Equine Law

We assist clients in horse-related transactions and litigation, particularly where regulated breeds are involved, such as thoroughbreds, standardbreds, and Arabians. To provide effective representation, we stay current with industry practices and legal developments in this area.

Case Summaries

Daniel Werre v. Kentucky Horse Racing Commission, Franklin Circuit Court, 14-CI-418 (June 15, 2015)

Kentucky Racing Commission suspended trainer Werre for a year because the horse tested positive for Levamisole.  The Franklin Circuit Court reversed the Racing Commission’s suspension of the trainer because the Racing Commission did not sustain its burden of showing the propriety of the penalty imposed.  The Racing Commission had misclassified the drug on its own Schedules and application of the regulation was therefore unconstitutional.

Racing Commission/administrative agency/burden/Levamisole

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June 15, 2015 Filed Under:   Equine Law   Litigation

Veitch v. Public Protection Cabinet, et al., Franklin Circuit Court, 13-CI-895 (November 26, 2014)

Chief State Steward of the Kentucky Horse Racing Commission was terminated.  The termination was upheld by the Kentucky Personnel Board.  On judicial appeal of agency action, the Franklin Circuit Court reversed the termination, reinstated the Chief Steward with recovery of back pay.

Personnel board/chief state steward/racing commission

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November 26, 2014 Filed Under:   Equine Law   Litigation   Employment Law

Gulf Coast Farms, LLC, et al. v. Fifth Third Bank Fayette Circuit Court 11-CI-88

Fifth Third Bank sought to enforce banking agreements that included pledges of equine collateral.  Gulf Coast attempted to prove that the terms of the agreement with the lender were different than contained within the documents executed by the parties.  The trial court ruled in favor of Fifth Third by Opinion and Partial Summary Judgment entered on July 30, 2013.  Gulf Coast appealed and the Kentucky Court of Appeals affirmed on April 19, 2013, in cases 2011-CA-965/1575/491, the trial court’s rulings in favor of Fifth Third.

In a related case, the US District Court ruled in favor of Fifth Third in its pursuit of proceeds generated from the sale of a share of a stallion, DISTORTED HUMOR that was pledged as collateral and the US Court of Appeals (case 13-6184) for the Sixth Circuit affirmed on July 23, 2014.

Equine collateral/four corners/ambiguity

July 23, 2014 Filed Under:   Equine Law   Litigation   Transactional Law

Borell v. Walnut Springs, LLC, (2013-CA-59, Fayette Circuit Court)

Trainer breached lease agreement by failing to pay rent and physically damaging the premise. After forcible detainer order was entered, Landlord sued to recover damages and summary judgment was granted over request for continuance. Tenant appealed. Court of Appeals affirmed monetary judgment against trainer (including attorneys’ fee recovery) and the discretion of the trial court as it relates to requests for continuance.  Enforcement of the Judgment included an objection lodged with the Kentucky Racing Commission under the Financial Responsibility obligations of trainers.

Landlord-tenant/summary judgment/ denial of motion to set aside/Kentucky Racing Commission/Financial responsibility of trainers

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January 1, 2014 Filed Under:   Equine Law   Litigation

Stewart v. Kentucky Horse Racing Commission (2013 WL 1003534, Ky. App. 2013)

Veterinarian was charged with possession of sealed alpha cobratoxin vials and carbidopa/levodopa tablets at Keeneland training facility. The Stewards suspended the vet for four years for possession of cobratoxin and one year for carbidopa/levodopa, to run consecutively. The Franklin Circuit Court reversed carbidopa/levodopa suspension, finding that it was not based on substantial evidence. On cross-appeals, the Court of Appeals affirmed reversal of the suspension for carbidopa/levodopa, and reversed four-year suspension for possession of alpha cobratoxin. The Court held that 810 KAR 1:018 §19(1) was void for vagueness and therefore unconstitutional as applied to the vet.

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January 1, 2013 Filed Under:   Equine Law   Litigation

Blue Skies Racing Stable, LLC v. O’Sullivan Farms, LLC and Vinery, Ltd., (2012-CA-2116-MR)

Blue Skies Racing Stable, LLC appealed a judgment of the Fayette Circuit Court dismissing appellee, O’Sullivan Farms, LLC from its declaratory action. The Court of Appeals reversed and remanded. The controversy centered over who was entitled to ownership of a thoroughbred stallion named LIMEHOUSE. Blue Skies contended that it had a valid and binding contract to purchase the controlling interest in the horse from appellee, Vinery, Ltd. and that Vinery breached the contract by purporting to sell that controlling interest to a third party, O’Sullivan Farms, LLC, instead. Blue Skies moved for a temporary injunction to prohibit Vinery and O’Sullivan Farms from removing the horse from Kentucky and taking it to West Virginia during the pendency of the litigation. Vinery and O’Sullivan Farms opposed the motion for temporary injunction and alternatively moved to dismiss. The Court identified several errors by the trial court. First, the trial court orally overruled the motion for temporary injunction at an August 30, 2012 hearing. However, the Court held that the Court did not effectively “deny Blue Skies’ motion for a temporary injunction” because a court may speak “only through written orders entered upon the official record,” and no written findings of fact and conclusions of law were entered. Id. at *6. Second, the Court found that the trial court had no authority “to render a nonbinding advisory opinion,” and that the trial court “could not properly have disposed of the underlying merits of this dispute when simply considering Blue Skies’ motion for temporary injunction.” Therefore, the trial court erred in justifying its dismissal of O’Sullivan Farms by citing its previous “denial” of Blue Skies’ motion for temporary injunction. Third, the trial court erred by foreclosing the possibility that specific performance was an appropriate remedy for Blue Skies under the circumstances. Finally, the trial court erred by indicating that it lacked authority to unwind O’Sullivan Farms’ purported purchase of LIMEHOUSE or otherwise exercise jurisdiction over LIMEHOUSE because the horse was, at the time of the hearing on the motion to dismiss, located in another state. “The circuit court undisputedly has personal jurisdiction over O’Sullivan Farms . . . the circuit court is fully authorized to compel O’Sullivan Farms to act in relation to any property not within its jurisdiction.” Id. at *8.

Equine/personal jurisdiction/rescission of purchase/stallion interest

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January 1, 2013 Filed Under:   Equine Law   Litigation   Transactional Law

Stewart v. Kentucky Horse Racing Commission (2013 WL 1003534, Ky. App. 2013)

Veterinarian was charged with possession of sealed alpha cobratoxin vials and carbidopa/levodopa tablets at Keeneland training facility. The Stewards suspended the vet for four years for possession of cobratoxin and one year for carbidopa/levodopa, to run consecutively. The Franklin Circuit Court reversed carbidopa/levodopa suspension, finding that it was not based on substantial evidence. On cross-appeals, the Court of Appeals affirmed reversal of the suspension for carbidopa/levodopa, and reversed four-year suspension for possession of alpha cobratoxin. The Court held that 810 KAR 1:018 §19(1) was void for vagueness and therefore unconstitutional as applied to the vet.

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January 1, 2013 Filed Under:   Equine Law   Litigation

Blue Skies Racing Stable, LLC v. O’Sullivan Farms, LLC and Vinery, Ltd., (2012-CA-2116-MR)

Blue Skies Racing Stable, LLC appealed a judgment of the Fayette Circuit Court dismissing appellee, O’Sullivan Farms, LLC from its declaratory action. The Court of Appeals reversed and remanded. The controversy centered over who was entitled to ownership of a thoroughbred stallion named LIMEHOUSE. Blue Skies contended that it had a valid and binding contract to purchase the controlling interest in the horse from appellee, Vinery, Ltd. and that Vinery breached the contract by purporting to sell that controlling interest to a third party, O’Sullivan Farms, LLC, instead. Blue Skies moved for a temporary injunction to prohibit Vinery and O’Sullivan Farms from removing the horse from Kentucky and taking it to West Virginia during the pendency of the litigation. Vinery and O’Sullivan Farms opposed the motion for temporary injunction and alternatively moved to dismiss. The Court identified several errors by the trial court. First, the trial court orally overruled the motion for temporary injunction at an August 30, 2012 hearing. However, the Court held that the Court did not effectively “deny Blue Skies’ motion for a temporary injunction” because a court may speak “only through written orders entered upon the official record,” and no written findings of fact and conclusions of law were entered. Id. at *6. Second, the Court found that the trial court had no authority “to render a nonbinding advisory opinion,” and that the trial court “could not properly have disposed of the underlying merits of this dispute when simply considering Blue Skies’ motion for temporary injunction.” Therefore, the trial court erred in justifying its dismissal of O’Sullivan Farms by citing its previous “denial” of Blue Skies’ motion for temporary injunction. Third, the trial court erred by foreclosing the possibility that specific performance was an appropriate remedy for Blue Skies under the circumstances. Finally, the trial court erred by indicating that it lacked authority to unwind O’Sullivan Farms’ purported purchase of LIMEHOUSE or otherwise exercise jurisdiction over LIMEHOUSE because the horse was, at the time of the hearing on the motion to dismiss, located in another state. “The circuit court undisputedly has personal jurisdiction over O’Sullivan Farms . . . the circuit court is fully authorized to compel O’Sullivan Farms to act in relation to any property not within its jurisdiction.” Id. at *8.

Equine/personal jurisdiction/rescission of purchase/stallion interest

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July 1, 2012 Filed Under:   Equine Law

Blue Skies Racing Stable, LLC v. O’Sullivan Farms, LLC and Vinery, Ltd., (2012-CA-2116-MR)

Blue Skies Racing Stable, LLC appealed a judgment of the Fayette Circuit Court dismissing appellee, O’Sullivan Farms, LLC from its declaratory action. The Court of Appeals reversed and remanded. The controversy centered over who was entitled to ownership of a thoroughbred stallion named LIMEHOUSE. Blue Skies contended that it had a valid and binding contract to purchase the controlling interest in the horse from appellee, Vinery, Ltd. and that Vinery breached the contract by purporting to sell that controlling interest to a third party, O’Sullivan Farms, LLC, instead. Blue Skies moved for a temporary injunction to prohibit Vinery and O’Sullivan Farms from removing the horse from Kentucky and taking it to West Virginia during the pendency of the litigation. Vinery and O’Sullivan Farms opposed the motion for temporary injunction and alternatively moved to dismiss. The Court identified several errors by the trial court. First, the trial court orally overruled the motion for temporary injunction at an August 30, 2012 hearing. However, the Court held that the Court did not effectively “deny Blue Skies’ motion for a temporary injunction” because a court may speak “only through written orders entered upon the official record,” and no written findings of fact and conclusions of law were entered. Id. at *6. Second, the Court found that the trial court had no authority “to render a nonbinding advisory opinion,” and that the trial court “could not properly have disposed of the underlying merits of this dispute when simply considering Blue Skies’ motion for temporary injunction.” Therefore, the trial court erred in justifying its dismissal of O’Sullivan Farms by citing its previous “denial” of Blue Skies’ motion for temporary injunction. Third, the trial court erred by foreclosing the possibility that specific performance was an appropriate remedy for Blue Skies under the circumstances. Finally, the trial court erred by indicating that it lacked authority to unwind O’Sullivan Farms’ purported purchase of LIMEHOUSE or otherwise exercise jurisdiction over LIMEHOUSE because the horse was, at the time of the hearing on the motion to dismiss, located in another state. “The circuit court undisputedly has personal jurisdiction over O’Sullivan Farms . . . the circuit court is fully authorized to compel O’Sullivan Farms to act in relation to any property not within its jurisdiction.” Id. at *8.

Equine/personal jurisdiction/rescission of purchase/stallion interest

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January 1, 2012 Filed Under:   Equine Law   Litigation   Transactional Law

James Lauffer v. Thoro-Graph, Inc. and Jerry Brown,Johnson Circuit Court 09-CI-157 (4/12/2010)

In the absence of an agreement, a horse purchaser adviser is limited to recovering 5% of the purchase price.

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April 12, 2010 Filed Under:   Equine Law   Litigation

Use of Repositories: A Buyer’s Perspective

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January 1, 2010 Filed Under:   Equine Law

Current Law on Fraud and Sale of Horses

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January 1, 2010 Filed Under:   Equine Law   Litigation

Sanders v. Victory Haven Training Ctr., LLC. (No. 2008-CA-002220-MR, Court of Appeals 2009)

MGM represented a horse training facility in recovering back rent owed by a trainer who breached her lease agreement. The trainer responded to the suit by filing a counterclaim seeking damages for an allegedly improper lien placed on the horses she trained but did not own. Judgment was granted on liability and a partial damage award entered. The trainer’s counterclaim was then addressed through discovery and a separate order entered dismissing that claim. An additional damage award was entered to quantify the damages accruing since the first award order. The trainer appealed the judgment and the Court of Appeals affirmed the trial court’s decision in favor of the training facility.

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January 1, 2009 Filed Under:   Equine Law   Litigation   Transactional Law

Litigating the Horse Transportation Claim

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January 1, 2007 Filed Under:   Equine Law   Litigation

Highland Stud International, et al. v. Baffert, et al., 00-261-JMH (EDKy 2002)

The former purchaser of the “breeding rights” to Kentucky Derby winner REAL QUIET purchased his “racing qualities” in 2000. The 2000 agreement provided that the horse was sold “as is” and with no representation or warranties concerning the physical condition of the colt. The purchaser later sued the seller, trainer, and a veterinarian asserting various claims, including breach of contract and fraud, after REAL QUIET manifested a tendon injury after his arrival in Kentucky. The Court held that the purchaser could not assert “tort claims” such as fraud, under the “economic loss doctrine.” That doctrine provides that in sales governed by the UCC and involving purely economic losses as opposed to personal injuries, a party is bound by the contract and generally is limited to only contract claims. The Court also held that there was no breach of contract and dismissing the purchaser’s claims in this horse sales case under the “economic loss doctrine.”

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January 1, 2002 Filed Under:   Equine Law   Litigation

Expert Valuation Testimony in Equine Cases (Getting Your Horse (Expert) through the Gate)

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January 1, 2001 Filed Under:   Equine Law

Dimario v. Coppola

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January 1, 1998 Filed Under:   Equine Law

When is the Trainer an Agent?

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January 1, 1997 Filed Under:   Equine Law

Thomas v. Hodge, 897 FSupp 980 (USDC WDKY 1995)

Saddlehorse owners from California pursued claims for an accounting and breaches of fiduciary duty against their Kentucky-based agent who boarded, trained and showed their saddlebred horses.  The United States District Court at Louisville ruled on a pretrial motion for an accounting and held that the agent was not required to account for expenses accrued when the agent was acting as vendor of services to principals and further had no duty to account for transactions in which he did not act as agent and did not receive a commission, distinguishing between horse sales transactions (i.e., disposition of principal’s property) and boarding and training expenses (merely rendering bills for payment).  The Court made clear that an agency is a fiduciary relationship resulting from manifestation of consent by one person, the principal, to another, the agent, that the agent may act on the principal’s behalf and subject to his control; and consent by the agent to so act.

Principal/agent/equine industry/show horses/American Saddlebred Horse Association/accounting

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July 1, 1995 Filed Under:   Equine Law   Litigation

When is the Syndicate Manager a Fiduciary?

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January 1, 1995 Filed Under:   Equine Law

The Sale of Horses and Horse Interests: A Transactional Approach

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January 1, 1991 Filed Under:   Equine Law

Cohen v. North Ridge Farms, Inc., 712 F.Supp. 1265 (USDC ED Ky 1989)

The court held that sellers of horses have a duty to inspect and find defects in horses they are selling.  This case led to the creation of repositories at public auctions in Kentucky.

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January 1, 1989 Filed Under:   Equine Law   Litigation   Transactional Law

Chernick v. Fasig Tipton, 703 S.W.2d 885 (1986)

Sales companies have a duty to insure the accuracy of information supplied to buyers.  This case was later cited in the adoption of negligent misrepresentation as a cause of action in Kentucky.

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January 1, 1986 Filed Under:   Equine Law   Litigation   Transactional Law

America Singing: The Role of Custom and Usage in the Thoroughbred Horse Business

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January 1, 1985 Filed Under:   Equine Law

North Ridge Farms v. Trimble, 37 UCC Rep. Serv. 35 (Callahhan) 1280 (Ky. Ct. App. 1983)

North Ridge Farms, Inc. v. Trimble, 37 UCC Rep. Serv.1280 (Ky. App. 1983), aff’d sub nom, Trimble v. North Ridge Farms, 700 S.W.2d 396 (1985); following remand, North Ridge Farm v. Stathatos, 760 S.W.2d 89 (Ky. App. 1988). Syndicator of a stallion took a security interest in a share sold to a syndicate member. One year’s nomination (breeding season) was sold to another breeder. The Kentucky Court of Appeals held that the buyer of the breeding season took free of the security interest in stallion syndicate share from which the season was derived. The Court stated that the buyer of the season could not be a buyer in the ordinary course of business of goods under section 9-307 of the UCC because although the stallion share was within the definition of “goods,” the season was severed from those goods. However, because the syndicate agreement authorized the sale of seasons, the security interest was extinguished as to the season pursuant to UCC section 9-306. The Kentucky Supreme Court affirmed, its reasoning different from that of the Court of Appeals, but the earlier (unreported) decision became the basis of In re Blankenship-Cooper, Inc. which is much broader in scope. On remand, the trial court awarded damages in favor of the buyer of the season, who had not been permitted to breed. The court held that the agent who handled the transaction for a disclosed principal was not liable, but the principal was liable. The Kentucky Court of Appeals affirmed.

January 1, 1983 Filed Under:   Equine Law   Litigation

Marsh v. Gentry, KY., 642 S.W.2d 574 (1982)

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January 1, 1982 Filed Under:   Equine Law   Litigation   Transactional Law