Current Ag Law & Taxation Cases and Rulings

Updated August 27, 2008

1. Swift & Company v. Elias Farms, Inc., No. 07-2466, 2008 U.S. App. LEXIS 18144 (8th Cir. Aug. 25, 2008)(contract action involving contracts with defendants (hog producers) for the supply of hogs; summary judgment against plaintiff on its contract claim and summary judgment against defendnats on their counterclaims for breach of contract and violations of the Minnesota Consumer Fraud Act are affirmed in part as to the counterclaims, but reversed as to the ruling on the contract claim where a "termination " provisions in a portion of the contract was ambiuguous and neither party produced conclusive evidence that dictated one meaning as a matter of law).

2. Frick Farm Properties, L.P. v. Kansas Department of Agriculture, No. 98,750 (Kan. Ct. App. Aug. 22, 2008)(buyer of farm property failed to carry burden of proof to show lawful and beneficial use of water, or due and sufficient cause for non-use; substantial evidence existed that prior  owner had failed to use without cause for statutory successive five-year period).

3. Michelsen-Caldwell, et al. v. Croy, et al., No. WD-08-001, 2008 Ohio App. LEXIS 3597 (Ohio Ct. App. Aug. 22, 2005)(will construction case; decedent’s will caused question as to whether separate and distinct tracts were being devised or simply drew a dividing line).

4. Bravo Farms, L.L.C. v. Battin, No. 26550-III, 2008 Wash. App. LEXIS 2062 (Wash. Ct. App. Aug. 21, 2008)(trial court’s denial of specific performance of alleged contract to purchase farmland affirmed; no acceptance of offer to buy land and evidence did not support existence of right of first refusal to purchase subject land – right of first refusal not in writing as required by Statute of Frauds and evidence not presented that parties’ conduct took matter outside the Statute of Frauds).

5. Rankin, et al. v. FPL Energy, LLC, et al., No. 11-07-00074-CV, 2008 Tex. App. LEXIS 6398 (Tex. Ct. App. Aug. 21, 2008)(wind farm development could be characterized as condemnation without the obligation to pay damages, but Texas law does not provide nuisance action for aesthetical impact and trial court’s grant of summary judgment on this point upheld; trial court’s exclusion of additional noise witness testimony upheld; each party to bear own costs because defendant’s conduct caused plaintiffs to respond to groundless motions).

6. Willis Provost Transportation, Inc. v. First Financial Insurance Company, No. 07-0411, 2008 U.S. Dist. LEXIS 62842 (W.D. La. Aug. 18, 2008)(defendant failed to carry its burden to show that clean-up costs that plaintiff incurred for leaking diesel fuel storage tank on farm were not covered by insurance policy).

7. Steffen v. Progressive Northern Insurance Co., 276 Neb. 378 (2008)(plaintiff’s husband killed when tractor he was driving on public road struck from behind; plaintiff brought breach of contract action against defendant; defendant claimed that policy did not cover underinsured motorist coverage for operation of farm tractor; trial court’s granted summary judgment for defendant on basis that policy did not provide coverage for operation of farm tractor and that action barred by statute of limitations; trial court reversed on appeal – policy exclusion contravenes state law; case remanded on statute of limitations issue).

8. In re Marriage of Webb, No. 48A02-0707-CV-568, 2008 Ind. App. LEXIS 1791 (Ind. Ct. App. Aug. 15, 2008)(trial court did not abuse its discretion in including planted, but not yet harvested, crops in marital pot and, when assigning value to crop, subtracting value of husband’s labor in planting, harvesting and caring for the crops; trial court did not err in including in marital pot USDA crop subsidy payments earned before and during period of parties’ separation, but paid during period of separation).

9. R.C.R., Inc. v. Deline, S-07-0029, 2008 Wyo. LEXIS 100 (Wyo. Sup. Ct. Aug. 15, 2008)(easement case involving Wyoming law).

10. Humboldt County v. McKee, et al., No. A117325, 2008 Cal. App. LEXIS 1248 (Cal. Ct. App. Aug. 15, 2008)(in 1977, plaintiff entered into Williamson Act (law establishing conservation contracts with landowners limiting land use to use for agricultural purposes in return for lower property tax valuation) contract with landowner establishing minimum parcel size of 160 acres for subsequent divisions of the property which was consistent with agriculture preservation Guidelines then in effect; in the following year, plaintiff revised guidelines and increased minimum parcel divisions to 600 acres; defendant purchased subject property and then divided and sold much of the land with some divisions being less than 600 acres (but all were more than 160 acres; plaintiff’s Guidelines upheld on appeal – plaintiff and prior owner voluntarily renewed their contract numerous times; new contracts incorporated revised Guidelines and revised Guidelines can be applied constitutionally to a Williamson Act contract executed in 1977).

11. Hueske v. State Farm Fire and Casualty Company, No. 07-3582, 2008 U.S. App. LEXIS 17459 (8th Cir. Aug. 13, 2008)(plaintiffs sued defendant for payment under third party supplier’s policy for losses plaintiff sustained from feeding cattle corn syrup tainted with diesel fuel that was purchased from supplier (a farmer); court holds that supplier’s corn syrup brokerage activity was a non-covered business pursuit of the insured separate from his farming operation that was not covered by the policy; plaintiff had previously entered into settlement with defendant stipulating that judgment may be collected only from proceeds of insurance policy with no personal liability to insured).

12. In re Western Iowa Limestone, Inc., No. 07-1968, 2008 U.S. App. LEXIS 17210 (8th Cir. Aug. 13, 2008)(case involves dispute between secured lender holding security interest in debtor's inventory and subsequent purchsasers of the inventory concerning which party's interest has priority; court upheld bankruptcy court's holding that subsequent purchasers were buyers in the ordinary course of business by virtue of their constructive possession of the goods which gave them priority under Iowa law).

13. Welcher v. Spees, No. 8-437/07-1377 (Iowa Ct. App. Aug. 13, 2008)(under Iowa law (Iowa Code §351.28)(owner of dog liable for all injuries caused by dog; defendant not dog owner so not liable for plaintiff’s injuries sustained in dog attack).

14. Umbdenstock v. Interstate Power and Light Company, No.8-529/07-1816 (Iowa Ct. App. Aug. 13, 2008)(defendant not liable for alleged stray voltage problems associated with plaintiff’s dairy operation; USDA publication properly admissible to establish defendant’s non-liability under hearsay exception for public records and reports that take place of expert testimony).
    

15. United States v. Fincher, No. 07-2514 (8th Cir. Aug. 13, 2008)(defendant's militia group not affiliated with state militia and, therefore, not subject to protections of Second Amendment; since machine guns not typically possessed by law-abiding citizens for lawful purposes, U.S. Supreme Court opinion in Heller did not protect defendant's possession of machine guns; case remanded on issue of whether defendant qualified as pauper or should be required to pay costs of court-appointed counsel).

16. United States v. Morawski, No. 06-13776, 2008 U.S. Dist. LEXIS 61580 (E.D. Mich. Aug. 12, 2008)(plaintiff (FSA) entitled to summary judgment directing defendant to pay balance due under promissory notes and summary judgment on right to foreclose subject real estate; plaintiff defaulted on several FSA loans extended to defendant for purposes of establishing dairy operation).

17. Clark v. United States Department of Agriculture, No. 07-3127 (8th Cir. Aug. 12, 2008)(defendant’s regulatory interpretation of “converted wetland” as property made more “suitable” for farming upheld rather than plaintiff’s attempt to strictly construe statute to mean whether subject property could possibly grow crops; defendant’s regulation placing burden on plaintiff to request and prove eligibility for “minimal effect” exemption” also upheld).

18. Exxon Shipping Co., et al. v. Baker, et al., No. 07-219 (U.S. Aug. 12, 2008)(Court refused to decide whether fisherman who sued over the Exxon Valdez oil spill are entitled to collect interest on the punitive damages award of $507.5 million; case remanded to Ninth Circuit).

19. Ventas Finance LLC v. Franchise Tax Board (Cal. Ct. App. Aug. 11, 2008)(state-imposed LLC fee is unconstitutional tax because not fairly apportioned, placed greater burden on interstate commerce than on intrastate commerce, and was based on LLC’s total income wherever earned; refund limited to difference between amount of levy actually paid and amount that could have been constitutionally assessed).

20. United States v. Park, No.0635886, 2008 U.S. App. LEXIS 17075 (9 th Cir. Aug. 11, 2008)(plaintiff owns and operates dog kennel on property subject to a scenic easement granted to the United States, which prohibits commercial activity but permits livestock farming; legal question involves whether dogs are "livestock"; term “livestock” ambiguous and much broader than traditional categories of horses, cattle, sheep and pigs such that summary judgment precluded).

21. Commonwealth v. Gussler, et al. , No. 2008-CA-000482-WC, 2008 Ky. App. LEXIS 251 (Ky. Ct. App. Aug. 8, 2008)(defendant injured while cutting trees on neighbor’s property for neighbor’s logging business for which defendant received W-2 wage statement annually; defendant’s claim for workers’ compensation benefits upheld; court holds that defendant not engaged in agricultural employment and, as such, employment not exempt from workers’ compensation coverage; statutory definition of “agriculture” did not include logging, and timber not cut to make land suitable for farming).

22. Logan County Commission v. Vandemoer, No. 07-CA1011, 2008 Colo. App. LEXIS 1277 (Colo. Ct. App. Aug. 7, 2008)(county Resolution prohibiting movement of agricultural irrigation sprinklers on or over county roads invalid; Resolution conflicts with state statute authorizing movement of implements of husbandry on public roads; mere fact that farmer moves irrigation sprinkler on county road does not, by itself, establish a public nuisance; plaintiff made no showing of present or imminent damage to road such that injunctive relief based on criminal statutory violation denied).

23. Precious Offerings Mineral Exchange, Inc. v. McLain, No. 07CA1264, 2008 Colo. App. LEXIS 1273 (Colo. Ct. App. Aug. 7, 2008)(owner of unpatented mining claim, like a federal oil and gas lessee, does not have standing to bring action to condemn easement of necessity; plaintiff failed to establish easement by implication over access road).

24. Baude, et al. v. Heath, No. 07-3323, 2008 U.S. App. LEXIS 17050  (7th Cir. Aug. 7, 2008)(state regulation requiring residents to first make fact-to-face contact with wine merchant before placing phone or online orders upheld as constitutional because effect on interstate commerce negligible; but, regulation prohibiting vintners from acting as their own wholesaler struck down as unfair burden on out-of-state sellers even though facially neutral).

25. Black Stone Acquisitions Partners I, L.P. v. Black, et al., No. 1:07CV9, 2008 U.S. Dist. LEXIS 60061 (N.D. Miss. Aug. 6, 2008)(case involves construction of language in deed reserving a one-half interest in all minerals; issue is whether lignite is “minerals”; plaintiff’s motion for summary judgment denied as fact issues remain concerning what parties intended “all minerals” to mean; in Mississippi, whether something is a mineral is fact question).

26. Center for Family Medicine et al. v. United States, No. 4:05-cv-04049 (D. S.D. Aug. 6, 2008)(two medical facilities entitled to a refund of FICA taxes paid on medical residents' stipends because they qualify for the student exclusion from FICA taxation but not on taxes paid for head residents who elected to stay after completing their residency programs to help administer the program).
    

27. First Farmers Bank & Trust v. Whorley, No. 34A02-0802-CV-124, 2008 Ind. App. LEXIS 1677 (Ind. Ct. App. Aug. 5, 2008)(plaintiff appointed guardian over estate of elderly person who owned over $5,000,000 of farmland; at time of appointment, bulk of farmland operated under share crop arrangement with unrelated third party which owner and defendant (decedent’s daughter) understood qualified the estate for special use valuation; plaintiff converted lease to cash lease without considering impact on eligibility for special use valuation; owner died and estate’s special use valuation denied by IRS due to failure to meet qualified use test; defendant sued for breach of fiduciary duties as guardian; trial court granted partial summary judgment for defendant; on appeal, court held that defendant’s claim brought within applicable statute of limitations, and defendant had standing to sue; but, genuine issue of material fact remained as to whether existing leasing arrangement qualified the estate for special use valuation before being changed to crop lease; accordingly,  and grant of partial summary judgment for defendant reversed).

28. In re Estate of Frank, No. 36206-6-II, 2008 Wash. App. LEXIS 1911 (Wash. Ct. App. Aug. 5, 2008)(ademption case involving bequest of land to family foundation).

29. United States v. Porter, No. 4:05-cv-00464-JEG, 2008 U.S. Dist. LEXIS 58858 (S.D. Iowa Aug. 4, 2008)(defendant, maker and seller of nutritional products for swine, dairy and beef cattle, classified salesmen as “independent contractors”, but plaintiff asserted salesmen were “employees” such that defendant was responsible for withholding and remitting employment and unemployment taxes on such persons; additional taxes and interest which defendant failed to pay; as such, plaintiff filed a federal tax lien on defendant’s real property and later moved to foreclose the lien; government’s classification of salesmen as employees upheld, but issues of material fact existed as to whether defendant entitled to Section 530 safe harbor; whether or not innocent spouse relief granted immaterial to issue in case; no fact issues present as to statute of limitations question; defendant’s motion to dismiss denied as is defendant’s motion for jury trial; government’s liens upheld).

30. Porter v. Gentry County Commission, No. 08-6029-CV-SJ-FJG, 2008 U.S. Dist. LEXIS 58800 (W.D. Mo. Aug. 4, 2008)(plaintiff’s Bivens action against defendant dismissed  because plaintiff failed to present sufficient facts to raise a reasonable expectation that discovery may reveal evidence of claims asserted in complaint  - that defendant acted with indifference to plaintiff’s opposition to wind farm within one mile of plaintiff’s residence; but, plaintiff may amend complaint to remove defendant from suit and add private party as defendant).

31. Darnall Ranch Inc. v. Banner County Bd. of Equalization, No. S-07-811 (Neb. Sup. Ct.  Aug. 1, 2008)(residential homes near animal feedlot entitled to depreciation adjustment for property tax purposes for external (locational) factor).

32. Border State Bank, N.A. v. AgCounty Farm Credit Services, FLCA, et al., No. 07-3102, 2008 U.S. App. LEXIS 16278 (8th Cir. Aug. 1, 2008)(both parties claimed security interests in assets of dairy operation – plaintiff’s interest established by promissory note executed in 2005 and defendant claimed a security interest based on loans made from 1998-2001; dairy defaulted on loans in 2003 and new investor took over dairy operation but also defaulted on loans from both plaintiff and defendant, and dairy’s assets liquidated; plaintiff claims entitlement to some of the sale proceeds based on claim that defendant’s security interest is invalid, and claims that defendant failed to give notice of asset disposition; trial court granted summary judgment to defendant; judgment affirmed – under MN law, defendant’s security interest in dairy’s collateral continued after collateral purchased by new investor; evidence presented that defendant’s debt not satisfied; claim that defendant did not properly perfect security interest not addressed by trial court and not considered on appeal; no notice of asset sale required because defendant did not “dispose” of the assets).