Case Summaries 09/2013

(court held that combination of transcripts, minutes from hearings and letters sufficient to satisfy writing requirement accompanying local government’s denial of wireless company’s application to build and activate cell tower after property owners had already approved placement of cell towers on their properties). 


(married couple owned farm and leased farmland to a son; son claimed the existence of an oral agreement that parents would compensate him for improvements as part of the price he would pay for eventual purchase of the farm; farm eventually sold to son at less than fair market value and son claimed he had made approximately $100,000 in improvements; parents then entered nursing home and resided their until their deaths; at time of their deaths approximately $93,000 remained in unpaid nursing home bills; nursing home sued to set aside transfer of farm as fraudulent conveyance; trial court set aside sale and held that son was personally responsible under state law for parents' unpaid nursing home bill; on appeal, court held that sale of farm was a fraudulent conveyance and remanded to trial court on issue of personal responsibility for debt of parents; appellate court determined that evidence was absence of oral agreement or of improvements to property, and that sale of farm made at time when parties reasonably believed that parents would need nursing home care; appellate court also held that trial court erred in holding son personally liable for parents' debt until determining liability of other parents' other children).


(plaintiff, a fish farm, sued defendant, fish feed manufacturer, in tort and contract based on issues with fish feed defendant supplied to plaintiff; defendant hired to prepare custom fish feed for plaintiff, successor in interest to original buyer of custom feed; plaintiff claimed that level of fishmeal in fish food insufficient and ultimately switched to buying food from different company; plaintiff claimed that health of fish improved after switch and claimed that was evidence of defendant's negligence and breach of contract warranties; defendant countersued for breach of contract; court determined that plaintiff's claims not preempted by Federal Food, Drug, and Cosmetic Act (FDCA) because material issue of fact existed as to whether defendant could have manufactured fish food containing the contracted level of fishmeal and taurine without supplementation - summary judgment on issue denied; plaintiff's tort-based claims barred by economic loss doctrine because plaintiff seeking damages for lost profits rather than physical injury to plaintiff's fish; summary judgment denied on plaintiff's breach of implied warranty claims). 


(plaintiff owns farmland and defendant owns mineral rights on same tract by virtue of severance deed that granted surface estate to plaintiff while “reserving and excepting” mineral estate to grantor; plaintiff uses surface estate to graze sheep and hay production; defendant operates three natural gas wells (via permits from state which required plaintiff to be given notice) on ten acres that was formerly used for hay production and that acreage is no usable for any other purpose; defendant followed waste disposal method denoted on permits  to dispose of drill cuttings; plaintiff sued for common law trespass, nuisance, trespass, negligence, intentional and negligent infliction of emotional distress, and sought injunction and damages; trial court granted summary judgment for defendant and appellate court affirmed; creation of drill waste pits necessary for recovery of natural gas and did not substantially interfere with surface use of property and was consistent with mineral lease and is common practice).


(petitioner is subsidiary of business that sold construction equipment and machinery and conducted equipment rental and leasing which parent company previously did in-house; parent had working relationship with major equipment manufacturer and like-kind exchange program created with petitioner; transaction involved petitioner conveying equipment to qualified intermediary (QI) which then sold equipment to unrelated third party with parent buying replacement property from manufacturer; QI used sale proceeds to buy the replacement property from parent who then transferred replacement property to petitioner; result was petitioner ended up with replacement property, third party had relinquished property and parent corporation had proceeds and manufacturer’s bill not due for six months; in essence, parent ordered replacement parts in purported like-kind exchange from manufacturer without having to pay for six months; because third party and QI involved, petitioner argued that transaction was like-kind exchange; court determined that transactions were structured to avoid I.R.C. §1031(f) because both petitioner and subsidiary “cashed-out” on low-basis property; non-recognition treatment not allowed). 


(IRS provides relief to taxpayers requesting relief for S corporation elections; such relief had previously been provided in other revenue procedures, but IRS, with this notice, is consolidating the prior revenue procedures; provides the exclusive simplified methods for taxpayers to request relief for late S elections, ESBT elections, QSST elections and QSub elections and late corporate classification elections). 


(defendant sold tractor that buyer finance through manufacturer and granted defendant security interest; buyer sold tractor to plaintiff for below market value and buyer later defaulted on purchase contract; plaintiff claimed lacked of knowledge of defendant’s security interest; court determined that plaintiff no bona fide purchaser due to plaintiff’s failure to search public records, and plaintiff’s attempt to hide tractor after learning of defendant’s interest amounted to conversion; appellate court upheld trial court’s award of summary judgment to defendant on conversion claim). 


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