Case Summaries

(plaintiffs lost money in livestock venture and failed to prove existence and amount of debt owed to plaintiffs by debtor; debtor’s poor management of venture and lack of communication insufficient basis for debt to be excepted from discharge).

(state water engineer has authority to implement a fixed water year in administration of plaintiff's storage rights).

(debtor's pre-petition disclaimer as trust beneficiary of $34,000 interest in family trust does not qualify as a "transfer of an interest of the debtor in property" under the federal fraudulent conveyance provision in the Bankruptcy Code).

(post-petition taxes triggered on sale of corn eligible for non-priority treatment under BAPCPA provision because corn sold to debtor’s custom cattle feeding operation and not to third party buyer).

(post-petition taxes triggered by sale of real estate eligible for non-priority treatment under BAPCPA provision).

(debtors had no intent to hinder, delay or defraud creditors upon converting non-exempt assets on the eve of bankruptcy filing to increase the value of their homestead exemption to its fullest; while some badges of fraud present, no extrinsic evidence present of intent to hinder, delay or defraud).

(defendant’s diversion of water across portion of property originally purchased by plaintiff’s deceased parents constituted inverse condemnation; case remanded for determination of value of taking).

(irrigation permits required for withdrawal of water for agricultural purposes from side channel of Bitterroot River, and public access allowed up to high-water mark; court utilized expansive definition of “natural” in reaching decision which  term was not limited to artificial or manufactured).

(action against farm for development on farm land that changed amount of surface water flowing onto plaintiff's land which damaged plaintiff's land and crops dismissed; plaintiff failed to plead negligence and failed to prove that discharge of surface water was negligent - water continued to flow in same natural drainageway that it did before construction activity).

(defendants, small capacity well owners, challenged plaintiffs' application for conditional water rights and augmentation plan for 205 wells to support five new residential subdivisions; trial court approved defendant's application for two of the subdivisions and Supreme Court affirmed because defendants did not prove the existence of unappropriated water for the conditional ground rights in three of the subdivisions or a non-injurious augmentation plan sufficient to protect the vested ground water rights of small domestic well owners who divert water from the aquifers between the proposed three subdivisions and the surface waters of the creeks at issue).

(above-median Chapter 13 debtor's plan must extend for five years; bankruptcy court erred by confirming debtor's plan as a four-year plan; court's holding is opposite the holding in In re Kagenveama, 541 F.3d 868 (9th Cir. 2008))

(in determining whether any river basin, sub-basin or reach is fully appropriated, defendant (State Department of Natural Resources) may, pursuant to the Nebraska Groundwater Management and Protection Act, consider a geographic area located in one river basin that is hydrologically connected to a second basin when determining that the second basin is fully appropriated).

(defendant’s diversion of water for wildlife protection purposes (endangered steelhead) constitutes compensable taking – plaintiff, not state of California, owns the water at issue; defendant’s argument that water was not taken but was merely regulated, rejected; however, plaintiff must pay for installation of fish ladder as part of operational and maintenance costs of running the diversion in accordance with prior contract; estimated that water right at issue worth $80 million).

(bankruptcy debtor’s right to voluntarily dismiss a Chapter 13 case under 11 U.S.C. §1307(b) is not absolute, but is qualified by an implied exception for bad-faith conduct or abuse of the bankruptcy process; bankruptcy court did not err in finding bad faith conduct in present case, and even though court failed to provide debtor with adequate notice and hearing before converting Chapter 13 case to Chapter 7, debtor failed to show prejudice).

(bankruptcy trustee claimed that check received by farmer from debtor in replacement of dishonored check constituted payment made within 90-day period before bankruptcy filing and, thus, was prohibited preference under 11 U.S.C. §547(b); court held that because replacement check resulted in release of farmer’s security interest in collateral, it was a contemporaneous exchange for new value falling within exception to trustee’s avoidance powers).

(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)).

(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).

(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). 

(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).

(three questions certified to the Oregon Supreme Court: (1) whether Oregon law precludes irrigation districts and landowners from acquiring beneficial or equitable interests in water rights acquired by the United States (Klamath Basin Water); (2) whether landowners and/or irrigation districts who receive water from the Klamath Basin Reclamation Project and put the water to beneficial use have a beneficial or equitable property interest appurtenant to their land in the water right acquired by the United States; and (3) whether Oregon law recognizes any property interest (legal or equitable) in the use of the Klamath Basin water that is not subject to adjudication in the Klamath Basin Adjudication in situations where surface water rights were appropriated before Feb. 24, 1909, and were not within any previously adjudicated area of the Klamath Basin.

(Under Oregon water law, plaintiff (irrigation district) is holder of water rights pursuant to water right certificate, rather than farmer-member of irrigation district; member’s application for change in point of diversion denied because not “holder” of water rights).

(debtors entered into lease of cropland and hay ground with landlord’s conservator with annual rent payable in April and December; debtors filed bankruptcy in November, and the following March rejected the lease; conservator requested full amount of December rent be treated as administrative expense and court held that rent due post-petition and pre-rejection could be allowed as an administrative expense only for the time of the debtor’s post-petition use of the premises with interest at 12 percent per annum (as provided for in lease for unpaid rent). 

(boundary line case involving riparian bottomlands in lake; Government Land Office plat serves as underlying basis for determining thread line, but thread line depended on shoreline as determined by all available evidence rather than meander lines alone; rule under state law is to equitably apportion useful riparian rights to riparian owners).

(joint federal/state effort to address conflicts and provide solutions to competing interests for water  in California’s largest water distributions systems complied with state law; reversal of state appellate court).

(11 U.S.C. §541(c)(2) which excludes from the bankruptcy estate a debtor’s beneficial interest in a spendthrift trust held inapplicable to debtor’s one-fourth distributional share of assets in parents’ spendthrift revocable trusts; trusts terminated upon death of surviving parent under Kansas law).

(title insurance does not cover monetary losses incurred by insured arising out of bankruptcy of qualified intermediary used in I.R.C. §1031 exchange absent claims asserting threat to marketability of title; thus, unless bankruptcy trustee’s preference action against insured does not implicate marketability of title or other risks specified in policy, title insurer has no duty to defend under policy).

(plaintiff's pre-petition tax liabilities not dischargeable because plaintiff willfully attempted to evade or defeat payment of taxes). 

(debtor’s transfer of one-half interest in farmland to mother within five months of filing bankruptcy does not constitute actual fraud under11 U.S.C. §548(a)(1)(A), but is constructive fraud under 11 U.S.C. §548(a)(1) (B); debtor had interest in the land, voluntarily transferred it to his mother within a year of filing bankruptcy, received less that equivalent value for the deed and became insolvent as a result of the transfer; bankruptcy trustee entitled to sell the farmland to pay mother for her interest and also entitled to debtor’s share of CRP payments related to the farmland).

(EPA’s 2002 regulatory definition of “navigable waters” (40 C.F.R. §112) under the Clean Water Act found to be arbitrary and capricious and in violation of the Administrative Procedures Act; EPA failed to consider impact of 2001 U.S. Supreme Court opinion in SWANCC and regulation was, therefore, not a product of reasoned decisionmaking and must be set aside).

(bankruptcy debtor may only deduct the actual amounts necessary to repay 401(k) loans when calculating disposable income, and once the loans are repaid, the debtor must redirect the funds used to repay the loans to unsecured creditors; bankruptcy court erred in allowing debtor to keep the funds).

(reinsurer sought unpaid premium for reinsurance of crop loss insurance issued by subsidiary of bankrupt debtor, and debtor sought return of premium amounts previously paid; court determined that it was clear that parties intended and understood the contract to provide reinsurance coverage and be supported by consideration; although subsidiary did not sign reinsurance contract, contract defined reinsurance to include both debtor and its subsidiary and debtor signed contract on subsidiary’s behalf; reinsurer entitled to full premium amount). 

(CWA wetland case involving “adjacency” issue; case primarily procedural in nature, but also involves proposed constitutional takings claim).

(spendthrift trust containing farm property invalid under Iowa law; debtor retained enough control over trust corpus such that trust property included in bankruptcy estate). 

(debtor’s motion for permission to sell calves and milo and use proceeds plus additional proceeds from earlier milo sales to pay crop insurance premium, with balance used in farm operation granted; bank adequately protected and debtor could not obtain crop insurance for 2008 crop unless premium paid for 2007 crop year).

(portion of farmer’s debts held not non-dischargeable under 11 U.S.C. §§523(a)(2)(A) or 523(a)(4); evidence unclear as to whether debtor made misrepresentations).