Annotations 03/2015

The plaintiffs sued the defendant, a railroad, to enforce a 1901 agreement between their predecessors-in-interest and the railroad's predecessor.  Under the agreement, the railroad's predecessor-in-interest agreed to construct and maintain a dam on its right-of-way which ran adjacent to the plaintiffs' predecessor-in-interest's land.  The ponded water was to have a water depth between 14 and 20 feet.  In 2005, the plaintiffs bought property to the east of and adjacent to the right-of way.  The defendant acquired the railroad right-of-way in 2006.  The plaintiffs told the defendant that the dam was leaking  and damaging their property and needed to be fixed and maintained with at least 14 feet of water.  The defendant argued that the 1901 agreement didn't run with the land, and that if it did, it didn't require the defendant to require the pond to be maintained at a specific depth.  The defendant also maintained that any breach that occurred happened before the plaintiffs acquired their property.  The trial court granted summary judgment to the railroad, but the appellate court reversed.  The court determined that the 1901 parties to the agreement intended it to run with the land based on the language used and that it created obligations on the successor parties.  Williams v. The Indiana Railroad Company, No. 77A04-1311-CC-580, 2015 Ind. App. LEXIS 258 (Ind. Ct. App. Mar. 31, 2015).

 

 


In this Chapter 12 case, the debtor took over his father’s 3,000-acre crop and dairy farm upon the father’s retirement.  The debtor got divorced and, as a result, only had 1,000 crop acres at the petition date.   Because the row crop business suffered continual losses, the debtor sold some of the land to his son and began growing berries and raising pheasants for hunting.  The debtor became licensed by the state to acquire and release pheasants.  The pheasants were raised in a barn until fully grown. The incubation period of three weeks required the debtor to ensure that the birds were protected and remained disease-free.  The pheasants were ultimately released for hunts by customers on the debtor's land that had been placed in the CRP. Upon filing Chapter 12, the creditors argued that debtor was not engaged in farming but in a recreational activity.  The court determined that the debtor was engaged in farming under the totality of the circumstances citing  the dissent in Armstrong v. Corn Belt Bank, 812 F.2d 1024 (7th Cir. 1987), cert. den., 484 U.S. 925 (1987) and In re Maike, 77 B.R. 832 (Bankr. D. Kan. 1987).  However, the court determined that the amount of the debtor’s debt was not 50 percent or more related to a farming operation.  This was the result because the court concluded that the debt related to the debtor’s personal residence did not arise out of the farming operation, and there was no evidence presented that the mortgage secured the farm debt.   The court held that the case was to be dismissed or converted to a different chapter.   On appeal, however, the appellate court held that the residence debt, as non-farm related, should be excluded from aggregate debt - both the numerator and the denominator in the calculation set forth in 11 U.S.C. Sec. 101(18)(A).  However, the appellate court determined that the bankruptcy court correctly concluded that the residence debt was not farm-related debt.  Upon recalculation, 93 percent of the aggregate debt arose from a farming operation and satisfied the farm debt test of Chapter 12.  As for the corporation owning the CRP land on which the pheasant hunts were conducted, the court determined that simply having land in the CRP was insufficient to constitute a farming operation by itself without other income from farming.    In re Acee, No. 6:14-CV-0259 (LEK), 2015 U.S. Dist. LEXIS 41055 (N.D. N.Y. Mar. 31, 2015), aff'g and rev'g., No. 12-61632, 2013 Bankr. LEXIS 4789 (Bankr. N.D. N.Y. Nov. 12, 2013).


The plaintiff, a Kansas farmer, sold hay to buyers in the U.S.  The defendant operated a cattle operation in Texas and bought hay from the plaintiff in 2011 on separate occasions.  Ultimately, the buyer did not pay for $15,992.35 worth of hay.  The plaintiff sued, asserting relief under the civil federal Racketeer Influenced and Corrupt Organizations Act (RICO) and the Kansas Consumer Protection Act (KCPA).  The defendant motioned to dismiss the claims and the court agreed.  On the RICO claim, the court held that the plaintiff had failed to allege close-ended continuity that threatens future criminal conduct and that the matter was simply a "garden-variety fraud and deceit case."  On the KCPA claim, the court noted that the plaintiff is a supplier and not a consumer and that the statute applied to protect consumers.  Cory v. Bailey, No. 14-1258-MLB, 2015 U.S. Dist. LEXIS 42328 (D. Kan. Mar. 31, 2015).


A third party bought cattle and shipped them to a feedyard for feeding and care until they were sold on the third party's behalf to various buyers. The feedyard deposited the sale proceeds with a creditor for application against its line of credit. The feedyard would then pay the third party an amount equal to the sales proceeds less the feed cost. Several payments to the third party occurred during the year immediately preceding the feedyard's bankruptcy filing during which time the feedyard was insolvent. The bankruptcy trustee motioned to recover the payments made to the third party within a year of the bankruptcy filing, and the bankruptcy court ruled in the trustee's favor. On appeal, the third party claimed that the proceeds were not a "transfer of an interest of the debtor in property" as required by 11 U.S.C. Sec. 547(b) because the funds were not the debtor's property but were held in trust by the feedyard as bailee for the third party. In addition, the third party claimed that the proceeds were not traceable to the funds transferred to the third party because the feedyard used the proceeds to pay its debts and, as such, the state (NE) "swollen assets" doctrine imposed a constructive trust on the funds. On appeal, the court determined that the third party was purportedly a bailor whose bailment property was misused by the debtor-bailee which led to the inability of the third party to recover under the bailment agreement alone. Accordingly, the court determined that genuine issues of material fact remained with respect to the existence of a bailment under NE law that would extend to the proceeds of the cattle sales and, thus, whether the proceeds were the debtor's property.  On remand, the bankruptcy court determined that the trustee was entitled to the proceeds as preferential transfers upon finding that the proceeds were the property of the feedlot.  The court reached that conclusion based on the fact that the creditor had a security interest in any funds in any of the feedyard's deposit accounts and could apply the funds against any loans or other of the feedlot's obligations.  The court also determined that neither the feedlot nor the creditor obtained the funds by fraud or misrepresentation and, thus, a constructive trust could not be imposed.  Because there was no conversion, the "swollen assets" doctrine was inapplicable.  The transactions also did not occur in the ordinary course of business. In re Big Drive Cattle, L.L.C. v. Overcash, No. BK11-42415, 2015 Bankr. LEXIS 991 (Bankr. D. Neb. Mar. 30, 2015), on remand from, No. 4:14CV3064, 2014 U.S. Dist. LEXIS 80853 (D. Neb. Jun. 13, 2014).  


The debtors (a farming married couple) borrowed $150,000 from a bank in exchange for a security agreement and note.  While the security agreement required the debtors to deposit all proceeds from the sale of collateral (crops, equipment, etc.) in their bank account, the bank did not strictly enforce the requirement.  The debtor/husband was injured in a farming accident  and relatives conducted the farming activity without depositing crop proceeds in the bank account.  Instead, farm income was largely used to pay medical bills of the debtor/husband.  The husband/debtor's son began his own farming operation in 2012 using his father's equipment and the son financially assisted his father.  The debtors filed Chapter 7 in early 2013 and the bank claimed that almost $75,000 of debt should not be discharged due to the debtors' willful and malicious injury to the bank.  The bank claimed that the debtors and son structured the farming operation to evade the deposit requirement.  The court allowed the debt to be discharged in full.  The court determined that the bank failed to prove that the farming operation, in 2012, was the debtors'.  The bank also failed to prove injury, willfulness, and malice as required by 11 U.S.C. Sec. 523(a)(6).  The court viewed the debtors' testimony as credible.  In re Jacobson, 532 B.R. 742 (Bankr. N.D. Iowa 2015).


The defendant insurance company filed this declaratory judgment action seeking a determination that it's "motor vehicle" exclusion in a farm insurance policy applied to bar coverage for the plaintiff, a farmer that had purchased the policy for coverage for his farm.  The plaintiff had been sued by a third party for injuries that the third party's granddaughter sustained while driving the plaintiff's all-terrain vehicle (ATV).   The plaintiff owned a farm on which he has cattle.   The plaintiff used the ATV daily to check the cattle and fences.  The ATV was designed to be used off-road.  The plaintiff's 14 year old daughter and her 14 year old friend (the third party's granddaughter) asked to use the ATV, but the plaintiff refused to give permission because he was not going to be home.  However, the girls found the keys and took the ATV for a ride on a public road resulting in the injuries to the granddaughter.  The third party sued the plaintiff for negligence, and the plaintiff asked the defendant to provide the defense and pay the third party's claim.  The policy excluded coverage for bodily injury arising from the use of a "motor vehicle."   However, the exclusionary clause did not apply to farm implements operated on public roads or "mobile equipment."       The trial court ruled in favor of the defendant, finding that the ATV did not qualify as either a farm implement or mobile equipment.  On appeal, the court reversed determining that the policy language of "mobile equipment" could reasonably be construed to provide coverage for the ATV accident.  Partin, et al. v. Georgia Farm Bureau Mutual Insurance Company, No. A14A2025, 2015 Ga. App. LEXIS 213 (Ga. Ct. App. Mar. 27, 2015). 


In this adversary action brought by a bank, the bank argued that the debtors’ obligations under a promissory note and an ag security agreement should be excepted from discharge in the Chapter 7 case under 11 U.S.C. Sec. 523(a)(6) due to the debtors’ willful and malicious injury to the property.  The debtors had borrowed $150,000 from the bank to finance their farming operation.  The security agreement required the debtors to make all proceeds from the sale of collateral available immediately to the bank by depositing the proceeds in the debtors’ account with the bank.  The bank did not enforce that policy.  The husband farmer was injured in a farming accident and his relatives took over the farming operation but did not deposit all proceeds from the farming operation into the bank account.  Instead, the majority of funds used to pay medical bills.  The husband’s son started his own farming operation with the use of his father’s equipment, with the son ultimately providing financial assistance to his father.  The debtors filed Chapter 7 and the bank argued that the funds not deposited into the bank account should be excepted from discharge due to willful and malicious injury to the bank.  The court, however, determined that the bank failed to prove willfulness, malice and injury as required by the statute.  The debtors’ testimony was viewed as credible.  In re Jacobsen, No. 13-00331, 2015 Bankr. LEXIS 94 (Mar. 27, 2015).    


The IRS has issued another item of guidance stating that Form 1099 need not be issued for income from freight services.  Treas. Reg. 1.6041-3(c) exempts payments for "freight services" from the general requirement for payors to issue Form 1099 to independent contractors and others with which they do business.  Thus, trucking companies need not issue Form 1099s to owner-operators that are under lease for freight hauling services.  The same rule applies to farmers that make payments in connection with the trucking or hauling of livestock, grain or other farm products - no Form 1099 is required.  CCM 20151002F (Jun. 6, 2014).   


The taxpayer was a non-exempt cooperative and a partner in an LLC taxed as a partnership.  It wanted to treat the partnership's grain purchases as its per-unit retains paid in money (PURPIM) when the partnership bought grain from the taxpayer's current or former patrons.  The IRS determined that it could not.  Absent an agency relationship, the taxpayer did not satisfy the requirement that the grain be bought from the taxpayer's current or former patrons.  The fact that the LLC was taxed as a partnership and that the taxpayer's income from the partnership flowed through to its members was irrelevant because an LLC is not a cooperative and cannot ascribe to itself the attributes and ability of a member cooperative to issue PURPIMS.  CCM 20150801F (Apr. 22, 2014).


The plaintiff contacted the defendant, a veterinary hospital, about the plaintiff's horse used in jumping event about possible treatment.  The horse required a "minimally invasive" surgical procedure which the defendant performed.  The horse, however, developed laminitis, and lived after further extensive treatment.  But, the horse could no longer participate in jumping activities.  The plaintiff sued for fraudulent misrepresentation concerning the services provided and the lack of appropriate equipment available to perform the required surgery.  During surgery, the anesthetist told the veterinarian performing the surgery that "we have to speed it up" and after the surgery stated, "the operation was too long."  No other parties involved in the surgery made any statements at all.  The court dismissed the case because the complaint failed to allege that any false statements were made.  Likewise the court dismissed the claim based on premises liability because missing equipment did not pose a "danger" to others coming onto the premises and the horse did not qualify as a business invitee.  The corporate veil piercing claim was also dismissed because the veterinarian's LLC was not formed for any improper purpose, but for estate planning purposes. Salas v. Wellington Equine Associates, et al., No. 9:14-CV-81483-Rosenberg/Brannon, 2015 U.S. Dist. LEXIS 38477 (S.D. Fla. Mar. 26, 2015).


The defendants wanted a recreational pond constructed on their property, and hired the plaintiff to build it.  After selecting a site, the pond was built at a cost of over $87,000 which the defendants paid.  Within a year, however, the pond failed to hold water.  A second round of work on the pond resulted in a bill of over $93,000.  The defendants refused to pay this amount and the plaintiff filed a petition to foreclose a mechanic’s lien.  The defendants countered that the plaintiff was negligent in the construction of the pond and failed to perform the construction in a workmanlike manner which caused damages.  The trial court held that the plaintiff had engaged in a second round of work voluntarily and refused to foreclose the lien.  The trial court also rejected the defendants’ claim for damages because the oral agreement between the parties did not involve any express or implied warranties or guarantees.  On appeal, the court reversed on the contract issues.  The court found that the plaintiff had expressly warranted that the pond would hold water even though there was no written contract between the parties because the statement that the plaintiff made that he would “do a pond” expressly meant that the pond would hold water.  The court also determined that the implied warranty of fitness for a particular purpose had been breached, and that the plaintiff had failed to construct the pond in a workmanlike manner due to miscalculating the soil conditions of the site selected for the pond.  The court also held that the defendants had not assumed the risk that the pond would not hold water.  However, the court did affirm the trial court’s determination that the mechanic’s lien should not be foreclosed.  Reilly Construction Co., Inc. v. Bachelder, Inc., No. 14-0817, 2015 Iowa App. LEXIS 261 (Iowa Ct. App. Mar. 25, 2015).


In 2000, a group of doctors formed an LLC to provide diagnostic testing services to patients in two counties.  They had a post-withdrawal non-compete agreement prepared that included a provision protecting member investments by restricting competition of former members in the two counties in which the LLC operated.  The provision specified that "each member shall...refrain from competing with the Company" within the two designated counties.  About five years later, one of the doctors began constructing a sleep laboratory and was going to operate it in the designated counties.  The LLC informed the doctor that such operation would violate the LLC agreement, so he withdrew from the LLC and operated the sleep lab.  The LLC sued the doctor for breach of the non-compete agreement.  The trial court ruled for the former member, holding that the agreement only applied to current or active members.  On appeal, the court affirmed, holding that the agreement no longer applied to a former member.  The court also held that the withdrawn doctor did not breach any implied duty of good faith and fair dealing and that the LLC had foregone any breach of fiduciary duty claim.  Grants Pass Imaging & Diagnostic Center, LLC, et al. v. Machini, No. A152437 (Ore. Ct. App. Mar. 25, 2015).    


Passive losses cannot be used to offset income from non-passive activities.  The petitioners, a married couple, operated a family business that had its genesis in the husband's father who started a lumber company in the late 1970s.  For planning purposes, the business developed into a real estate development business comprised of an S corporation and a partnership.  The enterprise incurred losses and the issue was whether the separate entities comprised a single activity under Treas. Reg. Sec. 1.469-4(c) for purposes of the material participation 500-hour test.  The court examined the factors under the regulation for determining the presence of an "appropriate economic unit," and determined that the S corporation and the partnership had common control and conducted the same type of business activity.  The court also determined that the entities were interdependent, used common employees and combined their financial reporting.  The petitioners were able to satisfy the 500-hour test in the combined entities based on witness testimony and phone records of business activity.  Lamas v. Comr., T.C. Memo. 2015-59. 


The plaintiff transferred farmland to her son in 1988, reserving a life estate in the 266 acres which entitled her to the rental income of $5,332 annually from the property for her life.  In 1992, the son leased a portion of the farm (including some of the life estate property) to another farmer for $8,200 annual rent, with that rent amount going to the son.  The plaintiff had moved off of the farm by the time she applied for Medicaid in 2011.  The state (ND) Medicaid agency denied the application, claiming that she should be receiving a portion of the $8,200 annual rent.  Due to that, her countable assets exceeded the limit to qualify for Medicaid.  On appeal, the trial court affirmed the agency decision.  On further review, the appellate court affirmed.  While the plaintiff claimed that the rent amounted to an annual gift to the son, the court disagreed.  The court noted that if a gift was intended, the petitioner should have released the life estate and transferred title to the property to her son.  Bleick v. North Dakota Department of Human Services, 861 N.W.2d 138 (N.D. 2015).


The petitioner, a C corporation that employed an eye doctor who also owned the C corporation, paid a $2,000,000 bonus to the eye doctor in 2007.  The payment of the bonus by the C corporation had the effect of eliminating corporate income, taxable at a 35 percent rate.  The petitioner also carried over an NOL from 2007 to 2008.  The IRS argued for a reduced bonus on the basis that $2,000,000 was not reasonable under the facts.  The court agreed with the IRS on the basis that the C corporation provided no methodology as to how the doctor's bonus was computed.  The court deemed $1 million of the bonus payment to be "excessive compensation" taxed at 32 percent.   The court also upheld the IRS determination of penalties in the amount of $62,000.  Midwest Eye Center, S.C. v. Comr., T.C. Memo. 2015-53.


The petitioners, a married couple, came into millions of dollars when the husband's family baking company founded by the petitioner's grandfather was sold.  The husband had started working for the business after dropping out of college.  He used the proceeds from the buyout to get involved in raising Arabian horses.  His venture, which is still ongoing, proved overwhelmingly unsuccessful, losing millions of dollars from 2004 through 2007, the years under review.  The IRS denied the losses under the hobby loss rules.  The court weighed the nine factors (not all with the same weight) and ruled for the petitioners.  The court note that the petitioners had made various business moves designed to facilitate the profitability of the horse activity, including borrowing against non-farm investments to channel funds into the horse activity.  The petitioner also sold many investments that resulted in a multi-million dollar capital gain to try to generate funds for the horse activity.  Based primarily on these events, the court determined that the factors weighed in the petitioners' favor and the losses were not limited by the hobby loss rules.  Metz v. Comr., T.C. Memo. 2015-54. 


The petitioner worked for Dupont in recruiting and human relations from 1968 to 1992, when he retied and created an S corporation through which, as a contractor, he offered many of the same services that he performed as an employee of Dupont.  Over the years, the s corporation income declined significantly, but the S corporation still had significant deductions. The IRS disallowed many of the deductions for lack of substantiation.  The court largely agreed with the IRS on the basis that the petitioner failed to show that the claimed deductions were ordinary and necessary expenses for the S corporation.  Instead, many of the expenses were for personal items.  The petitioner's automobile was also found to be used primarily for personal reasons and the petitioner failed to substantiate the extent of business use.  Consequently, only a small portion of claimed business deductions were  allowed.  Moyer v. Comr., T.C. Memo. 2015-45.


The debtors filed Chapter 7 in late 2009 and the creditor, a bank, filed four claims that were secured by the debtors' residence.  The bank knew that the debtors received a discharge in early 2010.  The debtors' Chapter 7 case was then converted to Chapter 12  and new payment terms were worked out resulting in a direct assignment of proceeds from the debtors' dairy farm (i.e., milk checks) to the bank along with new interest rates and maturity dates.  The debtors made the required payments for about two months until the checks no longer met the amount required under the new payment terms.  Almost two years later, the bank started foreclosure proceedings.  The debtors filed a contempt motion, claiming that the bank's conduct violated the discharge injunction of 11 U.S.C. Sec. 524(a)(2).  The debtors claimed that the milk payments were involuntary payments.  The bankruptcy court ruled for the bank.  On appeal, the court affirmed.  The court noted that the bank's conduct was exempt from the discharge injunction because the agreement between the parties - (1) involved a situation where the bank retained a security interest in the debtors' principal residence; (2) was entered into in the ordinary course of business between the creditor and debtor; and (3) was limited to seeking or obtaining periodic payments associated the bank's security interest in the residence (11 U.S.C. Sec. 524(j)).  In re Teal, No. 4:14-CV-15, 2015 U.S. Dist. LEXIS 32315 (E.D. Tenn. Mar. 17, 2015).  


At issue were conflicting deeds involving 202 acres.  A 1945 deed used a metes and bounds description to convey title to the 202 acres which included the 34.28-acre tract at issue.  A 1973 deed conveyed almost 5,000 acres in three tracts and the metes and bounds description did not contain the 34.28-acre tract, but a general description that referred to a previous deed did.  The issue was whether the 1973 deed subsequently conveyed the same 34.28-acre tract that was included in the 1945 deed and, consequently, who the present owner of the tract is.  The trial court determined that the metes and bounds description in the 1973 deed controlled, but the appellate court reversed.  On further review, the Supreme Court reversed the appellate court.  The court noted that the metes and bounds description was not defective or doubtful and was not ambiguous.  The court also determined that the metes and bounds description, which was more specific, better evidenced the parties' true intention and controlled over the more general description.  Stribling, et al. v. Millican DPC Partners, et al., No. 14-0500, 2015 Tex. LEXIS 270 (Tex. Sup. Ct. Mar. 20, 2015).


The plaintiff was watching her daughter participate in a high school soccer match at the defendant's facility.  After the match, while leaning on a gate to sign the school's required sing-out form for the daughter, the plaintiff fell approximately five feet and injured her ribs and arm.  The plaintiff sued for damages and the defendant asserted the state (TX) recreational use statute as a defense which would limit liability to intentional acts or gross negligence.  The defendant claimed that attending a soccer match was a recreational use covered by the statute.  The court disagreed on the basis that attendance at a soccer match was not a recreational use contemplated by the statute.  University of Texas at Arlington v. Williams, No. 13-0338, 2015 Tex. LEXIS 268 (Tex. Sup. Ct. Mar. 20, 2015).


In this case, the president of a corporation impeded an IRS audit of the corporation by creating and backdating promissory notes, issuing false Forms 1099, among other things.  From 2004 to 2008 the corporations earned over $100 million but didn't file any tax corporate tax returns.  The IRS claimed that the corporation owed $120 million in taxes, interest and penalties.  The petitioner was a minority shareholder that had received bonuses and dividends during the years that the corporation was not paying taxes.  The IRS sought to recover $5 million from the two minority shareholders.  The petitioner received over $3.5 million in dividends during the years at issue while the company was insolvent and another minority shareholder received about $.5 million.  Under state (FL) law, the IRS did not have to pursue all reasonable collection efforts against the corporation, but could go directly after the minority shareholders to the extent of dividends received during the years at issue.  Kardash v. Comr., T.C. Memo. 2015-51.   


The plaintiff, a group opposed to wind power stations in residential areas, opposed an Ohio project due to it's projected impact on the Indiana bat, an endangered species.  The U.S. Fish and Wildlife service approved the project's application for an incidental take permit under the Endangered Species Act, and the plaintiff challenged that approval.  The court determined that the approval was appropriate because the permit was granted on the condition that the project lower blade speeds during particular months and be limited to 26 bat takings over a five-year period. The court granted summary judgment for the government on the basis that the Administrative Procedures Act, the Endangered Species Act and the National Environmental Policy Act had not been violated.  The court noted that the government's mitigation requirements for the project fully offset the impact of bat takings and that the court didn't have to determine if the plan was the maximum that could be practically implemented, as the plaintiff claimed was required.  Union Neighbors United, Inc. v. Jewell, No. 13-01435 (RJL), 2015 U.S. Dist. LEXIS 33664 (D. D.C. Mar. 18, 2015).


The petitioner didn't file a return and the resulting unreported income contained a distribution from a pension plan that was subject to the early distribution penalty (10%) of I.R.C. Sec. 72(t).  The issue was whether I.R.C. Sec. 7491(c) shifted the burden of proof to the IRS with respect to the early distribution penalty.  The petitioner argued that it did on the grounds that the additional tax was a penalty rather than a "tax" or "addition to tax" or "additional amount."  The court held that the I.R.C. Sec. 7491(c) did not shift the burden of proof to the IRS.  The additional amount was determined to be a "tax."  El v. Comr., 144 T.C. No. 9 (2015).


The Large Business and International Division of IRS has issued a directive to examiners that lists several retail activities that typically don't constitute MPGE and, thus, the DPGR from the activities do not qualify to be deducted under I.R.C. Sec. 199.  The examples that the IRS lists include: (1) cutting blank keys to a customer's specification; (2) mixing base paint and a paint coloring agent; (3) applying garnishments to cake that is not baked where sold; (4) applying gas to agricultural products to slow or expedite fruit ripening; (5) storing agricultural products in a controlled environment to extend shelf life; and (6) maintaining plants and seedlings.  LB&I-04-0315-001, impacting IRM 4.51.2 (Mar. 16, 2015).     


This case, brought by various activist groups opposed to the planting of genetically modified crops, involved a challenge to five refuges in the National Wildlife Refuge System (including one in north-central Iowa) managed by the U.S. Fish and Wildlife Service (USFWS).  The plaintiffs challenged the USFWS decision to permit the farming of GMO crops and the use of certain pesticides in the refuges.  The plaintiffs claimed that the USFWS violated the National Environmental Policy Act (NEPA) and the Administrative Procedure Act (APA) by allowing farming in the refuges without NEPA analysis of the impacts of pesticide use via the use of neonicotinoid pesticides (which have been linked to harm to bee colonies) and the farming of GMO crops.  The plaintiffs sought to vacate the FWS decisions allowing pesticide use and GMO crop farming and enjoin the practices until the USFWS prepared an adequate NEPA analysis for the refuges.  With respect to the NEPA claims regarding GMO crop farming, the court denied the plaintiffs' motion for summary judgment with respect to the Iowa refuge, but granted it with respect to the refuge in Michigan.  With respect to the NEPA claim involving pesticides, the court granted the plaintiffs' motion for summary judgment, and ordered the defendants to file, by April 15, 2015, a notice indicating the extent to which neonicotinoid pesticides are currently used on the refuges and where they are used.  The court ordered the defendant to "devise a plan to phase out their use as soon as practicable, but no later than January 1, 2016."  Center for Food Safety, et al. v. Jewell, No. 14-360 (CKK), 2015 U.S. Dist. LEXIS 31700 (D. D.C. Mar. 16, 2015)..   


The petitioners got a refund of $54,507 in state (NY) income tax in 2008.  The refund was attributable to refunded state income tax credits which were based on state real property taxes that entities paid in which the petitioners had an ownership interest.  The property tax was paid and deducted at the entity level which decreased the entity income that ultimately passed through to the taxpayers, resulting in a lower tax liability.  The Court, agreeing with the IRS, determined that the petitioners received a tax benefit from the credits and, as such, the credits were income to them.  The court cited its prior decision in Maines v. Comr., 144 T.C. No. 8 (2015), which involved similar facts.  Elbaz v. Comr., T.C. Memo. 2015-49.   


The petitioner, in early 2007, entered into an agreement with a homeowner to lease the home.  The agreement also contained an option for the petitioner to acquire the home upon meeting certain conditions before the option expired on January 31, 2008.  The petitioner paid for the option and an additional amount per month to be applied against the purchase price if the option was exercised.  The petitioner did not exercise the option due to the inability to get financing.  The third party filed bankruptcy in late 2008, and the petitioner filed a complaint in the bankruptcy estate claiming that the third party had tried to defraud her concerning the option contract.  The petitioner's complaint was dismissed.  The petitioner claimed the FTHBC of $7,500 on her 2008 return which the IRS rejected.  The court upheld the IRS position, noting that the petitioner did not produce any settlement statement, closing statement, purchase agreement or any other document to substantiate that she had purchased or acquired an interest in the home.  Because the petitioner did not execute the option, she did not have any equitable in the house either.  Pittman v. Comr., T.C. Memo. 2015-44. 


The petitioner was a truck driver that spent 358 days on the road in 2009.  The company he worked for did not require him to return to base and told him where to go for his next trip after completing the current trip.  The petitioner used his mother's address to get his driver's license, but only stayed at her house rent-free while on jury duty and kept his personal effects in a storage locker.  The petitioner claimed over $27,000 as a deduction for unreimbursed employee business expenses, including over $19,000 for travel expenses while away from "home." The petitioner also claimed over $7,000 for truck stop "electrification" expenses (electricity provided by the truckstop so that the petitioner's truck didn't have to have its engine idle).  The court upheld the IRS denial of the per diem expenses and hotel expenses on the basis that the expenses were not incurred while away from home because the petitioner did not have a tax home.  To qualify as a tax home, the court noted that the petitioner needed to have incurred expenses associated with maintaining the home while away from it.  However the court allowed the deduction of expenses associated with truck stop electrification expenses.  Those expenses were deemed to be the functional equivalent of fuel expenses and were deductible subject to the two percent floor on itemized deductions.  The court, contrary to its own prior opinion in a different case, did not impose the negligence penalty because the petitioner had read IRS publications to determine how to handle the expenses and thus acted in good faith.  The court did uphold the substantial understatement of tax penalty.  Howard v. Comr., T.C. Memo. 2015-38. 


The decedent had 10 IRAs at the time of death with his estate designated as the beneficiary of each one.  The decedent's will specified that the decedent's tangible personal property would pass to the taxpayer and that the residue of the estate (such as the IRAs) would pass to a trust which, after payment of debts and taxes, would pass the remaining property to a POA trust.  The IRAs ultimately passed to the POA trust.  The POA trust gave the taxpayer the income annually and, upon written demand, the principal of the trust assets according to an ascertainable standard along with the right to withdraw trust principal upon written demand to the trustee.  The taxpayer did make such written demand and sought to transfer the remaining IRA proceeds to IRAs established in the taxpayer's name.  The IRS determined that such transfer would not qualify as an inherited IRA.  The taxpayer was deemed to have received the proceeds from the trust and not from the decedent.  The taxpayer was not the sole trustee of the POA trust.  U.I.L. 201511036 (Dec. 18, 2014).


The plaintiff worked for an equestrian center as its barn manager.  The equestrian center operated on 200 acres and provided riding lessons, horse training and riding facilities with riding lessons being the center's predominant activity.  The plaintiff performed general maintenance work and other necessary daily tasks to prepare horses for riding privately and for camps.  While training a race horse, the plaintiff fell from a horse and was injured.  The center did not carry workers' compensation insurance, having been advised it was exempt from coverage based on the statutory exemption for "[a]ny person employed in agriculture" contained in Ky. Rev. Stat. Sec. 342.650(5).  For purposes of that provision, Ky. Rev. Stat. Sec. 342.0011(18) defined "agriculture" as the "operation of farm premises, including the planting, cultivation, producing, growing, harvesting, and preparation for market or agricultural or horticultural commodities thereon, the raising of livestock for food products and for racing purposes,...and any work performed as an incident to or in conjunction with the farm operations...."  An Administrative Law Judge dismissed the plaintiff's claim and the Workers' Compensation Board affirmed.  On appeal, the court affirmed.  The court noted that a prior decision of the court had held that "raising" of race horses included the boarding of the horses and that there is no distinction based on whether the employer owned the horses or they were owned by other persons.  The court also noted that the KY Supreme Court had held that the ag exemption included conditioning or exercising of race horses after they had been sold or released to racing but had returned to the farm for rehabilitative purposes.  As to the facts of this case, the court stated that, "the feeding, housing, caring for, and training of horses in a farm setting is agricultural in nature."  Horses used at an equestrian center, the court determined, were the same as the raising of livestock for racing purposes.  Thus, "training" of horses constitutes "agriculture" for purposes of the ag exemption from workers' compensation.  In addition, the court's opinion, means that the raising of livestock for purposes other than food or racing constitutes "agriculture" for workers' compensation purposes.  Hanawalt v. Brown, et al., No. 2014-CA-000744-WC, 2015 Ky. App. 36 (Ky. Ct. App. Mar. 13, 2015). 


The defendant was convicted of second degree criminal mischief for damaging the "property of another" when he aided and abetted his son in shooting two state-owned deer decoys that the defendant and his son believed to be deer.  The defendant appealed his conviction because wild deer do not become property until reduced to physical possession (e.g., the son thought he was shooting at deer and deer are not "property of another" until reduced to possession).  The appellate court upheld his conviction and the OR Supreme Court granted review to determine whether wild deer are "property of another" as used in Ore. Rev. Stat. Sec. 164.354.  The Court noted that the legislature had amended Ore. Rev. Stat. Sec. 164.305(2) (the definition of "property of another" in 1977 to broaden it and that the state had previously declared that it had a property interest in wildlife.  Thus, the state had a legal interest in wildlife and wild deer are "property of another" for purposes of the statute at issue.  The conviction was upheld.  State v. Dickerson, No. S06218, 2014 Ore. LEXIS 1036 (Ore. Mar. 12, 2015), aff'g., 317 P.3d 902 (Ore Ct. App. 2013). 


The petitioner donated a perpetual conservation easement on 22 acres to qualified charity - the North American Land Trust.  The easement grant, however, allowed the petitioner to make "minor alterations to the boundary of the Conservation Area" if certain requirements were met within the first five years of the grant.  The petitioner claimed a charitable deduction for the contribution and the IRS denied the deduction.  The court agreed with the IRS because the easement was not a "qualified real property interest" as defined by I.R.C. Sec. 170(h)(2)(C) because the petitioner could change the property subject to the easement.  The court noted that I.R.C. Sec. 170(h)(2)(C) specifies that a "qualified real property interest" is one that involves an identifiable, specific piece of real property.  The retained right to change the property boundaries violated that requirement.  Balsam Mountain Investments, LLC, et al. v. Comr., T.C. Memo. 2015-43.


The petitioners, a married couple, received targeted economic development payments from the state of New York which the state terms "credits" and treats them as refunds for "overpayments" of NY state tax.  While one credit was limited to the amount of past real property tax actually paid, the other two credits at issue were not limited to past tax paid.  The credits first reduced a taxpayer's NY income tax liability with any excess being carried forward or partially refunded.  The petitioners claimed that the credits they received shouldn't be taxable income because they were "overpayments" of past NY income tax and, as such, were the functional equivalent of withheld taxes, and because they didn't claim deductions for NY income tax.  The IRS took the position that the credits were taxable income as cash subsidies, but the petitioners also maintained that the IRS was bound by the NY definition of the credits of the credits as "overpayments."  The petitioners also argued that the credits were not taxable income because they were welfare.  The court agreed with the IRS position.  The court first noted that if the petitioners' definitional argument were to be upheld, then states could undermine federal tax law by redefining terms.  On the "welfare" argument, the court noted that receipt of the credits were not conditioned on the petitioners showing need.  Thus, the credits were not excludible under the "general welfare" exception.  The court also noted that the credits were income to the petitioners irrespective of whether the credits were refunded or were carried forward.  Maines v. Comr., 144 T.C. No. 8 .


The plaintiff, a nonprofit corporation, supplies water to approximately 12,000 persons and alleged that the defendant caused solid hazardous waste to be disposed of at it's manufacturing facility that contaminated the plaintiff's water supply in violation of the Resource Conservation Recovery Act (RCRA).  The plaintiff also alleged public and private nuisance, abnormally dangerous or ultrahazardous activity, conversion and unjust enrichment  The plaintiff sought injunctive relief and an order mandating the cleanup of the defendant's facility.  The defendant motioned for summary judgment on all claims.  The court granted the defendant's motion for summary judgment on the abnormally dangerous or ultrahazardous activity claim, as well as the unjust enrichment claim.  The defendant's motion was denied on other claims.  The Little Hocking Water Association, Inc. v. E.I. DuPont de Nemours and Co., No. 2:09-CV-1081, 2015 U.S. Dist. LEXIS 29200 (S.D. Ohio Mar. 10, 2015).     


The petitioner claimed a charitable deduction of $31,037 on her 2008 return ($15,340 for cash contributions and $15,697 in noncash contributions) and a $10,357 charitable deduction on her 2009 return ($6,490 in cash contributions and $3,867 in noncash contributions). However, the petitioner merely attached Form 8283 to her 2008 and 2009 returns showing several contributions of property for each year with each contribution valued over $250 and further attempted to substantiate the contributions with donation receipts that lacked either the date of contribution or a property description, or both.  The receipts neither reconciled with Form 8283 nor provide anything more than vague descriptions of the donated items.  Accordingly, the court upheld the IRS' denial of the charitable deductions in any greater amount than IRS had allowed.  Jalloh v. Comr., T.C. Sum. Op. 2015-18.


The states of Colorado, Kansas and Nebraska executed a "water compact" in the 1930s concerning the apportionment of water in the Republican River between the states.  Under the compact, Colorado is to get 11 percent of the water, Nebraska 49 percent, and Kansas 40 percent for "beneficial consumptive use."  In the late 1990s, Kansas filed a complaint that groundwater wells in NE had pumped excess water from the Republican River which depleted stream flow as the river water flowed into Kansas.  The U.S. Supreme Court agreed with a  special master report upholding KS' claim.  The parties settled, with the settlement resulting in usage to be computed on a five-year running average (reduced to two years during drought).  Under the settlement agreement, groundwater pumping counted toward a state's water consumption.  KS later claimed that NE violated the first five-year review and a special water master agreed, determining that NE had "knowingly failed" to comply with the compact.  NE was found to have exceeded its allotment by 70,829 acre-feet (note - a four person family uses approximately one acre-foot of water annually).  The special master suggested an award of $5.5 million to KS ($3.7 million for loss and $1.8 million for disgorgement of gain), but did not issue an injunction.  Both NE and KS appealed.  The Court affirmed the special master's report, noting that NE had acted too slowly to come into compliance with the compact and had adopted a water management plan in 2005 that only required a 5 percent reduction in groundwater pumping without evidence that such reduction would bring the state into compliance with the compact.  In addition, the Court noted that NE had no way to enforce the 5 percent reduction other than to trust the irrigators.  The Court also agreed with the special master in that the settlement agreement should be reformed so that a state was not charged for using imported water.  The dissent disagreed on this latter point.  NE has 60 days from the date of judgment to pay.  In addition, the Court ordered each of KS and NE to pay 40 percent of the special master's fee, and assessed the remaining 20 percent to CO.  Kansas v. Nebraska, et al., No. 126, 2015 U.S. LEXIS 1835 (U.S. Sup. Ct. Mar. 9, 2015).     


A taxpayer created an irrevocable trust created a trust for himself, his spouse and his lineal descendants.  He later died, followed by his spouse.  A second taxpayer created a trust for himself and later amended it to have income paid equally to his children for life.  The second taxpayer later amended the trust to release his right to revoke.  A subsequent court order divided the second taxpayer's trust into two irrevocable equal trust for the benefit of the taxpayer's spouse and her descendants and one for the benefit of his son and his descendants.  The beneficiaries of one of the divided trusts and the taxpayer's trust were the same.  These trusts owned farmland, but the tracts owned by each trust was acquired at different times and some of the tracts were landlocked.  The trustees of the trusts want to sell the property in a coordinated sale to a limited partnership owned by a lineal descendant of each taxpayer.  The IRS determined that the sale would not trigger GSTT and would not be a taxable gift.  Priv. Ltr. Rul. 20151021 (Oct. 16, 2014).   


Just like it said in Priv. Ltr. Rul. 200818028 (Feb. 8, 2008) (see our article at https://www.calt.iastate.edu/article/operator-farmer%E2%80%99s-market-not-tax-exempt), the IRS has again said that an organization that operates a farmers' market is not a tax-exempt charity.  The IRS noted that most of the market's funding came from vendor and membership fees with the primary benefit going to the vendors that profited at the market by selling their goods to the public.  While a part of the reason for forming the market was to promote "healthy" foods, the IRS determined that was only a minor part of the reason of formation.  Priv. Ltr. Rul. 201510058 (Oct. 16, 2014). 


In this case, a holder of a 1/2 royalty interest in 1,773 acres of land who obtained the interest via inheritance sued the executive rights holder for breach of duty of good faith.  The plaintiff acquired the right to buy the land, acquired the right to negotiate and sign oil and gas leases for others, and later made a deal with another party under which the plaintiff exercised its right to buy the land, sold the land to the third party, reserving all minerals, and then leased the minerals to the third party for a 1/8th royalty and a $7,505 per acre bonus payment.  The holder of the 1/2 royalty sued both parties claiming they conspired to limit her royalty on production from the lease to 1/16 (1/2 of 1/8) when it otherwise should have been 1/8 (1/2 of 1/4).  The holder of the 1/2 interest produced evidence that the going rate for lease royalties in the county was 1/4 and claimed that the third party had agreed to a lower royalty to get an above-market bonus.  As such, the holder of the 1/2 interest claimed that the executive rights holder breached the duty of good faith with respect to her.  The trial court ruled for the executive rights holder and dismissed the case.  The Court of Appeals reversed, determining that factual issues remained for trial.  On further review, the Supreme Court affirmed.  While there is a duty of utmost good faith and dealing that an executive rights holder owes to a non-participating royalty owner, the Court said the executive rights holder did not have to wholly subordinate its interests in favor of the non-participating royalty owners.  However, the executive rights holder cannot engage in self-dealing.  The Court said that factual issues remained  and that a trial was needed to determine if the executive rights holder misappropriated what would have been a shared benefit ( market-rate royalty interest) and converted it into a benefit reserved only unto itself (an enhanced bonus), with the intent to diminish the value of the complainant's royalty interest. If established, that would show self-dealing.  KCM Financial LLC, et al. v. Bradshaw, No. 13-0199, 2015 Tex. LEXIS 220 (Tex. Sup. Ct. Mar. 6, 2015).  


The defendant was convicted under K.S.A. Sec. 21-6418(a) for allowing a dangerous animal (her dogs) to run at large when she knew they had dangerous or vicious propensities.  The defendant lives next to a sheep farm with many lambs.  The dogs had a history of predation upon the sheep and one dog had been shot while harassing the sheep on one occasion.  The farmer had often complained to the defendant about the dogs, but to no avail.  Ultimately, the county sheriff warned the defendant that the dogs could be considered dangerous and vicious and that the defendant needed to restrain the dogs.  The dogs again mauled some sheep, and the defendant was cited for the offense.  The rial court found that the defendant had violated the dangerous animal statute, imposed a sentence of 6-months in jail, one year of unsupervised probation and $192.85 in restitution.  On appeal, the court affirmed.  The appellate court determined that the trial court properly applied the plain language of the statute to the facts and that there was no need to resort to canons of statutory construction because the statute was not vague.  The appellate court also held that the evidence was sufficient to put the defendant on notice that the dogs had dangerous or vicious propensities.  The defendant had been warned numerous times about the dogs harming the sheep and lambs, the existing holes in the fence near the defendant's house and the unlikelihood of harm caused by coyotes.  State of Kansas v. Shell, No. 111,779, 2015 Kan. App. Unpub. LEXIS 153 (Kan. Ct. App. Mar. 6, 2015).     


A dog, "Brutus," had been turned over to the defendant (an animal control shelter) in May of 2010 to be euthanized.  However, the defendant allowed the plaintiffs to adopt the Brutus on July 3, 2010.  The plaintiffs were informed that Brutus had exhibited "food aggression" toward a child in his prior home and that the prior owner did not know how to handle him.  Between July 3 and July20, Brutus bit the plaintiffs on their arms without breaking the skin, and then later bit the plaintiffs  in a manner causing severe injuries.  The defendant removed Brutus from the plaintiffs' home, and the plaintiffs sued for damages for injuries, negligence, fraudulent misrepresentation, products liability and intentional infliction of emotional distress and sanctions.  The defendant argued that because Brutus had already bitten the plaintiffs before the bite that caused injury, the plaintiffs could not have reasonably relied on the defendant's representations concerning Brutus thereby defeating the plaintiffs' claims for fraud or negligent misrepresentation.  The plaintiffs claimed that they would not have adopted Brutus if they had been truthfully told about the prior owner's reason for turning him over to the defendant.  The court determined that fact issues remained on the reasonable reliance issue.  The court also held that the waiver language in the adoption agreement did not bar the plaintiffs from recovering for negligence because it did not advise the plaintiffs that their waiver of claims extended to claims that might arise from the defendant's own negligence.  However, the court did hold that the intentional infliction of emotional distress claim failed.  Sanctions were also not warranted.  Lawrence, et al. v. North Country Animal Control Center, Inc., No. 51812, 2015 N.Y. App. Div. LEXIS 1857 (N.Y. Sup. Ct. Mar. 5, 2015). 


The petitioner provided computer consulting services to family members without charge.  He deducted expenses associated with the activity, but the IRS denied the deductions on the basis that the petitioner was not engaged in the activity with a profit intent.  The court upheld the IRS position.  Shah v. Comr., T.C. Memo. 2015-31.


The petitioner deducted expenses associated with moving his wife from her home in South Carolina to his home in Minnesota.  The IRS denied the deduction and the court agreed.  The petitioner had moved to various locations in Minnesota as well as changing jobs.  The expenses were denied because the distance from the taxpayer's old home to his new workplace were not at least 50 miles more than the distance from his old home to his old workplace as required by I.R.C. Sec. 217.  Palmer v. Comr., T.C. Memo. 2015-30.


The defendants, from the Bel Air, California, area, were arrested in Illinois and charged in a two count indictment with violating the Animal Enterprise Terrorism Act (18 U.S.C. Sec. 43) (Act) for terroristic acts committed upon an Illinois mink farm.  In an earlier action, one of the charges involved using a facility of interstate and foreign commerce for the purpose of damaging and interfering with the operation of an animal enterprise under the Act.  Two cells phones were found in their car at the time of the arrest and the government searched those phones pursuant to a search warrant.  The search indicated contact with a third cell phone and the government sought an order seeking historical cell site and toll record information for the third phone.  The defendants claimed that the government had to obtain a search warrant to obtain that information because the defendant had a reasonable expectation of privacy in the information.  The court disagreed with the defendants, noting that no federal case had ever determined that obtaining such information implicated the Fourth Amendment's requirement of a search warrant.  The court held that the defendants did not have an expectation of privacy in historical cell site information.  The court also noted that the records were relevant and material to the ongoing criminal investigation of the defendants and that the third cell phone's number belonged to one of the defendants.  United States v. Lang, et al., No. 14 CR 390, 2015 U.S. Dist. LEXIS 7553 (N.D. Ill. Jan. 23, 2015).  In the present action, the indictment charged the defendants with damaging an animal enterprise (18 U.S.C. Sec. 43(a)(2)(A)) and conspiring to damage an animal enterprise (18 U.S.C. Sec. 43(a)(2)(C)).  The defendants moved to dismiss the indictment on the basis that the Act is facially overbroad because it criminalizes protected speech that causes an "animal enterprise" to lose profits or business goodwill.  They also challenged the indictment as being void for vagueness because it allowed for arbitrary and discriminatory enforcement against animal rights activists, and that it is violated substantive due process for punishing as terrorism non-violent damage to property.  The court rejected the overbreadth argument because the Act excludes purely economic damage.  The court also rejected the void for vagueness argument and the substantive due process argument under rational basis review.  United States v. Johnson, et al., No. 14-CR-390, 2015 U.S. Dist. LEXIS 26843 (N.D. Ill. Mar. 5, 2015).  


The petitioners, a married couple, bought a home in 1994 for $200,000.  They used the home as a group home for disabled persons.  The petitioners resided in another home in a different town, and it was this home's address that was used on the petitioners checks, payroll records, their kids' school records, etc.  The petitioner's sold the group home in 2007 for $600,000 and sought to exclude the gain under I.R.C. Sec. 121.  The court, agreeing with the IRS, denied the exclusion because there was no evidence that the petitioners ever lived in the group home and used it as their principal residence.  Villegas v. Comr., T.C. Memo. 2015-33.  .


The petitioner made an initial contribution of $1000.00 to an IRA and did not claim any deduction for the contribution.  The petitioner took a distribution of $950.81 from the IRA in 2010 at a time when the petitioner was less than age 59.5.  The petitioner received a Form 1099-R for that amount, but did not include the amount in income.  The IRS claimed that the full amount should have been included in income.  The Tax Court concluded that I.R.C. Sec. 72(e) applied which allows the taxpayer's investment in the IRA to be taken into account when computing the amount of the distribution to be included in gross income.  The court rejected the taxpayer's argument that because the distribution was less than his investment that the distribution should be treated as a return of the petitioner's investment.  The court also rejected the notion that the distribution was fully taxable.  Instead, the court told the parties to compute the taxable amount by utilizing I.R.C. SEc. 72(e)(3) and include in income the untaxed increase in the IRA value attributable to interest and investment growth from 2008 until the time of the distribution.  Morles v. Comr., T.C. Sum. Op. 2015-13. 


Minn. Stat. §216E.12 subd. 4, called the “buy-the-farm” election, allows owners of Minnesota farmland and other qualified property to require a utility company seeking to condemn a high–voltage transmission line easement to acquire fee title to the owner’s entire contiguous parcel, rather than just the smaller easement. A Minnesota couple owning farmland opted under this provision to require the appellants, several public utility companies, to purchase a 218.85-acre tract of their land instead of taking only the 8.86-acre easement necessary for a powerline project. The district court granted summary judgment to the owners, but the utility companies argued that the district court erred in not properly considering the reasonableness of the buy-the-farm election, as required under Coop. Power Assn v. Aasand, 288 N.W.2d 697 (Minn. 1980). In affirming, the appellate court ruled that Aasand was concerned with the commercial viability of the parcel, not a size differential. Aasand itself affirmed a buy-the-farm election resulting in the condemnation of 149 acres where the proposed easement was 13 acres. The court of appeals held that the district court did not err in determining that the owner’s election was reasonable.  On further review, the Minnesota Supreme Court affirmed.  The Court held that the statute did not allow a court to consider outside factors when ruling on an election to compel a purchase.  The statute was unambiguous.  Great River Energy v. Swedzinski, No. A13-1474, 2015 Minn. LEXIS 108 (Mar. 4, 2015), aff'g., 2014 Minn. App. Unpub. LEXIS 255 (Minn. Ct. App. Mar. 31, 2014).


The settlor of an intervivos trust named herself as trustee and three other persons as successor trustees.  One of those successor trustees was the settlor's son.  Several years later, the settlor executed a general power of attorney (GPOA) in which she directed that the son was to be the executor of her estate and trust.  The settlor, as principal, and the son, as agent, signed the GPOA.  The legal question was whether the GPOA was sufficient to amend the trust.  The court held that it was because, in accordance with the trust language, the settlor reserved the right to amend the trust "by a duly executed written instrument...".  Strange v. Towns, 330 Ga. App. 876 (2015).   


In 2014, the plaintiff seed company filed a complaint against numerous cotton farmers for violating the plaintiff's general utility patents on cotton seed.  The patents limit the use of the seed for planting a commercial crop in a single growing season, and prohibits a the buyer from saving harvested seed for the purpose of planting a subsequent crop.  In addition, the buyer can't sell saved seed or supply or transfer any seed produced from the purchased seed to third parties for planting.  The plaintiff claimed that the defendant, a cotton farmer in Georgia, intentionally planted the plaintiff's patented seed during three consecutive crop years without buying the seed from an authorized dealer and paying the technology use fee or obtaining a license from the plaintiff.  All other farmers who saved seed and replanted in the defendant's area settled the plaintiff's claims, but the defendant refused to settle.  The court, in this consent order, determined that the defendant violated the plaintiff's patents on cotton seed willfully and intentionally by planting the seed without the authority to do so, concealing the illegal planting and selling the patented seeds to other cotton farmers for planting.  The court ruled that the defendant was liable for damages to the plaintiff in the amount of $360,000.  The court also entered a permanent injunction against the defendant barring him from using, buying, acquiring, selling, offering to sell or otherwise transferring any of the plaintiff's patented seed.  Monsanto Company, et al. v. Ponder, No. 7:14-CV-00013-CAR (M.D. Ga. Mar. 4, 2015).  


The defendant held a grazing permit to graze cattle on federal land.  One of the permit conditions required the defendant to erect a fence, maintain it and remove abandoned fence wire and steel posts, etc.  The plaintiffs were riding a motorcycles on the federal land where they collided with an uncharged electric fence that the defendant had erected in accordance with the permit.  The plaintiffs sued the defendant for negligence on the basis that the defendant created a dangerous condition that the defendant should have discovered and remedied.  The trial court granted summary judgment for the defendant and the plaintiffs appealed.  On appeal, the court assumed that the plaintiffs had the status of "invitees," but affirmed the trial court on the basis that as a permit holder, the defendant was a mere licensee and was not an owner or possessor of the land at issue.  The permit also did not give the defendant an easement in the federal land at issue, and the defendant did not violate any of the standards and requirements associated with establishing fences on the property.  As such, the defendant lacked intended control sufficient to give rise to a duty to the plaintiffs.  There was also no duty that arose from the relationship of the parties as there was no "special" relationship between the parties.  Furthermore, there was no duty based on public policy.  Smith v. Almida Land & Cattle Company, LLC, No. 1 CA-CV 13-0757, 2015 Ariz. App. Unpub. LEXIS 283 (Ariz. Ct. App. Mar. 3, 2015). 


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