N.J. Thoroughbred Horsemen's Ass'n, Inc. v. Alpen House U.L.C.

• Decision Date: 12 September 2013
• Docket Number: Civil Action No. 08–613 (JEI/AMD).
• Parties: NEW JERSEY THOROUGHBRED HORSEMEN'S ASSOCIATION, INC.; ELR Corporation; Deckert Enterprises LLP # 2; and Timothy Hills, Plaintiffs, v. The ALPEN HOUSE U.L.C., Defendant.
• Court: U.S. District Court — District of New Jersey

942 F.Supp.2d 497

NEW JERSEY THOROUGHBRED HORSEMEN'S ASSOCIATION, INC.; ELR Corporation; Deckert Enterprises LLP # 2; and Timothy Hills, Plaintiffs,

v.The ALPEN HOUSE U.L.C., Defendant.

Civil Action No. 08–613 (JEI/AMD).

United States District Court, D. New Jersey.

May 2, 2013.

Opinion on Reconsideration in Part Sept. 12, 2013.

Lomurro, Davison, Eastman & Munoz, P.A. by Gary McLean, Esq., Peter Koenig, Esq., Freehold, NJ, for Plaintiffs.

Eckert Seamans Cherin & Mellott, LLC by Robert Zoller, Esq., Christopher Torkelson, Esq., Trenton, NJ, for Defendant.

OPINION

IRENAS, Senior District Judge.

This diversity suit arises out of an outbreak of Equine Herpes Virus—Type 1 (“EHV–1”) among certain thoroughbred horses stabled at Monmouth Park racetrack during the last months of 2006.¹ The source of the infection was later traced back to a Canadian training facility, Adena Springs North, owned by Defendant The Alpen House.² Plaintiffs ELR Corporation, and Deckert Enterprises, LLP # 2, whose horses were not infected but were quarantined due to possible infection³, and the New Jersey Thoroughbred Horsemen's Association, Inc. (of which the individual Plaintiffs are members), seek to recover damages for the effects of the quarantine, asserting theories of strict liability and negligence. Defendant moves for summary judgment. For the reasons stated herein, the Motion will be granted in part and denied in part.

I.

“EHV–1 is a virus that is found in most equine populations throughout the world.” (Torkelson Decl. Ex. O, Expert Report of Veterinarian Nikolaus Osterrieder, p. 3) EHV–1 infection can cause “respiratory problems,” “spontaneous abortions in pregnant mares,” and “the neurologic form of the virus can reach high morbidity and mortality rates.” ⁴ (Torkelson Decl. Ex. M, New Jersey Dept. of Agriculture Oct. 24, 2006 Memorandum) The virus spreads quickly from horse to horse through coughing, sneezing, or by direct contact with infected horses, feed, or equipment. ( Id.) “The incubation period of EHV–1 is typically 2–10 days.” ( Id.) The parties do not dispute that the industry-wide standardized response to an EHV–1 outbreak is to limit virus transmission through biosecurity measures, including quarantines of infected and potentially infected horses.

The events leading up to the quarantine began in Ontario, Canada. On October 6, 2006, Adena Springs North tested at least 14 of its horses for EHV–1 infection. (McLean Cert. Exs. B–K, M, O–Q).⁵ All of the horses tested negative for the virus. ( Id.)

Over the course of October 9th, 10th, and 11th, three horses in Adena Springs North's Barn # 1—Battling, Hitting Hard and Pfifficus—exhibited “low-grade fevers.” (Torkelson Decl. Ex. H—Defendant's Answer to Interrogatory # 8) Pfifficus was one of the horses who tested negative for EHV–1 on October 6th (McLean Cert. Ex. E); the other two horses were not tested.

On October 12th, Defendant transported two horses—Morgenrot and Spring Waltz—from Adena Springs North to Monmouth Park. (Statement of Undisputed Facts “SUF” ¶ 12) Because the horses were being imported into the United States, the Canadian Food Inspection Agency issued Veterinary Health Certificates for both horses. (See Torkelson Decl. Exs. I, J) The certificates state that the horses were “inspected on the premises of origin [on October 11, 2006] and found free from evidence of communicable disease, and insofar as can be determined, has not been exposed to communicable disease during the sixty (60) days preceding exportation.” ( Id.)

Also, a separate “Certificate of Veterinary Inspection” for each horse, signed by Adena Springs North's Attending Veterinarian Dr. Daniel Duncan on October 12, 2006, specifically states,

The horse(s) listed on this Certificate of Veterinary Inspection (CVI) have not originated from nor been stabled on a premise under quarantine or restriction due to EHV–1 or from a premise which has had equine herpes virus diagnosed during the previous 30 day period.

( Id.) The medical records for Spring Waltz and Morgenrot do not indicate that they were among the horses tested for EHV–1 on October 6, 2006. (Torkelson Dcel. Exs. I, J)

When Spring Waltz and Morgenrot arrived at Monmouth (on October 12th), their trainer Justin Nixon, put them in Barn 18, took their temperature “as is procedure,” and observed nothing “unusual” about either horse. (Torkelson Decl. Ex. T, Nixon Dep. p. 43)

The next day (October 13th), Northern Emperor, a horse housed in Barn # 1 at Adena Springs North, “was found down in his stall.” (SUF ¶ 14; Torkelson Decl. Ex. H—Defendant's Interrogatory Answer # 8) A neurologic exam was performed, and Northern Emperor was euthanized the same day. (Torkelson Decl. Ex. K) ⁶

The following day, on October 14th—two days after arriving at Monmouth Park—Spring Waltz exhibited a high temperature (SUF ¶ 15), which, the parties agree, is often the first clinical symptom of EHV–1 infection.⁷ Spring Waltz's trainer, Justin Nixon, immediately told both the Monmouth Park veterinarian, Dr. Keegan, and The Alpen House veterinarian, Dr. Duncan, about Spring Waltz's fever. (SUF ¶¶ 16, 18) ⁸

Also on the 14th, back at Adena Springs North, Defendant initiated a quarantine of Barn # 1. (Torkelson Decl. Ex. H—Defendant's Interrogatory Answer # 8)

Three days later (October 17th), another horse at Adena Springs North—Rock Bird—was transported to the hospital after exhibiting “neurological symptoms.” (SUF ¶ 19) Rock Bird's medical chart reads, “10/18/2006 12:00 AM EHV–1 PCR (Blood) ... Positive.” (Torkelson Decl. Ex. L) ⁹

On October 18, 2006, Haygard Equine Medical Institute wrote to Dr. Duncan at Adena Springs North enclosing a “completed biosecurity assessment report pertaining to EHV–1 and your training stables.” (McClean Cert. Ex. R) There is no other record evidence concerning when the biosecurity assessment was requested, or why it was requested.

On October 22nd, Nixon observed that “several” ¹⁰ of his horses in Barn 18 at Monmouth Park had spiked temperatures. (SUF ¶ 22) That same day, Dr. Keegan (at Monmouth Park) and Dr. Duncan (at Adena Springs North) spoke on the phone. (Torkelson Decl. Exs. T, V—Nixon Dep. p. 51; Keegan Dep. p. 42) Dr. Keegan testified about his thoughts immediately after speaking to Dr. Duncan:

A: It worried me ... that I could have a similar situation [as Adena Springs North]. I could have herpes or something of a neurological effect. I had five horses with a fever, so obviously it was probably a virus, so yeah, I was concerned.

Q: Why would you have those thoughts?

A: ... [B]ecause I had horses come in earlier, I believe a week before from Canada.

(Torkelson Decl. Ex. V—Keegan Dep. p. 43) Based on these concerns, Dr. Keegan began voluntary quarantine efforts in Barns 18 and 17 ¹¹, and contacted “one of the head [New Jersey] state veterinarians” to alert her to a possible “herpes virus” outbreak. (Torkelson Decl. Ex. V—Keegan Dep. p. 43, 45–46)

The next day, October 23rd, “Dr. Keegan began to collect samples from febrile horses ... for diagnostic testing.” (SUF ¶ 25) The University of Kentucky Livestock Disease Diagnostic Center later confirmed that some of those horses tested positive for EHV–1. (SUF ¶ 27)

At 10:30 a.m. on October 26, 2006, after receiving the data from the University of Kentucky, the New Jersey Department of Agriculture issued a formal quarantine for Monmouth Park. (SUF ¶ 28) ¹² The official memorandum from the New Jersey State Veterinarian stated that the quarantine would be maintained “for a minimum of 21 days after the last suspected new infection.” (Torkelson Decl. Ex. A)

The quarantine of Barn 17, where all of the individual Plaintiffs' horses were housed, lasted until November 18, 2006 (i.e., 24 days). (SUF ¶ 29) The quarantine of Barn 18 lasted until December 13, 2006, and Barn 21 was quarantined until December 19, 2006.¹³ ( Id.) As a result of the quarantine, the individual Plaintiffs' horses were prevented from racing, and therefore lost purse money.¹⁴

After the quarantine, the NJTHA established the 2006 EHV–1 Emergency Relief Compensation Fund to reimburse owners and trainers for their costs directly associated with the quarantine. (SUF ¶ 30) The New Jersey Sports and Exposition Authority (NJSEA) ¹⁵, with the permission of the New Jersey Racing Commission, gave NJTHA $500,000.00 from the “2006 purse underpay ¹⁶” to create the fund. (Torkelson Decl. Ex. N) Through the fund, the individual Plaintiffs were compensated for expenses such as veterinary bills and expenses incurred from implementing “biosecurity measures” to prevent the spread of EHV–1. (SUF ¶ 38; Torkelson Decl. Exs. E–G) ¹⁷ The individual Plaintiffs also submitted claims for lost purses but the fund administrator¹⁸ rejected those claims as “hypothetical expenses.” (Torkelson Decl. Exs. E–G)

The Second Amended Complaint asserts two counts. The first count asserts that Defendant The Alpen House “is strictly liable both directly as owner of the infected horses, and by virtue of vicarious liability for the strict liability of its trainer [Justin Nixon] for the condition of the horses which caused the illnesses and quarantine.” (Second Amended Compl. ¶ 23)

The second count asserts that The Alpen House “owed a duty to the plaintiffs ... to properly care for its horses and to promptly notify the officials where its horses were stabled of any adverse conditions of its horses which might affect others,” and that The Alpen House “negligently failed to supervise its horses and to immediately notify appropriate persons of the dangerous condition of its animals and is responsible for the failure of its agents to take appropriate and timely action to halt the spread of EHV–1.” (Second Amended Compl. ¶¶ 25–26)

Defendant The Alpen House moves for summary judgment on both counts.

II.

Summary judgment is appropriate when “the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any...