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Multi-Jurisdictional Comparison of Equine Liens


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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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Multi-Jurisdictional Comparison of Equine Liens

  1. 1. A Multi-Jurisdictional <br />Comparison of Equine Liens<br />Alison Rowe <br />Bryan, Texas <br />
  2. 2. “Possession is 9/10 of the law”<br />
  3. 3. What is a Lien?<br />A right to take hold or sell property of a debtor to secure the payment of a debt<br />
  4. 4. Creating a Lien<br />Statute<br />Contract<br />Vested by the Constitution of certain states<br />
  5. 5. Statutory Liens<br />
  6. 6.
  7. 7. Stableman’s/Agister’s Lien<br /><ul><li>Attaches to horses when one party leaves her horse(s) in the care of another for boarding or grazing.
  8. 8. Lien holder may hold horses and sell horses to collect amount owed.
  9. 9. Only applies to horse, not applicable to other personal property belonging to debtor</li></li></ul><li>Texas <br />Stableman/Agister’s Lien<br />
  10. 10. Kentucky <br />Stableman/Agister’s Lien<br />
  11. 11. Florida<br />Stableman/Agister’s Lien<br />
  12. 12.
  13. 13. Stock Breeder’s Lien<br /><ul><li>Statutory Lien available to owners or managers of stallions to secure unpaid stud fees.
  14. 14. Alternative- Most breeders hold the breeder’s certificate necessary to register foal until all stallion service fees are paid.</li></li></ul><li>Texas <br />Breeder’s Lien<br />
  15. 15. Kentucky <br />Breeder’s Lien<br />
  16. 16. Florida<br />Breeder’s Lien<br />
  17. 17.
  18. 18. Veterinarian’s Lien<br />Statutory Lien<br />available to vets to<br />secure unpaid<br />veterinary services<br />
  19. 19. States with a Veterinarian’s Lien<br />State with Veterinarian’s Lien <br />
  20. 20. Texas <br />Veterinarian’s Lien<br />
  21. 21. Kentucky <br />Veterinarian’s Lien<br />
  22. 22. Florida<br />Veterinarian’s Lien<br />
  23. 23.
  24. 24. Are holders of statutory liens secured creditors under the UCC?<br />YES, IF…<br /><ul><li>The debtor was engaged in the horse business
  25. 25. Statutory lien does not require possession
  26. 26. Services provided in creditors “ordinary course of business”</li></li></ul><li>“Agricultural Lien”<br />The 2001 “Agricultural Lien” Amendment to the UCC gives rise to the argument that:<br />Holders of statutory stableman’s, breeder’s and veterinarian’s liens hold UCC agricultural liens and thus are:<br />Permitted to foreclose said liens according to UCC self-help provisions<br />
  27. 27. What’s so Great About UCC Self-Help Provisions?<br />Allow for private sale of horses<br />2) Are a known-entity to most judges<br />
  28. 28. Under UCC adopted in Texasand Florida<br />It is clear that…<br />For UCC agricultural lien to apply, debtor must be engaged in “Farming Operation”<br />
  29. 29. UCC adopted in Kentucky includes a special <br />“Equine Interests” provision in its definition of <br />“Farm Products”<br />1) Livestock, born and unborn<br />2) Equine interests (interests in horses, mares, yearlings, foals, weanlings, stallions), whether or not debtor is engaged in farming operations<br />
  30. 30. Texas Stableman’s Lien <br />Cannot be an agricultural lien under the UCC because the statute requires possession<br />
  31. 31. Conclusions:<br />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.<br />
  32. 32.
  33. 33. Other Types of Liens<br />
  34. 34. Contractual Liens<br /><ul><li>Most commonly associated with a bank’s security interest in the horses
  35. 35. Bank obtains promissory note and security agreement with debtor and files a UCC-1 financing statement</li></li></ul><li>Contractual Liens<br /><ul><li>Another context is in the written contract of a boarding stable, a veterinarian, or a breeder
  36. 36. Can contract with horse owners to create a lien by agreement on terms different than those provided by statutes</li></li></ul><li>Judgment Liens<br /><ul><li>Judgment creditors may attempt to execute on horses as assets of a debtor
  37. 37. State personal property exemption statutes determine whether a horse is exempt from execution.</li></li></ul><li>Judgment Liens<br />Texas and Florida<br />are notorious for<br />being “debtors’ havens”<br />Texas law provides that a debtor<br />may potentially hold as exempt<br />up to $60,000 worth of horses.<br />
  38. 38. Auctioneer’s Liens<br /> Florida, Texas and Kentucky do not provide auctioneers a statutory lien on horses put through public auction<br /> HOWEVER… Most auction companies provide a security agreement in their conditions of sale covering each horse put through sale.<br />
  39. 39. Registration Transfer Holds<br /> A lien holder may request a “transfer hold” with the breed registry with whom the horse is registered to strengthen their lien.<br /> 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. <br />
  40. 40. Questions?<br />Alison Rowe Equine Legal Services<br />1716 Briarcrest Drive, Suite 300<br />Bryan, Texas 77802<br />Phone: (979) 691-7333<br />Email:<br />
  41. 41. Time for Cocktails!<br />