Case Summaries 10/2012

(plaintiffs brought constitutional challenge against state hazardous substances tax on basis that proceeds of tax could be used only for highways and roads under state constitution; court disagreed, holding that tax enacted to tax toxic substances, including motor fuel, for purpose of cleaning up spills of hazardous substances; consequently, collected amounts from motor vehicle fuel not limited to use for highway purposes). 

(an employee of a livestock industry middleman claimed the company was altering condemnation slips for cows refused by slaughterhouses; employee was fired and brought suit claiming she was fired because she was a “whistleblower”; defendant claimed employee was fired for falsifying her hours worked; court held defendant could amend its pleadings to include the “after-acquired evidence” defense; defendant found evidence that employee was working out at gym at same time she alleged to be clocked in at work; employee was aware of evidence and would not be prejudiced by the amendment; the court also allowed employee to amend her proposed joint final pre-trial order because an expert witness’ name was inadvertently left off; defendant had received notice of the witness and his testimony was discussed at pre-trial conference; refusing to permit amendment under the circumstances would be manifestly unjust).

(petitioner, operator of private golf club, deeded permanent conservation easement to qualified charity “to protect, preserve and defend the property from any development”;  grant of easement made standard recitals and stated that the instrument was the entire agreement of the parties with respect to the easement and that transfer was for “other good and valuable consideration”; petitioner claimed a $16.4 million charitable contribution for the value of the easement donation and attached a signed Form 8283 reporting the easement’s value and basis and statement of appraiser supporting the value; five years after contribution, donee issued letter to petitioner expressing thanks for the gift and stating that it did not provide any goods or services in exchange for the easement; IRS disallowed entire deduction on basis that petitioner did not receive contemporaneous statement indicating that no goods or services received in exchange for easement (as required by I.R.C. §170(f)(8)(B)) even though IRS and petitioner stipulated that petitioner received nothing in return from charity; petitioner argued that easement grant language in deed substantiated contemporaneous requirement; court held for petitioner based on similar facts in Averyt v. Comr, T.C. Memo. 2012-198; court noted that deed language stated that grant was for good and valuable consideration (but that such language was merely boilerplate and had no legal effect for purposes of I.R.C. §170(f)(8)), described the conservation value of the grant, and stated that grant was the entire agreement between the parties (i.e., no goods or services were received in exchange for contribution) court’s opinion reaches different conclusion than the court had earlier reached in case involving similar facts –Schrimsher v. Comr., T.C. Memo. 2011-71 where boilerplate deed language indicated “TEN DOLLARS, plus other good and valuable consideration”; however, grant did not qualify for stated purpose under state (MO) law; taxpayer must prove satisfaction of a permitted purpose of conservation easement grant under I.R.C. §170).

(lower court divided inherited land equally among three children and denied request by plaintiff for equitable lien on property for improvements he made; plaintiff appealed; plaintiff claimed parents made an offer to each of the children that if any agreed to indefinitely helped the father farm the land, the child would inherit the property; plaintiff claimed he accepted the offer; the property was deeded to plaintiff after the mother was in an automobile accident; plaintiff agreed to deed property back to his parents so they could reserve a life estate; a second deed was executed and delivered according to notary signature in March 1996 conveying land to plaintiff with a life estate reserved for parents; it was filed in chancery court on April 23, 1996; a third deed, however, was executed conveying land from plaintiff to his parents on April 22, 1996 with the same notice of delivery by the notary signature; the deed was filed in chancery court on April 22, 1996; both parents were now deceased; lower court held deed was delivered at time of notary signature, which was March 1996 for deed 2 and April 22, 1996 for deed 3, rather than the time deed actually filed; appellate court affirmed chancery court decision on delivery, which meant deed 2 had no affect; appellate court also held plaintiff unable to establish doctrine of after-acquired property defense because he was aware of ownership of property at time deed 3 was executed; denial of request for equitable lien also affirmed because expenses claimed by plaintiff were for farming expenses for which plaintiff received income from activities). 

(generic glyphosate sold by defendant to plaintiff and applied to land that plaintiff farmed; after application, corn crop died and plaintiff sued to recover damages on negligence, breach of implied warranty of merchantability and breach of express warranty theories; trial court granted summary judgment for defendant, but appellate court reversed and remanded case; plaintiff presented a viable theory that defendant supplied plaintiff with a contaminated 121-gallon container of generic glyphosate; genuine issue of material fact exists as to how ACCase inhibitor reached plaintiff's corn and trial court erred in granting summary judgment to defendant on negligence and breach of warranty claims).

(plaintiff injured while participating in horse camp; plaintiff’s father believed he enrolled his daughter in private lessons in dressage and she would not participate in trail rides; plaintiff’s father signed release of liability when he enrolled plaintiff in camp; however, before trail ride, plaintiff requested to switch horses because she did not feel comfortable on horse on which she was riding; her request was denied; plaintiff was injured when she jumped from the galloping horse she could not stop; district court granted summary judgment to defendants based on assumption of the risk; on appeal, court held that release of liability did not apply because plaintiff assumed only risks of riding in an arena and participating in dressage; questions of fact also existed regarding whether defendants committed “more-than-ordinary-negligence”; defendants objected that claim had not been pled; court held defendants failed to allege any prejudice in plaintiff’s failure to specifically plead more-than-ordinary-negligence, so claim could continue; summary judgment overturned).