Sunday, January 25, 2015

What is “reasonable care,” anyway? A horse person’s guide to legal terms.

Lawyers have their own language: legalese. Just like horse people speak equestrian, the average person doesn’t speak legalese. Here are some of the most common legal terms and phrases, in plain English.

Reasonable care: the degree of caution and concern for the safety of himself/herself and others an ordinarily prudent and rational person would use in the circumstances. This is a subjective test of determining if a person is negligent, meaning he/she did not exercise reasonable care.

Prudent person: hypothetical person who exercises average care, skill, and judgment in conduct that society requires of its members for the protection of their own and of others’ interests

Liable: responsible or obligated

Liability: legal responsibility for one’s acts or omissions

Waiver: the intentional and voluntary giving up of something, such as a right, either by an express statement or by conduct

Tort: a wrong or wrongful act, whether intentional or accidental, from which injury occurs to another

Contract: an agreement with specific terms between two or more persons or entities where there is a promise to do something in return for a benefit

Tortious interference: when a person intentionally damages someone else’s contractual or other business relationships

Reasonable reliance: what a prudent person would believe and act upon if told something by another

Claim: (1) to make a demand for money, property, or enforcement of a legal right; (2) making a demand for money due, property, damages, or enforcement of a legal right

Counterclaim: a retaliatory claim by a defendant against a plaintiff intended to off-set or reduce the amount of the plaintiff’s original claim

Defense: (1) effort of an attorney representing a defendant; (2) a response to a complaint

Mediation: the attempt to settle a legal dispute through active participation of a third party mediator who works to find points of agreement and make those in conflict agree to a fair result

Arbitration: a mini-trial held in an attempt to avoid a court trial and conducted by a person or panel of people who are not judges

Recovery: the amount of money and any other right or property received by a plaintiff in a lawsuit

Rescission: the cancellation of a contract by mutual agreement of the parties

Restitution: (1) returning to the proper owner property or the monetary value of loss; (2) in criminal cases, one of the penalties imposed is requiring the return of stolen goods or payment to the victim

Specific performance: the right of a party to a contract to demand that the defendant – who is claimed to have breached the contract – be ordered to perform the contract

Negligence: failure to exercise the care towards others which a reasonable or prudent person would do in the circumstances, or taking action which such a reasonable person would not

Custody: holding property under one’s control

Ownership: legal title coupled with exclusive legal right to possession

Independent contractor: a person or business which performs services for another person or entity. Distinguished from an employee, who works regularly for an employer. An independent contractor pays their own Social Security, income taxes without payroll deduction, has no retirement or health plan rights, and often is not entitled to worker’s compensation coverage. The independent contractor must be able to determine when and where work is performed, be able to work for others, provide own equipment and other factors which are indicative of true independence.

Employee: a person who is hired for a wage, salary, fee or payment to perform work for an employer

Indemnify: to guarantee against any loss which another might suffer

Venue: the proper or most convenient location for trial of a case

Choice of laws clause: a clause in a contract stating which state’s laws will apply to any dispute

Stablemen’s lien: a lien upon a horse or other animal provided by contract or law for the benefit of a person who has fed and/or cared for the animal

Lien: the legal right to take and hold or sell the property of another to satisfy an obligation or debt

Slander: oral defamation, in which someone tells one or more persons an untruth about another, which untruth will harm the reputation of the person defamed

Libel: to publish in print, writing, or broadcast an untruth about another which will do harm to that person of their reputation by tending to bring the target into ridicule, hatred, scorn or contempt

Lease: a written agreement in which the owner of property allows use of the property for a specified period of time for specific periodic payments, and other terms and conditions

Lessee: the person renting property under a written lease

Lessor: the person who owns the property being leased

Piercing the corporate veil: a situation in which courts put aside limited liability and hold a corporation’s shareholders or directors personally liable for the corporation’s actions or debts

Zoning: a system of developing a city or county plan in which various geographic areas are restricted to certain uses and development

Ordinance: a statute enacted by a city or town

Contingent: possible, but not certain

Variance: an exception to a zoning ordinance, authorized by an appropriate entity

Public hearing: a type of public meeting for receiving testimony from the public at large on a local issue or proposed government action

Setback restriction: building restrictions imposed on property owners prohibiting building a certain distance from a curb, property line, or structure

Planning commission or planning board: a local elected or appointed government board charged with recommending to the local town or city council the boundaries of the various original zoning district and appropriate regulations

Grandfather clause: a clause in a statute or zoning ordinance which permits the operator of a business or a land owner to be exempt from restrictions on use if the business or property continues to be used as it was when the law was adopted

Security interest: the property rights of a lender or creditor whose right to collect a debt is secured by property

Statute of Frauds: a law in every state which requires that certain documents be in writing: real property titles and transfers, leases for more than a year, wills, some types of contracts

Statute of Limitations: a law which sets the maximum period of time which one can wait before filing a lawsuit

A Guide to Liability Releases for the Equine Professional

Most boarding barns and equestrian facilities require riders and guests to sign liability release forms (and those that don’t should!). They are also known as hold harmless agreements or liability waivers. These forms are meant to protect the business from liability – but do they really?

Purpose of a liability release

There are two essential purposes to having people sign a liability release form:

1.     Discourage people from suing in the first place
2.     Help prevent them from winning if they do sue

Most states now have Equine Activity Statutes, which are laws designed to limit liability for injuries and deaths connected with horse-related activities. However, just because this statute exists does not mean that it will automatically give you immunity from liability! You can still be liable for negligence and for willful misconduct. Having a liability release fills gaps left by an Equine Activity Statute and ensures that the barn owner and the rider understands their duties.

What makes a liability release enforceable?

Here’s some good news: courts in most states have enforced liability releases – as long as the documents were properly worded and signed. Form contracts found online or in a book are only a starting point for a good liability release – there is no substitute for having a knowledgeable attorney. An effective liability release has two basic effects:

1.     Informs the signer of the risks of the activity they’re about to engage in
2.     Gets the signer to agree to accept those risks

This is known in legalese as “assumption of the risk.” In order to properly inform the signer of the risks, the release should be as specific as possible. For example, there should be specific provisions about the dangers involved in trail riding, such as wildlife spooking horses or low-hanging branches. If the release is for a student leasing a specific horse, there should be a paragraph stating that if the horse has any known dangerous behaviors – do they buck, kick, bite, and so on. Here are some examples of well-written and poorly written clauses:

Poorly written
“The undersigned acknowledges that a horse may, without warning or any apparent cause, buck, stumble, fall, rear, bite, kick, spook, or otherwise behave in a manner which may cause the rider to fall, which can result in serious injury or death.”
“Horseback riding is dangerous.”
“While trail riding the undersigned acknowledges that wild animals may spook the horse and there may be low hanging branches and other natural obstacles which could cause the rider to fall, which can result in serious injury or death.”
“Trail riding is dangerous.”
“The undersigned agrees to release and hold harmless the facility, its employees and agents, and any independent contractors from any injury or death resulting from horse-related activities, including but not limited to: riding, longeing, leading, grooming, cleaning stalls, and trailering.”
“The undersigned agrees to release and hold harmless the facility and its employees from any injury or death resulting from horseback riding.”

To advise the right person and get them to accept the risks of working with horses, the right people must be named in the release, meaning the people who might sue. For example, when parents sign for minor children (children under 18), there should be a clause stating that the parent is accepting the risks on their own behalf and on behalf of their minor child.

Even if a spectator – parent, friend, spouse – will not be directly interacting with horses, they should still sign a release! A release of liability should specify that it applies to people who are on or near the premises. This will protect the facility in case a bystander or spectator is injured. It is known as “spectator liability.”

Additionally, in order to protect the right people, everyone who could be sued should be listed in the release. For example, a boarding barn release should include the following people and entities as being released from liability:

·      The barn itself
·      The barn owners
·      Any employees of the barn – barn manager, stable hands, grooms, trainers, assistant trainers, and so on
·      Any independent contractors – farriers, veterinarians, outside trainers, and so on

It is best to release parties by categories – “all employees” or “all independent contractors.” If you are not sure whether your help qualifies under the classification of “employee” or “independent contractor,” be sure to either ask an attorney or, to be safe, include both in your release. Releasing parties by category ensures that if the individual people change they will still be covered under the original release.

Helmet related liability issues

It’s common knowledge that wearing a helmet can help prevent head injuries. Even so, many boarding barns do not require helmets while mounted, and many people choose not to wear helmets.

You can protect yourself without requiring helmets by highly recommending helmets rather than requiring them. This way, you advise riders that safety helmets are recommended, but leave the ultimate decision to the individual.

Always include in your liability release a clause spelling out the dangers of not wearing a helmet to ensure the person signing the release assumes the risk of not wearing an appropriate helmet while mounted. If they are injured while not wearing a helmet and sue, you will have a defense. You might also want to include in the helmet clause whether the rider or the facility will provide the helmet. If it is the rider’s own helmet, you should indicate that the rider agrees to provide a helmet that complies with appropriate ASTM and SEI certifications, and that if their helmet does not comply then they understand that their choice of helmet may not be as protective as the helmet you could provide. The helmet policy can be its own document, or it can be written into the liability release – that is entirely up to you.

Is the liability release enough?

Remember that a signed liability release is not a substitute for having good insurance. While insurance will not prevent liability, it can protect your home, or savings, and your property if you are sued, and it could spare you the enormous cost of a legal defense. In addition to having insurance, consider establishing your equine business as a corporation or LLC (Limited Liability Company). This will separate your business from your personal assets, and can protect your private funds if your business is sued.


What do you need in a liability release for it to be enforceable?

1.     Name of the party signing the release, who is giving up their right to sue if they or their child becomes injured as a result of engaging in horse-related activities
2.     Parties who are being released from liability: the barn or facility, its employees, any independent contractors, and so on
3.     Details: the particular risks of engaging in horse-related activities
4.     Helmet policy: signer understands the risks of not wearing a helmet, and agrees to assume those risks if they choose not to wear one
5.     Important dates: when the release was signed, how long it will remain in force
6.     Language required by the Equine Activity Statute in your state – for example, Tennessee requires this: “WARNING: Under Tennessee Law, an equine professional is not liable for an injury to or death of a participant in equine activities resulting from the inherent risks of equine activities, pursuant to Tennessee Code Annotated, title 44, chapter 20.”

A licensed attorney should look at your release of liability to determine its effectiveness. I also want to note that private horse owners should not expect to be covered under a barn’s liability release in the event their horse bites, kicks or otherwise injures someone on the barn’s property. Horse owners may want to look into liability insurance for such an occurrence and make sure the barn staff is aware if your horse has any bad habits so they can warn other clients and their guests.

Monday, January 12, 2015

From the Archives...A Recap of the 2014 Student Agricultural Law Symposium

On November 7, I had the pleasure of presenting at the Student Agricultural Law Symposium, hosted by the Agricultural Law Section of the State Bar of Michigan. It was a wonderful opportunity to address members of the agricultural law section as well as students, faculty, and staff at Michigan State University College of Law.

The paper I presented, “Transgressing Trainers and Enhanced Equines,” discusses the use of drugs in racehorses. I don’t want to give away too much – you can read the entire piece in the upcoming volume of the Journal of Animal and Natural Resource Law! – but in my presentation I touched on how the use of drugs has impacted the Thoroughbred racing industry. Following my presentation, the judges were able to ask questions, one of which was: could the FDA have a hand in regulating drugs in the racing industry?

I have to admit that I hadn’t considered the FDA despite their title (Food and Drug Administration) because to me, horse racing falls under the jurisdiction of either the USDA or gaming authorities. But what if the FDA did have a role? What if their regulatory enforcement powers were combined with the powers of local racetracks and state regulatory agencies? Maybe – just maybe – the tracks would be able to enforce raceday medication rules more effectively. But that still wouldn’t address the lack of funding for labs, or the cultural issue at the heart of it all: letting horses run on any kind of drugs.

After my presentation, one of the audience members approached me and said, “You need a celebrity to take the issue to Congress!” I think this is a good point. In a recent issue of Sidelines magazine, there was an article about Priscilla Presley and her fight to ban soring in the Tennessee Walking Horse Industry (shameless plug: if you’re interested in soring and the Horse Protection Act, check out my article published with the Kentucky Journal of Equine, Agricultural, and Natural Resource Law). Mrs. Presley appears to have had some success – she certainly has brought more attention to the issue. Racing could use a similar spokesperson: someone with enough of a background in the industry to make them legitimate, and with enough star power to get national attention. That’s how we can accomplish change in a Congress that appears not to be able to do anything: get constituents to talk to their representatives and senators, in a united voice.

What do you think? Could a celebrity voice help the racing industry become less of a dark horse? We’d love your take on the issue!

Basic Wills & Estate Planning for Horse Owners

As 2014 comes to a close, many people are making resolutions for 2015 (one of my resolutions is to blog more!). The new year is a time for reflection and for looking forward. One way to plan for the future is to make sure your animals will be provided for in case the unthinkable happens.

It’s not a pleasant topic, but the fact remains that drawing up a will and estate plan is the best way to look out for your family (human, equine, canine, feline…) when you’re gone, who will make sure they are cared for? Most states have inheritance laws that will transfer ownership of your animals to any children you have, or to your spouse or parents, if you don’t have a will drawn up. This is how children sometimes end up worrying about what to do with Mom or Dad’s beloved, if eccentric, old dog when Mom or Dad passes away. As much as you might love Rover, your kids might not be so thrilled to have an extra dog around – so imagine if they had a horse or two to think about! You can have a say in your animal’s care if you have a proper estate plan drawn up by an attorney.

I have a horse, but the rest of my family isn’t very “horsey.” What will happen to my horse?

If you don’t have a will, most likely your children will decide what to do with your horse. If you don’t have children, that decision will belong to whomever inherits your estate under the law in your state.

You can decide where the horse will go by having an attorney draw up an estate plan specifically outlining out the horse will be cared for. One option is to have the horse donated to a college or riding school. You could also leave the horse to a student or employee who knows the horse, and who you trust to care for the horse. A third possibility would be what is becoming known as a “pet trust,” where a portion of your estate is designated for the care of your horse in the future. The main difficulty with a pet trust is that there is a possibility the money will run out.

I own a boarding barn. What happens to my business?

Making a will is ESPECIALLY important if you own a business. The same rules apply to your business as to your personal horses regarding who takes ownership. You might have a barn manager or an assistant who would be willing to take over your barn, and you can give them that right in your will. Making a will also allows you to name an executor and create a buy-sell agreement if you have partners. Here is a document talking about estate and succession planning for small business owners, but you should always consult an attorney to make sure you have all of your specific interests and concerns addressed.

This is a very brief overview of wills and estates – mainly, the point here is that it’s important to have a will if you have horses or any sort of equine business. While there are many simple will forms available online, it is always a good idea to consult your attorney when you have specific goals in your estate planning.