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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.

Tuesday, October 11, 2011

Boarding Stable Lien Foreclosure - Washington Law

This article is the final installment in our four-part series on boarding stable lien foreclosure.  For information on boarding stable lien foreclosure in California, New York and Oregon, see our preceding blog posts, or visit the "Boarding" section of Equine Legal Solutions' website.

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

RCW 60.56.010 provides Washington 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 and training.  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 perfect the lien pursuant to RCW 60.56.015 by:
    1. Posting a lien notice in a conspicuous place where the horses are kept
    2. Providing a copy of the lien notice to the debtor
    3. Providing a copy of the lien notice to any other lien holder (if the lien is more than $1,500)
  2. Within 180 days after the lien attaches, the lien holder must file suit against the debtor in a court that has jurisdiction over the area where the horses are located
  3. If the court finds in the lien holder’s favor, the horses may be sold pursuant to the requirements of RCW 60.10.030, which include prior notice to the debtor.
Frequently Asked Questions about Horse Lien Foreclosure in Washington

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 sue them if I don’t know where they live? 

A:        In order to sue someone, you will need to have them personally served with a summons and complaint.  That means you’ll need to know where to find them.  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 Washington 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.  However, RCW 60.10.030 provides that lien sale proceeds are applied first to the reasonable expenses of holding the horses and preparing them for sale.

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.  RCW 60.56.005 is broad as to whom it applies: “farmer, ranchman, herder of cattle, livery and boarding stable keeper, veterinarian, or other person, to whom horses…are entrusted for the purpose of feeding, herding, pasturing, training, caring for, or ranching.”

Q:        Can I go to small claims court and get an order to sell the horses?

A:        No, you will have to file 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 – see RCW 60.10.030(a).  All of Equine Legal Solutions’ equine form contracts include this type of provision.

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

1 comment:

Corinna said...

thank you for the thorough explanation for these 4 states! I find it a little frustrating to find the location of statutory authority for the civil procedure of going through the lien process in each state (i.e., B&P Code, Rules of Court, local or state rules of Civ Pro, Lien Law (from your NY post) etc.). Thanks for spelling out California's process (where I am from).