EXHIBIT 11 Page 1 - Horse Authority cont.pdfMental Hygiene, Farm-to-Consumer Legal Defense Fund,...

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1 of 1 DOCUMENT Annotated Code of Maryland Copyright © 2014 by Matthew Bender and Company, Inc., a member of the LexisNexis Group All rights reserved. *** Statutes current through 2014 legislation effective July 1, 2014 *** *** Annotations current through May 1, 2014 *** COMMERCIAL LAW TITLE 16. STATUTORY LIENS ON PERSONAL PROPERTY SUBTITLE 4. LIEN ON LIVESTOCK GO TO MARYLAND STATUTES ARCHIVE DIRECTORY Md. COMMERCIAL LAW Code Ann. § 16-401 (2014) § 16-401. Lien for care and custody (a) Creation of lien. -- The owner or operator of a livery stable or other establishment who gives care or custody to any livestock has a lien on the livestock for any reasonable charge incurred for: (1) Board and custody; (2) Training; (3) Veterinarians' and blacksmiths' services; and (4) Other proper maintenance expenses. (b) Sale of livestock. -- If the charges which give rise to the lien are due and unpaid for 30 days and the lienor is in possession of the livestock, the lienor may sell the livestock to which the lien attaches at public sale. (c) Notice of sale. -- (1) The lienor shall publish notice of the sale once a week for two successive weeks in one or more newspapers of general circulation in the county where the livestock is located. (2) In addition, the lienor shall send notice by registered or certified mail at least 30 days before the sale to the owner of the livestock at his last known address. If the owner's address is unknown, the notice may be given by posting it on the door of the courthouse or on a bulletin board in the immediate vicinity of the door of the courthouse of the county where the livestock is located. (d) Application of proceeds. -- Page 1 www.ratemyhorsepro.com

Transcript of EXHIBIT 11 Page 1 - Horse Authority cont.pdfMental Hygiene, Farm-to-Consumer Legal Defense Fund,...

Page 1: EXHIBIT 11 Page 1 - Horse Authority cont.pdfMental Hygiene, Farm-to-Consumer Legal Defense Fund, Department of Legislative Services HB 502/ Page 3 Fiscal Note History: First Reader

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Annotated Code of MarylandCopyright © 2014 by Matthew Bender and Company, Inc., a member of the LexisNexis Group

All rights reserved.

*** Statutes current through 2014 legislation effective July 1, 2014 ****** Annotations current through May 1, 2014 ***

COMMERCIAL LAWTITLE 16. STATUTORY LIENS ON PERSONAL PROPERTY

SUBTITLE 4. LIEN ON LIVESTOCK

GO TO MARYLAND STATUTES ARCHIVE DIRECTORY

Md. COMMERCIAL LAW Code Ann. § 16-401 (2014)

§ 16-401. Lien for care and custody

(a) Creation of lien. -- The owner or operator of a livery stable or other establishment who gives care or custody toany livestock has a lien on the livestock for any reasonable charge incurred for:

(1) Board and custody;

(2) Training;

(3) Veterinarians' and blacksmiths' services; and

(4) Other proper maintenance expenses.

(b) Sale of livestock. -- If the charges which give rise to the lien are due and unpaid for 30 days and the lienor is inpossession of the livestock, the lienor may sell the livestock to which the lien attaches at public sale.

(c) Notice of sale. --

(1) The lienor shall publish notice of the sale once a week for two successive weeks in one or more newspapers ofgeneral circulation in the county where the livestock is located.

(2) In addition, the lienor shall send notice by registered or certified mail at least 30 days before the sale to theowner of the livestock at his last known address. If the owner's address is unknown, the notice may be given by postingit on the door of the courthouse or on a bulletin board in the immediate vicinity of the door of the courthouse of thecounty where the livestock is located.

(d) Application of proceeds. --

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(1) The proceeds of the sale shall be applied, in the following order, to:

(i) The expenses of the sale; and

(ii) The amount of the lien claim.

(2) After application of the proceeds in accordance with paragraph (1) of this subsection, any remaining balanceshall be paid to the owner of the livestock.

HISTORY: An. Code 1957, art. 63, § 51; 1975, ch. 49, § 3; ch. 366, § 1.

RIGHT TO SUE FOR DEBT. --Although it is not expressly provided that the lien given by this statute shall not affectthe right to sue for the debt, the terms and purpose of the statute give it this effect. The statute neither creates nordestroys the indebtedness. Donegan v. Meredith, 199 Md. 152, 86 A.2d 93 (1952).

NOTES APPLICABLE TO ENTIRE ARTICLE

ACKNOWLEDGMENT OF OFFICIAL COMMENTS. --Official Comments to the Uniform Commercial Code appearthroughout Titles 1 through 10 of this article. These Official Comments are derived from the original UniformCommercial Code commentary. References to "the Code" in the commentary refer to the Uniform Commercial Code.The term "title" has been substituted for "article" throughout the Official Comments.

Copyright 1972, 1981, 1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996 and 1997 by the American Law Institute andthe National Conference on Uniform State Laws. Reprinted with permission of the Permanent Editorial Board.

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HB 502

Department of Legislative Services Maryland General Assembly

2013 Session

FISCAL AND POLICY NOTE

House Bill 502 (Delegate Glass, et al.)

Economic Matters

Owner or Operator of Livery Stable - Lien on Dairy Animal

This bill grants an owner or operator of a livery stable or other similar establishment a

specified lien on the livestock under the care or custody of the livery stable or

establishment. The lien is in the amount of any reasonable charge incurred for milking a

dairy animal to provide unpasteurized milk to an individual with a partial or complete

ownership interest in the dairy animal.

Fiscal Summary

State Effect: The bill does not directly affect State governmental operations or finances.

Local Effect: The bill does not directly affect local governmental operations or finances.

Small Business Effect: Minimal.

Analysis

Current Law: The owner or operator of a livery stable or other similar establishment

has a lien on the livestock under the care and custody of the stable or establishment for

any reasonable charge incurred for (1) board and custody; (2) training; (3) veterinarians’

and blacksmiths’ services; and (4) other proper maintenance expenses. If the

aforementioned charges are due and unpaid for 30 days and the owner or operator is in

possession of the applicable livestock, the owner or operator may sell the livestock at a

public sale.

The owner or operator must publish notice of the sale once a week for two successive

weeks in at least one newspaper of general circulation in the county where the livestock

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HB 502/ Page 2

is located. In addition, the owner or operator must also send notice by registered or

certified mail at least 30 days before the sale to the last known address of the livestock’s

owner. If the address is unknown, the notice requirement may be fulfilled by posting it

on the courthouse door or on a bulletin board in the immediate vicinity of the courthouse

of the county where the livestock is located. Any proceeds from the sale are first applied

to the expenses of the sale then the amount of the lien claim. The remaining balance, if

any, is paid to the livestock owner.

Generally, a person is prohibited from selling raw milk for human consumption. The

Department of Health and Mental Hygiene (DHMH) regulations define “sale” or “sell” as

a transaction that involves the (1) transfer or dispensing of milk and milk products or

(2) right to acquire milk and milk products, including the sale of shares or interest in a

dairy animal.

Background: A common example of partial ownership interest in livestock, otherwise

known as a “herdshare,” is the right to use milk from a dairy animal. Owning a herdshare

allows a person to obtain raw milk in a state that prohibits its sale. According to the

Farm-to-Consumer Legal Defense Fund, herdshares are legal in Alaska, Tennessee, Ohio,

and Colorado by statute, regulation, or court decision. In six states (Alabama, Indiana,

Kentucky, Michigan, Virginia, and Wyoming) there are no laws either prohibiting or

authorizing herdshares.

According to DHMH, the consumption of raw milk and raw milk products increases the

risk of gastrointestinal illness caused by those pathogens. Raw milk has been implicated

in illness outbreaks in several other states.

Additional Information

Prior Introductions: None.

Cross File: None.

Information Source(s): State Department of Assessments and Taxation, Maryland

Department of Agriculture, Office of the Attorney General (Consumer Protection

Division), Judiciary (Administrative Office of the Courts), Department of Health and

Mental Hygiene, Farm-to-Consumer Legal Defense Fund, Department of Legislative

Services

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HB 502/ Page 3

Fiscal Note History: First Reader - March 4, 2013

ncs/kdm

Analysis by: Michael F. Bender Direct Inquiries to:

(410) 946-5510

(301) 970-5510

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Hi Anne - As you know I am in upstate New York for a conference. I will be giving you a call momentarily to see what your client wants to do with our offer of $25,000 to releaseSpellbound. Meanwhile, please allow me to comment on your interpretation of the Livestock Lien. It is not an "Equine Lien" - it is purposely called a "Livestock" lien. Livestock meaning, "horse, cow, goat, sheep, pig, etc.) This same lien is used for ANY and all livestock.It isn't ANY livestock that the individual person owns. And the customary expenses for the care and maintenance of the APPLICABLE animal is what the lien is used for toobtain payment on that animal. MD Ag Code Section 3-301 (attached) gives you the definition of livestock. You will not find any case law as it applies to the Livestock Lien because procedurally it does not go through the courts as would a mechanics lien (or other similar lien).That is primarily because we are dealing with a breathing being, not a non-living piece of property. I do have a Fiscal and Policy Note that summarizes the current law of the Livestock Lien (attached). Obviously this note is discussing a dairy cow - but that's what theLivestock Lien is about - "livestock." And regardless of which type livestock, the current law applies the same way - the expenses for care and maintenance directlyrelated to that particular animal - IF the person who had care and custody of the animal has possession of the animal. Otherwise, it would be a breach of contract issue. From Fiscal & Policy Note:Current Law: The owner or operator of a livery stable or other similar establishment has a lien on the livestock under the care and custody of the stable or establishmentfor any reasonable charge incurred for (1) board and custody; (2) training; (3) veterinarians’ and blacksmiths’ services; and (4) other proper maintenance expenses. If theaforementioned charges are due and unpaid for 30 days and the owner or operator is in possession of the applicable livestock, the owner or operator may sell thelivestock at a public sale. So, regardless - the charges cannot include hotel or food expenses, show expenses, loans, loan interests, etc. The proper remedy for payment of those type of chargeswould be a breach of contract complaint. Also, even if Kim were to go forward with the auction. Any amounts beyond the costs of the sale and the $23k plus that is owed on Spellbound would by LAW have to begiven to Maria Chungunco. It cannot be applied to other expenses she may owe Kim. Furthermore, it should be noted that from the time Kim has denied Maria access to Spellbound, she will not be able to charge her "training board fees" as the pony is notin training, but rather, padlocked in a stall. If Kim wants to put a lien on Exclusive for what is owed on Exclusive, that would be appropriate. But regarding the ponies owned by Kim that she leased to Maria, that is apure breach of contract issue. Let's keep talking and get this resolved quickly. Kathleen In a message dated 8/11/2014 11:38:38 A.M. Eastern Daylight Time, com writes:

Kathleen-

Thank you for forwarding the information which you mentioned in our telephone conference on Fridayafternoon. I have forwarded copies of the invoice and cost information to my client for review. As Imentioned to you on Friday, my client is out of town on business, but I hope she will be able to review theinformation so that I may discuss it with her. I did let my client know on Friday after we spoke that youwould be sending the information to me and that I would be forwarding it along to her for review, so shewill be expecting it.

I will also forward your proposed offer of settlement to my client for her consideration.

.comCc: Re: Glenwillow v Chungunco

August 11, 2014 4:50 PM

1 Attachment, 95 KB

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With respect to your position that the lien may only be for the costs related to the care and custody ofSpellbound, the statute says it applies to the care or custody of “any livestock”. My client has beenproviding care and custody for four (4) horses and ponies, either owned by Ms. Chungunco such asSpellbound, another horse she was borrowing money from my client to purchase, or leased by or throughmy client, all for the benefit of Ms. Chungunco and her minor daughter. I have not been able to locateanything in the Maryland statute or the Maryland case law which supports your position that we cannotsell the pony for the debts owed for the care and custody of the livestock. Of course, I will be happy toreview and consider any Maryland case law you would like to provide to me in support of your position.

I too am hopeful that we are able to resolve this dispute by a mutually satisfactory resolution for ourclients.

Thank you for your assistance. I will be in contact with you after I am able to discuss the information withmy client.

Anne

From: .com [mailto: .com] Sent: Friday, August 08, 2014 7:37 PMTo: Rollins, Anne-HerbertCc: Subject: Glenwillow v Chungunco

Hi Anne -

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It was nice to talk with you this afternoon. Sorry it took so long to get this email to you. As promised here is the emailoutlining our discussion as well as the attached spreadsheets regarding the invoicing of Glenwillow Inc's services to MariaChungunco.

The "INVOICES" spreadsheet was given to me by Maria through her Florida attorney (you may have received thispreviously from her attorney). My review of the invoices and expenses for Spellbound are on a separate spreadsheet. Asyou can quickly see there is less than $25,000.00 owed on Spellbound, but which only $6,265.00 were incurred here inMaryland. We are NOT disputing any of these expenses.

Therefore, the lien for $207,000 does not comply with the Md Livestock Lien law as only those customary maintenanceand care (including training/shows) expenses incurred for that particular animal, in this case, Spellbound, are only subjectto the lien.

I, also, have another suggestion for you to consider discussing with Kim. That Maria pay $25,000.00 on Wednesday,August 13th for what is owed (and a bit more) for Spellbound for services rendered in Maryland and outside of Maryland.

Kim releases Spellbound upon payment of $25,000.00 and therefore, no longer incurring additional expenses atGlenwillow. And then, at that point, I will withdraw the Replevin action.

You and I will still meet on Friday, as planned, and review the invoices and expenses so nothing has been missed. Ifthere are additional monies owed to Glenwillow that are related to Maryland expenses you and I can figure that out andwe'll get Kim paid for those Maryland expenses which we can agree to (I believe there are some ponies Kim owns thatshe had leased to Chungunco's.)

Rebekah Lusk has agreed to work with me on this matter. As I mentioned I will be out of town from Monday throughThursday at the Racing & Gaming Conference in New York. But Rebekah will be able to work with you on coordinatingthe payment of the $25,000 and picking up the pony.

However, if Kim cannot agree to accept the $25,000 to release Spellbound upon payment, then we will need to takefurther action to secure the pony.

I really believe you and I can help our clients achieve a satisfactory outcome (payment for Kim and Spellbound for Maria)and I look forward to working with you and resolving this matter for our respective clients.

KathleenKathleen TaborAttorney-at-Law ~ Collaborative Practitioner ~ MediatorLaw Office of Kathleen JP Tabor, LLC7814 Grassy Garth, Elkridge Maryland 21075Office: (443) 454-2163Fax: (443) 836-9178

Legal Office Web Site: www.ktaborlaw.comBook Web Site: www.marylandhorselaw.com

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This electronic transmission is privileged and confidential. It is intended only for the review of the party to whom it isaddressed. If you have received this message in error, please return it to the sender and destroy all copies. Unintendedtransmission shall not constitute waiver of the Attorney-Client or any other privilege.

_____________________________________________________________________________________________________________________________________________________________________________________________________ In accordance with Internal Revenue Service rules, any federal tax advice provided in this communication is not intended or written by the author to beused, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact theauthor if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties. Confidentiality Notice: This e-mail, including any attachment(s), is intended for receipt and use by the intended addressee(s), and may contain confidential and privilegedinformation. If you are not an intended recipient of this e-mail, you are hereby notified that any unauthorized use or distribution of this e-mail is strictlyprohibited, and requested to delete this communication and its attachment(s) without making any copies thereof and to contact the sender of this e-mailimmediately. Nothing contained in the body and/or header of this e-mail is intended as a signature or intended to bind the addressor or any personrepresented by the addressor to the terms of any agreement that may be the subject of this e-mail or its attachment(s), except where such intent isexpressly indicated. _____________________________________________________________________________________________________________________________________________________________________________________________________

Secure Upload/Download files click here.

hb0502 Stat…e.ZIP (95 KB)

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AFFIDAVIT In Support of Complaint for Temporary Restraining Order

1. I, Maria Chungunco, am over eighteen (18) years of age and am competent to testify.

2. I am the legal owner of the pony, “Spellbound,” currently being stabled at

Glenwillow Farm (aka, Glenwillow, Inc.) in Jefferson, Maryland.

3. I have read the Counter-Complaint for Declaratory Judgment and Injunctive Relief

and the Motion for TRO filed on my behalf and hereby verify that all of the facts set forth are

true and correct to the best of my knowledge and belief.

4. I had been a client of Kim Stewart, riding instructor and trainer, and Glenwillow, Inc.

many years ago for a short period of time. In January 2014 I, again, engaged her expertise and

training services for my minor daughter, Bernadette, and our pony, “Spellbound” for the Florida

show circuit. Our new relationship commenced in Wellington, Florida. We agreed to continue

the relationship through November 30, 2014.

5. It was not until late April, 2014 that we had our pony brought to Maryland.

6. Bernadette is a competitive rider and accomplished equestrian.

7. In good faith, I relied on Kim Stewart’s expertise in advising me on guiding my

daughter’s riding pursuits.

8. In good faith, I relied on Kim Stewart’s expertise in training and promoting our pony,

“Spellbound,” through the United States Equestrian Federation competitions in Florida.

9. In good faith, I relied on Kim Stewart’s expertise in encouraging me to lease

additional ponies for my daughter’s use and advancement of her riding pursuits.

10. In good faith, I relied on Kim Stewart’s expertise in encouraging me to purchase

and/or lease additional horses and ponies for my daughter’s use and advancement of her riding

pursuits.

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11. Kim Stewart acting on behalf of Glenwillow, Inc. failed to provide itemized and

monthly statements for services provided in Florida and I had to repeatedly request such

invoices.

12. I received the first of the invoices after April 2, 2014. I subsequently discovered

discrepancies in billing of services for the leasing and maintenance of the other ponies and

horses as well as the maintenance and training of “Spellbound.”

13. Kim Stewart had added expenses to the Glenwillow, Inc. invoices which are

inappropriate charges for care of horses, including her personal commission payments for leases

and sales agreements, and a personal loan and interest she offered to my husband and me.

14. Additionally, there have been payments made by me to the account that were not

credited and she is now claiming owed and due.

15. The personal loan was the result of a February 2014 purchase of a horse

(“Exclusive”) for $100,000 which turned out very badly.

16. In April 2014, while in Florida, Kim Stewart noted we needed to make a second and

final payment on the purchase of the horse, “Exclusive,” as well as make the final payment for

the lease on the pony, “Storyteller.”

17. I asked Kim Stewart to request an extension of time for us from the seller (Jolli Farm)

of “Exclusive” for the second payment of $50,000. She informed me that the seller (Jolli Farm)

would not permit an extension and that he would sue us if the final payment was not made.

18. Kim Stewart told us she would make the payment of $50,000 on our behalf, with

18% interest. My husband, Edwin Chungunco, agreed to this as we felt we had no choice but to

accept this loan or be sued by the seller (Jolli Farm).

19. This loan was never put into writing.

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20. I subsequently discovered Kim Stewart knowingly provided false information to me

regarding the veterinarian examination of the horse “Exclusive” (which took place in Florida on

February 23, 2014) as a way to induce us to purchase a blind and proven lame animal.

21. Kim Stewart knowingly and willingly deceived me and my husband, Edwin

Chungunco, into purchasing the horse, “Exclusive,” and offered in June 2014 to resell the horse

to remedy her misdeed.

22. Kim Stewart told us if we did not repay her the $50,000 loan with interest (to retain

full ownership of the horse) she would resell the horse “Exclusive.” We agreed she should sell

the horse and asked her to apply our $50,000 deposit on the horse toward our outstanding invoice

of $65,000. Kim Stewart refused to apply our money toward any invoices.

23. Kim Stewart then told us she would sell the horse for $150,000 ($50,000 more than

what we had purchased him for). We agreed for her to sell the horse for this amount, believing

this would repay the $50,000 loan with interest to her and recoup our initial $50,000 deposit.

However, she would not discuss this arrangement with us and stopped responding to our emails.

24. Kim Stewart was not successful in finding a new buyer for the horse “Exclusive.” We

were then left with owning this blind and lame horse.

25. In June 2014, unbeknownst to us at the time, Kim Stewart issued a Bill of Sale for

“Exclusive” in her name only. This is fraudulent as we have paid for this horse. ($100,000 paid

to the previous owner with $50,000 directly from us and a $50,000+ loan from Kim Stewart.)

26. I discovered the existence of this Bill of Sale with Kim Stewart’s name when making

an inquiry with the United States Equestrian Federation records for “Exclusive.”

27. We never signed over ownership of this horse to Kim Stewart.

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28. We repeatedly requested Kim Stewart to repay us the $50,000 we paid to the prior

owner (Jolli Farm) for “Exclusive” in February 2014.

29. Kim Stewart in fact, never credited our account with the $50,000.

30. From May through July 6, 2014, my husband, Edwin Chungunco, and I attempted

consistently and in good faith to address our concerns regarding Kim Stewart’s services,

misdeeds, and failure to serve the needs of our daughter, Bernadette, and the inaccurate invoices.

31. On or about July 6, 2014, Kim Stewart advised that I, Maria Chungunco, would

receive a call from her attorney to sort out the monetary dispute. No such call came.

32. Up until July 15th, Kim Stewart had repeatedly threatened to terminate our leases on

two other horses (“Lost Love” and “Storyteller”). On or about July 15th Kim Stewart told me that

her attorney advised her not to allow our daughter to have any more lessons and no more shows

until all invoices had been paid.

33. We still were disputing many of the charges on the invoice and the lack of credit on

our account for the $50,000. That was when I secured counsel in Florida to move the process

along as Kim Stewart was refusing to discuss the invoices and refusing us access to the farm, the

pony and horse we own, and the ponies we lease.

34. Through my legal counsel in Florida I had been in active and good faith negotiations

with Glenwillow, Inc.’s legal counsel regarding the double billing, inaccurate billing, lack of

adjustments, and disputed charges on or about July 21, 2014 and through July 24, 2014.

35. Because I believed Kim Stewart, through her attorney, was negotiating in good faith,

I did not file a Complaint for breach of fiduciary duty against Kim Stewart and Glenwillow, Inc.

36. Out of the blue, with no word from Kim Stewart or her counsel, I received an

unsolicited bulk mailing from an attorney’s office that gets business from reviewing docketed

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actions. I learned solely through this mailing that Glenwillow, Inc. (Kim Stewart) had

circumvented our negotiations and was planning to sell “Spellbound” despite the disputed

charges and what I believed were good faith negotiations involving all of the charges.

37. Never once in our negotiations did Kim Stewart ever mention selling either

“Exclusive” or “Spellbound!”

38. Kim Stewart has subsequently moved “Exclusive” from Maryland to Kentucky

without our permission.

39. “Spellbound” is currently being detained at the premises of Glenwillow Farm in

Jefferson, Maryland in a PADLOCKED stall, preventing him from rescue in the event of a fire or

other catastrophic event that could occur at the farm. I witnessed this when I tried to see him at

the farm on July 30, 2014.

40. “Spellbound” is not currently receiving the ongoing exercise and training required of

a pony which has attained the acclaimed status of Grand Champion.

41. Failure to continue exercising and training the pony devalues the pony and

significantly reduces his ability to continue as a national grand champion equine. Additionally,

standing in a stall is not conducive to the overall health of a pony.

42. Kim Stewart knowingly deprived our daughter, Bernadette, of the use of her pony

which has resulted in Bernadette’s inability to compete at the 2014 United States Equestrian

Pony Finals held on or about August 1, 2014.

43. I have always intended to pay those debts which are valid.

44. I have always attempted to communicate and negotiate in good faith with Kim

Stewart and Glenwillow, Inc.

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DONALD STEWART STABLES949 S E 12TH PLACEOCALA FL 34471

PH 352-861-7057 *FAX 352-861-3057

PURCHASEAG~_

THIS AGREEMENT is made September ~2012 by and between Ed Chungunco forBernadette Chungunco, a minor, of Fairfax, VA (Buyer) and Michael Newman forKelsey Landrum of Rancho Verdes, CA (USEF#49234 I 8 (Seller) for the purchasedescribed below

Name:Age:Color:Breed:Sex:Size:

Spellbound USEF#50118516114/2002ChestnutDutchGelding14.1 'l4 hands

1. PURCHASE PRICE

For the total sum of $250,000.00 Seller agrees to sell and Buyer agrees tobased on the terms to follow:

2. PAYMENT TERMS c:(\1\ AThe buyer agrees to pay $25,000.00 as a deposit on SePtembet/(2~~2-, and the nextpayment of $25,000.00 due November 1,2012. Final payment of $200,000.00 due on orbefore June 1,2013.

3. WARRANTIES

(a) Seller covenants that he is the lawful owner of said horse; that he has the right to sellsaid horse-and that he will warrant and defend the horse against lawful claims anddemands of all persons.(b) Seller makes no promises, express or implied, including the warranties of fitness for aparticular purpose unless further provided in the agreement.(c) This horse is being sold in AS IS condition.

4. TRANSFER OF OWNERSHIP

Once seller has received payment in full, seller shall transfer all owner and registrationpapers of the horse at his own expense to the Buyer.

5. RISK OF LOSS

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EXHIBIT 16
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Buyer assumes all risk of loss.

6. (a) GOVERNING LAW

The terms of this Agreement shall be governed by the Laws of the state of Florida. Anylegal action must be brought in Marion county/municipality.

OR

(b) ARBITRATION

The parties of the agreement mutually agree that any and all disputes arising inconnection with this Agreement shall be settled and determined by binding arbitrationconducted in accordance with the then existing rules of the American ArbitrationAssociation by one or more arbitrator appointed in accordance with said rules. Saidarbitration shall take place in Ocala (municipality), Florida (state) ..

7. BREACH

Either party may nullify this Agreement if the other party breaches a material term of theAgreement.The wronged party may recover reasonable attorney's fees and court costs.

8. ENTIRE AGREEMENT

This constitutes the entire Agreement between the parties. y modifications oradditions MUST be in writing and signed by all parties to .s Agreement. No oralmodifications or additions will be CO~idered to be part f this Agreement unless reducedto writing and,,"st;ned by all part~ I

Executed this' ~ day ~2012:

Signature: Ed Chungunco

/s:~ER0?_---------~ignature: Michael Newman, Agent

BUYER:

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