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Hutchins, Kinnear, and Patoine
entered into a series of oral agreements about the care, training and racing of
a horse. In this trial court
opinion, the court says that the oral agreement is void because not in writing
but orders certain sums to be paid as reimbursements among the parties.
These consolidated cases involve alleged oral agreements
concerning the ownership of three racehorses and the construction of a
veterinary clinic. In CV‑01‑240 two veterinarians Dr. Douglas
Hutchins of Lyman and Dr. Paul Kinnear of Staten Island have brought a three
count amended complaint against a carpenter and horse trainer Ronald Patoine of
Old Orchard Beach. The amended complaint alleges that an oral agreement was
reached regarding the care, training, racing and ownership of a horse named
Action Goal. The claim is that Dr. Kinnear would provide the horse, Dr. Hutchins
would provide veterinarian services and Mr. Patoine would board, train and care
for the horse. The other expenses and earnings, if any, would be split equally
three ways. After about five years the horse would be bred with the net proceeds
split. The claims are for breach of contract, unjust enrichment and specific
performance/promissory estoppel. Mr. Patoine has filed a counterclaim against
Dr. Kinnear for unpaid boarding and training fees for Action Goal and a horse
named Image of Elegance through April of 1997 and has brought a counterclaim
against both plaintiffs for two‑thirds of the costs of maintaining Action
Goal to date.
In CV‑01‑241 an amended complaint was brought by
Dr. Hutchins against Mr. Patoine concerning a horse named All Star Edition where
it is claimed that the horse was owned in equal shares. All Star Edition was
eventually sold and has done very well for its new owners. The amended complaint
raises the same three causes of action as CV‑01‑240. A counterclaim
was filed seeking in Count I a promised bonus for carpentry work done at Dr.
Hutchins' veterinary clinic, in Count II damages for unjust enrichment regarding
the carpentry work, in Count III boarding and training expenses for another
horse called Keystone Quick and in Count IV a claim for unjust enrichment
involving Keystone Quick. The plaintiff then filed what were called additional
claims or counterclaims to the counterclaims in the same three counts involving
Keystone Quick.
A consolidated hearing was held, numerous exhibits were
submitted and closing arguments were given.
This case involves three individuals who all clearly love
horse racing and who acted consistently with an apparent tradition in their
business of having oral agreements with undisclosed owners. These agreements,
while officially frowned upon by the governing association, The United States
Trotting Association, and while not consistent with the requirements of state
harness racing commissions, are common. It also appears that in most cases they
work out well enough. The individuals know and trust each other, their promises
are good and the understandings are honored. When the relationship fails, as in
these two cases, problems can develop with the legal requirements for written
contracts, the obligation to clearly establish what was agreed to and the
documentation of expenses.
Under the Maine Statute of frauds, 33 M.R.S.A. § 51(5)
"No action shall be maintained in any of the following cases: ... Upon any
agreement that is not to be performed within one year from the making
thereof." Here the alleged oral contracts for the joint ownership and
sharing of expenses and earnings for the horses all extended beyond a year.
To prevail on a claim of unjust enrichment "a party must
prove (1) that it conferred a benefit on the other party; (2) that the other
party had 'appreciation or knowledge of the benefit' and (3) that the
'acceptance or retention of the benefit was under such circumstances as to make
it inequitable for it to retain the benefit without payment of its value."
' Howard & Bowie, P.A. v. Collins,
2000 ME 148, ¶ 13, 759 A.2d 707, 710.
Regardless of whether promissory estoppel might otherwise
apply, see its definition at Daigle
Commercial Group, Inc. v. St. Laurent, 1999 ME 107, ¶ 14, 734 A.2d 667,
672, it is not applicable in contracts claiming to last more than a year. See
Daigle at ¶ 14 and the cases cited there.
The question then becomes whether the theory of unjust
enrichment can provide any remedy to the plaintiff veterinarians or the
defendant. In answering that question it is necessary to both determine what the
parties agreed to and did and how the facts match the requirements of unjust
enrichment.
While there is a dispute among the parties as to what was
agreed to, the documents that are in evidence are very helpful in establishing
what the arrangements really were. The payments regarding All Star Edition and
China Blaze, another horse that was indirectly involved in this case, and the
payments of stake fees and insurance fees by the veterinarians after their
ownership in Action Goal was supposedly transferred to Mr. Patoine convinces me
that the parties entered into an agreement to share expenses, work and earnings
for the horses. A stake race is a race with greater potential purses involving
generally faster horses. In order to participate a stake fee must be paid in
advance to reserve a place for the horse. Later a separate fee must be paid if
the horse actually races. It would be illogical for business people to pay a
stake fee on a horse they did not own.
I do find that the requirements of unjust enrichment have been
met as horses or veterinary services were provided to Mr. Patoine, he knew of
the benefit and it would be inequitable for him to retain the benefit without
paying its value. Assessing damages is far more difficult as Mr. Patoine, with
some temporary exceptions, did board and train the horses for which he should be
compensated. Additionally, one horse had minimal earnings and was transferred to
Mr. Patoine. Another had modest earnings and is now being bred while the third
was sold and then became very successful under new ownership and training.
Neither side has produced financial records, other than the lifetime earnings
for each horse, which are very helpful. The individuals involved are good with
horses but in these cases were not particularly good accountants.
The horse Action Goal is now in the care of Mr. Patoine. I am
unable to determine whether funds should be transferred to or from Mr. Patoine
once Action Goal's earnings and expenses are balanced. Since Action Goal is
really owned by Doctors Hutchins and Kinnear and Mr. Patoine and it would be
unjust for Mr. Patoine to retain the benefit of the horse's foals it shall be
sold within 90 days and the net proceeds from the sale shall be divided equally
among them, one‑third for each person. The parties may obviously agree to
other arrangements if they wish to. The counterclaims regarding Action Goal and
Image of Elegance likewise fail given the lack of written contracts, the
imprecision of the financial information and the decision to have Action Goal
sold as the just resolution of the dispute regarding Action Goal.
The horse All Star Edition was sold for $22,500. Since then it
has done very well with lifetime earnings of about $150,000, nearly all of which
are under its new owners. I will order that the sale proceeds of $22,500 be
divided equally between the owners Dr. Hutchins and Mr. Patoine. I cannot
determine what the net earnings of All Star Edition have been since it was sold
as its expenses are unclear and I cannot find that the horse was likely to have
achieved those earnings without a change in ownership, trainers and racing
locations.
Keystone Quick made very little money and was given to Mr.
Patoine. No money will exchange hands for Keystone Quick as I cannot determine
that it would be just to have either Dr. Hutchins or Mr. Patoine pay the other
since the horse was given to Mr. Patoine and since he had kept the earnings from
the horse after the first year.
Lastly, I am not convinced that there was an agreement to pay
Mr. Patoine a bonus beyond his wage of $17.00 per hour for his carpentry
services. If there was, there was no promise as to the amount of the bonus.
The entries are:
In CV‑01‑240 Judgment
for the defendant on Counts I and III of the amended complaint. On Count II
Action Goal shall be sold within 90 days and the net proceeds divided in equal
shares among the three parties. Judgment for the plaintiffs on the counterclaim.
In CV‑01‑241 Judgment
for the defendant on Counts I and III of the amended complaint and on Counts I,
II and III of the counterclaim of November 20, 2001 to the counterclaim.
Judgment for the plaintiff against the defendant in the amount of $11,250.00,
interest and costs on Count II of the amended complaint. Judgment for the
defendant on the counterclaim.
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