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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 an Oregon horse facility lawfully sell
a customer’s horses to satisfy a debt?
Oregon Revised Statute Section
87.226
provides Oregon 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, breeding, training and
veterinary 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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File a
written notice with the Oregon Secretary of State.
The notice must meet all the specific requirements
outlined in
ORS 87.242(2).
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Send
a copy of the written notice to the horse owner(s)
by registered or certified mail.
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Send
a copy of the written notice to anyone else who
may have a lien on any of the horses, such as a
veterinarian or farrier who hasn’t been paid for
working on the horses. This copy also needs to be
sent certified or registered mail.
-
Then, the lien holder must go to court before it
can sell the horses by either:
(a) Filing suit against the debtor in the Oregon
Circuit Court for the area where the horses are
located.
OR
(b) Filing a
petition with the clerk of the Oregon Circuit Court
where the horses are located requesting an order for
foreclosure of the lien. This petition must include
the specific items listed in
ORS 87.272.
-
If
the lien holder files suit as described in 4(a)
above, the lien holder will ask the court to rule
that the debtor owes the money. If the court rules
in favor of the lien holder, the debtor will
generally have 30 days to pay the lien holder. If
the debtor doesn’t pay, the lien holder can go
back to court and ask for an order permitting the
lien holder to sell the horses to satisfy the
judgment.
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If
the lien holder files a petition with the court
clerk as described in 4(b) above, a judge will
review the petition and may consider any other
evidence submitted to the court. If the judge
finds the lien holder has met the statutory
requirements for filing and serving the notice of
lien, the judge will issue what is called a show
cause order. The show cause order directs the lien
holder and the debtor to appear before the judge
for a hearing. At the hearing, the debtor can
present any arguments it has against the lien. If
the judge finds in favor of the lien holder, the
judge will issue an order allowing the lien holder
to sell the horses.
-
The
horses must be sold in a very specific fashion, as
set forth in
ORS 87.306.
Frequently Asked Questions about Horse Lien
Foreclosure in Oregon
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 send them
a notice if I don’t know where they live?
A:
ORS 87.252 requires the lien holder to send a notice
to the debtor’s “last-known address.” If you don’t
have a last-known address and therefore can’t send the
notice, a court won’t issue an order allowing you to
sell the horses. To find the debtor’s last-known
address, 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 Oregon
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.
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.
Still have
questions?
Contact ELS
to schedule a
telephone consultation
with an equine attorney licensed in Oregon.
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