NEWS
Liability through association
Posted: Tuesday, April 16, 1996
Horsemen, jockeys, and owners might consider additional insurance in light of Interwit caseRepercussions from the now-infamous Interwit case will surely have far-reaching consequences throughout the Thoroughbred industry. Where before it was almost universally accepted that owners assumed all risks once they entered a horse in a race, the decision of a California arbitrator could change that fact and hold jockeys and trainers responsible for the actions of 1,200-pound animals.
To revisit the specifics of the ill-fated Interwit's last race: In a Hollywood Park turf race in 1992, trainer Ted West saddled a three-year-old colt named Interwit that he owned in partnership with two others. Though Interwit had won an overnight stakes at Golden Gate Fields in his previous start, the colt had developed a curious habit of lugging in once he cleared the field.
"It's not that uncommon of a habit, but I told the jockey to keep the whip in his left hand," West said. "For whatever reason, he didn't listen and hit the horse right-handed."
Because of, or in spite of the whipping, depending on whom you talk to, Interwit then swerved into the rail and went down in front of Buchanan Hollow, who subsequently toppled over the fallen Interwit. Both colts were injured and had to be destroyed, and the owners of Buchanan Hollow sued the owners of Interwit, along with Hollywood Park, Pat Valenzuela, and West. To the surprise of many, they won.
The arbitrator ruled that Hollywood Park was 33.3% liable, Valenzuela was 50% liable, and West as trainer was 16.7% liable. The owners of Interwit were not found directly liable, but the judge said that since the jockey was an employee of the owners, he transferred the jockey's liability to the owners.
"In a nutshell," West said, "what I told the arbitrator was that once a trainer puts a jock up on a horse in the paddock, we become spectators to the races, just like everybody else, and have absolutely no bearing on what takes place during the race. I told him that if a trainer was found liable for what happens during the running of the race, or an owner, that it would be akin to Charles Barkley falling over Michael Jordan in a basketball game and having the owner of the Phoenix Suns sue the owner of the Chicago Bulls. I think it's exactly the same thing."
An important thing to remember was the ruling came from an arbitrator and not in a court of law, so it is not a precedent-setting case. However, the ruling and its potential threat to the livelihood of horsemen has sent shock waves through the barns of several top owners and trainers.
"We have liability insurance, but I don't even know if it would cover anything like that," said Bill Mott, 1995 Eclipse Award-winning trainer. "We've got workers' comp and general liability, but I'm not savvy enough to even know if I would be covered in something like that. I'm just a horse trainer."
Mott said he would contact his insurance agent and check his policy, but he was not sure additional insurance is practical.
"There's so many clauses in insurance policies that the policies probably look like a damn dictionary," Mott said. "What are you going to do? To think that a judge or somebody could financially wipe you out is a scary deal."
Likewise, the matter raises questions of insurance for jockeys as well. John Giovanni, national manager of the Jockeys' Guild, feels that jockeys need to protect themselves if they are potentially going to be held liable in all accidents.
"(Jockeys) do things mechanically sometimes," Giovanni said. "It's just programmed into a jockey-in the heat of the competition you do things to make a horse run. If he's not responding to one thing, you do something else. I certainly would hate to think that a lot more of this would come down the pike, but I'll tell you, personally ... I would want to be protected."
New developments resulting from the ruling have caught the insurance industry unprepared. None of the equine insurance agents contacted for this story were aware of any policies that were on the market for the protection of jockeys and trainers. As it stands now, riders could not protect themselves even if they so desired.
"I'm not aware (of any specific policy) to protect jockeys in something like this," said Mark Berry, vice president of American Specialty Underwriters, Inc., an equine insurance company based in Stoneham, Massachusetts. "There is a ... commercial liability policy (that) would pay for claims that arise out of one's profession that are for bodily injury or property damage, but generally they exclude any claim that was the result of athletic participation."
Giovanni is quick to point out that most jockeys would have trouble affording additional insurance payments, as many must assume personal life and disability payments on their own.
Trainers face the same problem of insuring for this potential disaster. Most carry some form of liability insurance, along with workers' compensation and possibly a care, custody, and control policy, but how many can afford an additional annual premium on top of day-to-day expenses of running a racing stable?
"I think it would put most small (trainers) out of business," West said. "When you start talking to people about liability they may just say, 'Who needs this?' I'm sure the insurance companies would love it, but where would it all end?"
Though they have the least control over the performance of their horses, owners ultimately will be the ones most at risk in light of the Interwit case. Just as the arbitrator ruled that the jockey was an employee of the owner, so could trainers argue that they were in the same position and absolve themselves of any liability.
Five owners of stables of national prominence were contacted for this article, and not one of them was willing to discuss the case on the record. However, one owner, whose past stable included a Triple Crown race winner, said that the Interwit case raises more questions than it answered.
"I would think that if (one) horse was not negligent as judged by the track steward, then there shouldn't be a case," said the owner, who wished not to be identified. "I think, on the other hand, if there is gross negligence on the part of a horse, it could be valid. It's complicated; I think you're looking for a simplistic answer and I don't think there is one."
Richard Hoffberger is president of Hoffberger Insurance Group, a national equine insurance agency, as well as the Maryland Thoroughbred Horsemen's Association. Hoffberger said there is protection available on the market to ensure owners do not have to risk everything to participate in a sport they love.
"You can buy a third-party liability policy (whose) design and concept ... is to protect the policy holder, in this case the owner, in the event of suit from injury to a third party's property, in this case his horse, due to negligence," Hoffberger said. "I guess the question was who was negligent. (For liability purposes) you're out of the racetrack area into regular liability law."
Hoffberger advises owners to make sure the wording in insurance policies specifies that the liability covers racing stock. He said such policies are readily available from most insurance companies, and they will cover expenses incurred in legal defense, as well as claims against the policy holder.
John Mabee, owner of the San Diego, California-based Golden Eagle Insurance Company, agrees with Hoffberger.
"For racing purposes, owners would need a liability policy," Mabee said, "and if you boarded or trained horses, you'd need a care, custody, and control policy as well. The liability for $1-million in coverage would be $225 annually if you had one horse, with additional horses costing a greater amount. A care, custody, and control policy would be $350 (annually). You sort of need both to take care and be fully protected."
So where does the Interwit decision ultimately leave those who rely on racing for their livelihood? The most important aspect of the Interwit decision to remember is, for now, that this case is an aberration and not a precedent. However, horsemen and insurance executives agree that, with a litigious society and unforeseeable court decisions, the time where accidents are scrutinized and responsibility assigned may be soon in coming. If that becomes commonplace, insurance agents may become as prominent on the backside as veterinarians and farriers.
Jim Cullen is a staff writer for Thoroughbred Times.
