ANOTHER LEGAL CHALLENGE FOR “AS IS” CLAUSES AT AUCTION SALES

Last week, I posted an article titled “When an ‘As Is’ Horse Purchase Isn’t” about a buyer at the 2013 Standardbred Horse Sale Company yearling sale who purchased a filly for $67,000 and two days later the buyer’s veterinarian discovered that the filly had a major heart defect. Ultimately, a jury in late 2018 in Pennsylvania relieved the buyer of the obligation to pay for the filly even though the auction company had an obvious and unambiguous “as is” clause in its terms and conditions of sale.

The day after I published the article, a lawsuit was filed in Lexington, Kentucky, alleging that some veterinarians at a leading Lexington-area clinic altered the dates on X-rays in the repository at Keeneland auction house to incorrectly indicate that the X-rays had been taken within three weeks of a yearling auction. Keeneland has a policy that X-rays must be current within 21 days for horses sold at its fall yearling sale and 15 days for other sales. The plaintiff—who paid $400,000 for 24 horses at Keeneland sales between 2007 through 2016–claims he has been defrauded.

The basis for the lawsuit is that in 2017 eight vets from the clinic in question admitted to the Kentucky Board of Veterinary Examiners that they had modified X-ray dates and consequently agreed to financial settlements.

While Keeneland is not a defendant in the lawsuit, admissions of guilt by vets call into question the integrity of the company’s auctions. A buyer looks at X-rays in a repository to determine the “as is” condition of a horse. If the dates of X-rays have been altered, the “as is” representation is misleading at best and fraudulent at worst. “As was” is a better descriptor.

Sales companies are put into an unenviable position when their reputation is tainted by the actions of unscrupulous veterinarians or sellers.

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