About Me

My photo
Rachel Kosmal McCart is a lifelong horsewoman and the founder of Equine Legal Solutions, PC, an equine law firm based in the Portland, Oregon area. Rachel is a member of the New York, California, Oregon and Washington State bars and is admitted to practice before the U.S. District Court for the District of Oregon and the U.S. District Court for the Central District of California. Rachel currently competes in three-day eventing.

Friday, October 7, 2011

Boarding Stable Lien Foreclosure - New York Law

This the second in a four-part series - stay tuned for similar articles dedicated to Oregon and Washington.

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 New York horse facility lawfully sell a customer’s horses to satisfy a debt?

NY Lien Law Art. 8 §183 provides New York persons and businesses with an automatic lien on their customers’ horses to satisfy debts incurred in caring for or providing services to those horses.  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:

  1. The lien holder must provide the debtor with written notice of the pending sale, and the notice must meet the specific requirements of NY Lien Law Art. 9 §201.
  2. If the debtor objects to the lien sale, the debtor must file suit in court within 10 days after the debtor is served with the lien sale notice – see NY Lien Law Art. 9 §201-a.
  3. If the horses in question are worth $100 or more, the lien sale must be a public auction in the city or town where the debt was incurred (e.g., where the boarding stable or other facility is located) – see NY Lien Law Art. 9 §202.
  4. Prior to the sale, the lien holder must advertise the sale in a specific manner – see NY Lien Law Art. 9 §202.
Frequently Asked Questions about Horse Lien Foreclosure in New York

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:        If the horses are really worth less than $100 total, you may be able to sell them for a small sum of money in a private sale if you meet all the other notice and sale requirements -  see NY Lien Law Art. 9 §202.  Otherwise, 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 meet the notice requirements of the lien statutes if I don’t know where they live? 

A:        NY Lien Law Art. 9 §201 provides for notice by mail to the debtor’s last known address in certain circumstances.  Otherwise, 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 New York 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 - NY Lien Law Art. 8 §183 specifically depends upon possession.  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 or business other than a boarding barn.  Do I still have lien rights?

A:        NY Lien Law Art. 8 §183 specifically applies to veterinarians.  NY Lien Law Art. 8 §183 is also fairly broad in its coverage, but if you are unsure, Equine Legal Solutions strongly suggests obtaining a legal opinion from an attorney before taking action.

Q:        Can the debtor dispute the lien in small claims court?

A:        No, they will have to file suit 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:        Only if you have an attorneys’ fees and costs provision in your boarding contract, training contract, or other contract covering your care of the horses – there are no statutory provisions in the New York agister’s lien law for recovery of attorneys’ fees and costs.  All of Equine Legal Solutions’ equine form contracts include provisions for recovery of attorneys’ fees and costs in the event of a contract dispute.

Still have questions?  Contact ELS to schedule a telephone consultation with an equine attorney licensed in New York.

No comments: