Exam A GIFT HORSE A


trainer and his client had at one time been engaged


to marry, and during the term of the engagement the client had given her trainer/fiancé a horse. The client claimed the horse was given as an early wedding gift. The trainer claimed that at the time the gift was made, there was no discussion of it being an early wedding gift, and in fact, the client had simply wanted to get rid of the horse due to her frustration with its many soundness problems, her inability to ride it herself and the high maintenance costs. There was no dispute between the parties that the client had in fact signed the horse’s registration papers over to the trainer, paid all the fees associated with making the transfer and stopped paying all of the horse’s expenses immediately thereafter. Shortly after the registration of paperwork


was complete, the engagement was terminated. Each testified that the other had terminated the engagement (for reasons wholly unrelated to the gift of the horse). The client stopped using the services of the trainer, but made no effort to reclaim the horse. The client removed all of her property (tack, trunks, and other horses) from the trainer’s facility, but left the horse in question and never made any further inquiries about the horse to the trainer. Over the next year, the trainer bore all


responsibility, financial and otherwise, for the horse’s maintenance and training. The trainer competed the horse, very successfully, earning a national horse of the year title. By all accounts, it was the horse’s most successful competitive


56 March/April 2012


by Attorney Krysia Nelson


Test your knowledge of equine law. Attorney Krysia Nelson presents a bona fide case study of equestrian litigation.


season. The trainer testified that the horse’s competitive performance had improved (over past years) as a result of the trainer’s efforts and investment in a creative maintenance program that the former client had been unwilling to support. About a year after the


termination of the engagement, the now former client sent the trainer a letter saying she needed the horse back to avoid gift tax liability. The trainer offered to provide her with an appraisal of the horse’s value (at the time of the gift) which he believed would not expose her to any gift tax liability given the horse’s (then) significant soundness problems. The former client rejected the offer and filed suit seeking the return of the horse under the theory that the gift was “expressly conditioned” on the trainer marrying her, and since the marriage would not take place she was entitled to the return of the horse who she believed to be worth $350,000. The trainer argued, in defense to the


lawsuit, that the former client’s claim for the horse should be dismissed because she had made an irrevocable gift, and even if she had not so intended, that she waited too long to seek revocation. Basically, he argued that the former client had abandoned the horse by not seeking its return sooner. The former client argued that she had not abandoned the horse because state law provided a five year statute of limitations for abandonment, and she had only waited one year.


☛ Turn to page 58 for the outcome of the case.


Bar


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