Divorce Case Illustrates Importance of Accurate Equine Valuation Methods at Trial

A Lubbock County district court held that approximately 130 head of horses it allocated to the husband in a divorce action were worth $520,000. The husband disagreed.

The husband, Robert “Greg” Collier, objected to the court’s valuation at trial and in two separate appeals of the divorce decree. According to Greg, the trial court’s allocation of $520,000 worth of divorce assets to him in the form of the horses was an abuse of discretion, because the horses were actually worth far less than that amount. Despite Greg’s objections, the Amarillo Court of Appeals did not find that the trial court abused its discretion with respect to its valuation of the horses.

When the honeymoon's over, can you prove the value of your horses with reasonable certainty?

According to the court of appeals, the trial court seems to have based its valuation on an "appraisement and inventory" proffered by the wife, Leanne Farrell Collier. Leanne alleged that Greg possessed "approximately" 130 head of quarter horses that could sell for between $200 at a livestock auction to $7,500, if sold privately with a little training put into the horse. 

The trial court apparently multiplied the number of horses (130) by one of Leanne’s estimates of what the horses could be sold for ($4,000) to arrive at the $520,000 figure.

Though the court of appeals noted that Greg’s testimony was more specific and “would support a different valuation”, Greg’s testimony was similar to Leanne’s in that it was full of estimates and guesses. At the end of the day, the evidence Greg used to support his objections to Leanne’s valuation was not specific enough for the trial court.

Because neither party provided the trial court with specific information regarding the number of horses owned by Greg, the trial court was left in a position of assessing the credibility of the parties’ estimated values. 

How could Greg have avoided this dilemma? The parties could have kept better books and records with respect to the number of horses owned by the couple and related business entities. Furthermore, Greg might have retained a professional equine appraiser to determine the true value of the herd.  A well-researched independent third-party appraisal is typically given more weight than the estimates and guesses of interested parties.

Well-founded appraisals are invaluable not only in divorce matters, but in any lawsuit where a horse’s value is at issue.

Related Cases:

In the Matter of the Marriage of Leanne Farrell Collier and Robert Greg Collier and in the Interest of R.C.C., a Child, No. 07-12-00084-CV, 2012 WL 3762475 (Tex. App.—Amarillo, Aug. 30, 2012, no pet. h.)

In the Matter of the Marriage of Leanne Farrell Collier and Robert Greg Collier and in the Interest of R.C.C., a Child, No. 07-09-00146-CV, 2011 WL 13504 (Tex. App.—Amarillo, Jan. 4, 2011, no pet.)

The Dangers of Advertised Exchange Policies for Horse Sales

Some horse breeders, trainers, and consignors who are in the business of selling horses advertise “exchange policies” on their websites. The typical exchange policy contains language promising that a buyer can exchange a horse purchased from the seller for another horse owned by the seller of the same or lesser value within ___ days of the sale. Posting an exchange policy of this nature on the Internet is not a good idea, in my opinion.

Don’t get me wrong--good customer service is paramount to a seller’s reputation. Sellers can surely offer a buyer an exchange horse if a particular situation warrants it and a suitable exchange horse is available. But so much can go wrong if a seller offers each and every buyer the “right” to exchange a purchased horse. For instance:

1)         Some buyers do not get a pre-purchase exam. Even for buyers who do get a pre-purchase exam, they do not check for every malady, disease, or infirmity due to the expense involved. This is problematic when an exchange has been offered. It can be very difficult to tell whether the horse is returned in the same or better condition as when he left the seller’s property.

2)         Exchange policies may work great for retailers where there is price tag on each item in the store and the same items can be found on-line or in other stores. But establishing the value of the exchange horse can be difficult. The seller’s asking price is not always the horse’s fair market value. Reasonable minds can differ as to the value of a horse. Even professional equine appraisers may disagree. 

3)         A seller may not have an exchange horse that possesses all the same qualities as the original horse within the stated time frame. This leads to a lot of confusion. Does the buyer have to keep the horse until the seller obtains a suitable replacement? Does the seller have to keep and feed the buyer’s horse until a suitable replacement has been obtained by the seller? How long will it take the seller to find a suitable replacement?

4)         If a buyer thinks he can simply return the horse for an exchange after 30 days if it doesn’t work out, he may be encouraged to purchase a horse without first inspecting it or spending the money to have a thorough veterinary examination done. This is problematic for several reasons. First, as discussed above, a seller who has offered an exchange policy cannot establish that the horse is being returned in the same condition if no thorough pre-purchase exam was done. Further, a buyer may come back to seller after the exchange policy has expired and demand a refund or exchange because the horse has a soundness or health issue. The presence or absence of a pre-existing condition is then hard to prove because no pre-purchase examination was done.

Due to all of these issues, an exchange policy on horses cannot function as simply as a similar policy offered on household goods sold by Home Depot, Target, and other retailers. Instead of offering a blanket exchange policy on the Internet, sellers should take an “all sales are final” approach and encourage all buyers to get a thorough pre-purchase exam and to inspect the horse prior to purchase in person or via an agent. Taking this approach does not prevent sellers from providing an exchange horse after the fact where the circumstances warrant it. 

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