Annotations 10/2009

(horseback riding school and the boarding and stabling of horses on private landowner's property adjacent to plaintiff's property is properly characterized as a commercial-agricultural use that is impermissible under county's development Code; defendant's issuance of special use permit allowing such usage improper). 

(court upholds defendant's ordinance banning commercial wind farms; defendant properly followed state statutory procedures in adopting ordinance prohibiting wind farm construction and such prohibition was reasonable based on defendant's consideration of aesthetics, ecology, flora and fauna of Flint Hills; court cited numerous adverse effects of commercial wind farms including, damage to local ecology, prairie chicken habitat - including breeding grounds, nesting and feeding areas and flight patterns, and unsightly nature of large wind turbines as well as negative impact on property values, agriculture and nature-based tourism; parties ordered to submit additional briefing and prepare for oral argument on whether defendant's ordinance constituted a "taking" of plaintiffs' property rights without just compensation, and whether the ordinance violates the Commerce Clause by discriminating against interstate commerce). 

(involves construction of state net metering statute - states sales tax is imposed on the gross amount of electricity sold to a customer-generator because value of excess purchased by local distribution utility is separate transaction that does not reduce gross receipts of local distribution utility).

(state statute allowing timeframe for buyer of real estate to rescind purchase contract once seller provides buyer with affidavit concerning certain statutorily required attributes of the land upheld as constitutional and seller compliance with statute is mandatory unless waived by buyer; as applied to buyers in the case who had actual knowledge of a federal flood easement over the property at issue, two buyers allowed their statutory rescission rights to lapse and are bound by the purchase contracts, but third buyer properly invoked rescission right). 

(landlord's lien for unpaid rent for farm lease not enforceable against plaintiff who bought grain from tenant without notice that tenant had failed to pay rent; plaintiff was an "innocent purchaser" and no facts present that would have put plaintiff on notice that it was purchasing crops grown on leased land which would have given rise to a duty of plaintiff to inquire about the possibility of a landlord's lien). 

(farmer died intestate and implied partnership deemed to exist with surviving spouse entitling her to one-half of assets of farm business with balance disbursed to decedent's estate; while Schedule F filed only in decedent's name, Schedule F included incomes of both decedent and surviving spouse). 

(taxpayer not entitled to exemption from sales and use tax on purchase of ATV; taxpayer failed to prove that ATV was used directly in farm production).

(payments for commodities from farmers' co-op qualify as PURPIMS and that farmers' I.R.C. Sec. 199 deduction to be computed without deducting amount of such payments).

(debtor filed amended Chapter 12 plan proposing to pay former spouse’s claim in full on installment basis; plan confirmation denied because proposal to pay spouse’s claim over 30 years with 10-year balloon; debtor had significant equity in farm but did not propose to sell any assets to pay former spouse). 

(insurance policy covering residence inapplicable to injuries sustained in ATV accident on farm property because accident "arose out of a premises" that was not an "insured location"). 

(debtor’s initial Chapter 12 case dismissed when debtor defaulted on post-confirmation obligation owed to bank; one day before foreclosure sale debtor again filed bankruptcy; even though second case filed within 180 days of first case, bankruptcy filing allowed because initial filing not dismissed voluntarily or for willful failure to follow court’s orders; bank not entitled to relief from automatic stay because bank adequately protected). 

(musician paid by church to play in Sunday morning services is employee of church rather than independent contractor; church exercised control over mode and manner of work such that musician's income is subject to employment taxes).

(court upholds trial court's refusal to remand case and decision to dismiss plaintiff's claim that defendant violated state regulations by retroactively imposing federal restrictions on lobster trapping).

(trial court's determination that primary heir of decedent did not unduly influence decedent's will and trust reversed - evidence established that heir improperly influenced decedent in making her will; trial court's order finding deed transferring property to trust valid and that heir had misappropriated decedent's assets while serving as attorney-in-fact vacated - sibling contesting will lacked standing to recover assets for the estate and trial court did not have jurisdiction over claims; sibling did have authority, as trust beneficiary, to challenge primary heir's actions while serving in capacity of trustee; case remanded for further findings and determinations concerning primary heir's transactions during the trust's winding-up period). 

(cleaning service contracts for the cleaning of meat processing plants and the tangible personal property contained in the plants are subject to sales tax; Defendant's regulation so specifying upheld).

(farmers who construct irrigation lakes may claim a sales tax exmption on supply and equipment purchases that are exclusively used for producing farm products). 

(non-exempt cooperative not entitled to patronage dividend deductions claimed for amounts paid to members out of earnings that are not attributable to corn purchases made pursuant to purchase contracts with members or for amounts paid for corn purchases that exceed members’ committed bushels; cooperative’s primary asset is investment in ethanol plant LLC which is the cooperative’s wholly owned subsidiary). 

(plaintiff class asserts numerous claims against defendant hog producers for nuisance and damages related to nuisance claims; plaintiffs filed suit in state trial court, but defendant sought removal to federal court; plaintiffs' motion to remand denied; Class Action Fairness Act (which vests jurisdiction in such matters in federal district court) applicable and exceptions not applicable). 

(petitioner not entitled to millions of dollars in research credits claimed under I.R.C. Sec. 41; in calculating the amount of the credit, petitioner omitted annual gross receipts from petitioner's foreign branches (overseas divisions) in computing average gross receipts for the four preceding tax years; the Congress did not expressly exclude foreign receipts from the calculation).

(validity of regulations that implement and enforce state Water Supply Management Act largely upheld; some regulatory amendments invalid because they are ultra vires).

(trial court erred in granting specific performance of land sale contract; no written contract in existence that expressed essential contract terms; no fraud by "seller" because no contract in existence; no trespass by "seller" because "seller" was owner of property).

(petitioner had only minimal amount of cancellation of debt income attributable to discharged credit card debt; petitioner reasonably disputed income reported on Form 1099-C and IRS failed to produce any reasonable and probative information independent of information returns).

(plaintiff's lease-in, lease-out transaction was true lease that possessed economic substance; related deductions allowable).

(for bankruptcy cases filed after the effective date of the 2005 Bankruptcy Abuse and Consumer Protection Act of 2005, IRS details those situations where federal tax debt is no longer collectible once debtor completes a Chapter 13 plan and receives a discharge; IRS notes that non-dischargeable taxes include debts for withheld taxes, taxes associated with a non-filed return, taxes associated with late-filed return within two years of filing or related to the filing of a fraudulent return, and taxes associated with the debtor's attempt to evade tax; IRS determined that if tax is dischargeable in Chapter 13 case, pre and post petition interest also dischargeable as are accrued non-pecuniary interest and penalties).

(water right had issued water permit to plaintiff’s predecessor in interest for construction of fish pond on condition that equal amount of water be returned to stream as was being diverted; state issued notice of revocation of water right for alleged violations of permit condition; summary judgment for defendant upheld – uncontradicted evidence revealed that amount of water returned to stream not same as amount of water being diverted).  

(sufficient evidence present to support defendant's determination that plaintiff violated town's wetland regulations and that exemption for farming activities did not apply).

(provides limited administrative exception to ability of IRS to examine Form 706 in connection with certain protective claims for refunds that are timely filed; if claim for refund ripens and becomes ready for consideration after expiration of period of limitations on assessment in I.R.C. Sec. 6501, IRS will limit review of Form 706 to evidence relating to deduction under I.R.C. Sec. 2053 that was the subject of the protective claim).

(water right had issued water permit to plaintiff’s predecessor in interest for construction of fish pond on condition that equal amount of water be returned to stream as was being diverted; state issued notice of revocation of water right for alleged violations of permit condition; summary judgment for defendant upheld – uncontradicted evidence revealed that amount of water returned to stream not same as amount of water being diverted).

(substantial and material evidence present to support trial court's determination that decedent's will invalid because two of decedent's children had confidential relationship with decedent and unduly influenced decedent to execute will).

(plaintiff claims that defendant is violating CWA by discharging pollutants into navigable waters of U.S. without a  permit; court determines that hatchery not discharging sufficient amount of pollution to be subject CWA discharge permit requirements). 

(petitioner denied loss deductions arising from dog racing activity under passive loss rules; petitioner did not participate in the activity on a basis that was regular, continuous and substantial; only self-serving, undocumented and uncorroborated testimony presented as to level of petitioner's involvement in the activity).

(petitioner not entitled to relief from joint and several liability under I.R.C. Sec. 6015).

(petitioner not entitled to claimed business expense deductions for musician and band business, not entitled to deductions for business use of home, and is a common law, rather than statutory employee). 

(ex-mother-in law defendant's filing of Form 1099-C with her tax return reporting debt forgiveness income of ex-son-in-law not actionable fraud; even though defendant not "applicable entity" under I.R.C. Sec. 6050P that is required to make such filing, such filing not actionable under I.R.C. 7434 if filing is truthful and accurate).

(plaintiff claimed that purchase price of farm should be reformed so that the amount paid to bank was reduced; plaintiff claim that farm was represented as irrigable, but water rights had been cancelled before purchase; no reformation allowed because both plaintiff and bank knew of water rights issue before purchase).

(plaintiff class, residents and landowners of lands and property along the Mississippi Gulf coast have standing to assert public and private nuisance, trespass and negligence claims against defendants for emission of greenhouse gasses that allegedly contributed to "global warming" that allegedly caused a rise in sea levels and added to the ferocity of Hurricane Katrina which combined to destroy plaintiffs' private property and public property that was useful to them; claims were not non-justiciable political questions; but, plaintiffs' unjust enrichment, fraudulent misrepresentation and civil conspiracy claims dismissed for lack of standing; case remanded; case could have been dismissed for plaintiffs inability to establish proximate causation, but trial court had dismissed case without relying on that ground so appellate court did not address the issue; case remanded and it is anticipated that trial court will dismiss case due to plaintiffs inability to establish causal connection).

(plaintiff's thirteen-year use of road over defendant's property via oral agreement did not give rise to easement; no written agreement executed and facts do not support easement by estoppel, no easement by implication because common ownership not present, and no easement by way of necessity because plaintiff has other access route to property).

(plaintiff claimed that purchase price of farm should be reformed so that the amount paid to bank was reduced; plaintiff claim that farm was represented as irrigable, but water rights had been cancelled before purchase; no reformation allowed because both plaintiff and bank knew of water rights issue before purchase).

(plaintiff, producer of raw milk sold to consumers challenged constitutionality of state law requiring raw milk sold to consumers to contain no more than 10 coliform bacteria per milliliter of milk; trial court denied plaintiff's motion for preliminary injunction that would stay enforcement of provision; plaintiff's request for dismissal of appeal granted).

(buyer of farmland under installment contract who cash leased the land to tenant defaulted on contract and forfeited interest in land; seller ordered tenant off property and tenant sued for damages; trial court ruled for tenant and appellate court reversed; on further review state Supreme Court reversed appellate court – seller had actual knowledge that tenant was farming the land but failed to join tenant in tenant’s forfeiture action against buyer, and forfeiture of buyer’s interest did not extinguish tenant’s leasehold interest; seller filed suit seeking forfeiture at a time when seller knew or reasonably should have known that tenant was in possession of property and tenant’s leasehold interest survives forfeiture action under state law unless tenant is made party to forfeiture action even though tenant had constructive notice of forfeiture action). 

(court affirms defendants’ conviction and sentence for violation of Animal Enterprise Protection Act (18 U.S.C. §43); Act not void for vagueness and sufficient evidence supported jury’s verdict).

(defendant's placement of cell phone antenna on electricity transmission tower located on plaintiff's property constituted (under Texas law) permanent rather than temporary trespass because neither existence nor nature of nuisance changed over time; result is that any alleged injury occurred before plaintiff acquired real estate at issue and any cause of action vested in property owner at time of injury; thus, plaintiff lacked standing to sue).

(plaintiff operates commercial organic orchard on leased land adjacent to public land on which hunting occurs and claims that his farming activities have been harmed by lead shot from firearms discharged onto the farming property by making plaintiff unable to meet federal standards for organic production and allowable poisons in food; on various motions for summary judgment, plaintiff's substantive due process claim denied - plaintiff not alleging that defendant has banned plaintiff from being an organic farmer; plaintiff's procedural due process claim denied - plaintiff failed to show that defendant deprived plaintiff of protected property right; plaintiff's Fifth Amendment claim denied - claim not ripe).

(petitioners (married couple) not entitled to automobile expense deductions associated with husband's appraisal business due to failure to meet strict substantiation requirements of I.R.C. Sec. 274(d).

(petitioner who incorporated his real estate business properly classified as employee because he was a corporate officer that performed substantial services for the corporation; corporation cannot deduct employment taxes and petitioner not entitled to additional business expense deductions beyond what IRS allowed).

(plaintiff liable for $6,300 payment to estate of employee who died in fire started by employee's blowtorch when pallet of frozen chicken fell on him; structure on which frozen chickens stored unstable).

(interim guidance relating to credit for carbon sequestration under I.R.C. Sec. 45Q).

(defendants, manufacturers of "Agent Orange," not liable for alleged injuries and other damages associated with leaking of barrels containing "Agent Orange" due to government contractor defense; "Agent Orange" manufactured pursuant to government contract, delivered to government at specified location after government inspection and stored by government after delivery).

(parties' riparian lot lines consistent with the lots' property lines; plaintiff failed to show that it acquired a portion of defendant's adjoining lot via adverse possession - conflicting evidence existed on whether plaintiff exercised exclusive control over subject area, and plaintiff's payment of taxes on disputed area not demonstrated to be clearly reasonable).

(adjoining landowner dispute; jury determination of willfull and malicious trespass upheld; trial court's determination finding negligent excavation and deprivation of lateral support reversed as not supported by the evidence; no need to prove adverse possession because parties stipulated that boundary line was existing fence line).