Saturday, January 10, 2009

The Bill with Comments: Mine and Yours!

A BILL to amend the Code of Virginia by adding in Title 3.1 a chapter numbered 4.9 consisting of sections numbered 3.1-22.78 through 3.1-22.82, relating to the sale of horses by dealers.
Dealer is not defined. We can be pretty sure its not an occasional sale or a private sale of your personal horse. It might be defined elsewhere in the code, but the intended parties are those who make a substantial portion from their income from horse sales, pay personal income taxes as a professional or have some kind of business. I think it s valid point to ask for this to be defined.

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding in Title 3.1 a chapter numbered 4.9, consisting of sections numbered 3.1-22.78 through 3.1-22.82, as follows:

Chapter 4.9.

Equine Sales by Dealers.

§ 3.1-22.78. Definitions.
As used in this chapter, unless the context requires a different meaning:
"Dual agent" means a person acting as representative for both the buyer and the seller in any sale, purchase, or transfer of an equine. Auction companies shall not be considered dual agents.
"Equine" means a horse of any breed used for racing or showing, including prospective racehorses, breeding prospects, stallions, stallion seasons, broodmares, yearlings, or weanlings, or any interest therein.

§ 3.1-22.79. Written bill of sale required.
If you are selling a horse for more then $10K, you can afford some ink and paper. You should have bills of sale anyway. Horses do not have titles like cars and houses do, this is a step in the right direction. In addition, its hard to cheat and make up numbers if all parties can see the sales price. If you want to add a few thousands bucks on without telling the owner, buy the horse and the resell it. Otherwise, you are already breaking the laws of agency regardless if this law gets passed.

A. Any sale, purchase, or transfer of an equine over $10,000 shall be: (i) accompanied by a written bill of sale or acknowledgment of purchase and security agreement that includes the purchase price; and (ii) signed by both the purchaser and the seller or their agent or, in a transaction solely relating to a season or fractional interest in the stallion, the syndicate manager or stallion manager.

B. If the equine is sold, purchased, or transferred at public auction, the requirements of this section may also be satisfied by the issuance of an auction receipt generated by the auction house, and signed by the purchaser or his agent. An agent who signs an auction receipt on behalf of the principal shall do so only if authorized in writing. When presented with such authorization, all other parties to the transaction may presume that an agent signing on behalf of the principal is authorized to act for the principal. For transactions at public auction, this section shall not require disclosure of the reserves, the identity of the principals, or the auctioneer's commissions.

§ 3.1-22.80. Dual agency; consent required; agency; consignor; disclosure of compensation.
This should already be done. There should be no need for a new law to make this enforceable, but clearly, from the fact that opposition exists, this bill needs to pass. I have to have consent for dual representation, real estate people have to do it, all other professionals and agents have to do it, why shouldn’t horse dealers have to do it? Are they hiding something? If following the law is going to cut into your income, then be happy nobody has enforced it until now, but you are not special or magic or above the law.

A. Any person acting as a dual agent in any sale, purchase, or transfer of an equine shall acquire the prior written consent of both the buyer and the seller.

B. Any person acting as a dual agent, consignor, or agent for either a purchaser or a seller in a transaction involving the sale, purchase, or transfer of an equine who may receive compensation, in any form, with a value in excess of $500 shall disclose the payment in writing to both the purchaser and seller; and acquire the written consent for such compensation from each principal for whom the agent is acting.

C. Any person acting as a dual agent, consignor, or agent for either a purchaser or a seller in a transaction involving the sale, purchase, or transfer of an equine shall, upon request by the principal, furnish copies of all financial records and financial documents in the possession or control of the agent pertaining to the transaction with the principal. Financial records shall not include the agent's or owner's work product used to internally evaluate the equine.

§ 3.1-22.81. Civil action for violation of chapter.

Again, not a new concept. Fraud almost always carries this with it. You pay for the lawyers and you pay punitive. The point is to teach you to not rip people off, even if you grew up thinking it was OK. You have not been sued up until now because the cost of litigation often exceeds the amount stolen. This evens up the playing field and no part of this bill was designed or Promoted by lawyers as a way to get more $$$$$. Most lawyers are not even aware of the prices top horses command or the amount of potential litigation out there. If they were, this bill would not be needed. This bill is for clients to take to their lawyers and lawyers to take to the judges so everybody clearly understands fraud in a horse deal is just as much “real” money as any other kind of fraud. We do not buy and sell horses with Monopoly money. Who is behind this bill? Horse owners who have been ripped off.

A. Any person who violates this chapter shall be civilly liable for damages in treble the amount of the damages sustained by the complaining party. The prevailing party in any litigation under this section shall be entitled to an award of costs of the suit, reasonable litigation expenses, and attorney's fees. As used in this section, treble damages shall equal three times the sum of: (i) the difference, if any, between the price paid for the equine and the actual value of the equine at the time of sale; and (ii) any compensation received in violation of subsection B of §

3.1-22.80. No person shall be held liable under this section unless that person has actual knowledge of the conduct constituting a violation of this section. Heck, you even have to be aware you are ripping people off!

B. No contract or agreement for payment of a commission, fee, gratuity, or any other form of compensation in connection with any sale, purchase, or transfer of an equine shall be enforceable by way of a civil action or defense unless: (i) the contract or agreement is in writing and is signed by the party against whom enforcement is sought; and (ii) the recipient of the compensation provides a written bill of sale for the transaction.
Go back and read the post about contracts. Statute of frauds. New law?? Not hardly. Get it in writing for anything over $10k anyway!

§ 3.1-22.82. Penalty.
Any person who knowingly commits a violation of this section is guilty of a Class 1 misdemeanor.

Here is where some people seem to be getting upset. Yeah they say, “we are willing to keep breaking the law and pay out once in awhile if we get sued, but criminal charges? Just because we are breaking a criminal law against fraud does not mean we should be treated like other criminals!” Uh, yeah, you should. You are not a higher class of con artist then other con artists and frankly, you usually hurt children. Mommy and Daddy can’t afford another horse to replace the broken one they bought that really was worth $20K less and is not sound. No pony for you! Go straight to jail, do not collect your $200. Actually, if you don’t do it often you will probably get probation and a fine. Suck it up or just don’t do it.

Its either going to be this bill or people will have to start using companies to do “Horse Closings” that are very similar to real estate closings. We can have a nice free law or start adding $1,200 onto every sale for the attorneys to do the closings. There is already one VA Law firm that does Horse Closings. They are not making this stuff up. The need is there, the top equine attorney in VA saw that need. They recognized the need for official papers and background checks and signed documents in the sales of horses. It would be a shame if honest dealers had to start paying for closings because a few dishonest ones hate a bill that is against fraud. Pick your poison—everybody pays an extra fee or only the people who are guilty of fraud pay.
If people are afraid they will not have to disclose their actual income for tax purposes if sales are in writing, well boo hoo. We all gotta pay taxes. Not paying taxes is a crime too. Welcome to the real world.

So what does this bill do? It makes you fill out a bill of sale. It makes all transactions open and honest. It gives penalties and remedies for those who rip off or have been ripped off. How is that a bad thing?

Now the comments are open. Maybe I am wrong. Maybe its more then the cost of paper and ink that has people upset. Maybe they have some valid points? Then come and post them and edumicate me. If you are against fraud and against this bill, why?


  1. Definitely in favor of it, but I agree that "dealer" needs to be defined so as to include "trainers" - otherwise you're giving the trainers a wiggle-out.

  2. Who do you contact if you want to support the Bill...Is there a place to talk to someone about an experience with a fraudulent deal?

  3. This person is sponsoring the Bill, but contacting any VA legislator will do. Particularly if you live in VA and have one of your own.

    And heck, MD is considering a bill to. If you live there contact your representative. BBs, forums and blogs are great, but you really matter IRL if you send them a PM. You get to make law. Cool.

    Senator Harry B. Blevins
    P.O. Box 16207
    Chesapeake, VA 23328
    757-546-7346 fax

  4. First....thank you for posting this information regarding my bill and giving everyone the opportunity to discussion the issue. When I approached Senator Blevins over a year ago to ask if he would sponsor legislation to help protect the average horse owner in horse sales he was more than willing to do so.

    Naturally I will encourage folks who support such legislation to contact Senator Blevins or their own Representatives and tell them so. I also welcome hearing from the opposition and why they oppose transparency and disclosure in horse sales.

    Even though I am 100% behind this bill I am open to and welcome comments and ideas. GoonrGrrl..excellent suggestion. I will be sure to mention this to Senator Blevins this week.

    Should anyone wish to contact me for any reason I will be happy to hear from you.

    Debbie Hanson
    Dehans73 at

    On a side note...Senator Blevins can also be reached at his Richmond address during the session.

    Senate of Virginia
    P.O. Box 396
    Richmond, VA 23218
    804-698-7514 Phone
    804-698-7651 Fax

    I also encourage folks to contact their own Representatives on issues they consider important whether horse related or not. You can find yours here...just click on "Who's My Legislator".

  5. Is there any reason this could not be made a federal law?

  6. No reason it couldn't, but that's a lot harder to get done. I wish it were Federal. So many cases involve 3 or more states.

    Horse is in VA, owner lives in PA, trainer sold horse to a New York buyer at a NC show.

    It certainly falls under the commerce clause, but that would take years to pass:<

  7. This horse was just sold for 35,000 to an unsuspecting rider who didn't know. The horse was advertised as 5 years old, renamed Bentley, and the new rider never had a pre-purchase done or was made aware of the situation surrounding his ownership. I am searching for his new rider and he/she is probably in VA somewhere. He was sold by Linda Nichols initially for 20,000 (without disclosure of his condition or ownership claim) and then by Gavin Moylan (who knew none of this because he wasn't told).

  8. Here's what I've always wondered, Sara: If a horse sales transaction crosses state lines in the way you described (in your comment above) and the seller (or anybody in fact) acts as dual agent, doesn't that already violate the Uniform Commercial Code? I was always taught that it did, and I could swear I looked it up at one point when Debbie's case was just starting.

  9. Which article? Article 2? I can look it up, but please narrow it down a little:> I can't imagine why, but I'd like to know. Each state adopts their own version of the UCC--its just suggested guidelines. So, the answer is I do not know but I'd like to find out.

    If someone breaks a law in more then one state it becomes a federal case instead of a state crime, but if you are quoting the UCC I doubt that is what you mean.

    If its just a civil case across state lines it becomes a headache.


If the comments do not work, somebody please e-mail me and let me know. Thnx!