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references before they started their horse racing activity. Upon
the recommendation of Ms. Kraynik, petitioners purchased a horse
named Stand Away in 1979 and seven horses in 1980 named Dublin
Bay, Captain’s K, Liberty Knoll, Bad Memories, Naughty Castle,
Distinctive Jet, and Talitha. All these horses, with the
possible exception of Distinctive Jet, were purchased by
petitioners for a total original investment of approximately
$65,000.
In 1983, petitioners and Ms. Kraynik became involved in a
dispute over the ownership of Distinctive Jet, which was
eventually resolved in 1987. As a result of the dispute,
petitioners lost any ownership rights in Distinctive Jet and,
therefore, were unable to register any of the foals of
Distinctive Jet or use them for racing or breeding purposes.
In 1980 and 1981, while petitioners were operating their
horse racing activity, a number of their horses were injured.
Liberty Knoll broke a bone in her leg and subsequently died;
Talitha suffered cuts from jumping out of a trailer while being
transported; Bad Memories suffered bone chips in her knee;
Captain's K developed tendon problems; and Naughty Castle
suffered injuries to her leg and foot. Petitioners had purchased
Liberty Knoll for $11,000, Talitha for $2,500, Bad Memories for
$5,000, Captain's K for $10,000, and Naughty Castle for $10,500.
Several of petitioners' other horses suffered injuries as well.
In 1983, Ruth Ann K suffered internal lacerations while giving
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