03/27/2009 12:00AM

Jackson seeks revision of California law


LEXINGTON, Ky. - Stonestreet Stables owner Jess Jackson is seeking revisions to California law covering dual agency and horse sales.

Jackson-supported Senate Bill 254 would widen the law to include show horses and would allow prevailing parties in sale-related lawsuits to collect their legal expenses, as well as triple damages. State senator Pat Wiggins introduced the bill on Feb. 24.

"The bill modifies the statute to make the line between what is prohibited and what is okay very clear," said Kevin McGee, Jackson's attorney and president of the Jackson-founded Horse Owners' Protective Association.

Dual agency is a practice in which a single agent represents both buyer and seller in a transaction. California law already makes undisclosed dual agency illegal. In 2006, a Kentucky law backed by Jackson and based on California's statute made undisclosed dual agency illegal. Florida's Department of Agriculture also issued new regulations last June banning undisclosed dual agency and mandating disclosure of some veterinary procedures, among other efforts to increase transparency in equine transactions. Similar legislation introduced in Virginia this year did not make it out of committee.

California's Senate Bill 254 would require a written bill of sale or purchase acknowledgement for "any sale, purchase, or transfer of an equine" and covers sales involving any breed used for racing or showing. The new wording specifically includes auction receipts as acceptable as a bill of sale. The proposed legislation also calls for a "security agreement" for such transactions, detailing the purchase price and signed by both buyer and seller or their agents (in the case of stallion seasons and shares, the syndicate or stallion manager could sign). The bill also adds a provision that requires the losing party to pay the prevailing party's legal expenses in a lawsuit. McGee, Jackson's attorney, believes that will act as a deterrent against harassment lawsuits against sellers or agents who have done nothing wrong.

California's current statute bans agents from receiving fees or compensation for equine transactions without the buyer's and seller's agreement in writing. But the revised language would allow agents to accept up to $500 in compensation, fees, or "items of value" from a third party without disclosing it. McGee called the $500 limit a "safe harbor" covering small gifts or dinners that allow agents to develop business relationships.

The revisions also call for dual agents to provide buyer and seller with copies of all financial records pertaining to the transaction on the principals' request.

Bill Baker, a vice president at California's Barretts auction house, said the company supports the legislation. Jackson and McGee consulted with the sale company, whose attorney helped draft the revisions.

"It's a little more specific," Baker said. "I don't think this kind of thing is a problem in California, but that doesn't mean we shouldn't have laws against it."

The new, more specific language should help all parties at auctions know what the rules are and help bring California in line with Florida and Kentucky, two other major sale venues, Baker said.

McGee said, "It gives buyers, sellers, consignors, and bloodstock agents guidance on what they could get in trouble for. . . . Having a bill like this lets everyone know where the lines are and allows people to more efficiently conduct their business and prevents unnecessary misunderstandings."

Sky Mesa not back on duty yet

Sky Mesa's return to the Three Chimneys stallion roster has been delayed while farm staff treat a skin-level infection on the stallion's incision from colic surgery.

"The infection is on the surface of the incision, no deeper than skin level, and is being treated topically," explained the farm's president, Case Clay.

A 9-year-old Pulpit horse, Sky Mesa underwent colic surgery on Feb. 15 and again on Feb. 20 at Rood and Riddle Equine Hospital in Lexington. He returned to Three Chimneys in Midway, Ky., on Feb. 25 and continues to thrive, according to Clay. The farm initially hoped to breed Sky Mesa again on March 20, but opted to postpone that until the infection has cleared up entirely.

"We're basically going to let him tell us when he's ready," Clay said. "He's doing well."

Sky Mesa is the sire of Grade 1 winner Sky Diva and such other graded winners as Terrain, Storm Mesa, Skylighter, Beethoven, and General Quarters. He stands for $30,000.