Can You Trust Your Pet? A Primer on Florida Pet TrustsNovember 1, 2014
Integrated Animal Court: A Better Fit for Animal Law Cases in FloridaNovember 1, 2014
By: Amanda Simmons Luby and Renée Thompson
Many attorneys are familiar with the construction lien laws found in F.S. Ch. 713, Part I, which are fairly well-developed by case law. However, liens are not just available for those who provide labor and materials to construction projects. Liens are also available for a broad spectrum of other service providers in other industries pursuant to F.S. Ch. 713, Part II, but many such service providers (and their attorneys) may be unaware of these lien rights. Given the varied array of personal property liens available, this article does not intend to explore in-depth each kind of lien recognized by F.S. Ch. 713, Part II, but rather provide an overview of the types of liens available and how such liens are perfected and enforced within Florida’s equine industry.
The equine industry in Florida is big business. Florida ranks only behind Texas and California with respect to the total number of horses (500,000). Approximately 440,000 Floridians are involved in the industry as horse owners, service providers, employees, and volunteers. Even more participate as spectators at equine-related events. The horse racing industry alone has a greater overall economic impact than baseball’s spring training.1 All equine activities generate approximately $5 billion for Florida’s economy. People from all walks of life are involved in Florida’s total equine industry, from the wealthiest families ( e.g., the Bloomberg, Steinbrenner, Gates, and Onassis families) to your regular Joe farmers, horse trainers, children and retirees.2 Florida’s equine lien laws impact all of them.
Miscellaneous personal property lien laws are recognized in Part II of F.S. Ch. 713. Like Part I, courts must strictly construe Part II statutes.3 Fortunately, at least for lienholders, Part II is a diverse collection of broadly worded statutes that establish liens, often with less stringent perfection requirements than those required in Part I. Thus, the need to strictly construe the statutes is routinely tempered by the lack of strict perfection requirements.
Many of the personal property lien laws4 have not been amended since they were enacted decades ago, and are rooted in Florida’s agricultural or industrial history. Some have remained substantively unchanged since they were first enacted in the 19th century. Specifically regarding the equine industry, Part II includes personal property liens available to those who provide care and maintenance for horses;5 provide veterinary services;6 provide feeding and caring for racehorses and polo ponies;7 and stallion owners who provide the service of their stallions for breeding purposes.8
These liens take priority over all other after-acquired liens, but they may not exceed the value of the services performed or goods supplied.9 In some circumstances, personal property liens can also take priority over a prior secured party if the lienor is still in possession of the property.10 Additionally, a lien only attaches to the horse that was improved by the service provider, but it also imposes personal liability on the property owner.11
Lienors in Privity — Perfection
Generally, for those equine industry providers in privity with the owner, there is no global requirement in Part II to provide notice of the lien to the owner in order to perfect a lien as the owner is presumed to have notice that the horse is being provided services.12 Alien goes into effect upon the provision of services; and, unlike what is found with construction liens, there is no global requirement to record a claim of lien.13
For those in privity with the owner, irrespective of whether such privity was created through oral or written agreement, the statutes do not mandate that a claim of lien arising from the care of a horse be recorded because it is presumed the owner is aware services are being rendered to the animal.14 For those who provide feed to racehorses and polo ponies, irrespective of privity, the lien attaches at the time of delivery of such feed and is presumed consumed by the horses at the delivery site at the time of delivery.15 Veterinarians also have a lien on horses from the date services were rendered to the animal.16
Stallion owners, who can generate substantial income from standing their stallions at stud, are the only lienors in the horse business who are required to actually record a claim of lien in order to perfect it. A claim of lien arising from a stallion servicing a mare must be recorded in the county in which the mare resides within 18 months from the last time the stallion serviced the mare.
Lienors Not In Privity — Perfection
For those equine industry service providers not in privity with the owner, a lienor can typically perfect his or her lien on the horse in an easier fashion than what is required of construction liens. In most cases, to perfect a lien, the lienor in the horse business need only mail to the owner a “notice of lien.”17 There is no specific deadline as to when this notice of lien is required to be delivered, nor are there requisites as to how this notice of lien is required to be served.18 The case law interpreting F.S. §713.75 is minimal, at best, and the statute itself is somewhat nebulous as to certain factors. Fortunately, the limited case law that does exist requires that this simple notice of lien contain the following information: 1) the services performed or to be performed; 2) a description of the property being improved; 3) the amount of the lien; and 4) the detailed contact information for the owner.19 In essence, this is nothing more than an invoice.
Compare this to what is required to perfect a construction lien. Construction liens for contractors not in privity with the land owner typically require 1) the contractor to provide notice to the owner within 45 days from the date of first furnishing services and/or materials; 2) that a claim of lien, using the format provided in the statute, is recorded in the county where the real property exists no later than 90 days from the date of final furnishing; 3) and that a copy of such claim of lien be delivered to the owner via US certified mail, global carrier, or hand delivery within 10 days from the date of recordation.20
Another difference between Part I and Part II is that the notice of lien mandated by F.S. §713.75 may be served simultaneously as the claim of lien, to the extent a recorded claim of lien is even required at all. As mentioned above and irrespective of whether he or she has privity with the owner or not, stallion owners are the only lienors in the horse business who have an affirmative duty to record a claim of lien in order to perfect their lien rights.21 Part II mandates that the stallion owner must not only provide written notice of the lien, but he or she must also record a claim of lien with the clerk in the county where the owner of the mare last resided no later than 18 months from the last service date.22
That some liens can be perfected without recordation of a claim of lien is recognized by F.S. §85.051, which provides the one-year statute of limitations period for bringing suit under Ch. 713:
When there has been no record of a notice of lien, an action to enforce a lien (if it exists without such record) must be brought within 12 months from the accrual of the unpaid rent, the performance of the work, or the furnishing of the materials, and if there has been such record, the action must be brought within 12 months from the time of such record.23
Given the age of most of the Part II lien statutes and in light of the legislative intent seen in Part I, an attorney whose client is a lienor not in privity with the owner should, as a matter of best practice, advise the lienor to record the claim of lien regardless of whether it is actually required by statute, in addition to serving a copy of that claim of lien (via certified mail or overnight carrier) on the owner within a reasonable time frame after the last day services are rendered so as to leave no doubt that the lien is perfected.
How And When Liens Against Horses Can Be Enforced
As set forth in depth below, Part II lien laws typically give the lienor the upper hand in dealing with payment disputes, especially when the lienor still possesses the animal. However, owners have a mechanism to have their liened horses returned if they dispute payment of the monies demanded by the lienor. A lien placed on personal property typically lasts only one year, but such lien can be released from the animal by the posting of a bond pursuant to F.S. §713.76. If an owner posts a bond, the lienor must promptly relinquish the horse to the owner or subject himself or herself to misdemeanor charges.24 It is then left to the court to determine who should obtain the amount of the bond posted, as possession of the horse should have been returned to the owner.
• When Actions Should Be Brought — Should the owner not post a bond, all lienors who recorded a claim must bring an action to enforce that lien within 12 months from the date of recordation.25 When no claim of lien need be recorded, an action must be brought within 12 months from the date the last services were rendered and remain unpaid.26 An ambiguity exists, however, with respect to lienors not in privity and F.S. §713.75 and §85.051. The former statute provides that a “lien shall exist from the time of delivery of the notice of lien of the amount unpaid…,” while the latter statute provides that a lien exists for up to 12 months from the time the services/materials were rendered and remain unpaid. Because there is no statutory timeframe for when a lienor not in privity must serve a notice of lien, and unless the notice of lien is sent to the owner via certified mail or some other service where the date of delivery can be confirmed, a lienor may never know when a notice of lien is actually delivered to the owner. Thus, because of the statutory ambiguity, a practitioner should advise clients who do not have privity with the owner that regardless of when the mandatory notice of lien is actually served under §713.75, the absolute deadline for filing suit to enforce a lien is 12 months from the date services were last rendered, not the date of delivery of the notice of lien, since the notice could be delivered months after services have ceased. It is better to err on the side of filing suit earlier rather than later to avoid any defense related to the enforcement action being time-barred.
• Types of Enforcement Actions — As with Part I, lienors under Part II have the ability to bring standard actions at law, actions to enjoin the removal of the horse from a county, and summary actions.27 The first two forms of enforcement are common enough that descriptions need not be made here. Though not often used, a “summary action,” as authorized per F.S. §85.011(5), could be highly beneficial to equine industry lienholders because these actions expedite and condense the litigation process, which can result in enormous cost savings as compared to standard litigation. For a summary action procedure to be triggered, the lienor must strictly follow the procedures outlined in F.S. §51.011. A summary action significantly shortens a party’s timeframe for responding to a complaint or counterclaim (from 20 days to only five), only allows oral depositions as a means of discovery (unless permission is otherwise granted by the court), and requires a final hearing to be set in short order — though no specific time frame is provided. The lienor must also specifically request a summary action in the complaint and must indicate in the complaint the statutes that authorize such action. Otherwise, the court will not give the case the expedited attention to which a summary action is entitled.
While a summary action can be particularly upsetting to a horse owner, due to the shortened time frames and limited discovery involved, the enforcement approach that horse owners may find to be the most onerous is a “sale without judicial proceedings” or a “non-judicial sale.”28 Unique to liens arising from the care of horses (and other animals) and presuming no bond has been posted, §713.65 and §85.031(2) permit the lienor to keep possession of the liened horse up to three months from the date the charges become due.29 Though the legislative history and case law on the purpose of this limited possessory period are sparse, it is logical to presume that this is our legislature’s way of giving leverage to the lienor to force payment from the owner. However, the maximum three-month possessory period also imposes a duty on the lienor to mitigate damages and resolve the cloud on the title because, otherwise, the cost of caring for the animal, and necessarily the amount due to the lienor, increases daily.30 The limited possessory period forces the lienor to make a decision within three months from the first day of arrearage as to how he or she will enforce the lien, either a nonjudicial sale or any of the aforementioned legal actions.
For liens specifically arising from taking care of animals, F.S. §85.031(2) actually enables a stable owner or trainer to force the sale of the horse without judicial proceedings after only one month of arrearage (with a limit that the lienor cannot keep the horse for more than three months once the account first becomes due).31 This short timeframe for enforcement should be a wake-up call to all horse owners who board and/or train their horses with someone else; they don’t have the luxury of falling behind on their monthly board or training bills because a lienor in possession is entitled to act quickly and sell the horse in order to enforce his or her lien.
This nonjudicial sale of the animal can be effectuated by simply posting notice in three public places, only two of which are specified: the local courthouse and a public, conspicuous location at the lienor’s place of business. The statutes do not prescribe how the third notice must be given, but practice has found that publication in a local newspaper typically suffices, as does another public, conspicuous location, such as city hall. These notices must describe the time and location of the sale, a detailed description of the animal being sold, and the amount of the debt.32 The notice must be provided at least 10 days in advance of the sale.33
Of note is that F.S. §85.031(2) lacks any requirement to provide notice to the owner of an upcoming nonjudicial sale. Given this omission, and as experienced repeatedly by the authors in their equine practices, it is not uncommon for a modern-day owner to not receive a notice of the sale, notwithstanding the owner’s dispute as to any balance owed to the lienor. Part II lien laws simply do not mandate that the defaulting owner be given notice of the nonjudicial sale before it occurs. While a singular federal district court has previously recognized the deficiencies in Florida’s lien law statutes, deficiencies that ultimately resulted in the repeal in 1979 of subsection F.S. §85.031(3), Florida state courts continue to find the lien laws impacting the horse business constitutional.
In Hann v. Carson, 462 F. Supp. 854 (M.D. Fla. 1978) , a towing company that had towed and impounded a car on behalf of the Duval County Sheriff’s Office was enjoined from selling the owner’s car when he refused to pay the fees. The towing company threatened to sell the car under the old F.S. §85.031(3), which specifically pertained to a towing company’s ability to impound and sell motor vehicles through a nonjudicial sale. Like F.S. §85.031(2), which is still valid, subsection 3 did not require that the owner be put on notice of the pending nonjudicial sale. This caused the district court great consternation. In enjoining the towing company from selling the car, the district court discussed the statutes’ non-judicial sale provisions at length and found the omission of a mandatory notice to owner and opportunity to be heard unconstitutional.
The apparent legislative purpose of this statutory scheme is to give an expeditious legal recourse to those persons who, having performed labor or services to personal property in general, and to motor vehicles in particular, are owed and entitled to payment of their justly earned and due charges. The intent is good, but it cannot justify the immense risk of error contained in the statute.34
In contrast and by way of another example, a horse owner who lived out of the country lost ownership of a racehorse valued at $150,000, after the owner’s horse trainer gave the requisite public notices required under F.S. §85.031(2) and purchased the horse for herself at the public auction for $10. The disputed balance was $6,500. The horse owner, who lived in Europe and never received notice of the nonjudicial sale, had no idea the sale took place and the trainer was able to subsequently sell the horse privately one month later and make a handsome profit. This anecdote demonstrates how personal property liens can create ulcers for horse owners.
While in the above scenario the original horse owner certainly would have surviving claims against the trainer regarding the disputed balance, even if an original owner is willing to challenge the legitimacy of the nonjudicial sale in court, the sparse case law in Florida indicates our state courts’ willingness to strictly construe these statutes and validate a nonjudicial sale, notwithstanding the Hann decision above.35
Particularly relevant is the Fifth DCA case of Lloyd v. Brendemuehl, 714 So. 2d 1154 (Fla. 5th DCA 1998), which involved the nonjudicial, public sale of three thoroughbred horses under F.S. §85.031(2). In that case, the court validated the legitimacy of the nonjudicial sale even though the owner did not receive any notice prior to the sale. However, even while the court upheld the constitutionality of §85.031(2), the court was nevertheless critical of the statute’s antiquated notice requirements:
Notwithstanding, we note that subsection 85.031(2) was enacted over thirty years ago and its notice provision could stand some modernization. Posting a notice of proposed sale in three places in the county may have been sufficient in times gone by. Perhaps the statute should be amended to at least provide that notice by certified mail be sent to the last known address of the debtor advising of the amount of the lien, and the date, time and location of the sale.36
Notwithstanding the Fifth DCA’s recommendation to the Florida Legislature to update Part II lien laws and the enforcement provisions contained in F.S. §85.031, as of the publication of this article, there has been no substantial effort to do so. Until a notice to owner becomes mandatory prior to any nonjudicial sale, lienholders may typically have the upper hand in enforcing their liens under Part II. As such, horse owners and their attorneys would be well-advised to stay on top of all equine accounts and be prepared to post bonds in the event of a dispute with a lienor so as to avoid losing ownership of very valuable assets.
1 Florida Thoroughbred Breeders’ and Owners’ Association, President’s Remarks (March 2014), http://www.ftboa.com/news/presidents-report/2983-presidents-remarks.
2 American Horse Council in Washington, D.C., http://www.horsecouncil.org.
3 Rieck & Fleece v. Cunniff, 190 So. 8, 9 (1939).
4 In general, other personal property lien rights are available for those who provide labor on machines ( Fla. Stat. §713.56); cut lumber ( Fla. Stat. §713.57); improve any kind of personal property used commercially ( Fla. Stat. §713.58); oversee the harvesting of crops ( Fla. Stat. §713.59); gin cotton ( Fla. Stat. §713.595); create manufacture’s molds, ties, or dies ( Fla. Stat. §713.596); perform any services or furnish materials to the maintenance and improvement of water craft ( Fla. Stat. §713.60); manufacture, alter, or repair anything of value ( Fla. Stat. §713.61 – last amended in 1887); provide materials such as lumber, sand, or any other material that is to be incorporated into manufactured products ( Fla. Stat. §713.62); provide any locomotive or machine for use in the railroad or telegraph system ( Fla. Stat. §713.63); provide materials that are furnished to vessels ( Fla. Stat. §713.64); furnish pest control ( Fla. Stat. §713.665); provide boarding and lodging and hotel ( Fla. Stat. §713.67, §713.68); procure loans or advances of money or goods or chattels ( Fla. Stat. §713.71); own a mobile and/or operate a mobile home park or recreational vehicle park for rent ( Fla. Stat. §713.77); recover, tow, or store vehicles and vessels ( Fla. Stat. §713.78); recover, tow, or store mobile homes ( Fla. Stat. §713.785); provide interior design services ( Fla. Stat. §713.79).
5 Fla. Stat. §713.65.
6 Fla. Stat. §713.655.
7 Fla. Stat. §713.66.
8 Fla. Stat. §713.70.
9 Fla. Stat. §§ 713.50, 713.73 and 713.75.
10 Associates Comm. Corp. v. Ross, 465 So. 2d 663, 664 (Fla. 4th DCA 1985) (citing Fla. Stat. §679.310).
11 Fla. Stat. §713.73.
12 Fla. Stat. §713.74.
14 Fla. Stat. §§85.011(3) and 713.74; see also Carter v. Gearty, 105 So. 329 (1925).
15 Fla. Stat. §713.66.
16 Fla. Stat. §713.655.
17 Fla. Stat. §713.75.
19 Rieck & Fleece, 190 So. at 9.
20 Fla. Stat. §713.18.
21 Fla. Stat. §713.70.
22 It should be noted that this 18-month deadline to perfect the claim of lien does not apply to other miscellaneous liens. This 18-month period takes into account the animals’ gestation periods to allow time for live progeny to be born. Once this claim of lien is recorded, this statute also prohibits the sale of the mare or cow unless payment of the account is made or unless the bull or stallion owner agrees in writing.
23 Fla. Stat. §85.051 (emphasis added).
24 See Associates, 465 So. 2d at 666; Fla. Stat. §713.76(3).
25 Fla. Stat. §85.021.
26 Fla. Stat. §§85.011 and 85.051.
27 Fla. Stat. §§85.011 and 85.021.
28 F la. Stat. §85.031(2).
29 Associates, 465 So. 2d at 666.
30 Id. at 664-665, discussing Ocala Foundry & Machine Works v. Lester, 38 So. 51 (1905).
31 In situations not involving an animal when, for example, storage costs continue to accrue, the lienor must wait the 90 days before disposing of the property.
32 Fla. Stat. §85.031(2).
34 Hann v. Carson, 462 F. Supp. 854, 867.
35 See Boyd v. Panama City Boat Yard, Inc. , 522 So. 2d 1058 (Fla. 1st DCA 1988).
36 Lloyd, 714 So. 2d at 1157.
Amanda Simmons Luby is a partner at the law firm of Shutts & Bowen, LLP, in Orlando. She is the founder of the firm’s equine law practice group and a member of the firm’s construction and commercial litigation groups. Author’s note: An excerpt from an earlier, condensed version of this article,not tailored toward the equine industry, was previously published in the Daily Business Review in September 2011 by Ms. Luby.
Renee E. Thompson is a partner at the law firm of Mateer & Harbert, P.A. She practices in their Ocala office, in the areas of commercial litigation and equine law. She is the Fifth Circuit representative to The Florida Bar Board of Governors and serves as the board liaison to the Animal Law Committee of The Florida Bar.