Monday, February 25, 2008
When It's Better to Just Let the Horses Go...
Non-paying boarders and abandoned horses have always been a significant problem for boarding stables, and judging from the volume of calls we receive at Equine Legal Solutions, the problem is escalating quickly. While state agister's lien laws typically provide the boarding stable with an automatic lien on the horses for unpaid past due board, foreclosing on that lien may not make sense. Here's why:
-Worthless Collateral. The horses seldom have much market value, and even if they do, that market value will be compromised by the situation. Registration papers (if the horse is even registered) will be hard, if not impossible, to obtain. Agister's lien statutes frequently require that the horse be sold at public auction, which almost certainly means a lower price than a private sale. Even if a private sale is permitted by the agister's lien statutes, prospective buyers will be spooked by the possibility of title problems. Note that all of these issues are exacerbated in a soft horse market.
-Expense. Horses are expensive to keep, and getting more expensive all the time due to the rising costs of hay, feed and bedding. To properly foreclose on an agister's lien and sell the horses, it will likely take at least 60-90 days, often longer. During that entire time, you will have to feed and care for the horses at your own expense, and you may not ever recoup those expenses. Not only that, you will have to hire an attorney to represent you in the civil lawsuit you will almost certainly need to bring to properly foreclose on the lien. Most attorneys charge several hundred dollars per hour and require a substantial deposit or retainer up front, and unless you have a signed boarding contract that provides for attorneys' fees in the event of a lawsuit, you will have virtually no chance of recouping your attorneys' fees.
-Better Alternatives. If you allow the horses to leave the property, it limits the amount that the boarder owes you, making it more likely that the claim can be brought in small claims court. And, you can usually convince the boarder to make at least some cash payment when they take the horses, reducing the amount of money that you have to chase. If, when the boarder arrives to take the horses, you can convince the boarder to sign a statement that they do owe you the amount in question, it will make pursuing your claim that much easier. In small claims, you can represent yourself and therefore do not have to incur the expense of hiring an attorney. And, contrary to popular opinion, small claims judgments CAN be enforced. For example, if the boarder has a job, you can garnish their wages. If the boarder owns a home, you can put a lien on it, ensuring that you will be paid if the property sells. A claim reduced to a court judgment is far easier to enforce than a claim of lien, and in most instances, judgments earn interest until they are paid and you can usually recoup the cost of enforcing a judgment.
-Liability. Horses are fragile. During the months it will take to foreclose on your agister's lien, you will be caring for the horses and if something happens to them, the horse owner could sue you.
-Opportunity Cost. While you are feeding and caring for horses that belong to a non-paying boarder, those horses are occupying stalls or pastures that could be occupied by horses belonging to a good paying customer.
-Stress. Let's not forget about your quality of life. Foreclosing on an agister's lien is a lengthy, expensive and time-consuming process that typically leads to a lot of stress for the boarding stable owner. The horse owner often surfaces at the 11th hour wanting to negotiate a deal or try to stop the foreclosure process, and they always seem to show up on a holiday or weekend. When the stable owner refuses to allow the boarder to take the horses, the horse owner will usually try to bring the sheriff out to intervene. Typically, the sheriff will arrive, hear the other side of the story and tell the parties that the situation is a civil matter and therefore law enforcement will not get involved or allow the boarder to take the horses. However, such situations frequently turn into a scene before that happens, with shouting, threats and worse.