Follow the money! By following the hoof prints!

As noted by the American Horse Council:

The Economic Impact Study’s results show that the horse industry directly produces goods and services of $38.8 billion and has a total impact of $101.5 billion on U.S. GDP.
Racing, showing and recreation each contribute between $10.5 and $12 billion to the total value of goods and services produced by the industry.
The study concludes that there are 9.2 million horses in the U.S., including horses used for racing, showing, competition, sport, breeding, recreation and work. This includes horses used both commercially and for pleasure.  1 out of every 63 Americans is involved with horses.  The industry directly provides 460,000 full-time equivalent (FTE) jobs.
Dressage Warm-Up: World Cup 2005
Quite the impact, no?!
The American Horse Council is a great website by the way; it keeps you up to date on current equine legislation in particular fields.  It's nice to know that President Obama signed the HIRE act-- which extends the benefit of  "expense deduction for assets, including horses, purchased and placed in service through 2010."  
Furthermore, "The Section 179 expense deduction allows an owner who purchases a horse or other business property and places it in service in 2010 to expense up to $250,000 of the cost.  This applies to horses, farm equipment and any depreciable property used in a business."  While there is some fine print, such as different tax tiers for expenses incurred, as a general principle, if you spend $750,000 in eligible property and horses as part of the business, then $250,000 can be written off on the 2009 tax return, and then you depreciate the balance.
The section also includes the numerous benefits of hiring an unemployed worker- payroll taxes are forgiven and there is a $1,000 tax credit given per hired employee- these benefits would be claimed on your 2011 tax return. Cool.
In conclusion, I urge you to know your tax rights, and to consult an equine specialist attorney or CPA to ensure you are receiving the benefits to which you are entitled as a horse and/or ranch owner.

Does California do things the Cowboy way? On a hand shake?


I found Florida Administrative Law Code 5H-26 today.  It contains new laws (two years old) governing the sale and purchase of horses.  At the very top of the list I found some of the most interesting provisions:


(1) Any sale or purchase of a horse or any interest therein in Florida shall be accompanied by a written bill of sale described in Rule 5H-26.004, F.A.C., except as provided in subsection (8).
(2) A person shall not act as a dual agent in a transaction involving the sale or purchase of an interest in a horse without:
(a) The prior knowledge of both the Purchaser and the Owner; and
(b) Written consent of both the Purchaser and the Owner.
(3) No person acting as an agent for a Purchaser or an Owner, or acting as a dual agent, in a transaction involving the sale or purchase of a horse or any interest therein, may receive consideration, compensation, fees, a gratuity, or any other item of value in excess of five hundred dollars ($500), related directly or indirectly to such transaction, from an individual or entity, including any consignor involved in the transaction, other than the agent’s principal, unless:
(a) The agent receiving, and the person or entity making, the payment disclose in writing the payment to both the Purchaser and Owner; and
(b) Each principal for whom the agent is acting consents in writing to the payment.


In summary, if a trainer arranges for two people to meet, for one to sell and one to buy a horse, the trainer cannot take a 10% commission as a finder's fee from both!  If the trainer wants to do so (be a dual agent), then it must be established BEFORE the transaction AND in WRITING.  And look closely at provision (3), limiting a trainer to receive $500 from the transaction, unless in writing and both parties (when both are represented by the same trainer)  agree in writing.  On a standard $20,000 horse, $500 is a pretty far cry from the typical 10% commission (which, by the way, is infrequently put into writing in the California horse world).

Furthermore, the statute also lists certain treatments that must be revealed to a buyer if the treatment was performed on a horse within 7 days prior to sale.  Included: acupuncture and electro-stimulation because it can conceal the "true conformation of the horse." Fascinating.

All this to say, California does not have a congruous statute.  California has hardly any equine administrative laws outside of drug regulations or the racing industry actually.   Presumably if someone wished to bring a case in California it would be on generic "consumer fraud" principles.  While very possibly a sufficient form of recovery, those principles do not provide specific remedies for this particular type of equine fraud as the Florida statute does.

One of the local equine lawyers told me that the greatest volume of fraud she has seen is when Trainer 1 has a client who is willing to pay, say $50,000.  Trainer 1 talks to Trainer 2, who has a client selling a horse for, say $40,000.  Trainer 1 and 2 collaborate and agree to work out a deal to give themselves the greatest commission..  Trainer 1 returns to her client and says that Trainer 2 has a horse at her barn for $50,000.  Voila, instant price inflation based on (what should be) confidential information (the amount willing to pay) between trainer and client.  Trainer 1 has not acted as an advocate for his/her client, but has abused the trust by fraud.

Equally fascinating as the Florida statute: why California seems to be missing an entire body of law.





Insurance and the Horseman


Gerry Spence

Alan Coren


Ah Insurance! The last lawyer I worked with said "If I had a nickel for every time I had a client complain about insurance companies, I would be a millionaire.  The sooner the better if people can realize that insurance companies are in the business of making money, not giving out money."

It can be so aggravating to pay for insurance for years, then at the moment you need the company to follow through on its obligations to you, your accident or incident happens to fit an obscure exclusion, leaving you without coverage.

However, it is incredible when you have faced loss and just like that (snap!), a check arrives in the mail from the insurance company.
And it is for those moments that we continue to insure ourselves in areas not required by law (the way car insurance is required for all drivers).

It is important for you to identify the liability risks you face so you can choose insurance policies right for you.  California does not have an Equine Activity Liability Statute like most states, though there is likely some protection, albeit uncertain, from the standard tort defense of Assumption of Risk
Here are some examples of insurance policies for the equine involved:

If you are a Ranch owner
In lieu of a standard homeowner's insurance policy, opt for a Farm and Ranch policy which can cover barns, outbuildings, and horses killed by fire, drowning, lightning, etc
Have special insurance coverage for employees, they are often not included in Farm and Ranch policies

If you host equine events
Commercial Equine Liability Insurance
(And you could have risk of loss clauses in a waiver separate  from the entry forms)

If you lease horses
Mortality and major medical injury (and possibly major surgery) coverage on the horse you lease

If you board other peoples' horses
Care, custody, and control insurance policy
(And of course if third parties are riding on your property, it can be a great idea to get personal waivers.) 


Insurance requires a lot of personal research, but there's a good reason we have the saying, better safe than sorry!