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Exam A LESSON IN LEASING P


arents are looking to lease an equitation horse for their daughter’s last junior year. They consider several horses that do not pass the vet,


and reject one horse on the grounds that it has “been nerved.” Their trainer agrees to lease them a suitable horse that she owns. That horse passes the vet and they agree to lease it. They sign the lease contract on December 1 and pay the trainer an $80,000 lease fee for the year. Pursuant to the terms of the lease contract, they purchase a mortality insurance policy and major medical coverage. They initially board the horse with their trainer, who lives in Pennsylvania. Towards the end of the month, they decide that they will bring the horse to their own farm in North Carolina, so that the daughter can continue to ride it until she goes down to WEF (Wellington Equestrian Festival in South Florida) mid-January. A few days after the horse arrives in North


Carolina, the daughter has a lesson on it at her farm with her “local” trainer. The horse is sound. The next day the daughter hacks the horse, and the horse is sound. The horse has a few days off , and then the next time the daughter hacks the horse, the horse is mildly lame. The vet is called and upon examination notices scars on the horse consistent with a neurectomy procedure (it appeared that the horse had been “nerved”). The horse does not appear to have anything else signifi cantly wrong with it, and the vet opines that the nerve endings are growing back and that this is causing the horse’s lameness —“foot soreness.” The parents ask for a refund of their lease fee, but the trainer says to “ship the horse down to WEF and we’ll see what’s going on and what we can do.” Parents ship horse and daughter to Florida having


told the trainer about the horse’s recent lameness. The trainer examines the horse upon arrival and pronounces him sound. After a week in the trainer’s care, the horse again is exhibiting symptoms of lameness that are now pronounced. Upon examination by a diff erent veterinarian, it is determined that the horse has strained a collateral ligament and, with aggressive treatment (stem cell therapy, etc), the horse may be sound enough to compete again in August.


42 September/October 2012 The trainer agrees to send the horse back to


Pennsylvania and manage its rehabilitation if the parents will agree to pay the veterinary costs through the end of the originally agreed upon lease term. The parents ask the trainer to refund their lease fee or help them fi nd another suitable horse for their daughter at no additional cost to them. The trainer refuses. The daughter claims that the trainer is now being mean to her and does not want to ride with her anymore. The daughter starts training with someone else. The trainer sues the parents for all the estimated


expenses related to the horse for the remainder of the lease term, as well as the full value of the horse, and the future “lease” income the trainer expected to be able to generate by leasing the horse in the future. The parents countersue on a theory of fraud (seeking a refund of their lease fee), claiming that the trainer knew that the horse had been nerved and that they would not have leased the horse had the trainer shared this information with them (given that they had already rejected a lease prospect on these grounds).


You be the Judge:


• Are the parents on the hook for the horse’s expenses through the end of the lease term, even though the trainer “took the horse back?”


• Are the parents liable to the trainer for the full value of the horse, under the theory “you break it, you buy it?”


• Are the parents liable to the trainer for the money the trainer expected to get for leasing the horse out in the future?


• Was it fraudulent for the trainer to lease the parents a horse that had been nerved without disclosing that information to them, when the trainer knew the parents had rejected another horse for that same reason?


 Turn the page for the outcome of the case.


by Attorney Krysia Nelson


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


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