General Background Regarding Tort and Contract Claims.
Most disputes involving horses or horse related activities, whether for profit or for pleasure, involve legal claims arising under tort law or contract law. Actions filed with the court will often include alternative claims sounding in tort and in contract. The facts and circumstances of the dispute should be carefully evaluated to determine which claim will likely be presented to the finder of fact even when the claims are made in the alternative. Once the initial evaluation is completed, a “road map” should be created for purposes of establishing what is required for proof at trial on any one particular claim.
Under the Restatement of Contracts “(a) contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes a duty.” (Rest.2d Contracts §1). The essential elements to any contract are: parties capable of contracting, their consent, a lawful object and sufficient cause or consideration for the agreement. (See 1 Corbin (Rev. ed.), §1.1 et seq.). A tort is “any wrong, not consisting in mere breach of contract, for which the law undertakes to give to the injured party some appropriate remedy against the wrongdoer.” (Denning v. State (1899) 123 C. 316, 323.) “(E)very person has . . . the right of protection from bodily restraint or harm, from personal insult, from defamation, and from injury to his personal relations.” (Rest.2d, Torts §1). The distinction between contract and tort claims is well established. Contract claims are designed to allow for enforcement of the parties’ intentions to an agreement between the parties; whereas, tort law is designed to promote a social policy of the community. See Foley v. Interactive Data Corp. (1988) 47 Cal.3rd 654, 683.
Contract damages unlike damages in tort do not allow for the recovery of unanticipated injury. The policy of the law is to protect contracting parties from the risk of unusual losses which could not reasonably be expected and hence voluntarily assumed by a contracting party. However, tort damages do allow for damages related to an unanticipated injury. See Lewis Jorge Construction Management, Inc. v. Pomona Unified School District (2004) 34 Cal.4th 960, 968; Osborne v. Keeney (Ky. 2012) 399 S.W.3d 1, 18; Ashland Oil, Inc. v. Picard (Fla. Dist. Ct. App. 1972) 269 So.2d 714, 723.
Contract based claims do not allow for the recovery of exemplary or punitive damages. Even where the party breaching the contract did so intentionally and with malice, the law does not permit punitive damages. (The motive of a party to breach a contract is immaterial. See Applied Equipment Corporation v. Litton Saudi Arabia Limited (1994) 7 Cal.4th 503.) Tort based claims do permit the recovery of such damages where the tort is deemed an intentional wrong and where the facts and circumstances confirm the presence of factors which support the claim for enhanced damages. Such factors include the presence of malice by a defendant or where the defendant is guilty of oppression and fraud. (See Cal. Civ. Code §3294(a) – malice, oppression and fraud are particularly defined in section (c) of the statute. Generally, the definitions include “despicable conduct” by a defendant which was carried out by the defendant with a willful and conscious disregard for the rights or safety of others.) When a complaint contains a request for exemplary damages the request will overshadow later discovery and negotiations for settlement if the claim has a basis in fact.
These legal principles set the boundaries of the litigation roadmap. They also indicate where resources should be allocated before and during the case. Emphasis should be placed on how evidence will be established at trial. Accordingly, it is very important to outline the law of the case and match the law to the facts which are known at the outset and to identify those additional facts which are needed to establish the necessary facts and evidence confirming the same for purposes of trial.
Once the claims are identified for the action and the roadmap is established regarding the evidence needed to prove the claims, then it is very important to preserve the evidence needed to prevail in the case, whether you are representing a plaintiff or a defendant.
Common Themes and Problems Inherent to the Equine Case.
All equine disputes involve the equine in some way. By reason of history, usage and custom in the equine industry there usually is confusion by industry participants related to their legal obligations today versus what they believe to be obligations given the history and custom of the horse industry. Besides common misconceptions regarding obligations to disclose material facts in the sale of a horse or disclosing commissions paid to persons involved in the equine sales transaction there are also fundamental problems related to intentional and unintentional agency formation between industry participants. Finally, there is a general lack of knowledge regarding the law of document or evidence preservation. Many equine industry participants believe it is wholly acceptable conduct to destroy or discard evidence or to “tamper” with witnesses.
Issues Unique to Equine Cases.
All equine cases involve a horse or horses. It seems obvious, but many cases arise by reason of a horse, but sometimes the case will not be resolved one way or the other because of a fact or circumstance involving a particular horse. That said, almost every equine dispute has at the center of the dispute a problem involving a horse. So, it is imperative to understand what will be required at trial in the way of proof regarding the particular issue at hand.
Common issues involve “relationships” between the parties and third persons such as veterinarians, blood-stock agents, transportation companies, riders and trainers. And, other common issues relate to the physical condition of the subject horse – i.e., the condition of the horse at time of sale, the condition of the horse before and after veterinary treatment, the condition of a horse following an injury caused during competition and the like.
It is absolutely critical when analyzing facts and circumstances of an equine dispute to identify the relevant relationships and the issues related to the subject horse. Great care should be exercised by the attorney to identify any agency or partnership relationship between the parties or a party and a third person. Many times the successful outcome of a case will rest on the facts and circumstances of an agency or a partnership. In virtually all states, a partnership and an agency relationship can be created in the absence of a written agreement. Moreover, the law in virtually all states will hold a partner fully liable for the acts of another partner and a principal will be held fully liable for the acts of an agent unless an exception applies.
In the typical equine case experts will be required. Normally, an expert will need to be retained on issues such as liability, standard of care, custom and usage in the particular horse industry and damages. When an expert is selected, it is always best to identify and retain the highest caliber expert available and within the client’s litigation budget. Moreover, the sooner an expert is retained the better regarding all aspects of the case.
Keep in mind that state and federal rules may differ regarding what communication with an expert falls within the “attorney-work product” privilege. Federal law has a qualified privilege that protects most communication between an attorney and an expert. See FRCP 26(b)(4). Whereas, states usually do not protect attorney communication with an expert from later discovery by an opposing party. See DeLuca v. State Fish Co. (2013) 217 Cal.App.4th 671, 688-689; Alliant Hosps., Inc. v. Benham (Ky. Ct. App. 2003) 105 S.W.3d 473, 476 [As expert testimony has steadily assumed greater importance in our courts, the trend has been decidedly toward open discovery and disclosure of the materials, including a lawyer’s work product, that a testifying expert considers].
The client is usually the best source of directions to identify informal discovery. At the initial client meeting it is critical to spend time identifying sources of information which can be obtained without the requirement of formal discovery requests. Again, because of the nature of the equine industry in many cases informal discovery is more important than the formal discovery which is obtained after the lawsuit is filed.
Informal discovery is any means to obtain factual information or information which leads to additional factual information without employing statutory means to obtain discovery. Once a dispute arises and before the parties start litigation there are “windows” of opportunity to obtain important factual information. However, after the dispute is ripe and the parties start to talk to potential witnesses or other parties with information there is the risk that the third party sources of information will close down and quietly take a position which is “neutral” as they do not want to offend a party or they simply do not wish to be involved in a dispute between the parties. The equine industry for all breeds is very small and word travels fast. Even the equine registries and administrative bodies are extremely careful when inquiries are made regarding factual information. They are loathe to get involved in a case.
When informal discovery is ongoing the attorney must assume that information provided by a witness or a potential witness at the outset of a case may later change when the witness is asked to sign a declaration or when the witness actually testifies at a deposition. Notwithstanding this caveat, it is helpful to obtain a witness declaration or affidavit if practicable. The declaration or affidavit can be used for motion purposes or at a later deposition if the witness goes sideways and begins to change their testimony. Remember that declarations and affidavits are hearsay and cannot be used independently to establish a fact at trial; however, the declaration or affidavit can be used for impeachment purposes of a witness if the declaration is used as an exception for hearsay such as an inconsistent statement of the witness.
Another form of informal discovery is locating and preserving information found in public or private locations. A public location would be information available through government or private agencies. Most of the time information at these entities will remain even after a lawsuit is filed. Information in private locations includes Internet based websites and information generally available through social media. It is imperative that this information be identified, copied and preserved at the earliest opportunity when a dispute arises and the attorney is retained to assist the client. In the typical equine case after the demand is letter is sent to the potential defendant and even where a plaintiff thereafter receives a response from the potential defendant, once the lawyers on both sides realize there is information on the Internet the information will likely be deleted from the Internet and the party in a later discovery response will claim they made no copies of the electronic media and accordingly the information is lost.
Federal and state courts have rules which require the attorneys to act professionally and in good faith with each other involving the exchange of discovery during a lawsuit. The federal system has a very streamlined and well-designed system of discovery exchange between the parties. The states typically have a statutory scheme which requires more effort by a lawyer to obtain information from the opposing party since most states do not have an early exchange of discovery which is automatic under the discovery rules. Typically, a formal written request by counsel for discovery is required.
At some point in equine based litigation there will be a discovery dispute between counsel. Because most equine cases have a strong component of passion these types of disputes are usually dripping with high emotion emanating from the client. Disputes involving horses by their nature often involve injury to a horse or a violation of trust by a trainer or a partner. When these facts arise, the client is usually emotional about the case and that emotion can drive discovery disputes. The lawyer must be objective and be prepared for the eventual emotional outburst from the client regarding the discovery process.
In Arizona if a motion is brought regarding a discovery dispute counsel must attach a certificate certifying their effort to resolve the dispute before the motion was filed. Likewise, California also requires a declaration by the attorney filing the motion of meet and confer efforts before the discovery motion was filed. The states of Florida, Kentucky and New York have like statutes. Federal Rule of Civil Procedure 37(a)(1) requires a certificate by the moving party that counsel did in good faith confer or attempt to confer with opposing counsel to resolve the dispute absent court intervention.
Meet and confer efforts are also a good source of identifying factual information useful to a party. Many times information can be obtained from an opposing attorney in the course of meet and confer communication. Telephone calls many times are the best means of obtaining spontaneous disclosures of important information. In the heat of a meet and confer conversation disclosures often occur when opposing counsel is attempting to justify a position. Many times opposing counsel will confirm the non-existence of a fact. Use this confirmation to support the non-existence of essential evidence regarding a claim or a defense to a claim. It is very important to confirm the same to avoid surprise at trial.
In today’s litigation environment courts require parties to mediate their dispute in the hope that the dispute may resolve at mediation. Although privileges apply to communication at a mediation, any statement made or information provided during mediation to opposing counsel, even where a mediator is bound to keep the information confidential, can and will be used by the opposing attorney for trial preparation if the case does not settle. A fine line exists between what to disclose at mediation and what should be withheld to allow for a positive trial outcome if the case does not settle at mediation. Such disclosures are “free discovery” since parties many times will provide information at a mediation which earlier was not identified for some reason because the party wants to settle the dispute.
A pre-filing Internet search should always occur in any equine litigation matter. The lawyer can undertake the search directly via the Internet or the lawyer can employ the services of a professional private investigative service. The Internet search should be based on known facts, but also on likely “suspected” facts. Do not rely entirely on client information when organizing and conducting the Internet search. Keep in mind normal custom and practice of the particular equine industry which is involved in the dispute. Also, prior to implementing the search it is a good practice to contact horse professionals to discuss common facts or industry custom which will be useful in any search of the Internet.
The Internet provides many sources of information and potential evidence for use at trial. Since the horse industry, whether for profit or for pleasure, involves a “sport” there will usually be sources of videos on the Internet related to the subject horse or the event at the center of any dispute.
YouTube offers videos of horses in competition at no charge, but YouTube is not specifically organized for equine videos. In other words, YouTube is an excellent source of video evidence of horses in competition, but additional effort will be required to source the available video information. A common method which usually provides success is to search by the name of a rider or a horse’s name.
Another source of electronic evidence can be found at social media sites and through blogs. Facebook usually provides extensive information regarding a horse’s competition history (both past, current and future), a rider’s competition history with a subject horse or another horse and, a trainer’s history involving the subject horse and other horses that may be relevant to the dispute. Moreover, social media can be used to locate the whereabouts of a party – a defendant – that a plaintiff is looking to serve.
Preservation of Evidence Before Filing.
Once electronic information is identified and located it is very important to properly record, replicate and preserve the information. Remember the caveat given earlier in this discussion – a party will usually remove and delete electronic information once they know they will be involved in a lawsuit. It is very important to pay particular attention to the rules of evidence regarding electronic media. Rules such as best evidence, hearsay, authentication of documents and the like need to be followed so that the information may be used at time of trial. Many times the information obtained is in the nature of “impeachment” evidence, but do not solely rely on the impeachment nature of the evidence for use at trial.
Federal law imposes on litigants an “uncompromising duty to preserve” what they know or reasonably should know will be relevant evidence in a pending lawsuit or a lawsuit which is likely to occur in the future. This duty applies even before a formal discovery request has been issued or before a court has made a discovery order to preserve the evidence. See Kronisch v. United States (2nd Cir. 1998) 150 F.3d 112, 130; see also Silvestri v. General Motors Corp. (4th Cir. 2001) 271 F.3d 583, 590. The duty to preserve evidence arises when a party is involved in actual or probable litigation, the party knows of the litigation or the imminent litigation, the party knows the relevance of the subject evidence (the evidence is necessary for a proper outcome) and, it is foreseeable the other party will suffer prejudice if the evidence is discarded or destroyed. See Winters v. Textron, Inc. (MD PA 1999) 187 FRD 518, 520. If a party is found to have violated the duty to preserve evidence, the federal court may issue a sanction order regarding spoliation of evidence based on the court’s inherent power to manage the litigation or for violation of a court order requiring the preservation of the evidence. Federal courts may fashion a remedy which in fairness is appropriate to the facts and circumstances applicable to the case. Such remedies include exclusion of derivative evidence, pre-trial evidentiary orders and in extreme cases, dismissal of a case or entering a default against a defendant including monetary sanctions. See West v. Goodyear Tire & Rubber Co. (2d Cir. 1999) 167 F.3d 776, 779.
Most states do not recognize negligent or intentional spoliation of evidence as an independent tort claim. When spoliation is found to have occurred, states typically apply a case-by-case analysis and usually adopt evidentiary sanctions or monetary sanctions as a remedy. In egregious cases the court may impose criminal sanctions or sanctions against an attorney for participation in the wrong which may result in state bar disciplinary proceedings against the attorney.
On occasion it may prove useful to hire a professional investigative service to search electronic media and Internet sources to obtain information regarding the case. It would seem that there would be one or more investigative services which focus on identifying equine related information, but a search by the author of the private investigative services focused on equine matters revealed very few if any services which focus on such investigative searches. The Internet does identify many professional investigative services as well as equine based experts regarding equine valuation, equine damage calculations and the like. These types of service providers can assist in the informal or later formal search for information regarding the case.
USEF/ FEI/ The Jockey Club, etc.
There are several breed registries and organizations which govern equine competition activities. Additionally, there are service organizations which exist to assist members of various equine organizations. Such organizations and entities are good sources of information; however, the organizations and entities do not guarantee the accuracy of the information they provide to members and the public at large. Generally, the information is reliable, but it should be cross-checked whenever practicable to confirm its reliability particularly if the information is crucial to the outcome of a case.
Organizations which provide beneficial information include The United States Equestrian Federation (www.usef.org), the Federation Equestre Internationale (www.fei.org), The Jockey Club (they offer show results and competition videos for sponsored events at www.equibase.com), the United States Hunter Jumper Association (www.ushja.org), the United States Dressage Federation (www.usdf.org), the National Barrel Horse Association (www.nbha.com), the American Quarter Horse Association (www.aqha.com), and the Arabian Horse Association (www.arabianhorses.org).
Certain information is available free of charge. In most situations, a deeper search will require payment of a membership fee or a subscription fee to obtain access to the relevant database. In most cases the fees and costs are very reasonable given the quality of the information.
In addition, there are also private sources of video information. One such source is ShowNet (www.shownet.biz). ShowNet offers a comprehensive collection of video data regarding horses in competition involving a variety of breeds and disciplines.
Documents and Interviews of Staff.
Horse registries and administrative/service organizations will provide public information where requested. Some information requires the consent of the client or another party who has an interest in the subject horse. Generally, information can be obtained through employees of the equine entity or by means of a telephone call with staff members. However, for deeper searches these entities will require a subpoena for the production of deeper information.
E-mail communication with third parties including equine agencies is not protected or privileged communication. This type of communication is discoverable. Accordingly, when the attorney or the client is seeking information from a third party, whether it is a trainer, a prior owner of a horse, a prior rider of a horse, a groom or any person who may have contact with the horse or the transaction it behooves the person seeking the information via e-mail to be careful with the content of the e-mail. In equine litigation discovery seeking such e-mails is very useful. In most cases a careless e-mail may provide very persuasive evidence of a party’s intentions or a state of health condition of a subject horse. Many times a party will send an e-mail to a third party without contemplating that the e-mail may be produced in litigation discovery.
Listen for “Leads” Given by Known Witnesses.
As stated previously, before the litigation starts, third party witnesses will usually be forthcoming regarding their view of the case and their opinions related to the dispute. When these witnesses are interviewed they will if prompted provide additional information regarding the identity and the location of other witnesses. Such information should be obtained early in the pre-litigation fact finding process. On occasion, the referred witness will have better testimony than the witnesses which are known at the commencement of the litigation. It is always best to interview as many witnesses as are known prior to filing a complaint to ascertain their positions related to the dispute. Better practice dictates that the attorney investigate all witnesses and simply not accept as true the client’s version of the facts.
A common fact in most equine disputes involves the existence of an “agent.” Another common fact in equine cases is the scope of authority of the agent. Early in the case evaluation the lawyer should identify any agents and the scope of authority given the agent by any principal. Typically, the agency issue arises where the owner of a horse employs a trainer, a veterinarian, a “partner” or a person to assist in the purchase or sale of a horse. Common fact patterns in horse disputes involve an absent owner and an agent of the owner having the primary relationship and communication with the complaining party or the party who is a potential defendant.
Be careful to research the law of agency in the jurisdiction where the dispute will be resolved. Most states have substantive agency law which tracks the Restatement of Agency.
Use of Discovery and Litigation Techniques to Obtain Cooperation of the Agent.
The “agent” is usually in a difficult position when an equine dispute arises. The agent in most situations has direct or indirect liability to the client or to another and by reason thereof the agent walks a fine line when they provide information about their knowledge of events which are relevant to a proper disposition of the disputes. On occasion, the client will want to sue their agent, however, in most situations the client and the agent will have aligned interests. (This is important regarding a later trial before the fact finder – especially with juries!).
It is important to interview the agent as soon as practicable after retention of the attorney by the client. Again, the client will provide a statement of fact to the attorney, but it is important to test the veracity of the client’s version of the facts by interviewing the client’s agent. Where the client continues to employ the agent, the agent will normally give full cooperation. Also, where the agent believes there may be an opportunity for future business with the client the agent will usually cooperate with any factual inquiry. Other reasons for the agent to cooperate are the agent’s concern about liability to a third party and the agent lacks the resources to pay for a defense. (The agent may ask the principal to pay for the agent’s attorneys’ fees related to a defense of a complaint against the agent by a third party.) Other reasons for the agent to cooperate are the standing and reputation of the agent in the horse industry (the agent will want to protect their reputation) and on occasion the agent will also be concerned about an administrative action by a governing equine administrative body.
Preserving and Confirming the Agent’s Testimony.
As previously noted it is important to preserve and confirm an agent’s testimony. The sooner the testimony of the agent is confirmed in an affidavit or by declaration the better. There will be times where an agent will refuse to sign the affidavit or declaration. When this occurs great care should be exercised to avoid antagonizing the agent. When an agent is involved in the litigation the attorney should endeavor not to alienate the agent, but at the same time confirm the agent’s testimony about events in the case. In very large cases it may also be advisable to videotape the agent before a certified court reporter.
Jurisdiction Law and Jury Instructions.
When the litigation roadmap is developed it is helpful to review the jury instructions which will be read to the jury if it is anticipated the case will be tried before a jury. The jury instructions available in most states are also annotated and the annotations will provide a quick overview of the applicable law in the subject jurisdiction. This is especially true with “agency” disputes. Not all states have jury instructions regarding agency law and so if the instruction does not exist in the particular state the attorney will need to prepare a special instruction for the jury. Again, agency law in many equine cases is the essential law to tie a party to either liability or a defense of a claim.
Equine disputes and the litigation which follows require a careful analysis of the case at its inception. The analysis must include a review of the known evidence at the outset, plus the preparation of a roadmap of facts supported by witness and document evidence. By employing informal discovery efforts combined with input from witnesses and experts the attorney representing a plaintiff or a defendant will have a better chance of winning the equine case.
Copyright © T. Randolph Catanese, Esq. 2017. All rights reserved.
 Most states require that facts to support a claim for punitive damages be plead with particularity. However, under Federal Rule of Civil Procedure Rule 9(b) allegations of malice, fraudulent intent and oppression may be plead generally and conclusory of averments of malice or fraudulent intent are sufficient. See Rees v. PNC Bank, N.A. (ND CA 2015) 308 FRD 266, 273-274.
 A principal is responsible for the acts of an agent where the principal benefits from the acts of the agent and the principal is held to have consented to the acts of the agent or by action or later affirmation the principal ratifies the agent’s conduct. See Pannell v. Shannon (Ky. 2014) 425 S.W.3d 58, 65; Benson v. Seestrom (Fla. Dist. Ct. App. 1982) 409 So.2d 172, 173.
 Rule 26(a)(1)(A) of the FRCP requires an early exchange of information between the parties relating to witnesses, documents, damages and insurance. A party is required to exchange information which is “reasonably available” to the party at the time of the disclosure. The required disclosure is only of those witnesses a party may use to support a claim or defense, there is no obligation to disclose witnesses harmful to the disclosing party’s case. (See Adv. Comm. Notes to 2000 Amendments to FRCP 26(a)(1)). Disclosure also requires that a party identify and disclose all information stored electronically that a party may use to support a claim or a defense. See FRCP 26(a)(1)(A)(ii).
 Arizona – Rule 37(a)(1) of the Arizona Rules of Civil Procedure; California Section 2030.300(b) of the California Code of Civil Procedure; Florida – Rule 1.380 of the Florida Rules of Civil Procedure; Kentucky – the Kentucky Court Rules follow closely the FRCP; and, New York - the New York State Court Rules Section 202.7(a)(2).
 Once the other side confirms the non-existence of a fact try to obtain a factual stipulation at or before trial confirming the non-existence of a fact. Counsel can also use form discovery responses to confirm the non-existence of an essential fact. Finally, motions in limine are useful to avoid confusion for a jury regarding the absence of such evidence.
 The author had a case where the defendant resided in Germany and the claim by the defense was the defendant could not be sued in the United States in federal court because the defendant was not located in the United States. The author did a Facebook search on the defendant and the defendant on his Facebook page confirmed he would be in the Palm Springs, California, area on a particular date and within a particular time frame to attend a horse show. The author arranged for the defendant to be served at the horse show. The defendant was then served with the summons and complaint. Under federal law, once the defendant was served in the United States the defendant was required to answer the complaint. See Burnham v. Sup. Ct. (1990) 495 U.S. 604, 610-611; Bourassa v. Derochers (9th Cir. 1991) 938 F.2d 1056, 1058.
 See Souza v. Fred Carries Contracts, Inc. (Ariz. App. 1997) 955 P.2d 3; Cedars-Sinai Med. Ctr. v. Superior Ct. (Cal. 1998) 18 Cal.4th 1; Martino v. Wal-mart Stores, Inc. (Fla. 2005) 908 So.2d 342; Morton v. Bank of the Bluegrass and Trust Co. (Ky. Ct. App. 1999) 18 S.W.3d 353; and, Met-Life Auto & Home v. Joe Basil Chev., Inc. (N.Y. 2004) 1 N.Y.3d 478.
 The first Restatement of Agency was published in 1933 and a second Restatement of Agency was published in 1958. A third Restatement of Agency has been proposed, but it has not been adopted in all states.