Annotations 02/2012

(before death, decedent executed amendment to real estate sale contract granting herself, as landlord, a 40 percent interest in crop; upon death decedent's share passed via will to constructive trust under state law; challenge filed to distribution of cropshare amount, CRP payments and earnest money from contract that had been forfeited; at trial, court determined that amounts were personal property subject to terms of decedent's will; on appeal, court affirmed on basis that decedent's will covered post-death receipts and that decedent entitled to profits from land as life tenant; other amounts belonged to representative of estate).


(plaintiff’s manufacturing process involved use of PCBs resulting in scrap insulating material that was sold to paint manufacturer; plaintiff deemed to have sufficient intent to dispose of scrap material to become potentially liable under CERCLA as an “arranger” for disposal of covered hazardous substances). 


(Chapter 7 case involving dairy operation; defendant sold cows to debtor and held perfected security interest in cows that debtor sold pre-petition and received $27,764.20 for net proceeds of sale of 22 cows; defendant filed claim in debtor’s bankruptcy case for $55,787.54 representing amount of unpaid balance owed debtor; at time of sale to debtor, defendant delivered Certificate of Registration for each cow containing  name of cow, identification of defendant as former owner, handwritten vaccination number, sketch of cow showing markings and ear tag i.d. number; at time of sale by debtor, some ear tags missing; bankruptcy trustee claims that collateral description in UCC-1 misleading because ear tags were used in description and were missing at time of sale such that security interest ineffective; question of first impression as to how to perfect security interest in specific cows; court held that custom in farming industry relevant; cows routinely lose ear tags,  are not fungible and are identifiable by numerous methods; while ear tag identification contained errors, name of each cow included in description; defendant’s UCC-1 effective irrespective of erroneous or outdated ear tag designations). 


(malpractice suit against veterinarian for death of a show horse; suit brought more than one year after horse’s death; notice of intent to sue sent to veterinarian prior to expiration of statute of limitations; district court granted summary judgment to defendants holding claims for damages to animals are property damages and statute extending statute of limitations when notice of intent to sue is received did not apply; court allowed owner to amend pleadings regarding negligence to add allegations to invoke separate tolling statute; defendants filed summary judgment motions after amended petition; court granted summary judgment on all claims;  appellate court affirmed, holding extension of statute of limitations only applied to “health care providers” and actions in this case based on property damage; veterinarians do not fit within statutory definition of “professional negligence”; amended petition failed because equitable tolling not available in cases where original compliant is defective).


(plaintiff constructed earthen levee on property without permit; county issued cease and desist order and required levee to be removed; plaintiff argued “common enemy” doctrine enables him to build levee to protect his property from further flooding and exempts him from local regulations; court holds common enemy doctrine serves only as defense to liability for damaging adjacent properties; doctrine does not exempt landowner from local regulations).


(petitioner filed Schedule C claiming $14,027 in expenses, but no income; claimed expenses were for such things as "training costs," "telephone and internet," "dues and subscriptions," but expenses denied because petitioner not engaged in business with requisite profit intent). 


(state use tax appeal by feed mill operator assessed approximately $20,000 after audit found certain equipment purchased did not qualify under agricultural production exemption; exemption requires taxpayer to be business enterprise and using and consuming the property in breeding, raising or caring for livestock; Tax Tribunal decision affirmed because operator used equipment to make feed to sell to other business entities rather than using and consuming property to feed livestock and poultry).


(taxpayer, limited partnership, filed partnership return but did not attach statement to return electing out of 50 percent bonus depreciation for qualified 5, 7 and 15-year property placed in service during year; taxpayer granted 60-day extension to file return with appropriate statement electing out of bonus depreciation because taxpayer acted reasonably and in good faith; accounting firm hired to prepare return failed to notify taxpayer of required opt-out statement). 


(plaintiff constructed earthen levee on property without permit; county issued cease and desist order and required levee to be removed; plaintiff argued “common enemy” doctrine enables him to build levee to protect his property from further flooding and exempts him from local regulations; court holds common enemy doctrine serves only as defense to liability for damaging adjacent properties; doctrine does not exempt landowner from local regulations).


(plaintiffs are thirty-eight Iowa citizens and entities seeking payment under the Supplemental Revenue Assistance Payment Program (SURE); plaintiffs appealed initial SURE payments to their respective FSA County offices alleging defendants used wrong “Price Election figures” and improperly calculated program guarantees; during first county hearing, Iowa State FSA director informed plaintiffs that the issue was not appealable because counties did not have authority to change the figures; plaintiffs, via legal counsel, made agreement with FSA Director to bypass “fruitless” and “futile” administrative appeal process and advance directly to federal court, so FSA Director provided notation on appeal letters that administrative appeal process had been exhausted; plaintiffs filed district court action to appeal “Price Election figures”; defendants filed motion to dismiss based on plaintiffs’ failure to exhaust administrative remedies; plaintiffs filed motion to gather evidence for resistance to motion to dismiss arguing defendants should be equitably estopped from raising an exhaustion defense due to representations made by Iowa State FSA director; court held case law establishes equitable estoppel is generally not available in suits against government; court denied motion because plaintiffs’ reliance on agreement with government employee to avoid law was not reasonable and plaintiffs did not take steps to verify legitimacy of agreement before relying on FSA director’s statements).


(rancher owned truck and trailer to haul supplies for his farm; rancher agreed to haul crushed cars with his equipment for another business on several occasions; during transport, truck and trailer collided with a vehicle--killing two people and seriously injuring a third; lawsuit filed against rancher; insurance company with policy on the truck and trailer brought declaratory judgment action for determination that no coverage exists for accident because of policy’s “business” exclusion; rancher filed third-party complaint against insurance agent asserting negligence in procuring insurance to protect him; uninsured carrier also intervened; multiple summary judgment motions filed; court found rancher engaged in business activity because he agreed to haul on specific dates, signed inventory slips, received payment, and expected to make a profit from the activity; court declared exclusion applied and policy did not provide coverage; court declined to exercise supplemental jurisdiction over third-party negligence claim, so dismissed claim without prejudice).


(case involves proper place on tax return to deduct net operating loss (NOL) of $51,000 – whether on Schedule C or on Form 1040; petitioner received $131,660 in non-employee compensation from accounting business and didn’t file Form 1040; IRS filed substitute return and determined deficiency including self-employment tax of $15,207; petitioner had NOL carryover from prior years and parties agreed that income could be reduced by amount of carryover ($51,065), but disagreed as to whether carryover offset petitioner’s self-employment income; court determined that I.R.C. §1402(a)(4) operates independently of subsection (a)(5) such that NOL cannot be taken against self-employment tax – petitioner cannot reduce net earnings from self-employment by the NOL carryforward; thus NOL deduction to be taken on Form 1040). 


(petitioner invested in Nevada limited partnership involved in growing jojoba beans and claimed a resulting loss on the investment (on petitioner’s 1982 return) which the Tax Court disallowed and held that petitioner negligent in claiming loss; appellate court reversed on basis that Tax Court committed clear error in determining that petitioner failed to engage in sufficient research to determine if investment had reasonable prospect of making a profit; petitioner not negligent under former version of I.R.C. §6653(a); Tax Court’s decision ordering additions to tax of $32,596 reversed; court implied that consultation with accountant sufficient to justify deduction; lengthy dissent). 


(petitioner received $57,500 payment pursuant to settlement agreement; amount not excludible from income under I.R.C. §104 because payment not based on physical injury or physical sickness). 


(Chapter 12 case; debtors (married couple) farmed hay and raised horses since 1999; debtors purchased land securing bank’s claim in 2007 and decided to build home on tract in 2008; home construction loan executed in 2008 and bank approved debtors for 30-year adjustable rate permanent loan; home completed in 2009 and parties engaged in dispute over bank’s commitment to permanent financing ultimately resulting in foreclosure of construction mortgage and pending sale of home which precipitated debtors’ Chapter 12 filing; debtors’ office and farm headquarters located in newly constructed home; issue was whether debtors qualified for Chapter 12; if bank’s principal and interest claim included in debtors’ farm debts, 50 percent test satisfied; court determined that construction portion of bank loan included in debtor’s “farm” debt because house was integral part of farm operation due to farm’s books and records maintained in office in home and home’s proximity to farming operation which allowed debtors to care for livestock and maintain irrigation system; debtors’ treatment of bank’s claim also satisfies 11 U.S.C. §1225(a)(5) – U.S. Supreme Court decision in Till v. SCS Credit Corp., 541 U.S. 465 (2004), overrules In re Hardzog, 901 F.2d 858 (10th Cir. 1990) and formula approach to determining cramdown interest rate applicable to Chapter 12 reorganization plan to be utilized rather than market rate for similar loan approach of Hardzog; interest rate is prime rate plus 2 percent; amended Chapter 12 plan feasible and confirmable). 


(petitioner utilized specialized trucks and "belly-dump" trailers in its business; use of trucks and trailers occurred on-road and off-road; trucks and trailers were street legal, but had been modified for heavy use; approximately 40 percent of use was off-highway; petitioner claimed I.R.C. Sec. 34(a)(3) and 6427(l)1) credits for off-highway business use; court upholds IRS determination that credits disallowed; tractors and trailers not analyzed together for purpose of interpreting statutory term "vehicle" because tractors and trailers could each perform designed functions with other vehicles; tractors not specifically designed for off-highway use and could operate at normal highway speeds; tractors do not qualify for "off-highway transportation" exception of I.R.C. Sec. 48.4061(a)-1(d)(2)(ii); for post-2006 tax years I.R.C. Sec. 7701(a)(48) defines "highway vehicle" more narrowly).


(plaintiffs, a coalition of groups that oppose transgenic seed consisting of organic and non-organic farmers, businesses, and associations, filed declaratory judgment action against Monsanto alleging 23 patents invalid and unenforceable and seeking declaration that Monsanto would have no remedy against them should contamination of their crops with biotechnology occur; no plaintiff has any claim of contamination occurring in crops grown or seeds sold; Monsanto has never enforced patent rights against any farmer for trace amounts of seed by inadvertent means; court granted motion to dismiss finding no case or controversy existed because no patent cases have been brought against plaintiffs or any similarly situated parties, Monsanto’s express statement clearly declared no intention to file suit for inadvertent exposure; and Monsanto’s failure to sign a blanket waiver of immunity for plaintiffs was irrelevant).


(Court unanimously holds (affirming court of appeals), on basis of oil and gas law, that landownership in TX includes interests in in-place groundwater; such water cannot be taken for public use without adequate compensation guaranteed by Article I, Section 17(a) of the TX Constitution; plaintiffs, farmers, had sought permit to pump underground water to grow and irrigate crops; underground water at issue located in Edwards Aquifer and plaintiffs' land situated entirely within boundaries of Edwards Aquifer; permit granted, but limited to 14 acre-feet of water rather than 700 acre-feet that was sought because plaintiffs could not establish "historical use"; Court determined that plaintiff's practice of issuing permits based on historical use was unjustified departure from Texas Water Code permitting factors).


(defendant did not commit tort of conversion with respect to sale of hay bales located on property defendant purchased at auction; plaintiff had cut and baled hay on premises prior to sale and party conducting sale gave plaintiff 30 days after sale to remove bales; over ninety days after sale, defendant sold bales to third party for $4,180 ($38/bale); plaintiff sued to recover proceeds and resisted defendant’s summary judgment motion by claiming that question remained as to whether plaintiff had abandoned bales; trial court granted summary judgment for defendant but awarded plaintiff $1,393.34 (of $4,180 total) and later reduced it to $500 for plaintiff’s labor in cutting hay;  on appeal, court determined that defendant did not commit tort of conversion because plaintiff had no right to possess hay at time of alleged conversion, and neither sale bond nor deed reserved right to possess corn; $500 award to plaintiff upheld on unjust enrichment theory).


(IRS announces innocent spouse relief granting 10 years for innocent spouse to file application from IRS first collection activity on joint liability; IRS relaxes proof requirements for marital status, economic hardship, abuse and significant benefit). 


(IRS announcement that maximum energy savings percentages for purposes of I.R.C. Sec. 179D deduction for energy efficient commercial buildings placed in service on or after March 12, 2012 is 25 percent for interior lighting systems, 15 percent for heating ventilation and air conditioning and hot water systems, and 10 percent for the building envelope). 


(worker injured on farm brought claim against farmers; farmers’ commercial general liability insurance policy excluded coverage for injury claims brought by employees, but provided coverage for a “temporary worker”, which was defined as worker “furnished” to replace employee on leave or to meet seasonal workload; undisputed that plaintiff was seasonal worker; dispute was whether “furnished” modified both temporary and seasonal workers and whether policy was ambiguous in this regard; court held that policy unambiguously required all temporary workers to be furnished to the policyholder; because no argument was preserved by farmers regarding whether worker was furnished, no coverage applied).


(plaintiff fell into manure pit while removing ice from a hydraulic liquid manure pump manufactured by defendant, severing right hand on pump’s agitator; plaintiff and wife brought claims against pump manufacturer alleging strict liability and negligence for defective design and manufacture of the pump, failure to warn of latent defects and breach of warranty; defendant sought summary judgment dismissing all claims; lower court denied motion; on appeal, court found question of fact remained on claim of negligence because of competing expert opinions regarding feasibility of better design; all other claims dismissed for lack of proof). 


(plaintiff injured during horseback ride when thrown from horse and sued defendant for negligence; district court held res ipsa loquitur inapplicable and granted summary judgment for defendant because plaintiff could not establish any evidence of defendant’s negligence; plaintiff appealed; appellate court upheld finding of lack of evidence of negligence and lack of evidence in records of disputed issues; appellate court dismissed theory of negligence first presented on appeal that plaintiff should not have been allowed to ride in front of trail guide; denial of res ipsa loquitur theory also affirmed because riding a horse is inherently dangerous despite precautionary efforts to avoid accidents).


(petitioner worked part-time as clerical worker at drug addiction center on at-need basis in addition to janitorial job at a school; no written contract with part-time employer, but employer considered petitioner an independent contractor and did not withhold income tax; petitioner did not include amounts received from part-time job in income ($4,451) on basis that she should not have been issued Form 1099-Misc. or that payments were a gift; but, petitioner conceded that amounts received were for petitioner's services and, as such, are gross income from compensation; amounts are not gifts).


(taxpayers, married couple, allowed extension of 120 days to file election to group taxpayers' interests in various rental real estate activities as a single activity for purposes of the passive loss rules).


(plaintiff, creditor, sought determination that state court judgment against Chapter 12 debtors for fraud in sale of longhorn cattle be excepted from discharge; plaintiff filed summary judgment for issue preclusion determination that state court opinion of findings and conclusions of fraud satisfied 11 U.S.C. § 523(a)(2)(A) - exception from discharge for fraud because state factors were virtually identical; bankruptcy judge granted plaintiff’s summary judgment motion as to fraud portion of judgment as exempt from discharge, but state court judgment awarding attorney fees  reversed).


(decedent and spouse established family publishing business and acquired 740 acres of land; family limited partnership established for preservation and potential development purposes; land appraised and transferred to FLP with FLP shares then gifted to kids, their spouses and transferors' grandchildren; gift tax paid with no discounts claimed; upon wife's death, issue was whether wife's partnership interest included in her estate under I.R.C. Sec. 2036(a); bona fide non-tax purpose present for establishing FLP - creation of family asset to be managed by family (sale of homes near lake) with court citing Mirowski v. Comr., T.C. Memo. 2008-74 to bolster its conclusion; two of transferors' children later divorced and deeded their interests in the land back with transferors paying real estate tax from own funds; IRS claimed partnership formalities not followed, but bona fide sale present and transferors not dependent on distributions from FLP, no commingling of personal and partnership funds, no discounting of interests claimed, and transferors in good health at time of transfer; I.R.C. Sec. 2036(a) inapplicable to cause inclusion of wife's FLP interest in her estate with result that over $2.5 million in estate tax saved). 


(case involved issue of what the appropriate test is for determining whether a river is navigable such that the state owns the riverbed; case involves wholesale generator of electricity that challenged trial court determination that defendant owned the riverbed and was, therefore, entitled to damages for generator's use of riverbeds from 2000-2007 at hydroelectric power stations; state Supreme Court affirmed on basis that rivers were navigable at time of statehood in 1889 and by providing a channel for commerce at that time; U.S. Supreme Court reversed (unanimously) on basis that Equal Footing Doctrine specified that states did not hold title to riverbeds on portions of rivers that were non-navigable at time of statehood; Court determined that Missouri River non-navigable over 17-mile Great Falls reach  - from head of first waterfall to foot of last; present-day recreational use of Madison River had  no bearing on navigability issue; in addition, state's lack of assertion to title over riverbed over long period of time provided additional evidence that river segments at issue non-navigable). 


(petitioner was the father and non-custodial parent of child and claimed dependency exemption and earned income credit for the child; but, child live more than half of tax year with mother and failed to satisfy I.R.C. Sec. 152(c) residency test; petitioner also failed I.R.C. Sec. 152(d) qualifying relative test due to lack of proof of providing more than 50 percent of child's support; I.R.C. Sec. 152(e) requirement not satisfied due to failure to attach Form 8332 to return (or equivalent release) and mediation agreement allowing former spouses to alternate years to take deduction didn't satisfy Sec. 152(e) because it didn't designate which year belonged to which spouse; EIC similarly denied due to child's failure to meet qualifying child definition and petitioner's income exceeded limit for taxpayers without a qualifying child). 


(case involved issue of what the appropriate test is for determining whether a river is navigable such that the state owns the riverbed; case involves wholesale generator of electricity that challenged trial court determination that defendant owned the riverbed and was, therefore, entitled to damages for generator's use of riverbeds from 2000-2007 at hydroelectric power stations; state Supreme Court affirmed on basis that rivers were navigable at time of statehood in 1889 and by providing a channel for commerce at that time; U.S. Supreme Court reversed (unanimously) on basis that Equal Footing Doctrine specified that states did not hold title to riverbeds on portions of rivers that were non-navigable at time of statehood; Court determined that Missouri River non-navigable over 17-mile Great Falls reach  - from head of first waterfall to foot of last; present-day recreational use of Madison River had  no bearing on navigability issue; in addition, state's lack of assertion to title over riverbed over long period of time provided additional evidence that river segments at issue non-navigable). 


(town enacted ordinance prohibiting activities relating to hydrofracking within town’s boundaries in response to petition from residents; plaintiff owned gas leases for 22,200 acres and invested $5.1 million prior to enactment of the ordinance; plaintiff brought suit arguing New York’s Oil, Gas, and Solution Mining Law (OGSML) preempted town’s ordinance; town filed motion for summary judgment; court examined earlier precedent interpreting identical provision in New York’s Mined Land Reclamation Law (MLRL) that found no preemption of local authority to zone mining activity (i.e., oil and gas drilling); court found no meaningful distinction between the two statutes and granted the motion finding current state mining law did not preempt local zoning authority; court did strike and sever provision invalidating lawfully issued permits granted by other governmental entities; court's decision raises significant cross-border implications, particularly with Pennsylvania, which allows fracking and limits municipal authority to regulate where drilling occurs; in addition, court's decision may be appealed or plaintiff may pursue constitutional takings claim against defendant; court's opinion also ignores the reality that a drilling area could cover many acres that overlap multiple towns with the result that local regulation could result in varying regulation of a particular drilling activity; court also ignored fact that while fracking has been conducted in the U.S. for over 60 years, there isn't hasn't been a single reported case involving contamination to groundwater).


(town enacted ordinance prohibiting activities relating to hydrofracking within town’s boundaries in response to petition from residents; plaintiff owned gas leases for 22,200 acres and invested $5.1 million prior to enactment of the ordinance; plaintiff brought suit arguing New York’s Oil, Gas, and Solution Mining Law (OGSML) preempted town’s ordinance; town filed motion for summary judgment; court examined earlier precedent interpreting identical provision in New York’s Mined Land Reclamation Law (MLRL) that found no preemption of local authority to zone mining activity (i.e., oil and gas drilling); court found no meaningful distinction between the two statutes and granted the motion finding current state mining law did not preempt local zoning authority; court did strike and sever provision invalidating lawfully issued permits granted by other governmental entities; court's decision raises significant cross-border implications, particularly with Pennsylvania, which allows fracking and limits municipal authority to regulate where drilling occurs; in addition, court's decision may be appealed or plaintiff may pursue constitutional takings claim against defendant; court's opinion also ignores the reality that a drilling area could cover many acres that overlap multiple towns with the result that local regulation could result in varying regulation of a particular drilling activity; court also ignored fact that while fracking has been conducted in the U.S. for over 60 years, there isn't hasn't been a single reported case involving contamination to groundwater).


(in contemplation of marriage, decedent and fiancé executed antenuptial agreement; decedent also revised will to transfer property to his soon-to-be spouse and establish testamentary trust for fiancé’s daughter; will identified fiancé by name; decedent died three days before wedding; court held will unambiguously devised property to fiancé and marriage not condition precedent; terms in will such as “wife” and “spouse” merely descriptive; will did not incorporate antenuptial agreement by reference, so could not be used as extrinsic evidence to establish ambiguity or construe meaning of will; all issues affirmed on appeal; additional issue raised on appeal; court held new provision in state probate code not applicable because fiancé’s right in will vested before adoption of statute).


(two-year old plaintiff visiting a retail store located on a farm was injured when a horse he was petting bit him, removing a large portion of his cheek; the defendant owner moved for summary judgment because there was no evidence defendant had actual or constructive knowledge of any vicious tendencies of the specific horse that bit the plaintiff; district court granted summary judgment; appellate court reversed holding that negligence can be proven against the owner of a domestic animal by proof of “natural propensities” of the species to “do mischief or be vicious” rather than the tendencies of a specific animal; if the species possesses the natural propensities to cause harm, then the owner must take precautions to prevent a foreseeable injury; a question of fact was generated in this case as to whether the defendant had notice that the horse belonged to a class of domestic animals possessing a natural propensity to bite). This case was affirmed on appeal.

 


(convictions under I.R.C. Sec. 7206 for aiding and assisting in preparation of false tax return constitutes aggravated felony if government’s revenue loss exceeds $10,000 (6-3 opinion written by Thomas)). 


(case involves challenge to EPA's adoption of numeric standards for nutrients in Florida lakes, springs, streams and rivers; court upholds EPA's determination that nutrient criteria are required to meet Clean Water Act requirements; spring and lake criteria upheld, stream criteria invalidated, some downstream-protection criteria upheld and EPA's decision to allow adoption of site-specific alternative criteria; FL failed to adopt acceptable criteria, and EPA entitled under CWA to propose and adopt new criteria).


(petitioner claimed that farmland and timberland should be valued less than fair market value due to flooding problems in recent years; while property did flood frequently, lack of evidence presented of value of comparable tracts; only assessed value of timberland from other counties presented rather than evidence of market value).


(land owned by Boy Scouts determined to be exempt from property tax; Boy Scouts organization is community service organization, and land at issue used with predominant purpose of providing humanitarian services (charitable and educational) as evidenced by organization’s articles of incorporation and bylaws; organization met a community need by improving physical, mental, social, cultural and spiritual welfare of members in county where land located; non-exempt land uses minimal in scope and did not interfere with predominant purpose). 


(appeal from denial of petition for formal probate of missing will; appellate court affirmed holding that petitioner failed to rebut presumption of animo revocandi (cancellation of a will) when decedent’s will executed in 1995 could not be located; court concluded testimony of grandson who loved and cared for decedent and witnessed deteriorating relationship between decedent and petitioner following death of decedent’s husband was more credible than testimony of petitioner who stood to inherit under the will).


(dispute between trustee, defendant, and beneficiaries, plaintiffs, regarding gift from bank account specified in decedent’s will but later transferred to trust account; plaintiffs sought relief to receive promised monetary gifts from decedent; defendant argued gift had been adeemed when all assets transferred to trust account, enforcement of in terrorem clause in will also revoked gift, and that defendant entitled to half of trust account as joint tenant of account; trial court granted summary judgment to defendant that ademption could apply to testamentary trust and gift was adeemed; court held in terrorem clause not applicable; both parties appealed; on appeal, court held intent of decedent was for gift to occur despite transfer of account and assets into trust because transfer occurred within short period of time after will drafted; summary judgment overturned and case remanded to trial court for determination of appropriate gift under terms of will; appellate court also held in terrorem clause not applicable and joint tenancy in bank account did not entitle defendant to one-half of account).


(plaintiff operates cow-calf ranch and also sells decorative boulders taken from land plaintiff leased from State to run cattle; defendant employed as boulder finder; defendant quit and bought mineral rights on State land from third party owner thereby obtaining right to harvest boulders and retain sale proceeds; parties later partnered in boulder-selling business, but later split-up; plaintiff sued for constructive trusts on certain parcels and proceeds of boulder-selling business; trial court determined that defendant in breach of contract, but that plaintiff not entitled to constructive trusts; judgment for defendant, but fees not awarded; on appeal, plaintiff claimed that trial court didn’t address issues contained in pre-trial statement that were not raised in complaint, and court remanded for additional findings on those issues; appellate court upheld trial court finding that plaintiff not entitled to constructive trust on some of the acreage that defendant harvested boulders on due to lack of equitable interest in the property; plaintiff argued for constructive trust on defendant’s profits on appeal on basis that defendant used information obtained during employment, but argument not raised at trial; defendant ultimately determined to be prevailing party on appeal and trial court abused its discretion by not awarding fees along with costs; but, appellate court remanded for court to determine which party ultimately successful). 


(defendant, closely-held farming corporation with long history in Montana, owned 51 percent by controlling shareholder with remaining 49 percent ownership held by two others; controlling shareholder proposed to award $1.2 million bonus (in stock and cash) to corporate president (son of controlling shareholder); shareholders voted in accordance with stock ownership and bonus approved; minority shareholders sought to void transaction and filed derivative action and direct action against corporation asserting breach of statutory and fiduciary duties and common law claims; trial court ruled for corporation; while transaction was a director's conflict-of-interest transaction under Mont. Code Ann. Sec. 35-1-461(2), it was saved by safe-harbor provision of Sec. 35-1-462(2)(c) as being fair to the corporation; action also satisfied business judgment rule and did not breach fiduciary duties and equities supported transaction; appellate court certified three questions to Montana Supreme Court which determined that transaction reviewable under safe-harbor provision and that business-judgment rule inapplicable to situations involving a director's conflict of interest, and set forth test for determining breach of fiduciary duties; on review, court affirmed on basis that transaction was fair to corporation based on the facts and record supported district court's other findings).


(decedent utilized tax avoidance plan with intent to avoid state (CA) tax on $660 million in capital gain income; upon death, decedent's estate deducted $62 million on Form 706 for estimated amount of state income tax that would be due if tax avoidance plan failed; IRS disallowed deduction and trial court agreed that deduction should be disallowed because state tax liability (and, hence, deduction) not ascertainable with reasonable certainty as of the date of the decedent's death and decedent had already entered into a settlement with the state as to the amount of capital gain tax liability at $26 million; estate subsequently paid $11 million and then filed refund claim for the $11 million, claiming that $47 million was correct deduction; estate paid $47 million and filed refund claim; deduction not allowed because claim not reasonably certain).


(case involves disposition of life insurance proceeds; decedent and second wife executed prenuptial agreement before marriage in 2008; agreement specified that  both parties waived any rights to each other’s separate property as listed in “Exhibit A which contained; life insurance policy with cash value of $15,000 and  face value of $100,000 “now payable” to decedent’s  spouse; decedent did not complete beneficiary change process because he did not provide all of the necessary information and it was unknown whether he ever knew the insurance company sent a letter requesting the additional information or not; without a designated beneficiary, the life insurance proceeds were paid to the estate; upon decedent’s  death, widow petitioned for spousal support; estate co-executor sought determination of whether estate should pay proceeds to widow; other co-executor (decedent’s sister who would inherit the proceeds) objected to both petitions; court determined that proceeds should be paid to widow based on the decedent’s intent  and  ambiguous “now payable” language in prenuptial agreement ; the court  denied  spousal support for widow because of the prenuptial agreement and the anticipated receipt of the insurance proceeds; sister co-executor filed several motions for review; the widow objected to the timeliness of the motions and in the alternative for the court to reconsider the denial of her request for spousal support; shortly thereafter,  sister co-executor filed notice of appeal;  probate court stated it lacked jurisdiction to decide the motions for review based on the appeal; on review by Iowa Supreme Court, Court remanded issue back to probate court for consideration of  sister’s motion for further review; the probate court affirmed its decision to grant the life insurance proceeds to the widow, but granted surviving spouse benefits to the widow for one year due to the delay in receiving the life insurance proceeds; the sister appealed both issues; on appeal, a majority affirmed both issues; one judge also affirmed the grant of spousal support, but disagreed that the widow should receive the life insurance proceeds; dissent pointed out that prenuptial agreement not ambiguous and that the Exhibit A was a list of assets only and not an intent to provide the insurance to the widow; dissent also pointed out that extrinsic evidence was used improperly by the court to find an ambiguity and then further extrinsic evidence used to interpret ambiguity, which is in conflict with contract interpretation principles; dissent also opined  that written obligations of the parties (premarital agreement, life insurance policy, and will) did not show the intent to give the insurance proceeds to widow.


(plaintiff tripped over a raised, uneven portion of the defendant’s sidewalk and fractured her left elbow and forearm; claim proceeded to trial; at trial, photographs of sidewalk after repairs had been made were admitted over defendant’s objection; jury found defendant 85% at fault and plaintiff 15% at fault and awarded plaintiff $163,128.77 after reduction for her fault; defendant appealed, arguing admission of photographs was improper and jury verdict excessive and not supported by evidence; appellate court held photographs were properly admitted because no photographs of pre-repair condition of sidewalk existed, and jury instructed to not rely on the repair as proof of negligence; court held jury award not excessive and evidence did not establish the jury relied on plaintiff’s answer to interrogatories outlining her damage as admission of defendant's claim rather than other evidence presented; judgment affirmed.


(Chapter 13 case; post-petition income that becomes available to debtor after debtor's I.R.C. Sec. 401(k) loans are repaid in full constitutes "projected disposable income" that must be turned over to trustee and committed to reorganization plan; such amounts cannot be used to fund voluntary I.R.C. Sec. 401(k) plans).


(Chapter 7 debtor (real estate agent) moved to hold former employer in contempt for violating automatic stay provision by withholding sales commissions earned pre-petition but due post-petition; debt incurred as result of agency pre-paying bills for which debtor was responsible; agency applied commissions owed to debt; bankruptcy court held commission earned pre-petition was part of bankruptcy estate and failing to disclose interest in schedules meant debtor was judicially estopped from claiming interest at later date and debtor lacked standing because entitlement to commissions became property of estate; debtor appealed these two issues; appellate court affirmed on both issues; court held commission was property of estate because right to commission vested post-petition, payment was made for services rendered pre-petition, so interest in commission required to be disclosed; court also agreed agency was entitled to commission pursuant to doctrine of recoupment, which permits the offset of debts when obligations are based on same transaction or occurrence; court found historical practice of applying commissions to outstanding expenses prepaid to enable commissions to be earned, so doctrine applied).


(defendant (dairy farm) sold ag preservation easement to State of Maryland on behalf of Maryland Agricultural Land Preservation Foundation (MALPF), an entity of the Maryland Department of Agriculture; MALPF then approved defendant's proposal to construct and operate creamery, processing facility, farm store and parking lot on premises; adjoining owners and plaintiff (conservation organization) alleged that such development violated terms of easement and sought writ of mandamus to compel MALPF to enforce easement; trial court determined that plaintiff and adjoining owner lacked standing to sue; on appeal, court determined that standing existed on theory of special harm, but not theory of constructive trust or third party beneficiary; easement did not create charitable trust enforceable by third parties; easement is creature of property law and made no mention of "trust" or "trustee" and provided for modification or termination by agreement of the parties; easement also not perpetual, so charitable trust doctrine inapplicable; no charitable purpose reflected in easement - MALPF paid $796,500 for easement; third party beneficiary doctrine also inapplicable because easement is type of contract between contracting parties and easement not intended for direct benefit of third parties; standing exists on basis of special harm because MALPF approval defendant's proposal was a land use decision; case remanded to trial court and burden of rebutting allegation of specific harm to adjoining owner shifts to MALPF). 


(defendant (dairy farm) sold ag preservation easement to State of Maryland on behalf of Maryland Agricultural Land Preservation Foundation (MALPF), an entity of the Maryland Department of Agriculture; MALPF then approved defendant's proposal to construct and operate creamery, processing facility, farm store and parking lot on premises; adjoining owners and plaintiff (conservation organization) alleged that such development violated terms of easement and sought writ of mandamus to compel MALPF to enforce easement; trial court determined that plaintiff and adjoining owner lacked standing to sue; on appeal, court determined that standing existed on theory of special harm, but not theory of constructive trust or third party beneficiary; easement did not create charitable trust enforceable by third parties; easement is creature of property law and made no mention of "trust" or "trustee" and provided for modification or termination by agreement of the parties; easement also not perpetual, so charitable trust doctrine inapplicable; no charitable purpose reflected in easement - MALPF paid $796,500 for easement; third party beneficiary doctrine also inapplicable because easement is type of contract between contracting parties and easement not intended for direct benefit of third parties; standing exists on basis of special harm because MALPF approval defendant's proposal was a land use decision; case remanded to trial court and burden of rebutting allegation of specific harm to adjoining owner shifts to MALPF). 


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