nona. As a thank-you for Anna's help, Clara takes Anna out for a lavish dinner.

Notably, and unlike the other provisions of Rule 26.003, Section 5H-26.003(5) includes "trainers" as well as agents. Florida Rule 5H-26.002(3) defines "trainer" as "a person who trains horses for contests, shows or performances." Notably, this definition of trainer doesn't state that the person must be paid for the training or otherwise have a business training horses. Therefore, an amateur such as Anna could possibly fall within the purview of the rule.

Penalties for Violating Florida Equine Sales Agent Disclosure Rules

Florida Rule 5H-26.003(13) provides that violation of any part of the Florida equine sale rules is an "unfair and deceptive trade practice" under Part II of Chapter 501 of the Florida Statutes. Pursuant to Section 501.211 of the Florida Statutes, the injured party can recover their actual damages, attorneys' fees and court costs from the violator. This is very significant. In the typical horse sale transaction, actual damages are fairly low, and therefore attorneys' fees and court costs often greatly exceed the actual damages. Without a horse sale contract containing an attorneys' fees clause, plaintiffs have little hope of recouping their costs of bringing suit and therefore they're unlikely to sue. However, the new Florida rules change that by providing a mechanism for plaintiffs to recoup their costs if they win. Therefore, Florida can expect a lot more lawsuits related to horse sales!

In addition, pursuant to Section 501.2075, the State of Florida is entitled to collect a civil penalty of up to $10,000 if the violator knew or should have known that their conduct was a violation of the Florida rules. This provision may provide an incentive to sue in cases where the plaintiff's actual damages are low, but sense of outrage is high, such as in Horse Sale #1.

Labels: equine liability, horse sales, horse training

A prepurchase veterinary exam is one of the best forms of protection for horse sellers as well as horse buyers. If the buyer has had a prepurchase vet check and the horse later develops a physical problem, that prepurchase exam provides the seller with an automatic defense. In order to have a valid legal claim for fraud or misrepresentation against the horse seller, the buyer will have to show that the horse's condition was pre-existing and that the seller (a) knew about it and (b) didn't disclose it - see The Legal Landscape of Horse Sales.

The prepurchase exam serves as a professional evaluation of the horse's condition at the time of sale, and one performed by an agent of the horse buyer. So, if the horse's post-sale ailment turns out to be a pre-existing condition, such as navicular, there are several distinct possibilities, only one of which implicates the seller: (a) the condition was not detectable at the time of the vet check; (b) the condition was detectable, but the vet performing the prepurchase missed it; (c) the condition was detectable, but the buyer did not authorize the vet to perform the diagnostics that would have revealed the problem (e.g., X-rays); or (d) the seller successfully concealed the condition by administering painkillers, tranquilizers or other drugs to the horse. Only in the case of (d) would the buyer have a case against the horse seller, and the buyer would have to be able to prove that the seller concealed the condition.

(5) Not Providing the Buyer with Access to a Sale Horse's Vet Records

Making a sale horse's vet records available to prospective purchasers is disclosure that serves to protect the seller (as well as the buyer). Note that making the records available to the horse buyer still protects the seller even if the buyer never actually obtains the records from the seller's vet, or reads them.

For example, let's say that a performance horse has been treated for various miscellaneous lamenesses over the years, and that he receives regular hock injections to help keep him sound. The horse is sound at the time of sale, but the seller doesn't specifically mention that the horse needs hock injections, figuring that it's routine maintenance. The horse's vet records clearly show the various lamenesses, as well as the hock injections. Two months after purchase, the horse shows some hock stiffness and is no longer sound. The buyer finds out through the grapevine that the horse had been receiving hock injections and had had various lamenesses, and sues the seller for fraud and misrepresentation. There was no prepurchase exam, and no bill of sale. At the time of sale, the seller told the buyer that they were welcome to obtain a copy of the horse's vet records from the seller's vet, and the seller faxed a letter to their vet authorizing the vet to release records to the seller. Clearly, the seller would be able to defend itself by stating that it had offered the buyer the opportunity to learn about the horse's veterinary history prior to purchase, and that the problems the buyer was complaining of were clearly stated in the written record. Had the seller not offered the buyer the opportunity to see the vet records (and the seller had proof of the offer, in the form of the faxed authorization to the vet), the buyer could then subpoena the horse's vet records and use them against the seller, as evidence that the seller was aware of a problem and didn't disclose it.

Labels: equine liability, horse sales

Today, ELS received a call from a forms customer who planned to have her family's pony available for pony rides at her daughter's own birthday party. She told us that she's planning to send out copies of our Youth Hold Harmless Agreement for Individual Horse Owners with the party invitations.

Now THAT'S smart!

**Note that this form would not work for a "pony party" where the family didn't own the pony. However, stay tuned - ELS is developing a forms package for pony party providers!

Labels: equine liability

Here's another example of why it's not a good idea to allow novice guests to saddle up, even if they are family members:

Canadian Rescue Sued by Relatives Over Horseback Riding Accident

Note that in this story, the hosts run a horse rescue and are fairly close relatives to the plaintiffs, but even that didn't save them from being sued! The good news here is that it appears the hosts had liability insurance. Although the hosts are quick to point out that a liability release might not have protected them, it's clear that there were no liability releases in place. Had the guests signed a properly worded liability release, it might have indeed protected the hosts, as it appears that the accident involved typically unpredictable horse behavior rather than some type of obvious negligence on the part of the hosts. Even if the liability release were not airtight, it would have provided the hosts' insurance company with a basis for negotiating a settlement with the plaintiffs.

Labels: equine liability

If you run a lesson program or a trail string, any horse in your program with a history of dangerous behavior is a four-legged liability. For example, the family of a child who was severely bitten by a horse is suing an Aspen outfitter, claiming that the outfitter was negligent by allowing its guests to come into contact with a horse that had a history of biting.

When a student or trail ride customer is injured by one of your horses, the mere fact of injury is not enough basis for a legal case against you. Instead, the injured party has the burden of showing, by a preponderance of the evidence, that you were negligent. Showing that you breached your duty of care to the injured party is an essential element of negligence. However, if you are aware that a horse in your barn has a particular behavior problem, say biting, and that behavior problem then results in injury to one of your customers, you have just made the plaintiff's case against you much easier to prove. The plaintiff can show that although you were aware that the horse had a problem, you breached your duty of care by not taking appropriate steps to protect the plaintiff from the particular harm that you knew might result from this horse's behavior. Sometimes, it's virtually impossible to protect the plaintiff from the possibility of a horse exhibiting dangerous behavior, such as with a horse that is spooky by nature. In such cases, the horse in question is indeed a four-legged liability and should be removed from the lesson program or trail string.

Labels: equine liability

A West Virginia woman who attended a party is now suing her host because she fell while trying to get on the host's horse. She alleges that her host was negligent for serving alcohol and then offering to let her ride one of his horses. Never mind that she didn't even make it all the way onto the horse!


Here's the news story from the West Virginia Record

This case is a great example of why every horse owner should have their social guests sign a liability release before they ride (or even come near) horses. If the plaintiff in the above case had signed a liability release in which she assumed the risk of horseback riding, her case would have been a lot less attractive prospect for plaintiffs' lawyers (many of whom work on a contingency basis). A sound liability release would also help prevent the plaintiff from winning her case, and would provide a good basis for the defendant to negotiate any settlement amount downward.

The case is also a great illustration of why horse owners should consider having a homeowners' umbrella liability policy that includes horse-related accidents, and/or a horse owner's liability policy. Here, unless the party-host-turned-defendant had insurance coverage that will pay to defend him in this suit, it could cost him tens of thousands of dollars to defend himself against the plaintiff's claims.

Finally, the case is also a good example of why living in a state with an equine activity statute doesn't prevent horse owners from being sued. Here, West Virginia's equine activity statute actually spells out several affirmative responsibilities that are quite helpful to support the plaintiff's claims. For example, Section 20-4-3(1) states that "Every horseman shall [m]ake reasonable and prudent efforts to determine the ability of a participant to safely engage in the equestrian activity, to determine the ability of the horse to behave safely with the participant, and to determine the ability of the participant to safely manage, care for and control the particular horse involved." Because part of the plaintiff's claims depend upon the idea that the defendant made an unsafe activity even more unsafe by serving alcohol, the plaintiff is sure to point to this statute and allege that the defendant didn't fulfill his duties.

Labels: equine liability, other equine topics

Though legal cases brought against farriers are relatively rare, I believe that they will become more prevalent in the near future. In the last ten years, lameness diagnostics have greatly improved, making it easier for veterinarians to conclusively identify the sources and causes of lameness. At the same time, horse owners have become much more aware of and knowledgeable about proper hoof care. This confluence of awareness, technology and information may very well lead more horse owners to point the finger at their farriers when their horses go lame.

In general, in order to have liability, a farrier would have to be proven negligent or to have engaged in willful misconduct. There are some generally accepted risks of having your horse receive farrier care, such as hooves that are a bit tender after a trim. However, the more extreme the consequences, the more likely it is that liability will follow. For example, a farrier who trimmed a horse so short that it developed laminitis would be likely to incur liability as a result of his or her negligence. Similarly,
a farrier who disciplines a misbehaving horse so severely that the horse injures itself may very well be liable for the cost of the horse's veterinary care. Less extreme scenarios might also lead to liability, such as changing the hoof angle too much in a single shoeing or using pads improperly.

What damages might be at stake in such situations? Although some farriers charge substantial sums for their work, most farriers make a relatively modest income, and the typical shoeing cost is often less than $100. However, the consequences of poor farrier work can be significant. Horse owners may have to spend thousands in corrective shoeing and vet care to repair the damage done by a single shoeing, and in the very worst cases, permanent and painful lameness may dictate that the horse be euthanized. Therefore, farriers would be well advised to seek liability insurance for their business to defend them against possible claims.

Labels: equine liability

If you are doing business, no matter how small or unprofitable your business is, you need commercial liability insurance. Period. Here are some of the common reasons we hear about why trainers, boarding stables, etc. do not have liability insurance, and why those reasons don't make sense.

(1) I Don't Need Insurance Because All of My Clients Sign Liability Releases

Liability releases are not a substitute for liability insurance, because insurance and contracts play very different roles. Contracts that include liability releases serve a number of valuable functions. They help set appropriate expectations for a business relationship so that the parties are less likely to have disputes. Contracts also provide the parties with legally enforceable rights. Liability releases discourage injured parties from suing and also help prevent them from prevailing in a lawsuit.

In contrast, insurance serves other valuable functions. If you are sued and the claim is covered by your insurance policy, your insurer will manage your defense and pay for your legal fees and court costs. Without insurance, if you are sued, you will have to pay for your legal defense out of pocket. The cost of defending an average civil suit easily runs into the tens of thousands of dollars, and an average retainer for a civil litigation attorney in a relatively small case is $10,000 - $20,000. Unless you have a contract providing for an award of attorneys' fees and costs to the winner of a lawsuit, you will have no way to recoup the cost of your legal defense, even if you ultimately prevail in the lawsuit. Representing yourself as a defendant in a lawsuit is simply not a viable option, as the other side's attorney will certainly use your lack of legal expertise to his or her client's advantage, and many judges are impatient with do-it-yourself litigants.

Your insurance will also cover the cost of any judgment that is issued against you in a lawsuit (up to your policy limits), provided that the claim that is the subject of the lawsuit is covered by your policy. Without such coverage, you will be forced to pay the judgment out of your own pocket, leading to potential financial ruin. If you cannot afford to pay the judgment and default in payment, the judgment holder can garnish your business' income and seize your business' assets to pay the judgment. If you do business as a partnership or sole proprietorship rather than a corporation, your personal assets will also be subject to seizure and your wages can be garnished to pay the judgment. Not all legal judgments are dischargeable in bankruptcy, either.

(2) I Don't Need Insurance Because My State Has an Equine Activity Statute

Equine activity statutes are often misinterpreted as "get out of lawsuit free" laws. In reality, equine activity statutes are limited in scope and other than serving to discourage some potential plaintiffs, they do not prevent lawsuits at all. Rather, much like a liability release, equine activity statutes provide a potential affirmative defense to claims in a lawsuit. As described in (1) above, defending a lawsuit and paying a judgment (functions typically performed by an insurer) can be financially ruinous.

(3) I Don't Need Insurance Because I Don't Have Very Many Clients

If you are accepting compensation for boarding, training, lessons or other horse-related services, you are in business. It only takes one client to sue you. Horses are very unpredictable and accidents can happen even in the safest possible environment. Even if you have only one client and you feel confident that they would never sue you, their insurance company or family may sue you if they are injured or killed in connection with your activities.

(4) I Can't Afford Liability Insurance

Many horse-related businesses are not particularly lucrative, and therefore it is often tempting to go without insurance because it seems cost-ineffective. However, given that the cost of defending just one lawsuit could be tens of thousands of dollars and all of your assets (however modest) are at risk, you really can't afford NOT to have insurance.

(5) I Don't Need Insurance Because I Don't Have Any Assets

Closely related to (4) above, this excuse also doesn't make financial sense. If you are not making any money and have very few assets, your financial situation makes it even less likely that you can afford the high cost of defending a lawsuit. Insurance serves to protect the assets that you do have.

Labels: equine insurance, equine liability, horse boarding, horse training

Every spring, Equine Legal Solutions receives a number of calls and emails from folks asking what legal requirements there are for housing a stallion. Often, the callers are mare owners suffering from unwanted visits from a neighborhood stallion. Other times, the callers are concerned about a stallion housed on a neighboring property behind fencing that appears to be constructed largely of baling twine and prayer. A few calls are from responsible stallion owners who want to be sure that they are legally compliant.

In a few areas, specific zoning regulations address the keeping of stallions. To find out whether your area has such regulations, contact your city or county zoning office and inquire.

In the absence of specific zoning regulations, the requirements for housing a stallion are no different than the requirements for housing mares and geldings or other types of livestock: the enclosure must be reasonably designed and maintained to contain the animals. For stallions, this generally means a higher and sturdier fence than would normally be required for other horses.

In some states, horse owners (and other livestock owners) have a legal responsibility to keep their animals contained on their property. In such states, if an escaped horse or cow causes property damage, the legal presumption is that the owner was negligent in permitting the animal to escape. This presumption can be rebutted by showing that the owner exercised reasonable diligence in preventing the escape (e.g., maintaining fences in good condition, fences designed to keep livestock of that type contained).

In other states, livestock owners have no affirmative duty to keep their animals contained, but a showing of negligence in permitting an animal to escape can still result in liability. Some factors that had led to a determination of negligence in legal cases involving escaped horses are: a history of animals escaping from the property, fences down or in obvious disrepair.

One big gray area is "open range" areas, where cattle and other livestock are permitted to roam freely. "Open range" is a legal designation and open range areas are typically found only in rural cattle-ranching areas of Western states. Historically, in open range areas, it is the land owner's responsibility to fence out unwanted visitors, and motorists driving on public highways assume the risk of livestock being on the highway. However, recent case law suggests that the open range may no longer be sufficient as a defense to lawsuits brought against motorists injured by loose livestock.

Labels: equine liability

At Equine Legal Solutions, we receive many calls from folks inquiring about whether they or someone else have liability for a horse-related incident. In a society where fast food diners can successfully sue over too-hot coffee, there is a lot of misinformation about liability and what creates it. In fact, the perspective of "I got hurt, so it must be someone else's fault" is alarmingly common.

However, in reality, there are four basic elements of liability. (1) The other person must have a legal duty to you and (2) the other person must breach that duty. To successfully pursue a claim, the you have to show (1) and (2), and also show (3) you suffered damages and (4) that the damages were proximately caused by (2). As the plaintiff in a civil case, you have the burden of proof, which is to show by a preponderance of the evidence that elements 1-4 are present. If you cannot adequately prove elements 1-4 are present, you do not have a sound legal basis for liability. Note that whether or not the defendant is insured does not enter into the assessment of liability, and nor does the relative ability of the parties to pay.

Labels: equine liability

Many boarding stable owners have asked ELS whether they have any say in who comes onto their property. They have expressed concern about the professionalism and methods of various trainers and instructors, and often are worried that they may have liability if the service providers hurt someone on their property. These concerns are very realistic. Even if the boarding stable doesn't have any actual liability for an incident that occurs on its property, the stable is still likely to be named in a lawsuit and therefore will have to pay to defend itself (or make a claim on its own insurance policy for the defense).

Contrary to popular opinion, boarding stables are not "public places" where anyone can conduct any horse-related business. As the property owner (or the leaseholder), you can certainly set reasonable policies about who is and is not permitted onto your property. In particular, no one should be earning income from activities taking place on your property without your knowledge and permission. Doing business on your property is a privilege and not a right.

ELS recommends that boarding stables require all independent contractors, including but not limited to trainers, instructors and persons who provide grooming and turnout services, to have commercial liability insurance. All such contractors should provide proof of insurance to the boarding stable, and name the boarding stable owners as additional named insureds on their policies. When adopting a contractor policy, the stable should put the requirements in writing and post them prominently at barn entrances and other locations where boarders and contractors will see them. ELS recommends sending a copy of the policy to each boarder with a cover letter introducing the new policy and noting that any contractors that the boarders invite onto the premises will have to comply with the policy. The barn manager should have copies of the policy on hand so that they can approach new contractors and inform them of the barn policy.

Labels: equine liability, horse boarding, horse training

Two weekends ago, my husband and I had his young cousins, age 7 and 10, come to visit us for the weekend. Recently relocated from Orange County, California to Camas, Washington, JD and Lauren had stayed with us for a few days in the spring while their folks were moving, and we all had such a great time that my husband and I suggested that the kids come and visit us for a weekend.
Lauren is nuts about horses and her brother JD likes them, so I took her and JD to the local rodeo playday. The play day had everything from leadline to adult divisions. Not only that, our neighbor planned to attend with her son, who is friends with JD. Perfect, I thought! Saturday morning, I woke the kids up early, and we loaded my show gelding into the trailer and headed to the playday, a mere 10 minutes from home.
I took Lauren in the leadline division, and JD decided to pass on the peewee division and just ride around the grounds instead. After poles, he decided that he wanted to ride by himself, without me leading him. Chase is the kind of horse that usually won't go any faster than the kids can make him, so I didn't hesitate, figuring that if JD could make him go, he could ride him. Normally, I have to step in and grab the reins when Chase stops, so I walked alongside him, ready to get him going again.
Suddenly, Chase spooked a bit at something going on around the announcer's booth, hesitated, then cantered off THROUGH THE OPEN GATE OF THE GROUNDS ONTO THE STREET! Parents and onlookers were yelling things like "Say WHOA!" and "Pull back on the reins," but JD was too scared to do anything but drop the reins and grab the saddle horn. I was running after them, as fast as a middle-aged gal in cowboy boots can go in 95-degree heat, but the gap between me and the horse was widening. Fortunately, a quick-thinking parent hopped into their Suburban and cut Chase off about a quarter mile up the road. Thank GOD it was a country lane with no traffic! JD held on and suffered no injury other than being scared to death.
On the way back into the rodeo grounds, everyone applauded JD for staying on, praising him "Good job for cowboying up!" Lots of parents were encouraging him to get back on, but he was too scared, sobbing into my shoulder that he just wanted to go home. Lauren gently suggested that he should wait to go home until she'd had her turn at barrel racing. :) I was particularly worried because JD had said his back hurt, so home we went. As it turned out, JD was just scared and his back was fine - once we got home, he still had enough energy to pick blackberries with my husband.
The next day, as JD was coaxed into getting back on a horse, and I gave him a leg up onto Juice, my husband's 17 yo Paint gelding, I reflected that I had been a particularly poor role model. Not only did I not wear a helmet myself that Saturday, I didn't make the kids wear one, either. I'm not sure what came over me, because I usually wear a helmet and insist upon guests wearing one, too. All I can say is that in an instant, the implications of that bad decision came home to me, and I was no more than just lucky that the kids weren't hurt. Even in the most benign of circumstances and on the safest of horses, accidents can happen, which is why it always makes sense to wear a helmet, no matter how experienced the rider, no matter how broke the horse. Those kids were my responsibility, and I let them down. From now on, a helmet - every ride, every time.

Labels: equine liability

Just a quick reminder that our blog readers are welcome (encouraged!) to post comments.

One of today's callers, a barn owner, discussed a situation where her stall cleaner's young son was visiting her property. The boy was running around, ignoring his mother's requests to stay off of the barn loft stairs. Eventually, he tripped and fell, necessitating a trip to the emergency room. The boy's mother thought that the barn owner should pay the tab for the hospital visit because "it happened on her property" and she didn't have health insurance for the boy.

The barn owner was concerned. I walked her through the legal aspects of the situation (in short, to be responsible for the boy's medical expenses, she would have had to be negligent in some way or have owed a duty to the child that had been breached). I suggested that even though it did not appear that she had any liability, she should report the incident to her commercial liability insurance carrier (fortunately, she had commercial liability insurance!). Most insurance companies require insureds to notify them of potential claims within a certain period of time, and failing to do so can mean that the insurer has the right to deny coverage for the incident (or even, in some instances, cancel the policy altogether).

We receive calls like this all the time at ELS. I took a memorable call last year where the caller had scheduled a saddle fitter to come out to her place. Her neighbor asked to be part of the appointment, wanted to try out a saddle, and asked to borrow the neighbor's horse to sit in the saddle. I don't recall the exact details now, but the neighbor fell off due to some circumstances that sounded more like her fault than anyone else's. The neighbor then wanted to sue the clinic host because "she didn't have insurance, nothing personal." Failure to take personal responsibility for your actions is a pet peeve of mine. Even better are the callers who argue with me when I tell them tactfully that we won't take their case, and why (such as the woman who wanted to sue her farrier for not showing up).

Labels: equine liability