Two Sides of a Soured Deal: Defense Responds to Allegations in Apple Barn Lawsuit and Makes Some of Their Own
With new court filings and a judge’s receivership decision, we revisit the Old Apple Barn Lawsuit to hear what the defense has to say

Disclaimer: This article reports on allegations in publicly filed court documents and statements from interviews in an ongoing legal dispute. These allegations—including claims of document irregularities, business misrepresentation, and capacity issues—have not been proven in court and remain contested by the parties involved. The court documents are public records and available for anyone to review.
The Cloudcroft Reader does not endorse, validate, or take any position on the veracity of claims made by either party. This reporting is presented in the public interest as a factual account of the current state of legal proceedings. Both parties were given equal opportunity to comment. Together, this article and prior ones attempt to present both perspectives fairly. Future developments in this case will be reported as they occur.
The recent lawsuit over the fate of the Old Apple Barn recalls the enduring adage that the truth is like a loaf of bread: no matter how thin you slice it, there are always two sides.
In the legal battle over the now-soured 2024 sale of the Old Apple Barn, the defendants have officially entered into the court record their side of what went wrong in a deal between friends.
The Plaintiffs, Bill and Beverly Niffenegger, along with their companies Old Apple Barn, LLC and Mountain Park, LLC, are suing Jerry and Carol Shulman and their company Old Apple Barn NM, LLC after allegedly defaulting on monthly payments to fund the owner-financed sale of the land and business known as the Old Apple Barn at 949 Hwy 82, Mountain Park, NM 88325.
The Old Apple Barn has been shuttered since late January, with no customers crossing its threshold for nearly three months.
The Cloudcroft Reader gave a full airing of the Plaintiff's allegations in our February 9, 2025 report. You can read the article here: https://www.cloudcroftreader.com/p/business-deal-turns-sour-at-old-apple
With the Defendants’ response filed, we revisit the dispute and report their side.
Plaintiffs’ Complaint
To recap, the court filings by Plaintiff attorney David Humphreys claim that the defendants breached a purchase agreement by failing to make payments on a loan to purchase the Old Apple Barn real estate and business.
The plaintiffs allege that the defendants engaged in a fraudulent scheme to avoid paying their obligations and to escape personal liability. They claim that the defendants have been depleting and destroying the business's assets, including removing inventory and furniture, and threatening to close the business and turn off the electricity.
The plaintiffs are seeking a judgment of foreclosure on the mortgage, an order directing the sale of the property at public auction, the appointment of a receiver to manage and preserve the property, and an award of damages for waste and fraud.
Read the Plaintiff’s filing:
The Defense Narrative
The defendants filed their answer to the complaints and introduced counterclaims in a sweeping denial of the allegations filed through attorney Russell Warren in a 29-page document on February 25, 2025 entitled Defendants’ Answer to Amended Complaint, Temporary Restraining Order, Appointment of Receiver and Defendants’ Counterclaims for Breach of Contract, Fraud, Negligence Per Se and Intentional Infliction of Emotional Distress.
You can read the full reply here:
We look at what they have to say.
In his filing, attorney Warren denied the plaintiffs’ allegations, presenting 130 rebuttal points. He then laid out a series of counterclaims, including breach of contract, fraud, negligence per se, and intentional infliction of emotional distress.
The defendants allege that the plaintiffs failed to disclose known adverse material facts about the property, misrepresented the income and operational status of the property, equipment, and business, and fraudulently made false and misleading statements to convince the defendants to purchase the Old Apple Barn business.
The defendants also allege that the plaintiffs' actions caused them to suffer damages, including personal injury from water from a well on the property, which they allege is contaminated. Finally, the defendants allege that the plaintiffs intentionally created difficult conditions that created an unnecessary burden on Mr. Shulman and his family as he attempted to move out of the Old Apple Barn.
On page 12 of his filing, Warren challenges whether there is a legal agreement. He alleges:
"Mr. Shulman, one of the named defendants in this case, is seventy-two years old and was hospitalized for severe Covid and suffered a stroke in 2022. After this episode, Mr. Shulman became erratic, suffered severe memory loss, forgetfulness, and became prone to irrational decisions.”
Warren argues Shulman’s condition made him vulnerable and led to poor decisions.
"In 2023, the Plaintiffs began attempts to convince Mr. Shulman to purchase the property and business known as the Old Apple Barn at an extremely inflated price.”
"In the past, Mr. Shulman had successfully run a toy merchandise business called"Texas Toy Distribution" and the Plaintiffs attempted to convince Mr. Shulman that the Old Apple Barn was a perfect business for someone like him.”
"Upon appraisal, the property and business were estimated to be worth approximately $1,500,000.00. However, the Plaintiffs and Defendants still attempted to enter a contract that would transfer the property from the Plaintiffs to the Defendants at a total sales price $3,500,000.00.”
"Any rational and reasonable person would understand that purchasing a property for double the appraised value is on its face is a grossly unfair deal.”
"Persuaded by the Plaintiffs, Mr. Shulman attempted to take out a loan for this so-called "turn-key business deal" at multiple banks.”
"After reviewing the documentation submitted for the loan by the Defendants, the loan officer told the Defendants "if you purchase this business you will go bankrupt", and subsequently denied Mr. Shulman the loan.”
Shulman was not represented by an attorney in the transaction. Warren alleges:
"Any experienced businessman such as Mr. Shulman would not have agreed to this deal or signed any contract against the advice of his bank, his family, and without seeking legal or real estate advice from a qualified source.”
"Mr. Shulman was clearly under the influence of the Plaintiffs and signed this deal without having the proper capacity to even enter into a contract due his significant cognitive decline. This deal is so one-sided and unfair as to be both procedurally and substantively unconscionable."
Additionally, the defense argues that the promissory note and mortgage only bind Old Apple Barn NM, LLC and not Jerry or Carol Shulman in their personal capacity.
Particularly noteworthy is the defense’s challenge to the legitimacy of several legal documents that the Plaintiff put into evidence.
On page 9 of his reply, Warren alleges:
“Plaintiffs' Complaint and/or Exhibits fail to sufficiently demonstrate that there is a valid contract under New Mexico law between any parties to the real estate and/or business known as the "Old Apple Barn."
“The contracts lack an offer, acceptance, consideration, and mutual assent as evidenced by missing signatures of Defendants, parties to the contract that do not exist, evidence of post-signature editing of the contracts, fraudulent documentation, and potentially forged signatures of Plaintiffs.”
“A party cannot assent to a contract if it does not exist.”
“A party cannot assent to a contract if that party did not sign, date, or initial the alleged contract.”
“Plaintiffs' Complaint and/or Exhibits fail to sufficiently demonstrate that there is a valid contract under New Mexico law between any parties to the real estate and/or business known as the "Old Apple Barn."
During an April 10th interview, Warren told the Cloudcroft Reader:
“My client has no recollection of seeing or signing those documents, and that was what we stated in our response.”
“Some pages are missing complete signatures, and others are missing dates. When those documents were shown to my client, he had no recollection of seeing a lot of those documents, and he can't tell us where those signatures came from.”
“The documents they provided as their exhibit clearly are not signed and executed properly, and our contention is it wasn't a valid contract based on how many signatures are missing, dates are missing, and printed names are missing. Even initials look different on each page.”
When contacted by the Cloudcroft Reader on April 9, 2025, real estate agent Annie Daniels, who was listed on documents as representing both parties in the transaction, declined to comment on the specifics but said, “We did everything to the T.”
In a phone call from Bill Niffenegger on April 11, 2025, the Cloudcroft Reader asked him if the copies of the contracts filed with the court were the actual ones. Niffenegger replied, “I don't know. I'm not the lawyer. I don't know what he put in there.“
Multiple calls to the Plaintiff's attorney, David Humphreys, for comment were not returned.
The profitability of the business is also in dispute. The defendants allege that the plaintiffs misrepresented the income and operational status of the company.
On January 6, 2025, Jerry Shulman alleged in an email to Bill Niffenegger (submitted as Exhibit G in the Plaintiff’s complaint) the following:
“The #1 issue, by far, is your mis-representation, in writing, that The Barn generated $427,000 NOl in 2023. Your breakdown of the $1,300,000 gross income into $300,000 food and $1,000,000 gifts, was significantly off. As you recall, you were actually losing money on food and working on keystone pricing on everything else. Even based on the numbers YOU provided, when adjusted into proper classifications, the NOl is only $31,885. Based on our buying abilities, this NOl increases to around $120,000/year. You were very smart to not provide the requested tax returns from CRI.”
Also filed as an exhibit is a January 7, 2025 email from plaintiff attorney Humphreys to defendant attorney Warren, in which Humphreys writes,
“My clients are unilaterally and without any conditions lowering the unpaid balance due on the promissory note by $500,000. This reduces the sale price in the same proportion to the decrease in 2024 profit of the business from expectations.”
Warren also challenged the minimal documentation of the business part of the transaction.
“The attempted transfer of a complex business on a real estate contract addendum reflects the haphazard nature and unconscionability of this property transfer.”
“The parties attempted to transfer buildings, inventory, retail, food, beverage, service, equipment, etc., on a one-page real estate addendum consisting of ten sentences.”
The Plaintiff's Reply
The Plaintiffs, Bill Niffenegger, Beverly Niffenegger, Old Apple Barn, LLC, and Mountain Park, LLC, filed a five-page Answer to Defendants' Counterclaims and Affirmative Defenses on March 20th.
In it, they deny all allegations of breach of contract, fraud, negligence per se, and intentional infliction of emotional distress. They also deny any failure to disclose known defects, any material misstatements of fact, and any recoverable damages sustained by the Defendants. Bill Niffenegger told the Cloudcroft Reader he sold it “as is, where is.”
The Plaintiffs also raised several affirmative defenses, including failure to state a claim, fraud and misrepresentation, Defendants' first material breach of contract, failure to state a legal defense, failure to mitigate damages, accord and satisfaction, failure of consideration, lack of good faith, equitable estoppel, recoupment, offset, and setoff, unilateral mistake of fact, novation, ratification, no material breach by Plaintiffs, spoliation, and failure to act in a commercially reasonable manner.
You can read the full reply here:
Appointing a Receiver
On March 5th, Judge Bryant ruled in favor of the Plaintiffs' Application for Emergency Relief. The defense did not oppose the appointment of a Receiver. Both sides supported appointing Joanne Smith as Receiver. Smith has worked at the Old Apple Barn under both owners.
The Defendants are ordered to provide the Receiver with a detailed accounting of the assets and property of the receivership estate. The order also restrains all parties from interfering with the Receiver's duties, removing or concealing assets, using assets in a way that diminishes their value, wasting or transferring assets, moving assets without further court order, and disparaging either Plaintiff or Defendant.
On April 9th, Judge Bryant granted the defendants an extension of 30 days to provide the Receiver with a detailed accounting of the assets and property of the receivership estate.

Warren said of the Receiver's work, "We think she is doing a really good job. She's being fair to both parties. We look forward to providing all the (inventory) documents and to her report to the judge because we think it will be favorable to us."
The lack of an inventory list in the purchase agreement complicates the inventory review to identify which inventory was provided by the Niffeneggers and which was brought in by the Shulmans.
You can read the judge's complete order here:
The Road Ahead
What happens next for the Old Apple Barn is uncertain.
Will it reopen anytime soon?
After the inventory list is reviewed, the Receiver may decide to reopen for business. The decision is hers to make. It’s unclear if it was to reopen, how it would be funded, and who would receive profits if there were any. When asked for a comment, Receiver Smith declined to discuss the case. “Give it a little bit more time,” she said.
Could it be sold again?
Warren said, "The way I understood the judge's orders is that the property is officially tied up; right now, the ownership is still in limbo about who actually owns it. So, if someone came up to the Receiver and offered her $2 million (as suggested in your question), my assessment of where the case is is that it would not be able to be accepted because the ownership is still in question."
Plaintiff attorney Humphreys was not available for comment.
Going to trial?
Warren said:
"The judge hasn't set a trial date yet, but I would guess if it did go all the way to trial, it would be either late fall or early winter of 2026."
Plaintiff attorney Humphreys was not available for comment.
Is a settlement possible?
Warren said:
"If the Plaintiff, Bill Niffenegger, agrees to a reasonable settlement. We have no problem taking the case to trial and feel that we will prevail. It is up to the Plaintiff to determine if they will give us a fair and reasonable settlement. We feel that we have a really good case and are ready to take it to trial. That's our plan as of now."
Plaintiff attorney Humphreys was not available for comment.
Summarizing his client’s position, Warren told the Cloudcroft Reader:
“My client wanted to make Cloudcroft/High Rolls of New Mexico his home. He wanted to run a business there. He took a lot of risk to move from Texas and start a business there and he feels awful for the community that the place is shut down .”
“He looks forward to presenting the evidence that we have in court to the judge and eventually to the public to show what really happened in this case.”
“He wishes that it worked out in a different way but here is where we are, and he's excited to actually be able to present this in front of the court, and have the public find out the truth about what happened.”
The Reader will follow further developments in this story.
To dig deeper…
All records in this case are publicly available online or by contacting the court.
You can retrieve all the documents filed in court for this case in two different ways.
First, email aladresearch@nmcourts.gov and request the documents for case number D-1215-CV-202500055. You will receive a zip file containing everything filed, typically within 24 hours.
Second, you can access the documents and court docket via reSearchNM. This website provides access to court records for all 33 New Mexico counties.
Search for case D-1215-CV-202500055.
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Another fantastic article. Well written and bipartisan. Absolutely love The Reader and its staff! Keep up the great work!
Drew’s illustration is awesome! 🍎