Boarding stables, like any other type of business, occasionally find themselves with a client who has run up large debts… except in the case of boarding stables, these clients sometimes refuse to move their horse(s) from the premises. Therefore, the facility finds itself still feeding and caring for the horses without pay – taking up room for another potential paying customers’ horse(s). So how can a California horse facility legally sell a customer’s horse to satisfy a debt?
California Civil Code Section 3080 provides California horse boarding facilities with an automatic lien on client’s horses to satisfy any debts incurred while caring for or providing services for these horses. This California agister’s lien law includes horses and other livestock with the goal of providing a remedy for a boarding facility to collect on board bills if a client refuses to pay board and care fees. Essentially, the boarding facility has the right to refuse to allow a client’s horses to leave until the bill for those horses is fully paid. However, a boarding facility must be very careful to follow the lien law in order to meet its requirements or it could face liability for conversion, negligence, and other types of tort claims.
Below are the steps a lienholder must take to be able to sell the horses to satisfy debts:
- Sue the debtor for the past due amount.
- When filing suit or at any time during the suit, the lien holder can ask the court for an order allowing the lien holder to sell the livestock. This application for an order must contain specific information, as set forth in California Civil Code 3080.03. The lien holder must request a hearing on the application for an order.
- The lien holder must serve the defendant with a copy of the application for an order to sell the horses and the notice of hearing. The notice of hearing must contain very specific information, as set forth in California Civil Code Section 3080.04.
- The court will then hold a hearing on the sale issue. The court will issue an order permitting the sale only if all the following conditions are met:
- The statutory lien applies to the debt at issue;
- The lien holder has shown the debt is valid;
- The lien holder has shown the lien is valid;
- The sale is necessary to prevent the horses from declining in value OR that equitable concerns demand the sale (such as the cost of continuing to feed the horses during the remainder of the lawsuit);
- The method of sale proposed by the lien holder would be commercially reasonable; AND
- The lien holder isn’t seeking the sale for reasons other than the debt.
Throughout all of this, it’s absolutely vital that an experienced Los Angeles equine lawyer be contacted to ensure the correct protocol is followed to protect yourself and your business. Contact Catanese & Wells today at 818-707-0407.