J. Paul Reddam (left) and Kenneth Ramsey (right)
A dispute over the sale of an injured horse has two of the nation's top owners headed to court.
Kenneth Ramsey, who won the 2004 Eclipse Award as the nation's leading owner with his wife, Sarah, stands accused of cheating prominent owner J. Paul Reddam in a Santa Ana, Calif., lawsuit. The case is set for a civil jury trial starting July 23 in Orange County Superior Court.
The case, which also names trainer Dale Romans as a defendant in an alleged conspiracy, focuses on the $600,000 sale by Ramsey to Reddam of then 3-year-old colt Big Picture on July 10, 2005.
The lawsuit claims Big Picture was lame and in considerable pain when he arrived at trainer Doug O'Neill's Southern California barn the day after the sale, a condition resulting from alleged undisclosed chronic shin problems.
Reddam's attorney, Daniel Baren, said he intends to prove that the defendants "doped up" Big Picture with painkillers and anti-swelling medication in order for the colt to pass a veterinarian's examination needed to complete the sale.
Reddam is seeking general, punitive, and exemplary damages, an order rescinding the sale agreement, the return of the original purchase price, and a permanent injunction barring the defendants “from engaging in the types of unfair business practices alleged …"
The defendants are accused of fraudulent inducement, concealment and misrepresentation, conspiracy to defraud, and unfair business practices.
Reddam, the president of the CashCall finance lending company in Fountain Valley, Calif., and a major player in Thoroughbred racing this decade, said he believes Ramsey, once informed of his objections, had an obligation to void the deal because of Big Picture's physical problems.
Instead, Reddam said in reference to the defendants, "Their attitude seems to be that if you didn't do your diligence, that's your problem."
Sarah Ramsey, originally a defendant in the case as the racing partner of Kenneth Ramsey, was dismissed from the lawsuit by agreement June 14. Sarah Ramsey is recovering from a stroke, according to attorneys in the case, and the defendants had sought a lengthy continuance to allow her time to recuperate. A motion for continuance was rejected July 5 by the judge in the case, Commissioner Jane D. Myers, setting the stage for trial.
Romans last October announced a split from the Ramseys, who also won an Eclipse in 2004 for their turf champion Kitten's Joy.
According to the lawsuit, Reddam was targeted for the scheme as someone "who had a reputation in the industry for overpaying for race horses." He was contacted by an agent for Ramsey less than 48 hours after Big Picture won his debut race by nine lengths June 25, 2005, a 6 1/2-furlong maiden turf race at Churchill Downs.
Reddam and his agent, noting the lateness of Big Picture's first race -- in the middle of his 3-year-old season -- questioned the health of the colt but were assured there were no physical problems, according to the suit. Based on the "potential" Big Picture had shown, the two sides agreed on the purchase price contingent on Big Picture passing a standard veterinary examination for soundness, as well as an inspection and exercise session for Reddam's trainer or representative.
In the days leading up to the July 10 vet exam, the suit charges, Big Picture's location was concealed from representatives of Reddam in Kentucky. Reddam alleges Big Picture was being "doped up" in the hope they could mask the swelling and soreness in the colt's shins so that he would pass the soundness exam. Dr. Rick Pelphrey, who performed the exam in Kentucky, passed the horse, the lawsuit claims, and Big Picture was immediately shipped to Southern California.
Michael Meuser, a Lexington-based attorney who is representing the defendants, contends Reddam and his agents were informed of Big Picture's condition and "radiographs taken at the time showed that he had gotten over his shins. We're not aware of any other problems. Anything that was wrong with this horse, they were told about. We don't think there was any basis for returning" the horse to Ramsey.
Meuser said there is no evidence Big Picture's shin problem was chronic at the time. He said the injury was pointed out both to Pelphrey -- who did not report it, according to O’Neill -- and a representative of Reddam who watched the horse jog.
"I hate to think what would happen to the racing industry if everybody who bought a horse at Keeneland or some other place" could back out of the sale afterward, Meuser said. "There is no right of return."
Pelphrey denies that he gave a clean bill of health to Big Picture. The long-time racetrack veterinarian claims in his deposition that he notified O’Neill and others about the condition, telling the trainer, “If you want a fast horse, he’s fast. But he’s not perfectly clean.”
In another deposition taken in the case, Romans claims he informed several parties of Big Picture’s shin condition, which he termed a common ailment, and justified the use of drugs at the time as part of a normal regimen for a horse in active training in Kentucky. He also blames Reddam and O’Neill for not doing their due diligence, and said he told them so during a chance meeting at Saratoga a few weeks after the sale.
“I told Mr. Reddam that I felt like I sent him a good horse, and that if I was spending $600,000, and I was Doug O’Neill, I would have flown out there and checked him myself…instead of hiring someone that I didn’t know,” Romans recalled in his deposition.
O'Neill said it was obvious Big Picture was in distress from the moment he arrived. "Within minutes, I called Paul and told him, 'Uh-oh, we've got a big problem.' "
The trainer declined to talk to The Blood-Horse about Big Picture’s specific injuries at the time of his arrival.
"Let's just say we bought him with the intention of running him right away, and we could see that wasn't going to happen," O'Neill said.
But Meuser has collected e-mail exchanges of Reddam which suggest Big Picture was being aimed at the 2005 edition of the Oceanside Stakes at Del Mar -- less than two weeks after the horse was purchased.
One of the e-mails allegedly written three days after Big Picture’s arrival at O’Neill’s barn declared Reddam thought the horse was “training well,” and would run in the Oceanside.
“The jury is going to have figure out that if the horse was lame on July 11, why was he ‘training well’ on July 14?” Meuser said.
Baren counters that "through fraudulent means and misrepresentations the horse that was received was not what (Reddam) thought he was buying. Who do you hold responsible for that, the innocent victim? We think the jury will see it our way."
The lawsuit was originally filed by Reddam in late July 2005.
In it, O'Neill and Reddam said they did not believe the colt could have passed a vet's exam unless drugged. They drew blood samples that were sent to the Ken Maddy Equine Analytical Laboratory at the University of California-Davis, the California Horse Racing Board's official drug-testing center. Dr. Scott Stanley, chief chemist, confirmed the presence of Flunixin and Phenylbutazone.
A veterinarian's report from Dr. Edwin L. Simpson filed at Hollywood Park a week after his examination of Big Picture July 12, 2005, found "subchondral bone defects in the fore fetlocks…are likely to be progressive in nature and result in serious irreversible lameness."
Dr. Rick Arthur, now the CHRB's equine medical director but at the time in private practice, examined x-rays taken of Big Picture's shins prior to the sale, and according to the lawsuit, concluded "that the horse had suffered chronic shin injuries prior to the sale and that he was not fit for racing."
Nearly 20 months after his first start, Big Picture returned to competition when he finished fourth in an allowance race on the Santa Anita Park turf Feb. 19. Now 5, the bay horse by Pioneering--Brush Back (by Broad Brush) has raced a total of five times with two victories. He won his last race June 20, a six-furlong Cushion Track event for a $25,000 claiming price at Hollywood Park, making a strong bid in the stretch to win going away by seven lengths.
However, Big Picture was vanned off afterward. O'Neill initially thought Big Picture, a $20,000 yearling purchase at Keeneland in September 2003, was simply leg-weary after his exhausting effort.
"Lameness is what I'd call it," Reddam said July 6. "I don't think he's going to hold up."
Meuser said the defendants are not responsible for what has happened to Big Picture since the transfer of ownership. He noted O’Neill admitted Big Picture was out of action for much of 2006 due to a broken pelvis sustained in training.
"Obviously this case wouldn't be going to trial if Mr. Ramsey and Mr. Romans didn't feel they hadn't done anything wrong and shouldn't have been sued for fraud," Meuser said.
Meuser said Ramsey and Romans have remained cordial despite their split. "They have a very professional relationship," he said.
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