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Compares scope and enforcement of equine-related statutory liens in TX, KY, and FL. Addresses applicability of UCC self-help procedures. Covers various types of liens that might attach to horses.
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Alison Rowe Bryan, Texas
“Possession is 9/10 of the law”
A right to take hold or sell property of a debtor to secure the payment of a debt
What is a Lien?
1) Statute2) Contract3) Vested by the Constitution of certain states
Creating a Lien
Stableman’s/ Agister’s Liens
Breeder’s Liens
Veterinarian’s Liens
Statutory Liens
Stableman’s/Agister’s Lien• Attaches to horses when one
party leaves her horse(s) in the care of another for boarding or grazing.
• Lien holder may hold horses and sell horses to collect amount owed.
• Only applies to horse, not applicable to other personal property belonging to debtor
Texas Stableman/Agister’s Lien
Possession Necessary?
• Yes
Enforcement
• Self-Help Sale• Not required
to file lien
Scope
• Charges for “care” only
Possession Necessary?
• No within 1 year• Yes if using “Self-
Help” public sale option
Enforcement
• Affidavit/Warrant• Self-Help Sale• Lawsuit
Scope
• “Reasonable charges for keeping, caring for and grazing animal”
Kentucky Stableman/Agister’s Lien
Possession Necessary?
• No• Yes if using
“Self-Help” public sale option
Enforcement
• Self-Help Sale• Lawsuit• Injunction &
Attachment
Scope
• Charges for “feeding or taking care” of horse
FloridaStableman/Agister’s Lien
Stock Breeder’s Lien• Statutory Lien available
to owners or managers of stallions to secure unpaid stud fees.
• Alternative- Most breeders hold the breeder’s certificate necessary to register foal until all stallion service fees are paid.
Texas Breeder’s Lien
Scope
• Stallion owner has lien on resulting foal (NOT mare) for unpaid breeding fees
When Enforceable
• 5 to 10 months after foaling date
Enforcement
• “Self-Help” according to Statutory Landlord’s Lien rules
• Filing recommended
Scope
• “Licensed” keeper of stallion has lien on offspring (NOT mare) for unpaid service fees
When Enforceable
• Up to 1 year after foaling date
Enforcement
• Filing lawsuit• Affidavit/Warrant
Priority
• Subordinate to agister’s lien regardless of filing order
Kentucky Breeder’s Lien
FloridaBreeder’s Lien
Scope
• Stallion owners have lien on the foal and the mare for unpaid stallion service
Perfection
• Stallion owner must perfect lien within 18 months after the service in mare’s county
When Enforceable
• Any time after mare conceives
Enforcement
• Same manner as Florida Stableman’s lien
Veterinarian’s Lien
Statutory Lienavailable to vets tosecure unpaidveterinary services
State with Veterinarian’s Lien
States with a Veterinarian’s Lien
Texas Veterinarian’s Lien
Scope
• Vet services provided to “large animals” (including horses)
When Enforceable
• 20th day after date vet first provided care
• Lien enforceable even if vet does not retain possession of horse
Priority
• Takes priority over all other liens if vet retains possession
• Otherwise, UCC Rules dictate priority
Enforcement
• Maintains possession: same as stableman’s lien
• No possession: same as residential landlord’s lien
Scope
• Vet has lien if horse’s owner contracted vet for services or gave written consent for services
When Enforceable
• Statement of amount due must be filed with clerk within 6 months of service
• Action to enforce lien must be brought within 12 months after filing with clerk
Enforcement
• Vet files petition with clerk who serves Defendant
• Clerk refers case to master commissioner
Priority
• Priority based on order of filing
Kentucky Veterinarian’s Lien
FloridaVeterinarian’s Lien
Scope
• Vet has lien if provided services at the request of owner, owner’s agent, or a bailee, lessee, or custodian
• Does not require vet to be “licensed”
When Enforceable
• Period of 1 year after vet services rendered
Enforcement
• Same manner as Florida Stableman’s lien
Are holders of statutory liens secured creditors under the UCC?
• The debtor was engaged in the horse business
• Statutory lien does not require possession
• Services provided in creditors “ordinary course of business”
YES, IF…
“Agricultural Lien”The 2001 “Agricultural Lien” Amendment to
the UCC gives rise to the argument that:
Permitted to foreclose said liens according to UCC self-help provisions
Holders of statutory stableman’s, breeder’s and veterinarian’s liens hold UCC agricultural liens and thus are:
What’s so Great About UCC Self-Help Provisions?
1) Allow for private sale of horses
2) Are a known-entity to most judges
Under UCC adopted in Texas and Florida
It is clear that…
For UCC agricultural lien to apply, debtor must be engaged in “Farming Operation”
UCC adopted in Kentucky includes a special
“Equine Interests” provision in its definition of
1) Livestock, born and unborn
2) Equine interests (interests in horses, mares, yearlings, foals, weanlings, stallions), whether or not debtor is engaged in farming operations
“Farm Products”
Texas Stableman’s Lien
Cannot be an agricultural lien under the UCC because the statute requires possession
UCC self-help remedies are best not enforced against hobbyists who are not clearly in the horse business of raising, breeding, boarding, or grazing horses, absent a written agreement that the UCC enforcement provisions will apply.
Conclusions:
Other Types of Liens
Contractual Liens
Judgment Liens
Auctioneer’s Liens
Contractual Liens
• Most commonly associated with a bank’s security interest in the horses
• Bank obtains promissory note and security agreement with debtor and files a UCC-1 financing statement
Contractual Liens• Another context is in the written
contract of a boarding stable, a veterinarian, or a breeder
• Can contract with horse owners to create a lien by agreement on terms different than those provided by statutes
Judgment Liens
• Judgment creditors may attempt to execute on horses as assets of a debtor
• State personal property exemption statutes determine whether a horse is exempt from execution.
Texas and Floridaare notorious forbeing “debtors’ havens”
Judgment Liens
Texas law provides that a debtormay potentially hold as exemptup to $60,000 worth of horses.
Auctioneer’s Liens Florida, Texas and Kentucky do not
provide auctioneers a statutory lien on horses put through public auction
HOWEVER… Most auction companies provide a security agreement in their conditions of sale covering each horse put through sale.
Registration Transfer HoldsA lien holder may request a “transfer hold” with the breed registry with whom the horse is registered to strengthen their lien.
Very effective- many potential buyers do not do a lien search, but will not finalize sale if cannot transfer the registration with the breed registry.
Questions?
Alison Rowe Equine Legal Services
1716 Briarcrest Drive, Suite 300Bryan, Texas 77802
Phone: (979) 691-7333Email: [email protected]
Time for Cocktails!