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Private sales: Where caveat emptor rules
Nancy Purcell, an owner of a small string of racehorses in upstate New York, was looking for a cheap prospect to run at Finger Lakes. Through a friend, she was directed to an Ohio operation, Stillfork Farm, that had several prospects, including a 4-year-old filly, Ohbabyobeyme, who had broken her maiden at Saratoga in August 2011 for a claiming tag of $20,000 but who had been laid up since the win.
“I thought she would fit in with exactly what I wanted,” Purcell said. “Here was a horse that didn’t fit at Saratoga, but probably would be competitive at Finger Lakes.”
After several discussions with Stillfork’s owner, Michelle Hubbs, in early February, Purcell agreed to buy the filly for $8,000. She wired Hubbs the money and, according to Purcell, paid for the horse to be shipped from Stillfork to a farm in Pennsylvania, where she passed an exam by a veterinarian recommended by Hubbs. All that was left was to get the filly’s registration papers, which are needed to enter a horse at U.S. tracks.
And that’s when the sale went sour.
According to Purcell, Hubbs claimed to have lost the papers two days after Purcell wired the money. When contacted directly, Hubbs disputed Purcell’s position and said that she never had the papers and that the filly’s former owners had lost them.
But according to one of the filly’s former co-owners, Michael Dubb, Ohbabyobeyme was sold to Hubbs without papers. The former owners, Dubb said, did not want the filly to race again because of a sesamoid injury. Hubbs paid the co-owners $500 for the filly, Dubb said, perhaps days before Hubbs reached the agreement with Purcell.
“We didn’t want this horse to go out and suffer a catastrophic injury and get a jockey hurt,” Dubb said. “This horse was only supposed to be a broodmare. That’s why we still have the papers.”
The fate of retired horses has become a hot-button issue, and beyond an ugly squabble over an $8,000 transaction, the dispute over Ohbabyobeyme highlights the perils of the unregulated world of private horse sales. Even without determining who is right and who is wrong, caveat emptor is the rule. By contrast, public auction companies impose voluminous conditions of sale.
According to racing officials, horse owners are more and more providing private farm operators with horses under the condition that the horses not be raced. While that condition can easily be attached to a bill of sale, making the condition legally enforceable, no regulation requires the new owner from attaching the same condition when the horse is re-sold, a loophole that sellers can exploit.
Late last year, Kelsey Lefever, a 24-year-old Pennsylvania woman, was charged with two felonies and two misdemeanors after allegedly misrepresenting her intentions when taking horses off tracks in Pennsylvania. According to law-enforcement authorities, Lefever told horsemen she would find retirement homes for the horses, but she then sold the horses to buyers who transported them to slaughterhouses in Canada.
Sellers who wish to prevent a horse from being used for specific purposes after a sale have several options. One is to retain the registration papers, which would preclude the horse from being entered at U.S. racetracks but would still allow the horse to be bred. The Jockey Club, the official registrar for the U.S. racing industry, does not require foal papers in order for a horse to be bred as long as the horse can be identified.
Another option is to surrender the foal papers to the Jockey Club and declare the horse was “sold without pedigree,” a designation the Jockey Club refers to as a SWOP. However, because a SWOP filing removes the horse from the registry and prevents the new owner from both racing and breeding the horse, few horses, especially mares, are sold under such a designation.
The Ohbabyobeyme transaction has entangled a number of other individuals who are upset the horse was apparently resold as a racing prospect, including Kim Dutrow, the filly’s former assistant trainer. Dutrow and her husband, Anthony, are well known for providing homes for horses who are retired out of their barn, and Kim Dutrow was insistent that Ohbabyobeyme had no future as a racehorse because of her injury.
According to Kim Dutrow and Dubb, Ohbabyobeyme was sold through a broker, without the Dutrows’ knowledge.
Kim Dutrow said that when she and her husband sell horses whom they do not want to be raced again, they attach an explicit condition to the bill of sale. In addition, the couple generally requires the buyer to pay a nominal price for the horse – usually at least $500, she said – so that the buyer cannot profit from a resale to a slaughter buyer.
In nearly all cases, Kim Dutrow said, the provision that a horse not be raced again is honored by the buyer. However, cases like the Ohbabyobeyme situation underscore how important it is for sellers to properly vet a prospective buyer.
“It’s so hard to place these horses, and we rarely have trouble like this,” Kim Dutrow said. “The worst part is that everyone was trying to do what was best for her.”
Stillfork maintains a website on which racehorse prospects and broodmares are offered for sale, showing photographs of the horses and providing access to their pedigrees and racing records. Hubbs said she has sold hundreds of racehorses over the last 20 years.
The farm is only one of hundreds of private operators offering Thoroughbred horses for resale. One popular online business, equinenow.com, listed 4,106 Thoroughbreds for sale in early April. Considering such a high volume of horses, any attempt to regulate the private market for Thoroughbred racehorses would be an enormous undertaking.
Two months ago, with support from the Jockey Club, Keeneland, and the Breeders’ Cup, a number of racing organizations formed the Thoroughbred Aftercare Alliance, which is seeking to accredit retirement facilities. Mike Ziegler, the interim executive director of the alliance, said the alliance is seeking to require aftercare organizations to demonstrate “sound and ethical business practices” before being accredited. But he also said operations that resell horses are not typical of the aftercare organizations the alliance was seeking to accredit because of their roles as brokers.
Asked if he thought the TTA might expand its reach to incorporate brokers, Ziegler said he would “wholeheartedly support that effort.”
“There’s no regulation of those entities or those facilities right now,” Ziegler said. “So you have to take people at face value and hope they are going to do the right thing by the horse.”
The Ohbabyobeyme incident is not the first time Hubbs has become involved in such a dispute. Steve Klesaris, a Florida-based trainer, said that in 2008 he gave Hubbs, free of charge, a 6-year-old stakes-winning horse, Mighty Mecke, after Hubbs assured him the horse would stand as a stallion at Stillfork. Mighty Mecke had broken his foot and had required three knee surgeries, Klesaris said, adding that he gave the horse to Hubbs on the condition that he would never run again.
Three days after paying for the horse to be shipped to Ohio, Klesaris said he found out the horse was in quarantine at Calder Race Course after receiving an e-mail from a man in Antigua. The man said he had purchased the horse and planned to race him, Klesaris said.
Klesaris said he was furious and called Hubbs.
“She told me that she couldn’t work it out, that her boyfriend or husband had just lost his job,” Klesaris said. “This happened in something like 24 hours.”
Hubbs said she reached the deal to sell Mighty Mecke to the Antiguan buyer while the horse was en route to her farm. She said she told the new buyer the horse wasn’t supposed to be raced, but she did not attach the condition to a bill of sale.
“Most people do what they say they are going to do,” Hubbs said. “I generally trust people to do that. He said he wanted to race the horse, and I told him, ‘You can’t do that.’ Why am I supposed to be held responsible for what the next guy does?”
Hubbs looks like another dirt bag ....she needs to be booted out of the game!
One possibility regarding the private sale of Racehorses is as follows... A National Data Base should be established, where-as any Racehorse, being retired by owners, trainers, vets, or racing commisions, has the NOT TO RACE disclosure, date effective, and name of retiring owner, added. This could easily be incorporated into the Delmar Pedigree Website, right on each horses Pedigree page and/or The Jockey Club Registration. Any perspective buyers would then be able to access that information, and completely leave out the issue of multiple sales in-between retirement and purchase. Prospective owners would also then be able to protect their interest in future Racehorses, by holding accountable, the owner of the horse at time of retirement.
The Hubbs woman sounds dodgy to me ... anything for a buck. She could have written "no racing" into the conditions of the sales she did ... of course she is responsible.