Annotations 05/2014

In this case, the petitioner sold his home and 80-acres of land on the installment basis for a gain of $657,796.  The petitioner calculated the gain by excluding $500,000 of gain attributable to the home sale exclusion of I.R.C. Sec. 121.  The buyers defaulted and the petitioner reacquired the property in full satisfaction of the debt.  The IRS claimed the petitioner had to recognize gain upon repossession to the extent of money and other property received before repossession, which would, in essence, recapture the Sec. 121 exclusion previously claimed.  The court agreed with IRS that the general rules of I.R.C. Sec. 1038 applied  and noted that the petitioner was actually in a better position than before the sale because he had received some payments for the sale before the buyer's default and recouped the property. The case is on appeal to the Eighth Circuit Court of Appeals.  Debough v. Comr., 142 T.C. No. 17 (2014).

 Before filing for Chapter 7, the debtors filed an action against their neighbors seeking to acquire a portion of their land through adverse possession. The debtors lost on summary judgment, and the trial court awarded the neighbors $45,000 in attorney fees. The debtors then obtained a Chapter 7 discharge, under which their 37.41-acre tract of real property was declared to be exempt homestead property. The neighbors objected, but the bankruptcy court overruled their objection. The court ruled that under Texas law, a claimant could establish homestead rights in his land by showing (i) overt acts of homestead usage and (ii) the intention on the part of the owner to claim the land as a homestead. An objecting party, argued the court, had the burden of demonstrating that the homestead rights had been terminated. Finally, the court ruled that a rural homestead could consist of "not more than 200 acres, which may be in one or more parcels, with the improvements thereon." Tex. Prop. Code Ann. § 41.002(b). The court ruled that the debtors showed that the parcels were contiguous and that they had used the parcels and the lot adjoining the house for the "comfort, convenience or support of the family." The court also ruled that the debtors did not abandon the homestead.  In re Ling, No. 13-36967, 2014 Bankr. LEXIS 2367 (Bankr. S.D. Tex. May 30, 2014).

The petitioner was in the land development business and sold land to builders for home construction.  The petitioner accounted for the income from the sales under the completed contract method which applies to home construction contracts and other real estate construction contracts if the taxpayer estimates that the contracts will be completed within two years of the contract commencement date and the taxpayer satisfies a $10 million gross receipts test under the Treasury Regulations.  Under the completed contract method, no income is reported until the contract is complete irrespective of when contract payments are actually received.  The IRS asserted that the contracts didn't qualify for the completed contract method of accounting because the contracts could not be considered long-term and were not construction contracts because the taxpayer did no construction activities.   The court determined that the custom lot and bulk sale contracts were long term contracts and were construction contracts.  However, the court determined that none of the contracts were home construction contracts because the taxpayer merely paved the road leading to a home.  Thus, gain under the contracts could not be reported under the completed contract method.  The court also determined that none of the contracts involved a general contract or subcontractor relationship.  The Howard Hughes Company, LLC v. Comr., 142 T.C. No. 20 (2014).

The taxpayers, a married couple, sold 2.63 acres of undeveloped land that generated over $60,000.  The taxpayers reported the income as capital gain subject to tax at favorable capital gain rates.  IRS claimed that the income was "other income" that should be taxed as ordinary income.  The taxpayers admitted that they bought the land for the purpose of developing the property and did attempt to find a partner to develop the property.  Ultimately, the property was sold to a developer and the taxpayers received a payment each time a developed portion of the property was sold.  The IRS denied capital gain treatment because they asserted that the income was from property "held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business."  The court noted that the determination of the nature of the income is a fact-based determination, and that the facts supported the IRS position.  The taxpayers intended to develop and sell the property at the time it was acquired and that the taxpayers were active in getting the property developed.  The fact that the property was the only one purchased for development was not determinative.  The court granted summary judgment to the IRS.  Allen v. United States, No. 13-cv-02501-WHO, 2014 U.S. Dist. LEXIS 73367 (N.D. Cal. May 28, 2014).    

The plaintiffs owned 140 acres of land. They filed a quiet title action against defendants, their neighbors, seeking to acquire title to a contiguous 30-acre tract of property through the doctrine of adverse possession. They claimed that a fence that had run through the woods on the disputed property was their property’s boundary line. The trial court disagreed and, on appeal, the court affirmed. Despite the fact that the fence had been in place for up to 40 years, the court ruled that the plaintiffs had failed to establish all of the common-law elements of adverse possession:  possession of the property continuously for more than seven years and that the possession has been visible, notorious, distinct, exclusive, hostile, and with intent to hold against the true owner. The trial court’s finding of sporadic use by the plaintiffs and their predecessors was not clearly erroneous. The defendants, their surveyor, and their forestry consultant perceived the fence to be a convenience fence rather than a boundary line. Plaintiffs failed to show sufficient acts of possession sufficient to "fly the flag" over the land and put the true owner on notice that his land was held under an adverse claim of ownership. Lafferty v. Everett, No. CV-13-766, 2014 Ark. App. LEXIS 439 (Ark. Ct. App. May 28, 2014).

The plaintiffs were the defendant's neighbors.  The defendant hired an aerial crop duster to apply the herbicide Surmount to his property. The plaintiffs incurred chemical damage to their property due to the aerial drift of the chemical. They filed an action against the defendant and the crop duster, asserting claims for negligence, trespass, and nuisance. The plaintiffs settled with the crop duster, and the parties filed motions for summary judgment. The trial court granted a directed verdict for the defendant, finding that he had no responsibility for the negligence of the contractor crop duster because crop dusting was not an ultrahazardous activity. On appeal, the court affirmed. The Arkansas courts had long held that the aerial application of pesticides was not a dangerous occupation in and of itself. The plaintiffs presented no evidence to establish that Surmount itself was inherently dangerous. The trial court did not abuse its discretion in refusing to take judicial notice of EPA documents concerning the pesticide 2, 4-D and the two component chemicals in Surmount. The court found that the plaintiffs had failed to present evidence showing how Surmount related to 2,4-D. As such, the trial court did not err in failing to admit the documents as evidence without support from any witness. Wilson v. Greg Williams Farm, No. CV-13-998, 2014 Ark. App. LEXIS 444 (Ark. Ct. App. May 28, 2014).

The bankruptcy court originally found that a creditor had a perfected security interest in 16 of the debtors’ dairy cows before the 90-day bankruptcy preference period. Specifically, the bankruptcy court found that the security agreement and filed financing statement, which included a barn name and ear tag ID number for each cow, provided sufficient notice to third parties, despite missing and mismatched ear tags, because industry custom included the inspection of Holstein registration certificates for each cow.  The district court vacated the decision and remanded for further factual findings, determining that the bankruptcy court did not adequately support its determination of the existence and scope of an industry custom of identifying dairy cattle using registration certificates. On remand, the bankruptcy court ruled that the creditor’s interest was unperfected because the evidence was insufficient to support a reliance on industry custom to prove proper notice to third parties. There was no proof of a regularly observed practice in the dairy cattle industry by third party lenders or creditors of utilizing registration certificates to identify cattle, subject to a prior security interest in the course of their due diligence.  In re Baker, Case No.: 08-62748, 2014 Bankr. LEXIS 2318 (Bankr. N.D. N.Y. May 28, 2014).


The plaintiff was a small family farm producing rare, colored breeder stock, eggs, and broilers.  The plaintiff held a dominant position in the market of breeding colored broiler chickens possessing "unique qualities." In 2002, an outbreak of Newcastle Disease (also known as END) was confirmed in a location near the plaintiff’s farm. Because END is very dangerous, the USDA determined that it must dispose of all flocks and eggs in the general vicinity of the disease. They ordered the destruction of the plaintiff’s unique flock and eggs and paid them $1,823,116.93 as compensation for the taking.  The plaintiffs filed an action alleging breach of contract stemming from the USDA’s alleged failure to pay a promised sum. In the alternative, the plaintiff sought just compensation for the regulatory taking of its "uninfected, genetically unique, and irreplaceable breeder chickens and eggs." The United States filed a motion for summary judgment, as did the plaintiff. The court denied the motions, ruling that questions of fact existed as to (1) whether consideration existed for the settlement contract allegedly breached by the United States, (2) whether the USDA employees with whom plaintiff dealt possessed authority to bind the United States, and (3) whether a compensable taking occurred.  Cebe Farms v. United States, No. 05-965, C2014 U.S. Claims LEXIS 439 (Fed. Cl. May 28, 2014).

The plaintiffs, a collection of environmental activist groups, sued to force the EPA to implement tougher regulatory standards for nitrogen oxide and sulfur dioxide in accordance with the Clean Air Act (CAA). The court, however, denied the plaintiff's petition on the basis that it was within EPA's discretion to take additional time to determine the new standards and study the matter further. The court noted that EPA was taking steps to update existing standards applicable to "acid rain." Center for Biological Diversity, et al. v. Environmental Protection Agency, No. 12-1238, 2014 U.S. App. LEXIS 9691 (D.C. Cir. May 27, 2014).

The appellant and the respondent were friends who shared farming equipment and occasionally stored equipment on each other's property. After the parties had a "falling out," the appellant commenced an action against the respondent for conversion, trespass, and defamation.  The respondent filed an answer to the complaint, admitting that he converted the appellant's property, defamed appellant, and trespassed on the appellant's land, causing damage. Based on the answer, the appellant filed a motion for judgment on the pleadings and a motion for summary judgment. The district court granted the motion as to liability and causation, but ordered a trial for the issue of damages. After a bench trial, the trial court awarded the appellant $2,000 in general damages for the defamation and $2,000 for the conversion.  The appellant challenged the award, arguing that he was entitled to the $50,200 in damages asserted in his pleading. He asserted that the trial court erred in refusing to award him special damages. The court affirmed as to the award of general damages award, but reversed and remanded as to the issue of special damages. The appellant had offered testimony establishing that the defamation was a substantial factor in bringing about the termination of a lease. On remand, the trial court was to determine the amount of special damages established by the appellant. Green v. Kellen, No. A13-1554, 2014 Minn. App. Unpub. LEXIS 514 (Minn. Ct. App. May 27, 2014). 

The petitioners were sheep ranchers who held a grazing permit on federal land. A recreational district had been granted a permit to access and hold events on the same land.  Petitioners owned several Great Pyrenees dogs to protect their sheep from predators.  The respondent was attacked and seriously injured by the petitioners’ dogs while participating in a mountain bike race sponsored by the district.  She and her husband filed an action against the petitioners, alleging negligence and strict liability under the Colorado dog bite statute (C.R.S. § 13-21-124).  The trial court granted summary judgment for the petitioners on the grounds that the Colorado Premises Liability Act preempted the common law claims and that the "working dog exemption" in the dog bite statute granted them immunity to strict liability. The court of appeals affirmed as to the common law claims, but reversed as to the dog bite statutory immunity, ruling that the "working dog exemption" required the dog owner to be in control of the property where the bite occurred such that the owner could exclude others.  However, the court remanded the case for further proceedings. On appeal by the petitioners, the Colorado Supreme Court disagreed with the court of appeals’ interpretation of the dog bite statute, finding that the “working dog exemption” in the dog bite statute applied if the bite occurred while the dog was on its owner’s property or while the dog was working under the control of its owner.  Nevertheless, the Court affirmed on other grounds, finding that the court of appeals properly remanded for further factual findings. Robinson v. Legro, No. 12SC1002, 2014 Colo. LEXIS 414 (Colo. Sup. Ct. May 27, 2014). 

Here, the petitioner had passive losses that were not currently taken and were suspended.  The petitioner claimed that he disposed of his interest in the passive activities involved in the year that the bank foreclosed on the two properties involved.  However, the court disagreed because the foreclosure action was not final in that year.  Simply filing a final partnership return for the partnership that owned the properties was inadequate proof that a disposition had occurred.  Herwig v. Comr., T.C. Memo. 2014-95.

The decedent's pre-deceased husband founded a farm supply company after WWII.  At the time of her death, the decedent owned a significant amount of stock in the company, but also had been making stock gifts to family members each year from 1999 to 2008, the year of her death. Gift tax returns reporting the gifts were filed each year. The IRS issued deficiency notices for nine of the 10 years involved, increasing the value of the adjusted taxable gifts significantly. The deficiency notice was issued to the estate due to the enhanced estate tax due because of the increased value of the adjusted taxable gifts. At issue was when the period of limitations on gift tax assessment began to run. Generally, gift tax must be assessed within three years after Form 709 is filed. The court noted that the value of a prior taxable gift is treated as finally determined if it is shown on a Form 709 and IRS does not contest it before the period of limitations on assessment runs and is adequetely disclosed on Form 709 (or attached statement) in a manner that sufficiently apprises IRS of the nature of the gift (Treas. Reg. Sec. 301.6501(c)-1(f)(2)). Court determined that issues of material fact remained concerning nature of gifted stock or basis of value reported. The court denied the estate's motion for summary judgment. Estate of Hicks, T.C. Memo. 2014-100.

A testator with no issue left a will granting four nephews and one niece an option to purchase her farm. If more than one option holder wanted the farm, a lottery would determine the buyer. One of the nephews predeceased the decedent with no issue of his own. The executor of the estate took to the position that the option to the deceased nephew lapsed and that the option was to pass to the residuary beneficiaries. One of the other nephews disagreed, arguing that because the gift was a class gift, it was to pass to the other members of the class. The executor sought declaratory relief, and the trial court granted summary judgment for the nephew. On appeal, the court affirmed, finding that the language in Alice's will was a reasonably clear expression of intent for the gifts, including the option, to pass to a class of her relatives. The court found that the decedent initially named the class by name and thereafter referred to them by class. As such, the court found that, KRS 394.410(1), which governed class gifts, controlled. Reynolds v. Reynolds, No. NO. 2013-CA-000865-MR, 2014 Ky. App. LEXIS 85 (Ky. Ct. App. May 23, 2014).

The decedent, an owner of a broadcasting corporation, died with a sizeable estate and the estate elected to pay a portion of the estate tax due in installments via I.R.C. Sec. 6166.  Shortly before death, the decedent paid a $6.7 million legal judgment on his son's behalf that had been entered against his son.  On the estate tax return, the $6.7 million amount was included in the estate as a loan receivable.  Of the $15.3 million in estate tax due, the estate paid $8.1 million that could not be paid in installments, and deferred via I.R.C. Sec. 6166 the balance of the estate tax due.  A year later, the estate filed an amended estate tax return reclassifying the $6.7 million as a taxable gift and filed a gift tax return and paid the $2.9 million in gift tax on the gift.  Another two years later, the estate again filed an amended estate tax return reporting one of the assets in the estate at zero which had originally been valued at $9.3 million.  The IRS assessed $650,000 as a penalty for late filing of the gift tax return, another $606,000 for late filing of the gift tax return and $742,000 of interest.  The IRS also issued notices of deficiency for estate tax for almost $40 million and almost $3 million of gift tax.  The estate sought to have the $8.1 million of estate tax paid applied against the gift tax liability.  The estate also claimed that it had made an overpayment of estate tax and that I.R.C. Sec. 6402 allowed the estate to have the overpayment credited against the gift tax.  Based on what the parties had already agreed to, the court noted that there was no available overpayment of estate tax to credit against the gift tax liability and that IRS could proceed to collection.  Estate of Adell v. Comr., T.C. Memo. 2014-89.  

The appellant purchased a utility tractor and a rotary cutter from an implement dealer for a combined total of $13,600. She made a $3,000 cash down payment and signed a bill of sale. When the implement company delivered the equipment to the appellant, she was incarcerated. Another party, acting pursuant to a power of attorney signed a retail installment contract obligating the appellant to pay the creditor $275 per month under the contract.  The appellant made payments for three years, but stopped paying when the remaining balance was $4,788.45. The creditor filed a breach of contract action, seeking the balance due, attorney fees, and permission to foreclose on the equipment. The trial court entered summary judgment in favor of the creditor, and the court affirmed. Although the appellant argued that she had not granted a valid power of attorney to the person who signed the contract, the court disagreed. There was sufficient evidence to establish that the signatory acted under proper authority. The trial court also did not err in finding that appellant’s purchase of the equipment was for commercial purposes and thus was outside the scope of the arbitration clause in the agreement.  Morris v. Deere & Co., No. 11-12-00079-CV, 2014 Tex. App. LEXIS 5574 (Tex. Ct. App. May 22, 2014).

When the wife sought divorce, the couple owned two pieces of real estate that made up the bulk of their marital estate: the marital home, worth approximately $150,000, and 158 acres of farmland worth approximately $885,000. The husband owned the marital home before the 25-year marriage, and during the marriage he inherited the farmland, which had been in his family for more than 100 years. Because the wife had no involvement in the acquisition of these assets, the trial court determined that a 70-30 unequal distribution as appropriate. He awarded the home and the farm to the husband and ordered him to make a cash-equalization payment of $309,885 to the wife. Both parties appealed, the wife arguing for an equal distribution and the husband contending that he would have to sell the farm to make the payment to the wife. In affirming, the court ruled that neither party had overcome the strong presumption that the trial court acted in accordance with the law in setting the distribution. The trial court did not act unjustly or unfairly. Powell v. Powell, No. 03A04-1308-DR-399, 2014 Ind. App. Unpub. LEXIS 673 (Ind. Ct. App. May 22, 2014).

In this case, the decedent died in 2006 with a taxable estate that included an investment account valued at the time of death at $4.8 million.  The estate paid federal estate tax of $1.9 million attributable to the account and sought a refund on the basis that the account was part of a Ponzi scheme established by Bernie Madoff and should have been valued at zero.  The court denied summary judgment for the IRS on the issue that the taxable asset was the account itself rather than the underlying assets.  The court also denied summary judgment to the IRS on the issue that the application of the willing-buyer/willing-seller test of Treas. Reg. Sec. 20.2031-1(b) would not result in an account value of zero as of the time of the decedent's death. The court noted that the account value was established via an appraisal, but said that the estate raised a disputed issue of material fact that if the estate had used a more rigorous fair market value standard a hypothetical buyer might have, through due diligence, discovered that the account was fraudulent and had no value as of the date of the decedent's death.  The case will proceed to trial on the refund issue.  However, the withdrawals from the decedent's account during life far exceeded the amount deposited into the account which makes the account subject to clawback by the Madoff bankruptcy trustee which is seeking $2.9 million from the estate.  Estate of Kessel v. Comr., T.C. Memo. 2014-97.

In this case, the taxpayer filed frivolous tax returns and got hit with the I.R.C. Sec. 6702(a) penalty (pre-Apr. 3, 2007 version) for doing so.  She paid the penalty and sued for a refund.  However, before the case came to trial, the taxpayer died.  The issue was whether the penalty survived her death.  The statute at issue was silent on the matter and the court determined that it was a civil penalty by nature and survived the decedent's death.  The court noted that its opinion had no bearing on whether the current version of the statute (with a much larger penalty) was still civil in nature that would survive a decedent's death.  United States v. Molen, No. 2:10-cv-2591-MCE KJN, 2014 U.S. Dist. LEXIS 69966 (E.D. Cal. May 21, 2014).   

The petitioner was a self-described real estate real estate professional that received income from the sale of land.  The petitioner reported the income as capital gain, but the Tax Court held that it was ordinary income because the petitioner held the property primarily for sale to customers in the ordinary course of the petitioner's real estate business.  The court noted that the issue of whether the petitioner was a developer (ordinary income treatment) or an investor (capital gain treatment) was fact dependent, and that the facts supported developer status.  The petitioner held his business out to customers as a real estate business and engaged in development and frequent sales of numerous tracts over an extended period of time.  In prior years, the petitioner had reported the income from sales as ordinary income and had deducted the expenses associated with the tracts.  Boree v. Comr., T.C. Memo. 2014-85.

The LLC at issue serves as the investment manager for a managed fund which is a family of investment partnerships.  The LLC has full authority and responsibility to manage and control fund business and affairs, and is primarily responsible for conducting market research and trading activity of the fund.  The LLC receives management fees for its work.  The LLC treated all partners/members as limited partners such that their distributive shares were not subject to self-employment tax.  Only guaranteed payments were subject to self-employment tax.  The IRS determined that I.R.C. Sec. 1402(13) only excluded from self-employment tax the income distributed to partners/members that were mere investors and did not actively participate in the partnership's/LLC's business operations.  The IRS determined that the present situation was analogous to the facts of Renkemeyer, Campbell, and Weaver LLP v. Comr., 136 T.C. 137 (2011), and the earnings of each partner/member were a direct result of the services rendered on behalf of the LLC by the partners/members.  The payments were also not "wages" and the reasonable compensation rules of corporations are inapplicable.  CCM 201436049 (May 20, 2014).   

Plaintiffs were non-exempt employees hired by defendants to perform seasonal work for the defendants’ table grape farm. Plaintiffs filed a putative class action against defendants, alleging that the defendants violated the Migrant Seasonal Agricultural Worker Protection Act ("AWPA") by failing to pay them wages when due and by failing to post notice as required by the AWPA. The plaintiffs alleged that the defendants also filed to properly pay them overtime in violation of the California Labor Code. The defendants filed a motion to dismiss for failure to state a claim, but the court denied the motion. The court found that the plaintiffs had pled factual allegations to provide notice of the basis of their claims.  The plaintiffs claimed that, when they were paid in full or in part by piece, the wages they received did not meet the minimum wage requirement. This was sufficient to state a cognizable claim for failure to pay wages when due in violation of the AWPA. The court also found that the plaintiffs stated a cognizable claim for failure to post a notice in violation of the AWPA.  The plaintiffs' allegations that the defendants required them to work in excess  of ten hour workdays or 60 hours in a workweek without compensating them at one and one half times their regular rate of pay when they were paid in whole or in part by piece stated a claim for a violation of the California Labor Code. Amaro v. Gerawan Farming, Inc., 2014 U.S. Dist. LEXIS 50639, 22 Wage & Hour Cas. 2d (BNA) 701 (E.D. Cal. Apr. 11, 2014), Adopted by, Motion denied by Amaro v. Gerawan Farming, Inc., 2014 U.S. Dist. LEXIS 69270 (E.D. Cal. May 19, 2014).

The petitioner sued for a refund as a result of a $4.8 million loss that IRS disallowed.  The loss stemmed from the petitioner's acquisition and leasing of a jet during 2005.  The court determined that the petitioner was at risk under I.R.C. Sec. 465 with respect to his aircraft leasing activity and that the leasing activity was within the exception from rental activities contained in Treas. Reg. 1.469-1T(e)(3)(ii)(A) because the average period of customer use of the aircraft was less than seven days.  As a result, the $4.8 million loss was not subject to the passive activity loss limitations.  Moreno, et al. v. United States, No. 6:12CV2920, 2014 U.S. Dist. LEXIS 69363 (W.D. La. May 19, 2014).

The plaintiff was paralyzed after her vehicle struck a cow on the interstate highway. She and her husband sued the owner of the cow and the state, alleging that the state was negligent in failing to maintain a right of way fence along the interstate. The state moved for summary judgment, alleging that it was entitled to immunity because its decision to not maintain a fence was a discretionary decision entitled to statutory immunity under Minn. Stat. § 3.736, subd. 3(b). The district court granted the motion, finding that the state had presented "sufficient evidence showing that [its] officials determined [that] repairing fences was not a high priority." In affirming the judgment, the court ruled that prioritization of maintenance activities was protected by statutory immunity. The court found that the affidavits presented by the state defined the policy placing fence repair at a low priority and explained the purpose of the policy. As such, the state was entitled to statutory immunity. Schmitz v. Rowekamp, No. A13-1686, 2014 Minn. App. Unpub. LEXIS 497 (Minn. Ct. App. May 19, 2014).

A farmer operated a farm including two registered feedlots and 4,000 acres of cropland. Each winter, the farmer would place more than 2,000 beef cattle on approximately 400 acres of its cropland. The resulting cattle density was several times higher than for a typical foraging field and, although there was at least an initial vegetative cover, the farmer provided his cattle with feed that supplied at least 90 percent of their nutritional needs. The Commissioner of the Minnesota Pollution Control Agency (MPCA) required the farmer to obtain a State Disposal System (SDS) permit for his winter cattle lands The MPCA also determined that the farmer needed a federal National Pollutant Discharge Elimination System (NPDES) permit because his operation was an animal feeding operation (AFO). The farmer challenged the administrative decisions, and the court reversed in part and affirmed in part the agency’s ruling. The court found that the farmer’s operation was not an AFO under 40 C.F.R. § 122.23(b)(1) because the farmer’s winter feeding fields sustained crops in the normal growing season. The “no vegetation” requirement in the regulation applied only to the normal growing season. The court did find, however, that the agency correctly determined that the concentration of cattle on the farmer’s winter fields was not commensurate with the statutory definition of “pasture” under  Minn. Stat. § 116.07, subd. 7d(b). The farmer’s cattle were not "allowed to forage" on the winter feeding fields and they did not qualify for the statutory pasture exemption. Accordingly, the winter feeding fields required an SDS permit. In the Matter of Reichmann Land and Cattle, LLP., No. A13-1461, 2014 Minn. App. LEXIS 50 (Minn. Ct. App. May 19, 2014).

A farmer believed that his cattle were infected by diseases caused by his neighbor’s cattle. He asked the Illinois Department of Agriculture (IDOA) to investigate, which they did. The IDOA concluded that the neighbor’s cattle did not cause the landowner’s cattle’s diseases. The farmer continued to complain to the IDOA and filed Freedom of Information Requests against the IDOA. Eventually, the farmer filed an action against the IDOA and others, alleging civil conspiracy, fraud, and misrepresentation. The court granted IDOA’s motion to dismiss, finding that the action was barred by the Eleventh Amendment to the United States Constitution, which prohibited a private party from filing suit in a federal court against a state, including a state agency, unless one of the following exceptions was present: (1) the state has unequivocally waived Eleventh Amendment immunity and consented to suit in federal court; (2) Congress unequivocally abrogated the state's Eleventh amendment immunity; or (3) the suit is for prospective injunctive relief. The court found that none of the exceptions existed and dismissed the action. Anderson v. United States Dep't of Agric., No. 13-cv-672-JPG-PMF, 2014 U.S. Dist. LEXIS 68239 (S.D. Ill. May 19, 2014).

In this case, the petitioner sold his home and 80-acres of land on the installment basis for a gain of $657,796.  The petitioner calculated the gain by excluding $500,000 of gain attributable to the home sale exclusion of I.R.C. Sec. 121.  The buyers defaulted and the petitioner reacquired the property in full satisfaction of the debt.  The IRS claimed the petitioner had to recognize gain upon repossession to the extent of money and other property received before repossession, which would, in essence, recapture the Sec. 121 exclusion previously claimed.  The court agreed with IRS that the general rules of I.R.C. Sec. 1038 applied  and noted that the petitioner was actually in a better position than before the sale because he had received some payments for the sale before the buyer's default and recouped the property.   Debough v. Comr., 142 T.C. No. 17 (2014).

The plaintiff, a downslope property owner, sued the defendant, the upslope property owner, for damage from a severe rainstorm that flooded the plaintiff’s property with water, mud and debris. The damage allegedly originated from a four-acre lemon grove on the defendant’s property. A jury awarded the plaintiff $350,000 in damages, but found that the Right to Farm Act (RTFA), Cal. Civ. Code, §3482.5, applied to nullify the damage award. The Court of Appeal reversed and remanded for a new trial. The court first found that the trial court did not abuse its discretion in allowing the defendant to amend her answer on the day of trial to allege a defense under the RTFA because there was no prejudice. The plaintiff filed a written opposition, and the trial court continued the trial date for more than 90 days and reopened discovery. A new trial was required because the verdict was inconsistent in finding that the defendant was unreasonable in the ownership and control of the lemon grove but that §3482.5 still applied. That unreasonableness finding suggested that the defendant did not operate the lemon grove in a manner consistent with proper and accepted customs and standards, as was required for immunity under §3482.5(a)(1). On remand, the trial court was to address the RTFA issue first. W&W El Camino Real, LLC v. Fowler, No. D062977, 2014 Cal. App. LEXIS 425 (Cal. App. 4th Dist. May 16, 2014)

In this ongoing litigation, the plaintiffs alleged that the defendants engaged in a wide-ranging conspiracy at both the processor and cooperative levels to fix, stabilize, and artificially depress prices for fluid Grade A milk and to allocate markets within Federal Milk Market Order 1 ("Order 1") among the co-conspirators.  The plaintiffs also contended that the prices in Order 1 were suppressed when the processors in Order 1 agreed with the defendants to suppress certain premiums paid to the dairy in exchange for defendants and other alleged co-conspirators' agreement to guarantee and control the supply of milk to conspiring processors. Under the scheduling order, expert discovery closed on February 14, 2012. In January 2014, the court had granted, in part, defendants’ Daubert challenge to one of plaintiffs’ experts. Shortly thereafter, the plaintiffs forwarded by email to the defendants eleven pages setting forth seven tables and various spreadsheets which included calculations that plaintiffs had not previously disclosed and that purported to "provide calculations in light of the court's Daubert opinion. The defendants sought to strike the untimely revision of the expert opinion, and the court granted the motion. The court considered the four factors set forth in  Outley v. City of New York, 837 F.2d 587, 590-91 (2d Cir. 1988) and found that exclusion was the appropriate sanction:  (1) the party's explanation for the failure to comply with the discovery order; (2) the importance of the testimony of the precluded witness; (3) the prejudice suffered by the opposing party as a result of having to prepare to meet the new testimony; and (4) the possibility of a continuance.   Allen v. Dairy Farmers of Am., No. 5:09-cv-230, 2014 U.S. Dist. LEXIS 67421 (D. Vt. May 16, 2014).

A farm couple’s marriage ended in divorce. After the wife moved out, but before the husband filed for divorce, he planted wheat and triticale. The couple stipulated that the marital estate was to be valued as of the date of the divorce filing.  However, they could not agree as to the value of the growing crops. The district court valued the crops “somewhere above the actual input price and somewhere below the gross return.” The wife alleged on appeal that the district court erred in its valuation, as well as in failing to properly account, with its method, for the value of the crop insurance and subsidy payments. In affirming, the court ruled that a district court has broad discretion when dividing the property of a marital estate and that its decision will not be disturbed absent a clear showing of abuse. The court found that the district court reasonably valued the growing crops in a manner consistent with Kansas law. The district court heard the evidence and weighed the potential economic value of a mature crop against the potential risk associated with an immature crop to arrive at a value "somewhere above the actual input price and somewhere below the gross return." The district court's valuation of $152,500 was supported by the evidence and was well within the wide discretion a trial court must exercise when dividing marital property. The court also ruled that the district court did not abuse its discretion accounting for the tractor repair expenses or in refusing to award post-judgment interest on the equalization payments the husband paid to the wife. In re Marriage of Stevenson, 2 No. 109,497, 014 Kan. App. Unpub. LEXIS 384 (Kan. Ct. App. May 16, 2014)

On July 18, 2013, the debtor filed Chapter 7 bankruptcy.  Before filing, the debtor owned farm equipment, a remainder interest in his mother's property, two 40-acre parcels and a log home.  Creditors held liens on the real estate.  The debtor transferred the real estate, log home and farm equipment to his girlfriend for approximately $240,000, somewhat less than fair market value.  The debtor was left with little assets, the remainder interest.  The debtor's liabilities on his bankruptcy schedules exceeded his asset values.  After the transfers, the debtor continued to use the equipment and land and turned over crop proceeds to his girlfriend.  The girlfriend never reported the income on her returns while the debtor continued to claim farming expenses on his return along with farm income.  The girlfriend also made payments to the lien holders.  The bankruptcy trustee filed an adversary proceeding to recover the transfer of the farm equipment under 11 U.S.C. Secs. 548 and 550.  Sec. 548 allows recovery if transfer was made within 2 years of bankruptcy filing.  The court determined that the evidence established that the debtor's transfer occurred within the two-year timeframe and that the logical explanation for the debtor's payments is that they were intended to reimburse his girlfriend for making payments to the creditors.  The court also determined that the transfers to the girlfriend were made with actual intent to defraud creditors insomuch as he was an "insider" with the transferee, was insolvent at the time of the transfer and continued to use the farm equipment.  Thus, the transfer was avoidable under 11 U.S.C. Sec. 548(a)(1)(A) and 548(a)(1)(B).  The court also determined that the property was recoverable under 11 U.S.C. Sec. 550 and that the good faith transferee defense of 11 U.S.C. Sec. 548(c) which could give the transferee a lien did not apply primarily because the girlfriend, as transferee, was paying many of the debtor's debts through her personal bank account.  In re Schnoor, No. BKY 13-50630, 2014 Bankr. LEXIS 2204 (D. Minn. May 16, 2014).

The petitioner had an outstanding tax liability at the time he received proceeds from the sale of his home and business.  However, the petitioner spent the funds without paying the tax liability.  The court upheld the position of the IRS that the sale proceeds constituted "dissipated assets" that should be included in the petitioner's reasonable collection potential based on all of the facts and circumstances.  The petitioner failed to carry the burden of proof that the proceeds were spent on reasonable living expenses.  The court computed the petitioner's reasonable collection potential.  Porro v. Comr., T.C. Memo. 2014-81.

In this case, the petitioner proposed an installment agreement for paying delinquent taxes.  The IRS rejected the proposal asserting that the petitioner should liquidate life insurance policies and a 401(k) retirement account to pay the taxes.  The court upheld the IRS position as not an abuse of its discretion.  Boulware v. Comr., T.C. Memo. 2014-80.

The petitioner's mother died in early 2006 and the petitioner moved into her home after the death to comfort his sister who also lived in the home.  In early 2007, the petitioner moved into an apartment.  About that same time, the mother's estate deeded the mother's home to the petitioner and his sister as tenants-in-common.  In May 2008, the petitioner purchased a condo as his principal residence, and claimed a FTHBC on the 2008 return of $7,500.  The IRS denied the credit and imposed an accuracy-related penalty of $1,500.  The petitioner claimed that he never used his mother's home as his principal residence.  Based on the facts, the court disagreed.  The court noted that the petitioner lived at the home, slept there and had no other place in which he could have resided or returned to.  Petitioner had an ownership interest in the mother's home at the time it was deeded to him (within the prior three years of buying the condo) and was not entitled to the credit.  However, the court did not uphold the imposition of the accuracy-related penalty on the basis that the petitioner acted with good faith and had reasonable cause for believing that he was entitled to the credit.  Goralski v. Comr., T.C. Memo. 2014-87

The key to obtaining a charitable deduction for the donation of a permanent conservation easement is to make sure that the easement restrictions actually diminish the value of the property.  Here, the petitioners, a married couple, owned two buildings in a historic area of Boston.  The buildings were already subject to local historic preservation rules that restricted what could be done to the buildings.  The petitioners placed historic façade easements on both buildings and claimed IRC Sec. 170 deductions. The IRS disallowed the deductions because the properties were already restricted by local law and the donated conservation easements did not further reduce value.  The court agreed with the IRS and noted that the facts of the case were identical to those of Kaufman v. Comr., T.C. Memo. 2014-52 where the court determined that there were no differences between the two sets of restrictions.  The total amount of deductions claimed exceeded what could be claimed in any given year based on the petitioners' income, so the deduction was spread out over three years.  IRS sought to impose 40 percent gross misstatement penalty for each year.  A portion of the petitioners' underpayment resulted from carryover of charitable deductions first claimed on 2004 return which was filed before effective date of the revisions to the understatement penalty at issue in the case that eliminated the reasonable cause defense.  Consequently, no 40 percent penalty applied for the two years at issue when reasonable cause was a defense.  But, the 40 percent penalty applied to the 2006 return (filed after Jul. 25, 2006) because the understatement was due solely to gross valuation misstatements.  No charitable deduction allowed for permanent conservation easement even though petitioners followed advice of National Park Service and the National Architectural Trust ensured that the buildings remained in their original state.  Chandler v. Comr., 142 T.C. No. 16 (2014).    

The plaintiff donated a permanent conservation easement on 82 acres of Florida land.  The land is presently used as a public park and conservation area, and is preserved as open space.  IRS claimed that the easement was worth approximately $7 million and, as a result, the claimed $24 million deduction resulted in a 40 percent accuracy-related penalty.  The IRS based it's before/after valuation on its claim that the tract should be valued in accordance with its present zoning based on prior zoning problems and likely opposition to a zoning change that would allow a higher-valued use such as multi-family housing.  The plaintiff valued the before easement value of the tract based on the ability to obtain a zoning change that would allow multi-family housing on concentrated parts of the tract which left the environmentally sensitive areas as open space.  The court determined that there was a reasonable possibility that the tract could be rezoned to the higher valued use, but then adjusted the plaintiff's valuation downward to reflect the downturn in the real estate market.  The court determined that the easement had a value of almost $20 million, reflecting the pre-easement value of $21 million and the post-easement value of $1 million (reflecting a reduction in the property's value of slightly over 95 percent).  Palmer Ranch Holdings, Ltd. v. Comr., T.C. Memo. 2014-79.

The U.S. Fish and Wildlife Service (USFWS) adopted a biological opinion in 2008 concluding that water projects on the Sacramento-San Joaquin Delta that resulted in water flowing into an aqueduct serving California's Central Valley and many urban residents in Southern California jeopardized the continued existence of the delta smelt, a threatened species under the Endangered Species Act (ESA).  The trial court held that biological opinion was arbitrary and capricious and was not supported by the record, and that USFWS had to explain reasonable and prudent alternatives.  The court noted that the USFWS failed to show how pumping cutbacks as required by the biological opinion would significantly benefit the delta smelt population.  On appeal, the court reversed.  The appellate court determined that the USFWS had no obligation to consider economic impacts when protecting the smelt and that the trial court erred in invalidating the 2008 biological opinion.  The appellate court also held that the National Environmental Protection Act did not require the FWS to prepare an environmental impact statement in conjunction with the biological opinion.  San Luis & Delta-Mendota Water Authority, et al. v. Jewell, 747 F.3d 581 (9th Cir. 2014), rev'g. sub. nom., Delta Smelt Consolidated Cases v. Salazar, 760 F. Supp. 2d 855 (E.D. Cal. 2010), pet. for cert. filed, No. 14-377 (U.S. Sup. Ct. Sept. 30, 2014).

The plaintiffs and defendants owned adjacent waterfront lots. The plaintiffs filed an action alleging that they had obtained title to a triangular section of the defendants’ land, including 24-feet of shoreline through the doctrine of adverse possession, pursuant to Wis. Stat. §893.25. The trial court granted summary judgment in favor of the defendants, alleging that, even if everything the plaintiffs argued were true, they were not entitled to judgment. On appeal, the court affirmed. The court ruled that the plaintiffs and their predecessors’ use of the property (for more than 20 years) did not constitute “usual cultivation or improvement”; nor was there a “substantial enclosure,” as was required to establish adverse possession under §893.25. Instead, their activities included cutting weeds, mowing grass, raking pine needles, and removing branches and sticks. Their use was insufficient to raise a “red flag of warning that they were asserting a claim for exclusive ownership of property.” Norman v. Declaration of Trust of Warner, No. 2013AP26632014, Wisc. App. LEXIS 395 (Wisc. Ct. App. May 13, 2014).

The decedent died with a large estate and with two grandchildren as his only heirs.  By the filing deadline for the estate tax return, the estate filed a request for an extension of time to file and paid $6.5 million in federal estate tax, a portion of the estate tax due.  The estate only made partial payment of estate tax due to legal advice that the estate might be able to elect installment payment under I.R.C. Sec. 6166.  The estate did receive a six-month extension to file.  The estate filed by the extended due date, but did not elect installment payment treatment.  The estate also requested an extension of time to pay.  The IRS denied an extension of time to pay and imposed a failure-to-pay penalty.  The estate then paid the estate tax due and a penalty of nearly $1 million, plus interest.  The estate then sued for a refund of the penalty and interest.  The trial court granted summary judgment for IRS.  On appeal, the court vacated the trial court's decision and remanded the case.  The court noted that the estate relied on the faulty advice of a tax "expert" and that could constitute reasonable cause for failure to pay by the deadline if the taxpayer can show either an inability to pay or undue hardship from paying at the deadline.  Estate of Thouron v. United States, No. 13-1603, 2014 U.S. App. LEXIS 8890 (3d Cir. May 13, 2014).   

In this case, workers for the defendant (a construction company) sued the defendant for injuries alleged to have been caused by improper ventilation at a worksite while acrylic concrete sealant (TIAH) was being applied.  The trial court had determined that TIAH was not a "pollutant" excluded by the pollution exclusion clause of the policy.  On appeal, the court reversed.  The court noted that TIAH was a pollutant because it was toxic, can irritate the nose, throat and respiratory system and cause permanent damage to the brain an nervous system of humans.  Thus, the policy's pollution exclusion clause could bar coverage for the workers' injuries.  The court remanded the case for a determination of whether the policy excluded coverage or whether there was also a "discharge, dispersal, seepage, migration, release or escape" of TIAH.  United Fire & Casualty Company v. Titan Contractors Service, Inc., No. 13-1307, 2014 U.S. App. LEXIS 8879 (8th Cir. May 13, 2014).

The plaintiff, a coal mine operator, claimed that the reclamation fee contained in 30 C.F.R. Sec. 870.12 triggered when coal is ultimately sold or used violated the Export Clause of the U.S. Constitution.  The court determined that while 30 U.S.C. Sec. 1276 allowed challenges brought after 60 days of enactment of the regulation being challenged, the challenge had to be based on grounds arising after the 60-day timeframe and remained subject to a 60-day time limit.  As such, the plaintiff's claim was deemed to be untimely.  Coal River Energy, LLC v. Jewell, No. 13-5119, 2014 U.S. App. LEXIS 8876 (D.C. Cir. May 13, 2014).

In this case, environmental activist groups petitioned the EPA seeking to require the EPA to add coal mines to the EPA's list of regulated stationary sources of air pollution.  The EPA declined and the plaintiffs sued.  The court upheld EPA's denial of the plaintiffs' petition on the basis that EPA was within its authority to add coal mines to the regulated list so as to focus on more "significant" sources of air pollution before it turned its attention to coal mines.  WildEarth Guardians v. United States Environmental Protection Agency, et al., No. 13-1212, 2014 U.S. App. LEXIS 8878 (D.C. Cir. May 13, 2014).

The plaintiffs' predecessor in interest began occupying the plaintiffs’ property in 1874 and filed a water-rights claim and constructed ditches shortly thereafter. A national forest that included that the servient tenement over which the ditches run was established in 1905.  The plaintiffs purchased the property in 1995, and a flood destroyed part of their ditch in 1997. To continue watering the property, the plaintiffs installed a new ditch which the United States Forest Service claimed (through two official letters) required a special use permit and verification of California water rights. Plaintiffs filed an action seeking, inter alia, to quiet title to their ditch right of way and alleging a violation of the Fifth Amendment. The USFS filed a motion to dismiss most of the claims. The court dismissed two statutory claims for want of jurisdiction, finding that there was no final agency action and the agency was not required to take the actions demanded by the plaintiffs. The court allowed the Fifth Amendment claim to survive, finding that the letters marked the consummation of the agency’s decision-making process. The court also found the plaintiffs had pleaded a cognizable legal theory sufficient to survive dismissal on the right of way claim. Luciano Farms, LLC v. United States, No. 2:13-CV-02116-KJM-AC, 2014 U.S. Dist. LEXIS 65753 (E.D. Cal. May 12, 2014).

The plaintiff didn't file a federal income tax return for 2007 and IRS issued a notice of deficiency in 2010 based on a substitute return that IRS filed.  The deficiency claimed taxable salary of $150,000 and taxable IRA withdrawals of over $400,000.  The plaintiff then filed a 2007 return reporting about the same salary amount, but less in taxable IRA distributions and a business bad debt loss of over $400,000.  The Tax Court denied the bad debt deduction and rejected the plaintiff's claim that he made an offsetting IRA rollover contribution.  The end result was that the plaintiff owed about $275,000 in taxes for 2007 including penalties for failure to file.  On appeal, the court reversed the Tax Court on the IRA rollover issue.  The court noted that the $120,000 contribution on April 30 was of the same amount of the February 15 withdrawal, and also pointed out that the contribution was a qualifying partial rollover of the $168,000 IRA distribution made on April 9, which was within 60 days of the contribution as required by I.R.C. Sec. 408(d)(3)(A)(i).  On the bad debt issue, the court affirmed the Tax Court's denial of the deduction because the plaintiff had nonbusiness reasons for making the loans at issue rather than simply to protect his salary.  Haury v. Comr., No. 13-1780, 2014 U.S. App. LEXIS 8808 (8th Cir. May 12, 2014).

Normally, for non-e-filed returns, having the return postmarked by the filing deadline is deemed timely filing of the return.  That is certainly the case for returns sent through the U.S. Postal Service.  The rule also applies for private delivery services specified in IRS Notice 2004-83.  The "mailbox rule" and the IRS Notice not only applies to the filing of returns, but also filing a petition with the U.S. Tax Court.  In this case, the petitioner received a statutory notice of deficiency (SNOD) which informed the petitioner that the last day he could file a petition with the Tax Court was May 3, 2012 (while the year was in error, the Court believed the error was apparent and harmless).  The petitioner filed a petition with the Tax Court dated May 1, 2013, and bore a UPS Ground label dated May 2, 2013.  The petition was filed on May 6, 2013.  The IRS claimed that the petition was filed late because UPS Ground did not qualify for the mailbox rule in Notice 2004-83.  The Tax Court agreed.  UPS Ground is not designated by IRS in the Notice as a private delivery service entitled to the timely mailing/timely filing rule of I.R.C. Sec. 7502.  The court noted that the petitioner could pay the tax deficiency and file a refund claim with the IRS and, when denied, sue for a refund in federal court.  Sanders v. Comr., T.C. Sum. Op. 2014-47.

When the debtor filed for Chapter 7 bankruptcy, he claimed several firearms, two boats, a camper, an ATV, a utility trailer, a two-horse trailer, and some fishing poles as exempt property used in the operation of his outfitters business.  State law (Colo. Rev. Stat. § 13-54-102(1)(i)) allowed a $20,000 exemption for tools  “used and kept for the purpose of carrying on any gainful occupation.”  Although he held a full time job at a grocery store, the debtor intended to grow his outfitters business to a full-time occupation. The bankruptcy trustee objected to the exemption on the ground that it applied only to "gainful occupations," which he asserted meant a business that was "profitable" as of the petition date. The bankruptcy court found that "an occupation need not be profitable at the time of filing.” Rather, the bankruptcy court held that it need only be a “valid occupation,” not a hobby or pastime.  On appeal, the court affirmed the bankruptcy court’s order, finding that the term "gainful," as used in the Colorado statute, was ambiguous. The court concluded after analysis that the term "gainful occupation" required at least some aspect of profitability. Considering the purpose of tools of trade exemptions, which was to permit debtors to retain items used in an occupation to aid them in providing support for themselves  and their dependents, the court ruled that, in order to disqualify a debtor's claimed tools of trade exemption under the Colorado statute, the objecting party had to prove by a preponderance of the evidence that the debtor's occupation was unlikely to contribute to the support of the debtor and his family in any significant way within a reasonable period of time under the specific facts of each case. The court found that the trustee had failed to meet that burden.  In re Sharp, No. CO-13-053, 2014 Bankr. LEXIS 1567 (B.A.P. 10th Cir. Apr. 11, 2014).

A wireless company applied to the defendant (county planning commission) for approval of the placement of a 305-foot self-supporting, lattice-style cellular antenna tower on a 10,000 square foot section of a farm. Appellants’ property bordered the farm, and the proposed tower was to sit 391 feet from their residence and 56 feet from their property line. Because the proposed tower did not fit the commission’s design guidelines for cellular antenna towers, the application requested several waivers.  The appellants objected to the construction of the tower, citing concerns about health issues, property values, setbacks, waivers, tower lighting, visibility of the tower, and lightning strikes. The commission initially denied the application, but in the same meeting approved it on the condition that the tower be moved 75 feet from its proposed location. The appellants argued in a challenged before the circuit court that the commission’s actions were invalid and that it had arbitrarily disregarded the comprehensive plan and zoning regulations. The trial court upheld the commission's decision, and, on appeal, the court affirmed.  The appellants were afforded due process, the wireless company gave appropriate notice to affected landowners, and the commission did not arbitrarily disregard the comprehensive plan. A comprehensive plan, declared the court, was a “guide for development, not a straight-jacket.” Hampson v. Boone Co. Planning Comm'n, No. 2011-CA-001559-MR, 2014 Ky. App. LEXIS 63 (Ky. Ct. App. Apr. 11, 2014).

The taxpayers owned 280.5 acres of property that they used to operate a horse breeding and training business. They also hosted camps and demonstrations and provided riding lessons, cottage rentals, and horse-drawn carriage rides. The Vermont Department of Taxes enrolled the land in the Agricultural and Managed Forest Land Use Program (Current Use Program), but refused to enroll the taxpayers’ buildings in the program, arguing that the taxpayers received more than half of their income from non-farming activities. The taxpayers appealed the Department’s determination, and the Department filed a motion for summary judgment. The court granted the motion, finding that the buildings were not actively used by a farmer as part of a farming operation because the taxpayers did not earn at least one-half of their income from farming. The court noted that a person engaged in farming for recreation or pleasure, rather than profit, was not engaged in farming. Because 32 V.S.A. §3752(7)(A) excluded riding lessons, horse training, and cottage rentals from farming income, more than one-half of the taxpayers’ income was non-farm related. LaBrie v. Vermont. Department of Taxes, No. 302-7-13 Wmcv. 2014 Vt. Super. LEXIS 38 (Vt. Super. Ct. May 9, 2014).

The plaintiff, acting as an estate administrator, filed a wrongful death action against the defendant, seeking damages for fatal injuries sustained by the decedent in an accident in which his motorcycle struck the defendant’s cow that had wandered onto the road.  The trial court granted summary judgment to the defendant, and the plaintiff appealed. On appeal, the court modified the order, ruling that there was a triable issue of fact with respect to whether the defendant was negligent. The defendant testified himself that there was a break in the fence on the night of the accident and that there had been previous breaks that had to be repaired. The defendant’s neighbors also testified that the escape of the defendant’s cows was a recurring problem. Finally, the plaintiff’s expert testified that the defendant’s fence was inadequate. Sargent v. Mammoser, No. 308 CA 13-00042,2014 NY Slip OP 3372 (N.Y. Sup. Ct. May 9, 2014). 

In this case, the court denied the plaintiff's petition for review of an EPA Final Rule involving particulate matter.  The EPA adopted stricter nationwide standards for fine particulate matter in 2013, shifting the acceptable level from 15 micrograms/cubic meter to 12 micrograms/cubic meter.  The EPA rule also established additional requirements for many cities requiring the installation of air quality monitors to test for pollutants.  The court determined that the EPAs regulatory conduct was not arbitrary and capricious.  The court noted that the statutory scheme created by the Congress granted the EPA substantial discretion and that EPA's actions and explanations were at least reasonable.  The court denied the petitions for review of the EPA's Final Rule.  National Association of Manufacturers v. Environmental Protection Agency, et al., No. 13-1069, 2014 U.S. App. LEXIS 8726 (D.C. Cir. May 9, 2014).