Seventh Circuit hears case of show horse kept alive by insurer

CHICAGO (CN) — What is the worth of a horse?

This was the question at the heart of a case argued before the Seventh Circuit on Tuesday, in an appeal from an Indiana resident named Julie Greenbank who argues she should have been allowed to euthanize her $500,000 show horse Thomas, aka Awesome At This, after he sustained career-ending injuries.

Great American Assurance, the company that insured Thomas, prevented Greenbank from doing so. Citing an element of the insurance policy that allows the company to take control of the horse's medical care, it instead brought him to two veterinarians in 2018 who helped treat his chest abscesses and right leg tear. Thomas is still alive, but his days as a show horse are over.

Greenbank sued Great American in 2018, arguing in her complaint that its actions violated the company's equine mortality insurance policy. The complaint characterizes Thomas' extensive veterinary treatments as a cynical attempt to avoid paying Greenbank the $500,000 it would have owed her had Thomas been put down. Her lawsuit also said that euthanizing Thomas, as his trainer Chuck Herbert and a third veterinarian named Raymond Stone initially suggested, would have been more humane.

"Despite those most knowledgeable of Thomas’ condition recommending his humane destruction, [Great American] exercised control over Thomas and his treatment and... began a course of radical, controversial and enduring medical treatment which subjected Thomas to excessive suffering so as to avoid payment of a covered loss under the policy," the complaint stated.

After the case was removed to Evansville federal court, Senior U.S. District Judge Sarah Barker disagreed with Greenbank. The Ronald Reagan appointee ruled last year that Great American acted reasonably under its equine mortality policy. It avoided unnecessarily killing a horse that, even if it could no longer perform in horse shows, could still live out its natural life.

"Because Great American followed the recommendations and guidance of two qualified veterinarians when rendering care to Thomas, we found Ms. Greenbank's averment that this care was somehow unreasonable to be wholly unsupported by the factual record presented," Barker wrote.

Barker also opined that Greenbank had suffered no material damages from Thomas' survival, other than that she didn't get any life insurance money. Unsatisfied with the ruling, the horse owner appealed to the Chicago-based Seventh Circuit.

Before a three-judge panel on Tuesday, Greenbank's attorney Robert Burkart of Ziemer Stayman abandoned any pretense of discussing Thomas' well-being. He framed the case entirely as an insurance company mishandling its client's property and ignoring her wishes for that property in order to benefit itself financially.

"Our position is that... what they did is merely keep this horse alive for three months until the policy terminated," Burkart said.

He argued that the insurance company's actions in treating Thomas' injuries, particularly its approval of a tenotomy for his right leg tear, ignored Greenbank's stated purpose for having a horse to begin with. He claimed the insurer's actions violated Indiana law on bad faith dealing and robbed Greenbank of a profitable investment.

Why have a show horse, he asked the judges, if you can't show the horse?

"Under Great American's policy, they can take control and alter your use [of the horse], without any liability to you. So you payed $500,000 dollars for this show horse, insured it as a show horse, but they can take control, they can cut that horse and render it a pasture horse with no liability," Burkart told the panel.

Great American's attorney Hugh Griffin repeated the district court's finding that the company shouldn't be penalized for trying to keep an injured but otherwise healthy horse from being killed.

"We're here on a horse mortality policy, for a horse that's alive and doing remarkably well," Griffin said. "I think I could almost stop there."

He went on to argue that his client acted within the bounds of its policy to take control of Thomas' veterinary care, stating that mortality insurance coverage does not oblige the company to destroy Thomas simply because Greenbank requested it.

When asked by U.S. Circuit Judge Candace Jackson-Akiwumi, a Joe Biden appointee, why Great American didn't return Thomas to Greenbank once the mortality policy expired in September 2018, Griffin said that Greenbank had never asked to get the horse back since then. He said the insurer considered that abandonment and that it wouldn't make sense to give Thomas back to an owner that wanted him dead.

"I think at this point in time, she has abandoned him. She has never, in all the time we've been doing this, she's never asked for the horse back... Their argument is that the horse should have been euthanized. That's their conclusion," Griffin said.

Jackson-Akiwumi was joined on the Seventh Circuit panel by U.S. Circuit Judges Amy St. Eve and Joel Flaum, appointed by Donald Trump and Reagan, respectively.

While Flaum remained mostly silent throughout the hearing, St. Eve and Jackson-Akiwumi seemed to favor the insurance company's arguments.

Both needled Burkart on the fact that they could not find any element of the policy that stated Great American would agree to euthanize Thomas at Greenbank's request.

"What is the evidence that they expressly agreed to the destruction of the horse? I did not see anything in the record that would suggest that," St. Eve asked.

"As a corollary to Judge St. Eve's question," Jackson-Akiwumi added, "where in the policy are you getting these rules or standards about how Great American should have agreed to Ms. Greenbank's desire that the horse be put down?"

Burkart could not point to any specific policy clauses, instead reiterating that the company's refusal to euthanize Thomas was unreasonable and violated state law.

"Because what you look at is the policy construction, and that's where Indiana law imposes a duty of good faith and fair dealing. There's reasonableness when you make those determinations under the policy," the attorney said.

The judges seemed unconvinced, but took Burkart's and Griffin's arguments under advisement. The panel did not say when they would issue a ruling.

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