Justice on track - Real world lessons from a Thoroughbred court case

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Justice on Track: Real-World Lessonsfrom a Thoroughbred Court Case By Peter J. Sacopulos Morning training of Thoroughbreds at tracks is standard to the industry. So too are exercise riders losing their mounts and loose horses. Less standard is a collision between horses resulting in civil litigation. This article examines such a case and several issues important to Thoroughbred trainers including the Sports Activity Doctrine.From Routine to UnforeseenMonday, May 7, 2018, dawned clear and cool at the Indiana Grand racetrack in Shelbyville, Ind. Jeremy Staley, who worked as an assistant groom for Michael E. Lauer Racing Stables, prepped a chestnut mare named Accessorizing for a routine morning training session. Accessorizing is owned by the trainer’s wife. The four-year-old had chalked up an impressive three first-place finishes in just under two years, and the Lauers were confident she had a bright future ahead.As expected, Mr. Staley met with a licensed jockey named Marcelle Martins. Martins had offered to exercise horses free of charge. Several trainers had taken her up on it, including Mike Lauer. Lauer had four decades of experience as a trainer and knew that Martins was a skilled horsewoman with a valid jockey license.Each received something of value from the transaction. For Lauer, it was the chance to test a potential hire while saving the expense of an exercise rider. For Martins, it was the chance to showcase her skills for a successful trainer and a shot at mounts in future races. Neither Martins nor Lauer presented or signed any paperwork. It was the kind of easy, informal agreement that happens all the time in professional horse racing.Martins mounted Accessorizing and began the workout. Of course, she was not the only rider on the track that day. A number of other exercise riders were putting horses through their paces, and the track’s outriders were on duty. Everything went as expected until Martins and Accessorizing rounded a turn. The mare began ignoring Martins’ commands. Martins was unable to gain control of the reins. Martins lost her balance and mount, and Accessorizing was loose and headed toward a group of horses that included Glitter Cat. Glitter Cat was owned by Civiol Cruz, who was taking his horse through its own morning exercise routine.Accessorizing collided with Glitter Cat. Cruz was thrown to the ground and injured. The clocker had sounded the loose horse alert. Cruz was loaded into an ambulance and taken to a local hospital. Martins was roughed up but did not require a trip to the ER. Remarkably, neither Accessorizing nor Glitter Cat sustained serious injuries.The LawsuitOn July 2, 2018, Civilo Cruz filed a civil lawsuit. The suit named the track, the training business, the owner/trainer, and Marcelle Martins as defendants. Cruz alleged in his complaint that the owner of the track failed to provide adequate safety precautions and protections. He also alleged that the existing safety systems, including the loose horse siren, failed to function properly. Cruz further alleged that, as owner/trainers, the Lauers knowingly allowed an unqualified employee to ride a dangerous horse, consciously putting others at risk. Finally, Cruz claimed Marcelle Martins was an unqualified exercise rider who had acted recklessly by losing control of her mount.Simply put, Cruz and his attorneys alleged that the defendants were responsible for the accident because they behaved recklessly and/or negligently. Cruz demanded the defendants pay his medical bills that totaled over $60,000. He also sought compensation for lost income and for pain and suffering.Insurance and LiabilityThe owner and trainer had purchased a ranch insurance policy. A ranch insurance policy is something of a hybrid between a consumer homeowner’s policy and a commercial policy. While policies vary, a ranch policy typically offers the protections of homeowner’s insurance, providing coverage for theft, burglary, fire and certain natural disasters. Similar to a homeowner’s policy, a ranch policy also offers specified levels of liability protection should someone be injured on the property. Ranch policies also include commercial protection, covering business assets and activities associated with the property, such as animals, equipment, and outbuildings. The policy’s liability protections extend to commercial activities as well. In many instances, a ranch policy may provide coverage beyond the physical location of the ranch. However, these policies vary.Therefore, had a visitor been injured by a horse on the Lauers’ Kentucky ranch, the company that issued the policy would have been involved in determining fault. If the injured party was not at fault, the policy would afford coverage within the limits of the policy. If an incident or injury resulted in a lawsuit, the insurer would provide a defense, including payment of legal costs and judgments per the limits of the policy.Confusion and misunderstandings about insurance coverage abound in the Thoroughbred racing world. What is clear is that trainers and owners should give serious consideration to securing business insurance that specifically covers equine athletic activity. A reputable equine insurance professional will ensure that you have a policy that fits your needs.Kevin Lavin, director of equine insurance at Sterling Thompson in Louisville, Ky., explains, “If an equine policy contains an athletic activity exclusion, a liability exposure exists for Thoroughbred trainers and owners.” Evan Beauchamp of Equine Insurance Specialists in Lexington notes: “At the bare minimum, trainers should have a liability policy that covers their training operation. In fact, in many areas, proof of liability coverage is required to participate in racing activities.”Mounting a DefenseThe defendants had a strong and solid defense to Mr. Cruz’ allegations. In fact, many points of the owner and trainer’s defense and the track’s defense overlapped.Counsel for the defendants moved that the case be dismissed before proceeding to trial. Such a dismissal is known as a “summary judgment.” A summary judgment is a motion seeking a ruling in favor of the moving party. To be successful, the moving party must show that there are no genuine issues as to any material fact and that the moving party is entitled to judgment as a matter of law.It might be assumed that Indiana’s Equine Activity Law, which limits lawsuits against individuals and businesses involved in horse-related activities, played a role in these motions. However, in most states, the Equine Activity Statutes do not apply to horse racing. This meant the Sports Activity Doctrine formed the core of the defense.The Sports Activity Doctrine holds that, in most situations, an individual participating in a sport understands and accepts the inherent risks involved. Because the individual willingly exposes himself or herself to those risks, the Sports Activity Doctrine places limits on a participant’s ability to sue if he or she is injured. Of course, there are exceptions. If the injuries suffered are due to someone else’s negligence, recklessness, or intent to cause harm, legal action may establish that the injured party is owed a “duty of care.”The track, owner, and trainer asserted that Mr. Cruz had willingly and knowingly participated in a dangerous sports activity, accepting the risks involved. All defendants also asserted that the accident was of the type known to occur during such activity, and no one involved acted with recklessness, negligence, or the intent to harm. The track’s attorneys maintained that the safeguards it had in place were appropriate and functioning at the time of the accident. The owner and trainer pointed out that Marcelle Martins was licensed as a jockey by state regulators, and that her license qualified her to be an exercise rider, proving she was qualified to ride Accessorizing. Further, the owner and trainer’s defense maintained that Martins was not an employee, but rather an independent contractor.Employees and Independent ContractorsAn issue not decided by the trial court was whether Marcelle Martins was an employee or an independent contractor at the time of the incident. Martins had exercised horses for multiple trainers on the morning of May 7, 2018. The possibility of Martins being determined to be an employee of the trainer would have been contrary to the nature of the business. Therefore, the Lauers sought a determination of Marcelle Martins’ status on appeal.The issue of exercise riders being employees or independent contractors was not unique to this case. A brief discussion of the differences and distinctions between employee and independent contractor for trainers is important.Employees work directly for an individual or company. They are on the payroll, under the direction of the employer, and often receive benefits, such as sick time, paid vacation and health insurance. An employer is responsible for the actions of his/her employee(s) and specific payments toward an employee’s Social Security, unemployment insurance and Medicare funding.An independent contractor is an individual or company that operates as an independent business entity. Independent contractors often establish their own schedule, provide their own equipment, and are responsible for their own Social Security and Medicare payments. They are also typically responsible for their own business and health insurance retirement funding, and so on. Whether one is an employee or independent contract is a recurring issue in the racing business. Mr. Cruz argued that Ms. Martins was an employee; the owner and trainer argued that she was an independent contractor.Trainers retaining exercise riders or anyone else on a “per assignment” basis should establish that these individuals are independent contractors, not employees. Having a simple contractor agreement that is signed before any work is performed is ideal, as is creating a record of work assigned and payments issued. If the work requires a license, check the license, and make sure it is up to date. Doing so will go a long way toward protecting your business.A Decision and an AppealOn November 21, 2019, the trial court granted the defendants’ motion for summary judgment, holding that the Sports Activity Doctrine applied and that the track and the Lauers were entitled to judgment as a matter of law. In doing so, the court ruled that Cruz had not provided adequate evidence that the track, trainer, owner or the exercise rider had engaged in reckless or negligent behavior, nor that any of them owed him a “duty of care.” Pursuant to the Sports Activity Doctrine, Cruz had been injured while participating in an inherently risky activity. However, the court did not dismiss the issue of whether Martins was an independent contractor or employee, providing a possible avenue of appeal.The Court Conducts a ReviewCounsel for Mr. Cruz appealed the trial court’s decision. The Court of Appeals, in affirming the trial court’s decision, reviewed the Sports Activity Doctrine. In doing so, the court reviewed and relied upon Indiana’s Sports Activity Doctrine authority that has been applied to date. The discussion reviewed three cases that used the Sports Activity Doctrine. Those cases and a brief synopsis of those decisions follow.• In South Shore Baseball vs. DeJesus, a woman seated just outside of an area protected by netting was injured by a foul ball. She filed suit, largely based on the claim that the ballpark’s netting and other safety precautions were inadequate. South Shore Baseball asserts a defense based on the Sports Activity Doctrine. The state supreme court dismissed her case. The court found the netting and warnings to be adequate and determined that the woman had willingly exposed herself to the type of accidents known to occur in ballparks.• In Pfenning vs. Lineman, a teenager attending a golf tournament was injured by a golf ball while driving a beverage cart on a golf course. She filed suit, claiming negligence. The defense relied on the Sports Activity Doctrine. The court ruled that the young woman had accepted the risks associated with a sporting event, and in a decision viewed as expanding the protections of the Sports Activity Doctrine, that participants in a sport cannot be held liable for accidents if their conduct is within the range of acceptable behavior for that sport.• In Megenity vs. Dunn, a woman bracing a large punching bag at a karate event was injured when another participant delivered a more powerful type of kick than instructed. This case also found its way to the state supreme court. The defendant relied on and advanced a defense based on the Sports Activity Doctrine. The judges ruled that because sports are “imprecise and intense,” courts must look at the sport in general, and not focus on unintentional, in-the-moment mishaps occurring within the range of acceptable behavior.A Decision Is MadeOn June 26, 2020, the Indiana Court of Appeals dismissed Cruz’s suit against defendants, citing precedents established in the cases summarized above. The court ruled that the track’s safety systems met acceptable standards, and that none of the track’s personnel had acted recklessly or negligently.The appeals court also ruled that the precedents and protections defined by Pfenning and Megenity shielded the exercise rider, Martins, from liability. Because Martins could not be held liable, the owner, trainer and Lauer Stables could not be held liable regardless of the nature of her employment. The court noted that the Lauer Stables could potentially have been held liable if 1.) Martins had deliberately intended to harm others and 2.) Mike Lauer had been aware of such intentions but made no effort to prevent her from doing so. However, there was no evidence supporting either of these hypothetical situations.The court also ruled that there was no evidence that Accessorizing was any more dangerous than a typical Thoroughbred racehorse, vindicating the trainer and owner. Finally, the court found no that there were no facts disputing Marcelle Martins’ status as an independent contractor.Having represented individuals and entities in the equine industry for more than 15 years, there are a few “take away” points. First, do not assume that equine activity statutes and/or the Sports Activity Doctrine offer ironclad protection or defenses against liability actions. Second, work with an equine insurance professional to assure you and your business have the necessary coverage. Third, classify and document business interactions to limit disputes regarding whether assistants are employees or independent contractors.#####################

By Peter J. Sacopulos

Morning training of Thoroughbreds at tracks is standard to the industry. So too are exercise riders losing their mounts and loose horses. Less standard is a collision between horses resulting in civil litigation. This article examines such a case and several issues important to Thoroughbred trainers including the Sports Activity Doctrine.


From Routine to Unforeseen

Monday, May 7, 2018, dawned clear and cool at the Indiana Grand racetrack in Shelbyville, Ind. Jeremy Staley, who worked as an assistant groom for Michael E. Lauer Racing Stables, prepped a chestnut mare named Accessorizing for a routine morning training session. Accessorizing is owned by the trainer’s wife. The four-year-old had chalked up an impressive three first-place finishes in just under two years, and the Lauers were confident she had a bright future ahead.

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As expected, Mr. Staley met with a licensed jockey named Marcelle Martins. Martins had offered to exercise horses free of charge. Several trainers had taken her up on it, including Mike Lauer. Lauer had four decades of experience as a trainer and knew that Martins was a skilled horsewoman with a valid jockey license.

Each received something of value from the transaction. For Lauer, it was the chance to test a potential hire while saving the expense of an exercise rider. For Martins, it was the chance to showcase her skills for a successful trainer and a shot at mounts in future races. Neither Martins nor Lauer presented or signed any paperwork. It was the kind of easy, informal agreement that happens all the time in professional horse racing. 

Martins mounted Accessorizing and began the workout. Of course, she was not the only rider on the track that day. A number of other exercise riders were putting horses through their paces, and the track’s outriders were on duty. Everything went as expected until Martins and Accessorizing rounded a turn. The mare began ignoring Martins’ commands. Martins was unable to gain control of the reins. Martins lost her balance and mount, and Accessorizing was loose and headed toward a group of horses that included Glitter Cat. Glitter Cat was owned by Civiol Cruz, who was taking his horse through its own morning exercise routine. 

Accessorizing collided with Glitter Cat. Cruz was thrown to the ground and injured. The clocker had sounded the loose horse alert. Cruz was loaded into an ambulance and taken to a local hospital. Martins was roughed up but did not require a trip to the ER. Remarkably, neither Accessorizing nor Glitter Cat sustained serious injuries. 

The Lawsuit

On July 2, 2018, Civilo Cruz filed a civil lawsuit. The suit named the track, the training business, the owner/trainer, and Marcelle Martins as defendants. Cruz alleged in his complaint that the owner of the track failed to provide adequate safety precautions and protections. He also alleged that the existing safety systems, including the loose horse siren, failed to function properly. Cruz further alleged that, as owner/trainers, the Lauers knowingly allowed an unqualified employee to ride a dangerous horse, consciously putting others at risk. Finally, Cruz claimed Marcelle Martins was an unqualified exercise rider who had acted recklessly by losing control of her mount. …

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