It’s finally raining in Texas! And grass is beginning to grow in pastures following the crippling drought brought on by Texas’s “Nuclear Summer of 2011”. Horse businesses in many parts of the country have only relatively recently begun to purchase round bales and make other preparations for winter. But most operators in Texas have been
Thinking about borrowing over $123,000 to buy a living quarters horse trailer? The case of John Michael Blake and Keith Blake v. GE Money Bank is an illustration of all the reasons you should do due diligence before you drop that kind of cash on a horse trailer.
John Michael and Keith Blake borrowed $123,173.16 from…
The 2011 breeding season in North America has officially drawn to a close. The BloodHorse.com posted an article on Tuesday with commentary from several major Thoroughbred stud farms about how they fared during the 2011 breeding season. Some stallion farms did better in 2011 than in 2010 (primarily those where proven sires stood in 2011). Overall, stallion…
A lot of horse owners call in complaining of disputes with their partner in a horse. Most disputes arise when a partner quits paying his or her share of the expenses on the horse, or when one partner wants to sell the horse and the other does not. Most predicaments arise when there is no written …
I get a lot of inquiries from lawyers and law students about how they can develop a niche practice in equine law. Below are the most common FAQs and my responses.
1. Is there enough business in equine law to make a living?
The answer to this is a resounding "yes"! I honestly do not believe the state in which you live will dictate this, either. I left a big firm 3 years ago and have been exclusively handling equine matters since then. I now have more business than I know what to do with. And I *only* take equine cases. I truly believe that the smaller your niche is, the bigger your market becomes. I also believe there is enough work for a lawyer to have a niche practice *within* equine law!
2. Do your clients pay you?
Yes. I do handle some pro-bono cases by choice but my clients do pay and I have a competitive hourly rate. Getting paid for your work has nothing to do with the industry your client is involved in. This comes down to running your firm like a business.
3. What kinds of stuff does an equine lawyer do?
I think it depends on what kinds of matters you’re drawn to. While I can handle most types of equine-related matters, I do a lot of trial work. I was a litigator at the big firm so I was trained at the big firm for 6 years to try civil lawsuits. I represent horse owners in several main types of lawsuits, including 1) possessory disputes / recovery of horses being wrongfully held by someone; 2) enforcement of liens on horses; and 3) sales disputes (where the buyer is suing the seller for fraud, DTPA, breach of warranty). I represent individuals almost exclusively. I don’t do any criminal (i.e. cruelty cases) because they are not civil matters. If you’re interested in criminal, you can get a job with the county prosecuting those cases (think "Animal Cops"). Equine lawyer Julie Fershtman(Michigan) often represents the horse owner’s liability insurance company when someone sues a boarding facility or trainer, for example, in a personal injury matter. She has written a lot of books and you need to buy those and read them if you have not already done so. Joel Turner, an exceptional lawyer and person, often represents huge Thoroughbred farms in Kentucky in stallion syndications, racing syndications, and major business transactions.
Texas law provides liens for two specific types of services provided to horse owners: 1) the stable keeper’s lien, (Tex. Prop. Code §70.003) which secures payment for charges related to the care of horses; and 2) the stock breeder’s lien, which secures payment for breeding services. The stable keeper’s lien also applies to…
In these economic times, horse industry businesses need to make sure they are effectively managing their credit, as well as their client relationships.
Many equine-related businesses owners have occasion to extend credit to their customers or clients. First of all, it is important to get everyone on the same page with respect to billing. “Everyone” includes you, others in your office who have client contact, and the client. For example, everyone who deals with your accounts should know when statements are mailed, when payment is due, and when or if the client may spread out payment over a number of installments. Similarly, your customer or client needs to clearly understand your expectations regarding payment.
Your spoken words and your actions must match your paperwork and billing terms. This is one of the weakest areas for many horse businesses in debt management. I have seen, for example, many people who believe someone is boarding or training their horse for free in exchange for a commission when the horse is sold, only to receive a bill in the mail months later for thousands of dollars of boarding and training services. When this occurs, there is a much higher potential to really upset a client who believes your rules have changed between what was verbally offered and how they were actually billed.
The following are some things you can do to avoid having to collect a debt in the first place:
1. Have clear, written terms from the outset. You need to give your client a written confirmation of the product or service you will be providing before you provide the product or service. The initial agreement should be signed by both you and the client.
2. Publish your terms frequently. Your terms should be published frequently after the original agreement. For example, the payment due date should be printed on each statement.
3. Send out detailed statements. You should bill your clients at least once per month, and the bill needs to be as detailed as possible. People are more likely to pay a bill and pay it on time when they fully understand all the services that were performed. When a client sees a general entry such as “vet services” on a bill, for instance, when the client had no idea a veterinarian had treated their horse, the client may become suspicious that you are divvying up your vet expenses equally among all clients, whether that particular client received the vet service or not.
4. Invoice clients on a consistent billing cycle. Once a product or service has been delivered, invoice the client as soon as possible. Whichever date you choose to send out bills, send one out at least once per month on that same schedule as long as you are providing services or waiting for payment.
5. Encourage prompt payment. To encourage the prompt settlement of bills, offer an incentive such as discounts for early payments (while always balancing the extent of the price cut with the benefits of an improved cash flow).
For more debt collection tips, continue reading.
Profit-sharing arrangements between a horse owner and his or her trainer are commonplace in the horse industry. They are often referred to as “partnerships,” but a written contract is seldom used. I strongly advise my clients against doing any kind of profit-sharing or partnership arrangement without putting the terms in writing. I have seen countless relationships between owners and trainers break down over a profit-sharing deal, and it generally happens because the parties had a different idea about what the agreement was supposed to entail. These disputes can get ugly, and sometimes law enforcement even becomes involved in disputes over possession of the horse.
Usual Scenario. The typical profit-sharing arrangement usually arises when the owner and trainer agree that the trainer will train, board, and promote the horse free of charge or at a very discounted rate to the owner in exchange for an increased percentage of the horse’s racing proceeds or a percentage of the proceeds from selling or breeding the horse.
Essential Documents. The following documents should be drafted to fit your specific terms and executed by the appropriated parties:
* A purchase and sale agreement between the owner and seller;
* A bill of sale transferring title of the horse from the seller to the owner; and
* A profit-sharing agreement between the trainer and owner.
Every horse business should have a written business plan. There are a couple of reasons for this. First, if your business is a start-up, the business plan will help you reduce financial risk by realistically assessing anticipated income and expenses before the business is launched. Second, a written and regularly-updated business plan will help you…
The second incentive of the Economic Stimulus Act of 2008 brings back 50% first-year “bonus depreciation” for horses and most other depreciable property purchased and placed in service during 2008. “Bonus depreciation” was first passed in 2002 but had phased out at the end of 2004. Bonus depreciation helps horse businesses by allowing…