Want to Sue Your Vet? Read This First.

Denton County CourthouseAttorney Gregory M. Dennis gave an excellent presentation on Veterinary Malpractice at the 2010 National Conference on Equine Law.  Greg’s topic could not have been more timely or relevant. We receive multiple calls per week from horse owners wishing to sue their veterinarian for injury to or the death of their horse. 

My firm does not sue veterinarians due to conflicts purposes.  Although we can’t take these cases, we often consult with horse owners who are considering a veterinary malpractice case. If you are considering a lawsuit against a veterinarian, here are some things you should consider:

We usually tell people that most (but not all) veterinary malpractice cases are difficult for plaintiffs for two main reasons:

1)      It is hard to find a veterinarian who will testify against another veterinarian; and

2)      Horses are personal property (chattel) under the law. As such, a plaintiff usually cannot recover pain & suffering damages (for the horse or the owner) or damages based on the sentimental value of the horse.

The burden of proof in a veterinary malpractice action is always on the plaintiffFackler v. Genetzky, 595 N.W.2d 884, 889-90 (1990) appeal after remand 638 N.W.2d 521 (2002).

The plaintiff must prove:

1)      A veterinarian’s acts or omissions failed to meet the standard of care;

2)      Acts or omissions were negligently performed;

3)      Negligently performed acts or injuries caused the animal’s injury or death; and

4)      As a result, the plaintiff was damaged.

See Eades, Jury Instructions on Medical Issues, VETERINARIANS, 7-20 (6th ed. 2004).

To establish element number one (failure to meet the standard of care) the plaintiff must get another veterinarian to testify against the veterinarian being sued for malpractice. Downing v. Gully, 915 S.W.2d 181 (Tex. App.—Fort Worth 1996, writ denied). This is where a lot of people run into problems. They have trouble finding a vet to testify as to what the standard of care was, and that their veterinarian breached that standard of care.

Note: a veterinary negligence case is different from a veterinary malpractice case. If you are suing for ordinary negligence only, a veterinarian might not have to be called to testify.

Example: A healthy horse comes in for his annual vaccinations. A veterinarian leaves a door open and allows a horse to get into the feed room. The horse eats a whole bag of feed and then colics and dies as a result.

Another tough element in many cases is element number 3 (causation). This is especially tough in cases where the horse died. If a horse dies in the care of the vet and the plaintiff wishes to prevail on a malpractice suit, the plaintiff needs to prove that the horse would not have died anyway (but for the vet’s malpractice).

Damages typically awarded in vet malpractice cases in Texas and most states are 1) loss of animal’s market value or the cost of replacement, and 2) veterinary expenses. Because attorney fees are generally unrecoverable on a vet malpractice case, the case might cost more to bring than the horse's fair market value.

That said, states such as Alaska, Florida, Hawaii, Idaho, Kentucky, New York and New Jersey to some extent, as well as the District of Columbia have expressed a willingness to accept claims requesting damages beyond market value. 

This post is not meant to discourage people from bringing "bad" vets to justice. It is meant to give potential plaintiffs an idea of the legal framework surrounding veterinary malpractice cases in general.

Take aways: 1) Use good vets that you know and trust; if you don't know a good vet, ask other horse owners in the area for a referral; 2) if your horse is valuable, get major medical and mortality insurance on the horse; and 3) if you suspect malpractice, your first call should be another veterinarian so you can get an idea of whether or not the standard of care was breached. That will be your ultimate issue.

For additional information on veterinary malpractice suits, there is a helpful article  by David S. Favre published online by the Animal Legal & Historical Center.

******

If you are a veterinarian who has testified for a plaintiff in the past or would be willing to testify for a plaintiff, please contact my office as soon as you can so I can refer you to horse owners and other lawyers who may need your services. My number is 817-878-3541. Thank you!

**A special thank you to Greg Dennis, whose presentation materials provided valuable references for this post.

Photo credit:  Courthouselover (Flikr)

Enforcability of "Soundness Guarantees"

A Texas caller bought a horse without getting a pre-purchase exam. The caller has emails from the seller that say the horse “never took a lame step” and was “always sound” while the seller owned the horse. The horse became lame about two months after the caller got him home, and the caller’s veterinarian speculated that the lameness was due to a condition that pre-dated the caller’s purchase of the horse. The caller wants to reverse the sale because the seller “guaranteed” the horse to be sound.

First, the horse trade is one where the phrase caveat emptor (“buyer beware”) applies. It is the buyer’s responsibility to get a pre-purchase exam before buying a horse. Every pre-existing condition cannot be determined in a routine pre-purchase exam. Thus, it is the buyer’s burden to ask the seller specific questions about soundness and suitability for the buyer’s intended purpose, and obtain access to all prior veterinary records on the horse from the seller prior to taking possession of the horse.

Unless the seller expressly promises a refund if the horse is found to be lame, or otherwise expressly guarantees or warranties that the horse is sound, a court will likely not find an express warranty of soundness to have existed. There are no implied warranties on livestock or their unborn young in Texas, as provided in Texas Uniform Commercial Code Section 2.316.

In the absence of an express warranty of soundness, the buyer will have to pursue a fraud action against the seller. To prevail on a fraud claim, the buyer must prove (among other elements): 1) the condition causing the lameness was there when she bought the horse (through a veterinarian’s opinion); and 2) the previous owner knew about the condition at the time of the sale and intended to defraud her.

Plaintiffs lawyers also like to bring horse sale actions under the Texas Deceptive Trade Practices Act ("DTPA") or similar consumer protection statutes in other states.  The DTPA is attractive to plaintiffs because they allow for treble damages and attorneys' fees in some cases.

Fraud and DTPA cases are often "tough sledding'" because the buyer must prove the seller knew about the defect at the time the sale took place.  See Tex. Bus. & Com. Code Sec. 17.46(b)(24). 

Proving the seller knew about the defect is hard to do if there are no vet records or other evidence pre-dating the sale showing a diagnosis of the condition or treatments related to the condition.  

Take aways:  When buying a horse,

  • get a pre-purchase exam done by a vet you know and trust;
  • get a written Purchase & Sale agreement on each horse you buy. This agreement should contain a disclosure by the seller of all known faults with the horse;
  • and ask the seller specific questions about past injuries and illnesses;
  • ask the seller who their vets are and obtain releases from the seller so that you can get copies of prior vet records on the horse. Most veterinary practices adhere to confidentiality practices that prevent them from providing a buyer with acces to records that pre-date the buyer's purchase of the horse; and
  • if you think the seller is guaranteeing a horse sound, get the guarantee in writing.

 

Horse Insurance 101: Special Event Liability

Special Event Liability insurance will be the final topic of this week's discussion about the various types of equine liability insurance available for purchase.  If you are hosting an event such as a clinic, a roping, a show or a trail ride, you should consider buying insurance.

Special Event Liability insurance typically extends to the organization putting on the show and its members.  Show officials, committee members, judges, course designers and premises owners can usually be included as additional insureds (and I recommend getting coverage for all of the above, if applicable).

If considering Special Event Liability insurance, ask your agent what types of incidents are covered and what parts of the premises are covered.  Many accidents that occur at a horse event do not involve horses and do not happen in the arena.  I know of one instance where a horse show sponsor was sued in connection with a golf cart wreck in the parking lot.  As such, the Equine Activity Laws will not always provide a defense so you need to make sure you have insurance coverage.

Also, make sure that claims made by spectators and guests (not just participants) are covered under the policy.

In addition to Special Event Liability insurance, I recommend that event sponsors1) post the Equine Activity Law signs at the event; and 2) have each participant sign a liability waiver form that is a separate document from the entry form.

The "downside" for some sponsors (depending on the event) is that the liability carrier may prohibit the sponsor from allowing dogs or alcohol on the premises during the event.  Even if the sponsor is not selling alcohol, that "col'beer" in people's private ice chests in their pickups might be disallowed under the insurance policy.  So add dogs and beer to the list of things to discuss with your agent to make sure you're covered.

Photo credit:  Eric Ashford (Flikr)

Horse Insurance 101: Commercial Equine Liability


If you board, breed, race, train, give riding lessons or conduct any kind of business-related equine activity, I highly recommend that you consider a Commercial Equine Liability policy. 

Homeowner’s and standard Farm & Ranch insurance policies completely exclude your equine business pursuits. 

Commercial liability insurance pays the damages for liability imposed upon you or your business by a liability claim or court judgment.  It also pays the cost of defending you when a lawsuit is brought against you.

This policy kicks in when an accident occurs and someone is hurt, regardless of whether you own the horse involved.

However, the basic Commercial Equine Liability policy does not cover claims for damage to property in your care, custody or control.  If someone claims, for example, that you injured their horse in the course of training it, you would need a Care, Custody & Control policy to cover that damage claim.

The Equine Activity Laws may help you provide a defense in the event of an equine incident, but they will not prevent you from being sued.  Without adequate liability coverage you will have to pay damages and defense costs yourself.  And the Equine Liability Laws only cover “inherent risks” in equine activities.  Some plaintiffs are able to successfully argue that their situation did not involve an “inherent risk”.  In other words, you could lose the case.  It bears repeating that defense costs are generally not recoverable by defendants in Texas lawsuits.

Commercial Equine Liability policies are designed to help protect you if you are sued by a third party who is injured or whose property is damaged.  A third party is generally someone who is not a family member or employee. 

If you have employees, you should consider carrying workman's compensation insurance as they are not covered under the general liability policy.  You should also make sure that any independent contractors that work with you show proof of their own liability insurance and ask that you be named as an Additional Insured on their policy.  This is especially true if you have an independent instructor or trainer working at your facility.

In addition to this policy, I recommend that all equine businesses 1) post the applicable Equine Activity Law in your state in conspicuous areas in your barn and on your property; and 2) have each third party who uses your facility sign a liability waiver that contains a covenant not to sue and specifically waives liability for ordinary negligence.   

 

Photo credit:  Katarina 2353 (Flikr)

Horse Insurance 101: Care, Custody & Control

Care, Custody & Control insurance is meant to cover people who board or train horses or are otherwise responsible for other people’s horses while breeding, showing, or racing them. The policy pays sums you are legally obligated to pay to others for death, injury or theft of horses in your care, custody, or control.

Example: a boarder’s horse dies of colic while it is at your barn, and the owner sues you for negligence.

Almost all general or commercial liability policies exclude coverage for injury or death to any horse in your care, custody or control.

This coverage does not apply to horses you own or lease, which typically are covered by a mortality policy.  Also, a Care, Custody & Control policy also does not cover you if a third-party’s horse in your care injures someone or damages their property. The Care, Custody & Control policy only protects you against claims of damage or loss of the third-party’s horse itself.

The policy typically pays for damages to horses and defense costs for suits brought against you. Premiums are usually based upon the average number of horses in your care or the total number of horses in any one barn, whichever is greater.

The basic policy also covers you if a horse is injured during incidental transit (hauling) of horses. “Incidental transit” is usually defined as 6 trips of 150 miles or less per year. The mileage restriction can usually be eliminated for an additional premium.

This coverage is especially recommended for trainers due to the multiple ways a horse can be injured in the course of a training program.

In addition to a Care, Custody & Control policy, I also recommended that trainers and boarding facilities get a written agreement with clients that includes 1) a “risk of loss” clause where the client assumes all risk of loss or injury to the horse; and 2) a veterinary power of attorney whereby the client agrees that the trainer or boarding facility has the discretion to provide veterinary care if the owner cannot be contacted.

Photo credit:  Markus Shaltrin

Horse Insurance 101: Farm and Ranch

In yesterday’s post, we talked about the Private Horseowner’s Liability policy and discussed the ways it might cover a horse owner for liability claims that are not covered by a basic farm and ranch policy. Does that mean that holders of PHO policies do not need a farm and ranch policy? Not necessarily.

A basic farm and ranch policy can be compared to an extended “homeowner’s policy” for farm or ranch owners. Although many insurance companies allow clients to customize their farm and ranch policies to cover additional perils, the basic farm and ranch policy typically covers the following instances:

  •  Loss of your home or certain types of damage to your home;
  •  Loss of your barn or outbuildings or certain types of damage to your barn or outbuildings;
  •  Accidental death of your horses caused by lightning, fire, predator attack, accidental shooting, or drowning;
  • Liability claims brought by third parties who are on your property with your permission and the incident did not happen in connection with your equine business operations; and
  • Medical bills for third parties who are on your property with your permission are are injured from an occurence that did not arise from your equine business operation.

The basic farm and ranch policy does not typically cover the following instances:

  •  Incidents that do not occur on your property; 
  • Liability claims for medical bills or damages brought by family members or employees;  
  • Horses that die or have to put down due to injury or sickness;
  • Accidents caused by horses that do not belong to you; and
  • Accidents that arise from your equine business operations.

For people who own a farm or ranch, a basic farm and ranch policy is usually a good idea. This type of policy should be considered in lieu of the basic homeowner’s policy due to the additional coverages available.

But there are many ways in which a farm owner can be held personally liable even when covered by a basic farm and ranch policy. Therefore, it is advisable to ask your insurance agent exactly what is covered so that additional insurance can be purchased, if necessary.

The most important thing to remember is that if you are sued, you want to be covered by insurance. No matter how frivolous or unmeritorious the claim, you will still have to hire an attorney to defend you. Legal fees are costly, and usually not recoverable by defendants in law suits.

Horse Insurance 101: Private Horseowner's Liability (PHO)

Many lawsuits involving horses can be avoided altogether if the right insurance policy is in place. Or, if a lawsuit cannot be avoided, a horse owner with the right insurance policy does not have to rack up $75k plus getting their case to trial and face a potential judgment of thousands or millions of dollars.

Remember, posting the Chapter 87 Equine Activity Act sign, setting up an LLC, or getting people to sign a liability waiver does not immunize you from suit.  If you are sued, you will still have to pay a lawyer to defend you even if you eventually win the case.  In Texas, defendants usually cannot recover attorneys' fees in court.

So, the theme this week is equine insurance.  Do you need it and what kind do you need?

In the May 2010 Issue of SuperLooper, insurance specialist Amy J. Daum talks about Private Horseowner's Liability Policies (PHOs).

A PHO is meant to cover you if your horse directly injures someone or damages someone's property, and you are sued.  Some examples of when a PHO might cover you are:

1) One of your horses gets out of your pasture and is hit by a car, and the motorist sues you;

2) Your horse is tied to your horse trailer at a show or roping and kicks someone's child while you are around the corner doing something else; and

3) You allow your friend to ride your best horse and he falls off when your horse stops quickly.  Your friend has no medical insurance so has to sue you to pay his medical bills.

Even if you have a farm & ranch or homeowner's policy, a PHO might cover you under circumstances that your farm & ranch policy would not.  For example, some farm & ranch or homeowner's policies will not cover you if the accident happened off your property.  Also, if an accident happens at an event where money can be won (roping, barrel race, cutting, etc), some policies will consider the event a "commerical activity" and exclude coverage.  

The really cool thing about PHOs is that they are cheap!   By way of example, PHOs with Broadstone Equine Insurance Agency start at about $130 per year for $300,000 in coverage, and $235 per year for $1million in coverage.  

Even the $1 million policy costs less per year than one hour of work for the average trial lawyer!

But PHOs are not available for everyone.  Daum says that an equine professional who teaches lessons, boards, trains, or buys and sells horses cannot get a PHO.  

Also, a PHO only covers you if you are sued by a "third party".  A third party is someone who is not a family member or someone performing services for you (such as a vet, farrier, or employee). 

An equine professional or someone being sued by a service provider could be covered by a general liability policy, a type of insurance that will be discussed in a future post.

For those horseowners who do qualify, I believe getting a PHO is worth the money.  This is especially so if 1) you haul to shows, ropings, or rodeos on a regular basis, 2) other people will frequently be riding your horses, or 2) you have any reason to believe your horses might get out and make their way onto a road.

Compilation of Texas Stock Laws

**List of available counties updated 11-15-10**

I have recently, with the help of my assistant (and soon-to-be law student) Christina Heddesheimer, taken on the monumental task of compiling the local stock laws for all 254 Texas counties. 

Oh, and when I say with the "help" of Christina, I mean that Christina is doing all of heavy lifting and all of the county-by-county research.  Her work has been invaluable.

We are so grateful to the many people who have taken time to assist us in this research project in over 100 Texas counties so far.  Thank you, Texas county officials!

This project takes extraordinary persistence, hours and hours of time, and lots of patience.  And money.  It's probably for these reasons that no other lawyer or organization has ever, in the history of the State of Texas, compiled all the stock laws in one place.  Until now....

So, why is this project so monumental, you ask?  As discussed in an earlier post, the default rule in Texas is that livestock may roam freely in Texas ("open range") .  The only state-wide exception is a prohibition of open range grazing/roaming on interstate and state highway right-of-ways.  Pursuant to the Texas Agriculture Code and its predecessors, counties have the right to hold one or more elections to restrict the free roaming of livestock.  The individual elections can include one or more species (such as cattle, horses, mules, hogs, sheep and goats), and the elections can be held for the whole county or part(s) of each county.

These laws are very difficult to find as they are only located in the commissioner's court minutes of each individual county.  The dates these laws were enacted range from the 1800s to now.

The stock laws are important because they often determine who is liable when, for example, a motorist collides with a horse on a farm-to-market road, or a horse gets loose and destroys someone else's property.

So far, we have obtained the stock law status of 234 Texas counties, and we continue to receive more updates daily.  We will periodically post updates as we gather more information from more counties.  For each of the following counties, we currently either have a copy of the stock law, or we have a confirmation that the county is open range:

 

Continue Reading...

Highlights from 2010 National Conference on Equine Law

I just returned from the 2010 National Conference on Equine Law , held last week in Lexington, Kentucky. This was my fifth year in a row to attend the conference, and it was a great year.  The conference had a record number of attendees--180 practitioners from all over the United States. This year's lineup of speakers and topics was the best I've seen so far in five years.

I was lucky enough to be invited to speak this year.  My topic was "A Multi-Jurisdictional Comparison of Equine Liens".  With only 30 minutes to speak, I only had time to cover Texas, Kentucky, and Florida.  However, I hope the materials are helpful by reference to every practitioner or horseman regardless of state.  My handout can be accessed in two parts: Part 1 and Part 2.  Click here for a copy of my PowerPoint presentation.

Takeaways from my presentation:  1) no matter what state you're in, and regardless of whether your state requires it, always send written notice directly to the debtor (if you can find them) before foreclosing on an equine lien; 2) if you want to do a private lien sale under the UCC foreclosure provisions, make sure you can prove to a judge or jury that your debtor was engaged in a "farming operation" (i.e. they are in the horse business--not just a hobbyist); and 3) there may be multiple liens on the horse at issue.  Be aware of which lien has priority.  The person in possession of the horse almost always has the most bargaining power, regardless of priority.

Ned Bonnie, a long-time Kentucky horseman, equine lawyer, and graduate of Yale undergrad and law school, told me he also attaches (seizes via court order) the original registration papers to a horse when a lien dispute arises.  I like this idea, though it requires filing a lawsuit in Texas.

Other highlights from this year's conference:

1) Frank T. Becker's annual Equine Case Law Update--The "case of the year" (the year's most wacky or novel case) was State v. Coates, 2009 WL 2414334.  Frank calls it a "silly case of no legal significance", but interesting nonetheless!  It involved a case of "road rage" between a jogger and a horseman fighting over who should yield a pathway.  The jogger intentionally startled the horse and ended up getting arrested.  Horsemen 1, joggers 0.

2) Ted Martin and April Neihsl talked about the recoverability of damages in equine cases.  Ted stressed the importance of determining the fair market value of the horse at issue and said it is usually determined by 1) expert testimony; 2) previous sales prices and offers to buy; and 3) the owner's testimony (in some cases).

April addressed the recoverability of lost profits, sentimental, and punitive damages.  April stressed that when proving up lost profits, it is essential that the plaintiff had income in the past and that the focus is on net profits rather than gross profits.  Also, while sentimental damages are rarely awarded in equine cases, some states (Colorado, Illinois, Oregon, Tennessee, and Utah) allow them by statute.  

3) Bob Webb and Chris Coffman discussed the IRS's "National Research Program" that is targeting many horse businesses.  The key issue to survive these audits is to prove that the horse operation is a for-profit business, or a trade at the very least.

4) Doyice and Mary Cotten discussed changes in the law affecting the enforceability of liability waivers.  The most frequent causes of liability waiver failure are, according to the Cottens: 1) statutory prohibition of waivers in some states (such as Montana and Louisiana); 2) lack of clarity in the waiver (use of phrase "all liability"); 3) inclusion of waiver in entry form or membership contract; 4) waiver is overbroad or too narrow; and 5) surprisingly--the party to be released is not named in the waiver!

5) Paul Husband presented on the law determining whether someone is an independent contractor or an employee.  Paul stressed the importance of this issue as 6,000 employment tax audits are planned as part of the IRS National Research Program.  The Obama administration has budgeted $25 million to target misclassification of workers as independent contractors.  If an employer misclassifies an employee as an independent contractor, they can receive the "100% penalty" (the person with signature authority on checks for the employer personally pays the employee's tax and serves time in jail).

6) Jay Hickey of the American Horse Council addressed current federal legislation affecting the horse industry.  The Economic Stimulus Bill contains at least one thing that might benefit horse owners--$1.7 billion that can be used for the maintenance and construction of equine trials.  The AHC encourages local organizations to contact district offices to make sure funds are appropriated to horse-related projects.

7) Julie Fershtman discussed liability issues surrounding equine shows and events.  Because most shows or rodeos do not get each spectator to sign a liability waiver, it is important that event sponsors ask their insurance company about insuring against spectator liability.  Furthermore, it was noted that many accidents at equine activities do not involve horses at all, thus bringing them outside the Equine Activity Acts.  Sponsor insurance should, if possible, cover all premises liability issues...not just accidents involving horses.

8) Krysia Carmel Nelson and Tamara Tucker addressed liability issues in boarding and training arrangements.  They suggested including the following clauses in some boarding/training agreements: 1) "training disclaimer" to protect against claim that bad training diminished value of horse; 2) "risk of loss/indemnity" provision to curtail claims that the trainer or boarding facility injured the horse; 3) "veterinary power of attorney" to protect boarding facility from claim that veterinary services were not authorized and ruined horse; 4) "abandonment clause" holding that after a certain period of time, a horse becomes property of the boarding facility/trainer if the owner doesn't pay, make contact, or move the horse.

9) Bruce Smith and Mike Meuser covered fraud in horse sales transactions.  They addressed the crucial issue of a seller's duty to disclose a known defect in a horse.  A duty to disclose can arise when 1) a sales contract requires it; 2) a seller voluntarily makes a partial disclosure that is misleading; 3) the seller knows the buyer has the wrong impression about something related to the horse; 4) a confidential or fiduciary relationship exists; and 5) the seller knows the horse has dangerous propensities.

10) Gregory Dennis, a practitioner who specializes in veterinary malpractice and disciplinary proceedings, discussed various issues surrounding veterinary malpractice cases involving horses.  His presentation highlighted the difference between general negligence in veterinary actions versus veterinary malpractice.

If you would like further information about this year's conference, please click on the individual presenters' names discussed above to find their contact information, or contact me for details.