Case Summaries

(11 U.S.C. §1222(a)(2)(A) applies to taxes triggered post- petition in a Chapter 12 case with result that government's claim is an unsecured claim; affirming 379 B.R. 899 (Bankr. D. Neb. 2007)).

(Equal Access to Justice Act (EAJA) applies to USDA administrative appeals; NAD proceedings meet the definition of “adjudication,” provide an opportunity for a hearing and are on the record; thus, prevailing party may recover attorney fees and expenses if administrative officer determines that government’s position was not substantially justified).

(plaintiff, as cash rent landlord, was ineligible for farm program payments under Market Loss Assistance program ; plaintiff did not incur risk of crop production).

(under plain reading of BAPCPA, attorneys who provide bankruptcy assistance to "assisted persons" are included in definition of debt relief agencies; but, 11 U.S.C. § 526(a)(4) which prevents debt relief agencies from advising debtors to incur debt is unconstitutionally overbroad as applied to attorneys; advertising disclosure requirements of 11 U.S.C.§ 528 are constitutional as a means of preventing deceptive advertising).

(case remanded on issue of whether rezoning of adjacent land effected a partial taking under the Penn Central analysis).

(easement extinguished under doctrine of merger).

(plaintiff entitled to easement by necessity; plaintiff lacked legally enforceable access to farm property).

(decedent had been previously married and died with will executed during prior marriage which left property to spouse if spouse survived, then to children; decedent remarried and did not amend will to provide for current spouse (plaintiff); pre-marital agreement entered into specifying that plaintiff would receive none of decedent's assets held in revocable trust; plaintiff held to be pretermitted spouse entitled to intestate share of decedent's estate, but premarital agreement upheld).

(EPA not required to challenge permits issued to coal-fired power plants, even if EPA previously accused plants of violating Clean Air Act (CAA); violation notice and civil complaint merely initial steps in an enforcement action and do not, by themselves, inevitably trigger EPA's duty to object under the CAA).

(plaintiff sued to collect a debt that the defendant (a farmer) owed to a third party (provider of farm products and marketing services) through its grain marketing program but which the plaintiff had acquired; trial court judgment for defendant upheld; trial court did not err in finding that defendant and third party had not entered into an agreement authorizing the trading of grain futures on the plaintiff's behalf, and in finding that the third party had kept possession of corn deliveries as collateral for a loan it paid off on the defendant's behalf).

(taxpayer's refund claim denied based on a loss carryback because taxpayer failed to establish that he worked at least 500 hours and "materially participated" in his family-run stock trading business (which would have exempted him from the passive loss limitations of I.R.C. § 469).

(defendant’s statutory authority to require private access ranch road comply with fire code and access requirements inapplicable to farms and ranches; summary judgment for defendant reversed and case remanded for determination by trial court of whether property traversed by the road qualifies as a farm or ranch as defined by state law).

(local groundwater conservation district exceed rule-making authority in grandfathering existing wells without regard to both historic amount of groundwater used and its beneficial purpose; district’s scheme for issuing permits for transfer of groundwater out of district invalid).

(case involves lawsuit challenging the USDA's refusal to allow plaintiff to purchase and use kits to test for bovine spongiform encephalopathy (BSE) in 100 percent of cattle it slaughters for shipment to Japan (who requires 100 percent testing); under the deference standard of Chevron, court upheld defendant’s regulations under the Virus-Serum-Toxin Act that allowed defendant to regulate the use of biological products, including the test kits, and to restrict their distribution and sale such that plaintiff effectively blocked from conducting BSE testing; case remanded for ruling on whether defendant acted arbitrarily and capriciously in refusing to allow plaintiff to test its cattle in violation of the Administrative Procedures Act).  

(local groundwater conservation district exceed rule-making authority in grandfathering existing wells without regard to both historic amount of groundwater used and its beneficial purpose; district’s scheme for issuing permits for transfer of groundwater out of district invalid).

(Chapter 7 farm debtor’s debt non-dischargeable  under 11 U.S.C. §523(a)(2) and discharge denied pursuant to 11 U.S.C. §727(a)(5); credit received based on  submission of false financial information). 

(arbitration award of $616,600 as a result of USDA discrimination includable in gross income in year received and startup costs not deductible against amount of award due to lack of substantiation; Schedule F farming deductions also disallowed for lack of substantiation; rental real estate losses limited to $25,000 under I.R.C. §469(i); accuracy-related penalties imposed).

("gold clause" in 99-year lease entered into in 1912 upheld requiring rent to be paid in gold coins rather than cash; gold clauses banned in 1933, but became enforceable again via federal legislation in 1977; 1982 assignment of lease obligated defendant to terms of 1912 lease; "meeting of the minds" present where assignment quoted extensively from 1912 agreement).

(contract action involving contracts with defendants (hog producers) for the supply of hogs; summary judgment against plaintiff on its contract claim and summary judgment against defendants on their counterclaims for breach of contract and violations of the Minnesota Consumer Fraud Act are affirmed in part as to the counterclaims, but reversed as to the ruling on the contract claim where a "termination " provisions in a portion of the contract was ambiguous and neither party produced conclusive evidence that dictated one meaning as a matter of law).

(buyer of farm property failed to carry burden of proof to show lawful and beneficial use of water, or due and sufficient cause for non-use; substantial evidence existed that prior owner had failed to use without cause for statutory successive five-year period).

(will construction case; decedent’s will caused question as to whether separate and distinct tracts were being devised or simply drew a dividing line).

(buyer of farm property failed to carry burden of proof to show lawful and beneficial use of water, or due and sufficient cause for non-use; substantial evidence existed that prior owner had failed to use without cause for statutory successive five-year period).

(trial court’s denial of specific performance of alleged contract to purchase farmland affirmed; no acceptance of offer to buy land and evidence did not support existence of right of first refusal to purchase subject land – right of first refusal not in writing as required by Statute of Frauds and evidence not presented that parties’ conduct took matter outside the Statute of Frauds).

(wind farm development could be characterized as condemnation without the obligation to pay damages, but Texas law does not provide nuisance action for aesthetical impact and trial court’s grant of summary judgment on this point upheld; trial court’s exclusion of additional noise witness testimony upheld; each party to bear own costs because defendant’s conduct caused plaintiffs to respond to groundless motions).

(defendant failed to carry its burden to show that clean-up costs that plaintiff incurred for leaking diesel fuel storage tank on farm were not covered by insurance policy).

(easement case involving Wyoming law).

(trial court did not abuse its discretion in including planted, but not yet harvested, crops in marital pot and, when assigning value to crop, subtracting value of husband’s labor in planting, harvesting and caring for the crops; trial court did not err in including in marital pot USDA crop subsidy payments earned before and during period of parties’ separation, but paid during period of separation).

(in 1977, plaintiff entered into Williamson Act (law establishing conservation contracts with landowners limiting land use to use for agricultural purposes in return for lower property tax valuation) contract with landowner establishing minimum parcel size of 160 acres for subsequent divisions of the property which was consistent with agriculture preservation Guidelines then in effect; in the following year, plaintiff revised guidelines and increased minimum parcel divisions to 600 acres; defendant purchased subject property and then divided and sold much of the land with some divisions being less than 600 acres (but all were more than 160 acres; plaintiff’s Guidelines upheld on appeal – plaintiff and prior owner voluntarily renewed their contract numerous times; new contracts incorporated revised Guidelines and revised Guidelines can be applied constitutionally to a Williamson Act contract executed in 1977).

(plaintiff’s husband killed when tractor he was driving on public road struck from behind; plaintiff brought breach of contract action against defendant; defendant claimed that policy did not cover underinsured motorist coverage for operation of farm tractor; trial court’s granted summary judgment for defendant on basis that policy did not provide coverage for operation of farm tractor and that action barred by statute of limitations; trial court reversed on appeal – policy exclusion contravenes state law; case remanded on statute of limitations issue).

(defendant's militia group not affiliated with state militia and, therefore, not subject to protections of Second Amendment; since machine guns not typically possessed by law-abiding citizens for lawful purposes, U.S. Supreme Court opinion in Heller did not protect defendant's possession of machine guns; case remanded on issue of whether defendant qualified as pauper or should be required to pay costs of court-appointed counsel).

(case involves dispute between secured lender holding security interest in debtor's inventory and subsequent purchasers of the inventory concerning which party's interest has priority; court upheld bankruptcy court's holding that subsequent purchasers were buyers in the ordinary course of business by virtue of their constructive possession of the goods which gave them priority under Iowa law).

(plaintiffs sued defendant for payment under third party supplier’s policy for losses plaintiff sustained from feeding cattle corn syrup tainted with diesel fuel that was purchased from supplier (a farmer); court holds that supplier’s corn syrup brokerage activity was a non-covered business pursuit of the insured separate from his farming operation that was not covered by the policy; plaintiff had previously entered into settlement with defendant stipulating that judgment may be collected only from proceeds of insurance policy with no personal liability to insured).

(defendant not liable for alleged stray voltage problems associated with plaintiff’s dairy operation; USDA publication properly admissible to establish defendant’s non-liability under hearsay exception for public records and reports that take place of expert testimony).

(owner of dog liable for all injuries caused by dog; defendant not dog owner so not liable for plaintiff’s injuries sustained in dog attack).

(defendant’s regulatory interpretation of “converted wetland” as property made more “suitable” for farming upheld rather than plaintiff’s attempt to strictly construe statute to mean whether subject property could possibly grow crops; defendant’s regulation placing burden on plaintiff to request and prove eligibility for “minimal effect” exemption” also upheld).

(plaintiff (FSA) entitled to summary judgment directing defendant to pay balance due under promissory notes and summary judgment on right to foreclose subject real estate; plaintiff defaulted on several FSA loans extended to defendant for purposes of establishing dairy operation).

(plaintiff owns and operates dog kennel on property subject to a scenic easement granted to the United States, which prohibits commercial activity but permits livestock farming; legal question involves whether dogs are "livestock"; term “livestock” ambiguous and much broader than traditional categories of horses, cattle, sheep and pigs such that summary judgment precluded).

(state-imposed LLC fee is unconstitutional tax because not fairly apportioned, placed greater burden on interstate commerce than on intrastate commerce, and was based on LLC’s total income wherever earned; refund limited to difference between amount of levy actually paid and amount that could have been constitutionally assessed). 

(defendant injured while cutting trees on neighbor’s property for neighbor’s logging business for which defendant received W-2 wage statement annually; defendant’s claim for workers’ compensation benefits upheld; court holds that defendant not engaged in agricultural employment and, as such, employment not exempt from workers’ compensation coverage; statutory definition of “agriculture” did not include logging, and timber not cut to make land suitable for farming).

(state regulation requiring residents to first make fact-to-face contact with wine merchant before placing phone or online orders upheld as constitutional because effect on interstate commerce negligible; but, regulation prohibiting vintners from acting as their own wholesaler struck down as unfair burden on out-of-state sellers even though facially neutral).

(county Resolution prohibiting movement of agricultural irrigation sprinklers on or over county roads invalid; Resolution conflicts with state statute authorizing movement of implements of husbandry on public roads; mere fact that farmer moves irrigation sprinkler on county road does not, by itself, establish a public nuisance; plaintiff made no showing of present or imminent damage to road such that injunctive relief based on criminal statutory violation denied).

(owner of unpatented mining claim, like a federal oil and gas lessee, does not have standing to bring action to condemn easement of necessity; plaintiff failed to establish easement by implication over access road).

(case involves construction of language in deed reserving a one-half interest in all minerals; issue is whether lignite is “minerals”; plaintiff’s motion for summary judgment denied as fact issues remain concerning what parties intended “all minerals” to mean; in Mississippi, whether something is a mineral is fact question).

(two medical facilities entitled to a refund of FICA taxes paid on medical residents' stipends because they qualify for the student exclusion from FICA taxation but not on taxes paid for head residents who elected to stay after completing their residency programs to help administer the program). 

(ademption case involving bequest of land to family foundation).

(plaintiff appointed guardian over estate of elderly person who owned over $5,000,000 of farmland; at time of appointment, bulk of farmland operated under share crop arrangement with unrelated third party which owner and defendant (decedent’s daughter) understood qualified the estate for special use valuation; plaintiff converted lease to cash lease without considering impact on eligibility for special use valuation; owner died and estate’s special use valuation denied by IRS due to failure to meet qualified use test; defendant sued for breach of fiduciary duties as guardian; trial court granted partial summary judgment for defendant; on appeal, court held that defendant’s claim brought within applicable statute of limitations, and defendant had standing to sue; but, genuine issue of material fact remained as to whether existing leasing arrangement qualified the estate for special use valuation before being changed to crop lease; accordingly,  and grant of partial summary judgment for defendant reversed).

(plaintiff’s Bivens action against defendant dismissed because plaintiff failed to present sufficient facts to raise a reasonable expectation that discovery may reveal evidence of claims asserted in complaint  - that defendant acted with indifference to plaintiff’s opposition to wind farm within one mile of plaintiff’s residence; but, plaintiff may amend complaint to remove defendant from suit and add private party as defendant).

(defendant, maker and seller of nutritional products for swine, dairy and beef cattle, classified salesmen as “independent contractors”, but plaintiff asserted salesmen were “employees” such that defendant was responsible for withholding and remitting employment and unemployment taxes on such persons; additional taxes and interest which defendant failed to pay; as such, plaintiff filed a federal tax lien on defendant’s real property and later moved to foreclose the lien; government’s classification of salesmen as employees upheld, but issues of material fact existed as to whether defendant entitled to Section 530 safe harbor; whether or not innocent spouse relief granted immaterial to issue in case; no fact issues present as to statute of limitations question; defendant’s motion to dismiss denied as is defendant’s motion for jury trial; government’s liens upheld).

(both parties claimed security interests in assets of dairy operation – plaintiff’s interest established by promissory note executed in 2005 and defendant claimed a security interest based on loans made from 1998-2001; dairy defaulted on loans in 2003 and new investor took over dairy operation but also defaulted on loans from both plaintiff and defendant, and dairy’s assets liquidated; plaintiff claims entitlement to some of the sale proceeds based on claim that defendant’s security interest is invalid, and claims that defendant failed to give notice of asset disposition; trial court granted summary judgment to defendant; judgment affirmed – under MN law, defendant’s security interest in dairy’s collateral continued after collateral purchased by new investor; evidence presented that defendant’s debt not satisfied; claim that defendant did not properly perfect security interest not addressed by trial court and not considered on appeal; no notice of asset sale required because defendant did not “dispose” of the assets).

(residential homes near animal feedlot entitled to depreciation adjustment for property tax purposes for external (locational) factor).