Equine Law Blog
June 28th is National Insurance Awareness Day. Certainly, people in the equine industry may be aware that they have liability insurance, but they sometimes forget to assess whether they have the right insurance. National Insurance Awareness Day offers an annual reminder to review, understand, and update your insurance policies.
Courts nationwide have grappled with the meaning of equine activity liability laws – especially their exceptions. Exceptions in the laws are important as they could potentially allow certain lawsuits to proceed. Although all of the equine activity liability acts (referred to as “EALAs”) differ, many share common characteristics. Several include an exception for a “dangerous latent condition of the land.” This article explores how the exception has been faring in the courts.
Your club or association wants to organize a horse show or clinic. These events, your group believes, will boost publicity, increase membership, and generate extra money. Usually the event is a success, leaving happy memories and satisfied participants. But sometimes, things can go wrong, such as:
Teenagers, when they learn to drive, are sometimes cautioned that they’re actually driving five cars at once – cars in front of them, behind them, and on either side in addition to the car in which they’re seated – and must watch all of them to protect their safety. In a roughly comparable way, those who board their horses at other peoples’ stables have every incentive to be watchful of the other horses on the property. Knowing that all the horses are current on their de-wormings and vaccinations can be just as important as making sure that your own horse stays on schedule. All it takes is one horse with a contagious illness, such as strangles, to cause disastrous problems throughout the whole barn.
A boarded horse colics severely and requires emergency surgery, but the boarding stable cannot reach the owner to consent. Days earlier, the owner left for a vacation in a remote place with no phone or internet access. Despite hours of effort, the stable cannot find the horse owner. Finally, with no way of knowing whether the owner will approve costly surgery, the stable directs the veterinarian to euthanize the suffering horse.
A week later, the owner returns from vacation, only to find that her horse is gone. Then, when she submits a claim with her equine insurer, the company denies her insurance claim because the owner violated the insurance policy's condition to give the insurer timely notice of the horse's illness and death.
Although emergencies are a foreseeable part of horse ownership, the rest of this scenario could have been avoided, as this article explains.
Foster Swift shareholder Julie I. Fershtman’s latest book, Equine Law and Horse Sense, has just been published by the American Bar Association (ABA).
A backyard horse owner named Jane boards a few horses during the winter. Jane’s facility has box stalls and an indoor arena, making it desirable during the snowy winter months where Jane lives. Jane doesn’t view her activities as a business. She views herself as earning some extra money and helping friends.
What could go wrong? Plenty.
Never did the stable owner expect to be sued. A horse in his care became injured in the pasture, with a large wound, but the stable owner thought he had it under control. He dressed the wound, gave the horse a penicillin shot using old medication in the barn refrigerator, left the horse in the stall for a few days to rest and recover, and gave the horse only quick checks in the days that followed. There was no need to call a veterinarian, he thought. Several days later, however, the horse’s condition worsened to a very serious point, and by the time a veterinarian was summoned, the horse had to be put down. It turned out that the cut was more severe than the stable owner thought, and the penicillin was unsuitable for the horse. At the very end, a surprised horse owner received the call that the horse was gone.
Cindy and Sam have been long-time friends and once rode together. Now, as Sam recovers from a serious illness, his barn has been empty. He once enjoyed looking out at the horses in his pasture. He approached Cindy with an offer to stable her horses on his property for free, as long as she takes care of her horses at her own expense.
People sometimes enter into arrangements like this, but what are the legalities? What can Cindy and Sam do to protect themselves?
Should your stable have rules? Stable rules list the various policies and regulations governing activities on the property. In developing and posting them, stables try to establish limits for customers and visitors, set expectations, and promote safety. Stables have every incentive to develop, post, use, and update rules.
For years, we have written about the importance of liability releases used by horse owners, instructors, trainers, stables, and others in the equine industry. Stables that use boarding contracts without proper release clauses could be missing a valuable opportunity to manage their risks. Two cases help illustrate why.
Janet is fighting a serious illness, but no medicine gives her more comfort and happiness than her horse, "Whistler." She visits the boarding stable several times a week just to brush his coat and feed him carrots. What if Janet's health takes a turn for the worst - who will take care of "Whistler"? What if the horse needs costly colic surgery while she's too ill to give directions or if she is longer here? Is there anything Janet can do now to ensure that "Whistler" remains with her family and receives proper care and attention in the years ahead?
Yes, under Michigan law it is possible for Janet to create a trust, known as a Pet Trust, for the care of her horse. If you have a horse like Janet, would you like to provide instructions for its care if you are no longer able to do so due to your death or disability? If so, by creating a Pet Trust you can, for example:
It's only a matter of time before a boarding stable encounters a legal dispute over payment of fees. In a recent Illinois lawsuit, both the boarder and the stable sued each other, but the stable won at the trial court level and later when the case was appealed.
Every year you write the check to your insurance agent, fully expecting that you're covered for liabilities arising from your horse-related activities. But what if a claim or lawsuit is brought against you, and, to your surprise, you discover that you’re not covered for it?
Here are some equine liability insurance coverage surprises that people have experienced over the years. With careful planning, you can make sure that they never happen to you.
Private, Backyard Facility Could Qualify as an “Equine Activity Sponsor” Under Equine Activity Liability Law
As of July 20, 2015, 47 states– all but California, Maryland, and New York – have passed some form of an Equine Activity Liability Act ("EALA"). These laws sometimes share common characteristics, but all of them differ. Most follow a pattern that prevents an “equine activity sponsor,” “equine professional,” or possibly others from being sued if a “participant” who “engages in an equine activity” suffers injury, death or damage from an “inherent risk.” For example, Tennessee’s EALA, T. C. A. § 44-20-103, states:
Except as provided in § 44-20-104, an equine activity sponsor, an equine professional, or any other person, which shall include a corporation or partnership, shall not be liable for an injury to or the death of a participant resulting from the inherent risks of equine activities. Except as provided in § 44-20-104, no participant or participant's representative shall make any claim against, maintain an action against, or recover from an equine activity sponsor, an equine professional, or any other person for injury, loss, damage, or death of the participant resulting from any of the inherent risks of equine activities.
The laws typically include a list of exceptions, many of which this blog has explained.
Imagine owning a boarding stable that had a barn fire, causing loss to some of the horses. Imagine later being sued from a disgruntled boarder whose horse perished in the fire. This happened to a Michigan stable, and the stable faced an aggressive legal challenge from the boarder. In the end, the trial court dismissed the case and the Michigan Court of Appeals affirmed the dismissal in 2014. Why did the stable win? The liability release in its boarding contract played an important part of this result.
- A boarder brings her curious and rambunctious 4 year-old son, Henry, to the stable, but he slips away when she enters the tack room, despite her command to stay put, and wanders over to a nearby stall. He opens the stall door, allowing a yearling inside to run loose. The yearling gallops into the road, collides with a car, and motorists are injured. They sue the stable.
- Before Sarah, 15 years old, takes a riding lesson, the instructor requires her parent to sign a liability release. Minutes later, Sarah falls off during the lesson and is injured. She sues the instructor.
Misunderstandings and myths abound when it comes to liabilities involving children. Make sure to separate fact from fiction.
For boarding stables, making a profit can be very difficult. Stables face increasing costs each year such as the cost of hay and employment expenses. Raising rates can be especially difficult, but some stable managers have found ways to avoid increasing their standard boarding fees. How do they do it? They require their boarders to pay extra for specific services or amenities.
Boarding, lesson, and training stables have one thing in common – they all have clients and visitors on the property. For the general safety of the facility, stable managers sometimes develop and post stable rules that everyone should follow
Benefits of Stable Rules
The greatest benefit of stable rules is that they promote safety and cleanliness. Stables have every reason to expect each person who enters the facility to follow them as a condition for being allowed on the property.
Boarding stable owners sometimes feel pressured by ever-increasing costs of hay, shavings, and feed, while their clients resist rate increases and sometimes fail to pay. What can a stable do? Many stable owners believe that non-paying boarders are a reality of the business, but boarding contracts can help the stable in these situations. For example:
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The contract can allow the stable the option of raising rates by giving each customer notice of an upcoming raise, such as thirty days or more. The contract can also allow boarders the option of giving the stable notice of termination within that time so that a boarder unhappy with the increase can plan to move out before it takes effect.
Julie Fershtman, a shareholder at Foster Swift, secured summary judgment in favor of her client, an equine boarding and riding stable, on April 2, 2014.
The plaintiff accompanied his granddaughter to her riding lesson at a private stable and watched her ride from the observation room. When the lesson ended, he entered the barn aisle to ask the riding instructor questions about saddles. The plaintiff claimed that while standing in the barn aisle, with his back to the aisle, an unknown person led a horse too close behind him that brushed against his back, causing him to lose his balance and fall down. He claimed that he sustained significant injuries as a result.
When a horse facility takes in a horse for care and keeping, but the horse's owner fails to pay boarding fees and is nowhere to be found, is the horse "abandoned"? Surprisingly, many stables simply draw their own conclusions and then take drastic action, such as give away horses, lease them out, use them in lessons, or sell them off. Is that legal? Probably not.
In these challenging financial times, more and more horse owners have entered into arrangements they call “free leases.” No legal dictionary, to our knowledge, recognizes the term “free lease,” but in the horse industry it has come to mean a horse that is leased to another with no lease payment to the owner (the lessor) as long as the lessee provides the horse care and attention.
In our experience, lessors (horse owners) usually enter into these arrangements to avoid costly horse care. In an effort to save money, lessors rarely insist on contracts. Not surprisingly, disputes arise. For example:
Some boarding contracts specify that the boarded horse has a stated value. For example, the contract might state: “The parties agree that the horse boarded under this agreement is worth $15,000.”
A few years ago, some valuable breeding stallions contracted Contagious Equine Metritis (“CEM”), an equine venereal disease, while boarded at a breeding farm in Kentucky. The stallion owners sued the breeding farm, alleging that it was negligent in allowing the CEM to spread to their stallions from an incoming stallion, who had been brought to the farm from a Wisconsin quarantine facility where it contracted the CEM. [CEM is regulated by the United States Department of Agriculture (“USDA”), in part through its importation guidelines for horses that arrive from foreign countries and are quarantined. These guidelines also prohibit horses with CEM from being imported into the United States.]
In January 2013, I was the speaker at a national teleconference on Equine Law and also spoke at continuing legal education programs on Equine Law for the Washington State Bar Association and New York State Bar Association. Attendees raised several questions, and some of them are shared on this blog.
Question:
Should the boarding stable specifically ask the owner to disclose a horse’s known “aggressive behavior” (which may, of course, be manifested in biting and kicking)?
In January 2013, Julie was the speaker at a national teleconference on Equine Law and also spoke at continuing legal education programs on Equine Law for the Washington State Bar Association and New York State Bar Association. Attendees raised several questions, and some of them are shared on this blog.
Question
Some boarding contracts in the equine industry ask owners to give their consent for veterinary services. What is your opinion of these kinds of clauses?
Stables looking to collect past-due board by invoking a stablemen’s lien law should take caution.
Almost all states have laws on the books that are specifically designed to give lien rights to horse boarding stables. State laws differ significantly as to stables’ rights when board has not been paid. Here are some examples of how the laws differ:
Almost all states have laws on the books that are specifically designed to give lien rights to horse boarding stables. Some of these laws also give special lien rights to people who provide services to horses, such as veterinarians or farriers. These laws are often referred to as “stablemen’s lien laws” or “agisters lien laws.” They differ widely across the country and usually explain:
Stables with non-paying boarders have several options to consider. Proceed with caution as some options are mutually exclusive, meaning that state law might prevent the stable from pursuing two or more of them at the same time. The stable’s options, depending on the applicable state law, could include:
Horse boarding stables nationwide have been encountering the problem of non-paying or slow paying boarders. At the same time, expenses continue to rise. What are the boarder’s options when they owe the stable board money?
When a boarding stable accepts a customer’s horse for care and keeping, the law generally imposes a duty on the stable to use reasonable care. Consequently, a stable could potentially be liable for a horse’s injury even if it had no real intention of harming a horse.
If a boarder wins a case against the stable, the stable might (depending on the facts and the applicable law) be ordered to pay:
Are you considering allowing a boarding stable to use your horse in its riding lesson program? Take caution. Horse owners face risks in these arrangements, including:
A boarded horse colics and is in need of surgery, but the owner cannot be reached to find out what, if anything, can be done. What can the stable do?
When boarding stables are not paid, they sometimes ask for trouble by taking matters into their own hands without following the law. For example, some have been known to give away the boarded horses, sell them to offset the debt, or place the horses in their lesson program without first receiving clear permission from the horses' owners. These actions are usually illegal.
Stables that accept horses for boarding and keeping do not automatically own them when board is unpaid. To become the owner, the stable must follow the law. Depending on state law, legal action that can include:
In these difficult economic times, boarding stables nationwide are struggling to get their clients to pay. Stables can be asking for trouble, however, when they make their own conclusions that a horse is abandoned due to unpaid board and then take matters into their own hands without following the law.
In these challenging financial times, people sometimes consider making extra money by taking in boarders. Plan ahead and understand the risks. The arrangement could be far more complex and costly than you think.
The setting is tragic. The boarding stable catches fire and horses perish. Is the stable liable?
Merely because a boarding stable’s barn has caught fire, injuring or killing horses inside, does not necessarily mean that the stable is automatically liable for the consequences.
People in the horse industry sometimes enter into arrangements through which the horse is shared by agreement between two people, while only one of them owns the horse. People in the horse industry call these arrangements “half lease” or “share board” arrangements. They may seem simple but, in the eyes of the law, they can be complicated and call for a carefully written contract. Here are a few details to consider:
Our challenging economy has taken its toll on equine businesses, many of which are seeing unprecedented numbers of clients who cannot afford to pay their boarding fees. Does the law allow the stable to sell off a horse for non-payment? What are the stable's rights? This podcast explores state laws to prevent stables, owners, and purchasers from costly civil – and criminal – legal battles.
Imagine the shock of returning from a lengthy vacation only to learn that your horse died at the boarding stable soon after you left, but stable management could not reach you to consent to needed surgery. Your horse was put down. Imagine the further shock when your equine insurance company advises you that it has denied your claim because nobody gave it proper or timely notice of your horse’s illness and death.
Equine insurance policies usually require that you give the company (or designated representative) prompt notice of an insured horse's illness, lameness, or injury. Insurers take these provisions very seriously, and many will deny claims on the basis that they were not given proper notice. When this happens, litigation sometimes follows.
When finances are tight, people sometimes consider canceling or reducing their liability insurance coverage. Watch out – this could be mistake.
What is Liability Insurance?
Liability insurance as to equine activities is designed to protect people from certain unintentional situations where someone is injured either on your property, from an act that occurs around your horse (such as a bite or kick), when your horse gets loose, or from acts that occur when someone rides your horse.
In these difficult financial times, more boarding stable customers than ever are falling behind in their board payments.
Stable’s Rights
Many states have stablemen's lien laws (sometimes called “agister's lien laws”) that often give the stable a lien (or right of lien) on the boarded horse. In some states, the lien is created automatically, but in other states, procedures, such as a suit, must be taken to formalize the lien. Laws can also address whether the stable can deduct side charges (such as legal fees, hauling fees, sale fees, or others) from the sale proceeds. With wide variations among the laws, stable managers need to check the law carefully before taking drastic action.
I receive numerous calls from people in the midst of contract disputes. Most people thought they protected themselves by using a contract, only to discover later that the contract was either silent or unclear on an important aspect of the transaction.
Let me share with you some problems people have encountered with equine industry contracts to help you avoid them.
