Harnish v. Liberty Farm Equine Reprod. Ctr., LLC
| Decision Date | 25 June 2013 |
| Docket Number | Case No. 3:10-cv-511-PPS |
| Parties | BRENT HARNISH, JULIE HARNISH, STEVEN HECKAMAN, and JANIS KENGIS, Plaintiffs, v. LIBERTY FARM EQUINE REPRODUCTION CENTER, LLC, DEGRAFF STABLES KENTUCKY, LLC, DEGRAFF STABLES, INC., and ROBIN DEGRAFF, Defendants. |
| Court | U.S. District Court — Northern District of Indiana |
There's no denying that some people have great jobs. Take a federal judge, for example. You work indoors, there's no heavy lifting, and the work is pretty interesting. It's a good gig. On the other end of the spectrum is the job at issue in this case - equine semen collector. See Dirty Jobs: Horse Breeding (Discovery Channel; Season 7, Episode 0; posted online on Mar. 31, 2011; available at http://www.mikeroweworks.com/2009/03/horse-breeding- dirty-jobs/). That's the job David Dooge did for defendant Liberty Farm Equine Reproduction Center, LLC. As we'll find out in more detail in a moment, the semen is collected with an artificial vagina (an "AV" for short). The reason we're here is that there was a glitch in the process. The unfortunate combination of sharing AV covers and the introduction of a sexually transmitted disease previously thought to be eradicated in the United States caused several of the stallions at Liberty Farm to become infected. That, in turn, reduced their value. Four owners of afflicted horses arenow trying to recoup the losses.
Two summary judgment motions are before me. First, Liberty Farm asks for summary judgment on a tort clumsily referred to as the "violation of privacy through publication of private facts." It also seeks summary judgment on the more generic invasion of privacy claim as well as the tortious interference and negligent or reckless supervision claims asserted against it. (DE 137.) There are a number of other claims not being challenged on summary judgment by Liberty Farms including bailment, negligence, professional negligence and breach of fiduciary duty claims. Second, the other defendants (Robin DeGraff and two DeGraff Stables companies) ask me for summary judgment on all of the claims against them. (DE 138.)
I'll take DeGraff's motion first. She essentially argues that Plaintiffs Brent and Julie Harnish, Steven Heckaman and Janis Kenghis (whom I'll collectively refer to as the "Stud Owners") haven't uncovered enough evidence to allow me to disregard Liberty Farm's corporate formalities and impute any of its liabilities to her or her other companies. I understand what these defendants are saying, but I want to hold off on dismissing them, at least for now. To be sure, a plaintiff attempting to pierce the corporate veil of a defendant normally faces a steep hurdle. But the Stud Owners have pointed to at least some evidence suggesting that it might be appropriate here. And in any event, this is a question of equity and not law, so it will be up to me to decide after a jury returns a verdict. It may even be unnecessary if there is no liability to impute to DeGraff and her companies (or if there is, but Liberty Farm has sufficient assets to satisfy it). In light of that, the most efficient course of action is to keep them in the lawsuit for the time being and address any veil piercing arguments as needed after the jury trial.
A different result is warranted with respect to Liberty Farm's partial summary judgmentmotion. The tort of violation (or invasion) of privacy through the publication of private facts is difficult to formulate because there aren't a lot of reported decisions encompassing that sort of claim, and those that do address it usually focus on different elements. But one thing is clear. In order for the disclosure of a private fact to be actionable, that fact must be "highly offensive" - or significantly embarrassing - to the person asserting the claim. That's where the Stud Owners' claims fall short. It's just too hard for me to believe that a horse owner would suffer a sufficient degree of personal embarrassment simply because it became known that his or her animal was infected with an STD, and the Stud Owners haven't presented me with any evidence or even argument to make me think otherwise. They certainly might have suffered pecuniary damage from the disclosure, of course, but that's covered by their remaining claims.
I also agree with Liberty Farm with respect to the negligent/reckless hiring and supervision claims. The only person who the Stud Owners say was negligently or improperly hired or supervised is Dooge. Perhaps he didn't have enough experience at the time he was hired. But it doesn't matter now. Dooge has worked for DeGraff and her operations for at least ten years, and there's undisputed evidence he gained extensive breeding experience during this time. So regardless of whether he should have been hired in the first place, any negligence or recklessness a decade ago isn't a proximate or substantial cause of an injuries that occurred years later. Similarly, given Dooge's extensive experience breeding horses, there wasn't any reason for his supervisor (DeGraff) to think he was so incompetent as to warrant close supervision. And the Stud Owners haven't produced any evidence to the contrary. They just say that DeGraff must have been negligent in supervising Dooge given the ultimate outcome. That's not enough.
Therefore, and for the reasons set forth below, the Motion for Summary Judgment (DE138) is DENIED, and the Motion for Partial Summary Judgment (DE 137) is GRANTED as to all challenged claims.1
FACTUAL BACKGROUND
The facts of the case are complicated but mostly undisputed. The Stud Owners are four individuals who own several stallions used for breeding purposes. (DE 137-2 at 5.) Liberty Farm is a horse breeding facility located in Midway, Kentucky. (Id. at 1-2.) It's sole member is DeGraff, who manages the company with the assistance of a number of employees and associates, including Dooge. (DE 142-2 at 3; DE 143 at 2; DE 143-2 at 8.) DeGraff Stables, Inc. is an Ohio corporation that owns and breeds horses from an Ohio facility. (DE 137-2 at 2.) DeGraff is an officer and the sole owner of the company. (DE 142-1 at 5.) DeGraff Stables Kentucky LLC is a Kentucky limited liability company; DeGraff is the sole member of the entity. (DE 143 at 2.)
Before I start on my narrative of the case, I should address one factual issue that has become relevant - the corporate relationship and interactions between DeGraff, Liberty Farm, and the other two DeGraff companies. DeGraff says that when she communicated with at least some of the Stud Owners, she was acting on behalf of Liberty Farm. However, there is some evidence that she solicited them to use her breeding services before the company was even formed, and that she never indicated she was merely acting as a representative for a third party. (DE 140-1 at 1; DE 140-2 at 1; DE 140-3 at 1; DE 142-1 at 31-32.) There's also some evidence that Liberty Farm failed to observe normal corporate practices, like taking and retaining companymeeting minutes. (DE 142-1 at 12; DE 142-6 at 1-2.) Finally - at least for the purpose of this opinion - there's evidence that assets from the various DeGraff companies were used interchangeably by one another and by DeGraff and Dooge for their own personal use, including a Cadillac, house and even a common website. (DE 142 at 2; DE 142-2 at 2; DE 142-4.)
Let's move on to the meat of the story. In November 2007, DeGraff began soliciting the Harnishes to use her operation to breed their stallion, Gentlemen Send Roses (known informally as "Gus"). (DE 29 at 2; DE 137-5 at 4.) The Harnishes had some hesitation, but on December 14, 2007, they took her up on the offer and sent Gus to what was then Liberty Farm to have his semen collected for breeding. (DE 137-2 at 5.) On February 18, 2008, Heckaman and Kenghis sent two of their stallions (named Potential Investment and Potential Asset) to Liberty Farm for the same purpose. (Id.; DE 137-6 at 2.) Shortly thereafter, the Harnishes purchased another stallion, Invited Back, which they had taken to Liberty Farms to be put in the ongoing breeding season. (DE 137-5 at 5.)
All four horses had their semen collected while at Liberty Farm. It generally was a three person process. DeGraff would handle the horses. (DE 142-1 at 13-14.) An employee named James Skipper prepared them for collection. (Id.) And Dooge did the actual collecting. (Id.) He also cleaned the instruments used in the process, including the AV, which is normally used with a cover. (Id.) At the time Liberty Farm and DeGraff were collecting from the Stud Owners' stallions, they sometimes shared AV covers between the different horses - which, as we will soon see, will be an important fact in this case. (Id. at 21.)
That takes me to the heart of the case. Unbeknownst to the Stud Owners (or DeGraff and Dooge, for that matter), at around the same time that they sent their stallion to Liberty Farm,another horse arrived on the scene. On December 17, 2007, Zips Heaven Sent (Zips for short) was taken to the farm for on site breeding and semen collection. (DE 137-2 at 4-5.) The problem was that Zips was infected with contagious equine metritis, or CEM. (Id. at 5.) This is a highly contagious sexually transmitted disease that's spread between horses from mating or - most relevant here - the use of contaminated breeding equipment and instruments. (DE 142-7 at 1-2.) Zips ultimately infected seven horses with CEM. (Id.; DE 137-13.) Evidence in the case suggests that the primary culprit behind the spread is the sharing of AV covers. (DE 142-1 at 21; DE 142-7 at 2.) Further complicating matters, at the time the United States was thought to be a CEM-free country, and horses generally weren't tested for the disease. (DE 137-3 at 3.) So there was no real way to detect the infection, at least not domestically. (Id.)
In any event, Liberty Farm sold horse semen throughout 2008, and it was successfully inspected by the USDA in March and October of...
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