Donald Keith Morley and Rebecca B. Morley - Page 4

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          Petitioners also had a barn at their home that Mr. Morley used              
          for foaling.  When mares were ready to give birth to a foal, Mr.            
          Morley moved the mare from the farm to the barn located at                  
          petitioners' home.  He attached a "monitor" to the mare that                
          would go off when the horse was ready to give birth.3  When the             
          monitor went off, it signaled a beeper that Mr. Morley carried              
          with him at all times.                                                      
               Additionally, petitioners had a closed-circuit television              
          system that monitored horses about to give birth.  The barn                 
          located at petitioners' home contained a camera in the stall with           
          the horse.  A separate bedroom in petitioners' home contained a             
          monitor that received the transmissions from the camera.  When a            
          horse was about to give birth, Mr. Morley slept apart from his              
          wife in the separate bedroom containing the monitor.  When the              
          mare gave birth, Mr. Morley delivered the foal.                             
               In 1985, Mr. Morley purchased two broodmares that were in              
          foal, Sophia and Khola, and a syndicate share of a stallion, T.O.           
          Bolero.  T.O. Bolero was a Bask-bred horse.4  The most Mr. Morley           
          paid for a horse was $10,500.  Mr. Morley maintained casualty               
          loss insurance on some of the horses.  Between 1985 and 1991, Mr.           



               3  Horses lie down flat on the ground when they give birth.            
          Horses only lie down to give birth.  The monitor detected when              
          the horse lied down, thus signaling the impending birth of a                
          foal.                                                                       
               4  This means that it was a famous horse.                              



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