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Boarding stables, even very
high-end ones, occasionally find themselves with
customers who run up large past due balances and
refuse to remove their horses. As a result, the
facility finds itself essentially feeding and caring
for someone else’s horses for free. Meanwhile, the
deadbeat customer’s horses occupy facilities that
could be filled with paying customers’ horses. How can
a California horse facility lawfully sell a customer’s
horses to satisfy a debt?
California Civil Code Section
3080
provides California persons and businesses with an
automatic lien on their customers’ horses to satisfy
debts incurred in caring for or providing services to
those horses, such as boarding and health care. This
type of lien is sometimes called an agister’s lien,
and it means the facility can refuse to allow a
customer’s horses to leave until the bill for those
horses is paid in full.
While the
lien is automatic, the ability to sell the horses to
satisfy the debt is not. Here are the steps a
lienholder must take to be able to sell the horses:
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Sue
the debtor for the past due amount.
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When filing suit or at any time
during the suit, the lien holder can ask the court
for an order allowing the lien holder to sell the
livestock. This application for an order must
contain specific information, as set forth in
California Civil Code 3080.03.
The lien holder must request a hearing on the
application for an order.
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The lien holder must serve the
defendant with a copy of the application for an
order to sell the horses and the notice of
hearing. The notice of hearing must contain very
specific information, as set forth in
California Civil Code Section
3080.04.
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The
court will then hold a hearing on the sale issue.
The court will issue an order permitting the sale
only if all the following conditions are met:
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The statutory lien applies to the debt at
issue;
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The lien holder has shown the debt is valid;
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The lien holder has shown the lien is valid;
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The sale is necessary to prevent the horses
from declining in value OR that equitable
concerns demand the sale (such as the cost of
continuing to feed the horses during the
remainder of the lawsuit);
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The method of sale proposed by the lien holder
would be commercially reasonable; AND
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The lien holder isn’t seeking the sale for
reasons other than the debt.
Frequently Asked Questions about Horse Lien
Foreclosure in California
Q: The horses aren’t worth anything.
Can I give them away, sell them for a dollar, take
them to a rescue or donate them to a therapeutic
riding facility?
A: Not lawfully. If you give away or
donate the horses without the debtor’s permission, the
debtor could later sue you for what is called
conversion. Conversion is essentially the civil form
of theft. Even if the debtor doesn’t ultimately win
their case against you, you will still have to pay a
lawyer to defend you, which is expensive.
Q: I don’t know where the debtor
lives. How can I sue them if I don’t know where they
live?
A: In order to sue someone, you will
need to have them personally served with a summons and
complaint. That means you’ll need to know where to
find them. To find the debtor, you may want to use one
of the many free online people finder services, such
as
WhitePages.com
(which also has a reverse phone directory search). In
extreme cases, you may need to hire a private
detective to track down the debtor for you.
Q: The debtor has several horses,
and one is worth more than the others. Can I keep the
valuable one and let the debtor take the rest?
A: Yes, but you can only assert a
lien on the valuable horse for the amount that is
actually owed with respect to that horse.
Q: Is there any other way to sell
the horses without going through the lien foreclosure
steps in the California statutes?
A: Only two: Getting the debtor to
sign the horses over to you, or getting the debtor to
waive their rights under the lien statutes. Equine
Legal Solutions’
horse boarding contract forms
contain a lien statute waiver provision.
Q: The debtor already took the
horses from my property. Can I still file a lien?
A: Because the horses aren’t on your
property anymore, you no longer have the automatic
lien provided by the agister’s lien statute. However,
you can still sue the debtor to collect the amount
owed, which is often a more practical alternative to
foreclosing on an agister’s lien –
here’s why.
Q: Do I have to keep feeding and
caring for the horses that are on my property, even
though I’m not getting paid?
A: Yes, or you run the risk of
violating animal cruelty laws. However,
California Civil Code 3080.02(a)
specifically provides that you can add the cost of
caring for the horses during the pending lawsuit to
your original claim.
Q: I’m a vet, farrier or business
other than a boarding barn. Do I still have lien
rights?
A: Yes, as long as you have the
horses in your possession.
California Civil Code 3080(c)
is broad as to what it covers: “any and all grazing,
feeding, boarding, general care, which includes animal
health services, obtained or provided by the livestock
servicer, or his employee, transportation or other
services rendered by a person to livestock for the
owner of livestock, or for any other person acting by
or under the owner’s authority.”
Q: Can I go to small claims court
and get an order to sell the horses?
A: No, you will have to file in
regular civil court.
Q: Can I foreclose on my lien
without having to hire an attorney?
A: Technically, yes, but you may
find the statutory requirements difficult to navigate
on your own, and errors will cause additional delay.
Q: If I hire an attorney to
represent me, can I recoup that cost from the debtor?
A: Yes –
California Civil Code 3080.16(c)(1) provides that the
livestock sale proceeds shall be applied first to the
debtor’s expenses, including reasonable attorneys’
fees.
Still have questions?
Contact ELS to schedule a
telephone consultation
with an equine attorney licensed in California.
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