Source: https://www.calt.iastate.edu/annotation/2013-10
Timestamp: 2019-04-18 23:04:46+00:00

Document:
(petitioner received distribution from IRA and such amount was included in income; second distribution also included in income in spite of "accounting dispute").
(petitioner worked for S corporation and purchased 5 percent ownership interest from a shareholder and later purchased $5.8 million worth of additional shares from another shareholder via loan from corporation and paid total of $5.353 million to shareholder; petitioner sued corporation on basis that stock purchased only worth $1 million and, thus, petitioner should only be liable on note for $1 million rather than $5.353 million and that he paid higher amount as favor to corporation; lawsuit settled for $1 million and loan reduced to $1 million and was later paid off; petitioner later sold his stock for $3 million and claimed basis of $4,502,519 (original $5.353 million less S corporation adjustments) resulting in claimed capital loss of $1,502,519; IRS claimed that petitioner should have reported capital gain of $2 million ($1 million original basis) with additional tax of $746,984 and accuracy related penalty of $149,397; court agreed with IRS on basis issue because indebtedness owed and paid based on $1 million value which is to be used for basis calculation; court also determined that original $212,334 paid for initial 5% interest should be included in basis computation and that accuracy-related penalty should not apply because petitioner relied on competent tax counsel; petitioner's basis determined to be $1,212,334).
(provides guidance on the credits under I.R.C. Secs. 25C and 25D with respect to nonbusiness energy property and residential energy efficient property and incorporates changes made by 2010 legislation and ATRA of 2012).
(oil and gas leases granted defendant (lessee) right to match any third-party offer to lease land for purposes of oil and gas exploration; question was whether on defendant’s refusal to match third-party offer plaintiffs (landowners) could terminate defendant’s lease and enter into new lease with third-party immediately; trial court rejected plaintiffs’ argument; pertinent language granted defendant preferential right and did not impose duty on defendant; no right to terminate lease granted by clause language; trial court decision affirmed).
(petitioner used funds in IRA to start business; petitioner was paid a salary and leased property from an LLC that petitioner owned along with spouse and children; payment of salary to and leasing of property from a disqualified person held to be prohibited transaction via I.R.C. Sec. 4975).
(petitioner not entitled to mortgage interest deduction due to lack of substantiation and self-serving statement and testimony that could not be corroborated did not substitute for adequate records).
(petitioners, married couple, reside in community property state, where wife ran real estate brokerage and husband operated separate accountancy business; under Social Security Protection Act of 2004, if one spouse runs the business the income is community property but s.e. tax is borne by operating spouse without any sharing with other spouse).
(Medicaid case; non-institutionalized (community) spouse purchased an annuity before institutionalized spouse determined to be eligible for Medicaid; institutionalized spouse entered nursing home in 2005 and couple used personal funds to pay nursing home bill for four years; community spouse then purchased annuity using his personal IRA funds; annuity guaranteed monthly payments of $1,728.42 to community spouse for almost 10 years - the community spouse's actuarial life expectancy; upon community spouse's death, institutionalized spouse was first contingent beneficiary and state Medicaid agency was remainder beneficiary to extent of Medicaid benefits paid to institutionalized spouse; court noted that federal Medicaid law specified that annuity is not asset of community spouse if purchased with retirement plan funds and state is named as beneficiary; annuity was actuarially sound and was for community spouse's sole benefit).
(relatives named in residuary clause of husband’s will filed an action seeking to reopen husband’s estate, which was closed 18 years earlier after full distribution to wife; relatives, who had not received formal notice of the probate proceedings argued that pursuant to Iowa Code §633.489’s “for any other proper cause appearing to the court” clause no statute of limitations barred their action; in reversing the lower courts’ decisions reopening the case, the Iowa Supreme Court ruled that §633.488, which had a five-year statute of limitations, applied to the action because it applied to actions disputing the distribution of an estate, whereas §633.489 applied to actions disputing the administration of an estate; the Court stated that, if interpreted too broadly, §633. 489’s “other proper cause” clause would subsume §633.488’s five-year statute of limitations; the court also relied on the fact that §633.488, unlike §633.489, specifically applied to persons not receiving notice of a final accounting).
(case involves issue of whether trust protector liable for not replacing existing trustee of special needs trust (SNT); trust protector had right to remove trustee and appoint successor trustee and would not be liable for any actions taken in "good faith"; trust did not contain provisions giving protector power or duty to supervise trustees or direct trustee actions; initial trustee resigned and successor appointed until resignation two years later; successor trustee appointed and then protector resigned; trust assets declined in value substantially (with the slide beginning before protector resigned) and suit brought against protector and parties that had served as trustee on claim that fiduciary duties had been breached and conduct had been in "bad faith"; trial court granted protector's motion for summary judgment, but appellate court reversed on basis that fact issues remained; on remand, trial court determined that trust limited protector's power to trustee removal and that protector had no obligation to monitor trustee's actions; trial court granted directed verdict for protector; on appeal, court affirmed on basis of lack of evidence of loss of trust value due to protector's conduct or lack thereof; trust protector only has authority granted in trust instrument and trust did not state that protector was a fiduciary).
(plaintiffs filed an action challenging a decision from the county road commission, which denied their request for a driveway permit to access their farmland from a stub street in a residential neighborhood; the trial court ordered the commission to grant the permit, but the appellate court reversed, finding that the trial court had not given proper deference to the commission’s decision; plaintiffs were not entitled to relief under the Driveway Act, MCL 247.321 et seq. because the commission’s denial of the permit was not “totally unreasonable”; access was available from a sparsely populated street, which would allow unobstructed access for plaintiffs’ wide farm equipment; the Right to Farm Act, MCL 286.471 et seq. was not implicated by the commission’s actions because the RTFA did not address the permitting or location of field driveways; thus, the RTFA did not preempt the commission’s decision).
(plaintiff filed an action against defendants, alleging violations of the Plant Variety Protection Act (PVPA) and the Lanham Act for defendants’ alleged illegal use of plaintiff’s wheat seed; the court denied defendants’ motion to strike plaintiff’s expert witness, whose testimony was offered to help the jury determine a reasonable royalty owed to plaintiff under the PVPA claim; the testimony met the three admissibility factors of qualification, reliability, and helpfulness; defendants were not entitled to judgment as a matter of law on the PVPA claim because plaintiff introduced sufficient evidence to raise a jury question as to infringement, willfulness, and damages; defendants were also not entitled to judgment as a matter of law on plaintiff’s Lanham Act claims: evidence raised a jury question as to whether (1) plaintiff had trademark rights and (2) defendants adopted a mark that was the same or confusingly similar, such that consumers were likely to confuse the two; evidence also raised a jury question as to whether defendants were liable for false designation of origin; plaintiff was entitled to judgment as a matter of law on defendants’ tortious interference claim).
(petitioner is direct mail advertising company that distributed direct mail advertising in U.S. to potential customers for products and services sold by petitioner's clients; petitioner supplied advertising material that it had contracted with third party commercial printers for printing; petitioner claimed DPAD (I.R.C. Sec. 199) on material that petitioner supplied which included rough art, reprint with changes and client-supplied art; petitioner retained ownership of intellectual property for rough art and reprints with changes; printing agreements contained "risk of loss" provision stating that risk of loss passed to petitioner upon delivery to petitioner's branch facility; petitioner assembled and shipped finished product; petitioner claimed that gross receipts from printed direct mail advertising and distribution products qualified as DPGR, but IRS claimed that petitioner's use of third-party printers eliminated "manufacturing" aspect for petitioner; issue was whether petitioner manufactured advertising mail packages or produced only intangible property used by printers to produce tangible personal property in the form of advertising mail packages; under Treas. Reg. Sec. 1.199-3(f)(1), court determined that petitioner did not bear benefits and burdens of ownership; petitioner had to be exclusive owner of underlying property with benefits and burdens of ownership such that petitioner was only taxpayer that could claim DPAD; multiple factor weighed in favor of government - legal title passing; how parties treated transaction; whether rights of possession vested in purchaser and which party controlled production process, which party received profits from operation and sale of property and whether petitioner actively and extensively participated in management and operations of activity; petitioner did not bear benefits and burdens of ownership while advertising material was printed and, thus, no MPGE present and no DPGR available).
(to secure a yearly operating loan, a bank properly perfected its interest in the proceeds of the sale of a farm company’s crops; a supplier later perfected an interest in the same proceeds; when the company sold its grain, the supplier sought to obtain the proceeds; when the bank intervened as the superior lienholder, the supplier argued that the doctrine of marshaling should have required the bank to resort to other secured assets not also serving as security for the debt of another; in affirming the trial court’s summary judgment in favor of the bank, the court ruled that marshaling was only appropriate where it could be shown that resorting to the second fund would not cause the senior lienholder to suffer injury in some way, including delay of payment; because the supplier failed to show an absence of injustice or potential prejudice to the bank, summary judgment was proper).
(two brothers inherited equal shares in 18-acre tract with two houses on lake; property conveyed to one brother so as to defraud other brother’s ex-wife who had substantial child support judgment against other brother; oral agreement alleged that proceeds of any sale to be divided 50-50; tract ultimately sold on installment basis and payments split equally; “owner” brother died at time when $185,000 balance due remained on contract and other brother filed probate claim for his “one-half” of proceeds pursuant to oral agreement; trial court determined that balance due on contract be split 50/50 pursuant to oral contract; trial court judgment affirmed; use of letter of deceased brother’s attorney referring to oral agreement was not basis of judgment, but conduct of parties was; surviving brother’s account of terms of agreement complete and clear).
(plaintiffs sought rezoning of property from agricultural to commercial to allow operation of seasonal deer processing facility and retail counter; agreement reached restricting use of tract to wild game processing and associated activities in addition to allowing a single family residence; defendant approved zoning request consistent with agreement; plaintiffs again sought rezoning to add service of ready to eat food; request denied; retail services could be conducted year-round, but plaintiffs could not serve ready-to-eat foods or have a deli shop; on appeal, court determined that ordinance limited plaintiffs’ retail services to seasonal operations between October and January; deli-style sandwiches not permitted; retail service does not comprise ready-to-eat products).
(taxpayer proposed to transfer ownership of S corporation from two co-equal owners to key employees; IRS determined that profit on redemption of co-owners' shares in return for notes will be treated as capital gain in co-owners' hands and will be spread-out over term of notes; no gain to S corporation; S corporation entitled to deduction for interest paid on notes; notes do not constitute second class of S corporate stock).
(son was appointed trustee of deceased father's trust and personal representative of his estate; son received a $50,000 deathbed transfer from his father which he failed to deposit in the trust account; son also commingled trust property with personal property, and failed to make any distributions to daughter, an income beneficiary under the trust; at the request of the daughter, the trial court removed son from his role as personal representative and trustee; on appeal, the court affirmed, rejecting the son’s argument that the trial court should have used a less intrusive method, such as appointing a special administrator to merely limit son’s role; Neb. Rev. Stat. § 30-3862(b) allowed removal where a trustee “committed a serious breach of trust”; son’s interests irreconcilably conflicted with the interests of the estate and trust, and appointing a special administrator would not have alleviated the problem).
(claimants’ predecessor first perfected a water right in 1904 for surface water from a creek to be applied by flood irrigation on a maximum of 645 acres; the Department of Natural Resources and Conservation published issue remarks noting that aerial photographs of claimants’ property from 1962 and 1978 appeared to indicate “0 acres irrigated”; the State of Montana joined in an action before the Water Master, seeking summary judgment declaring the water right abandoned; the Water Master concluded that the water right had been abandoned, but the Water Court reversed; in affirming the Water Court’s holding, the Court ruled that the standard from 79 Ranch v. Pitsch, 204 Mont. 426, 666 P.2d 215 (1983)—a long period of nonuse raises a rebuttable presumption of intent to abandon—did apply to pre-1973 existing water rights; however, the record supported the Water Court’s determination that the claimants submitted sufficient evidence to overcome the presumption of abandonment).
(petitioners determined to have engaged in ranching activity without requisite profit intent - losses denied; gross income of $195,473 from activity and expenses of $2,826,336; no meaningful action taken to reduce expenses or increase income; court did not believe ranch acquired to profit from increase in value; court noted that enhanced value as intent to profit is useful only if income from activity exceeds deductions from ranching activity that are not attributable to holding the land).
(court denied petitioner's deductions for contract labor due to lack of documentation (contracts, invoices, Forms 1099-Misc, canceled checks, etc.); no deductions allowed for wages paid to employees because amounts on Forms W-2 did not match W-3 transmittal and no evidence presented that forms filed with IRS).
(petitioner's record label activity not engaged in for profit; no separate entity formed as expert had advised, no records kept to aid analyzing business, etc.; eight factors favored IRS and one factor was neutral; court determined that petitioner engaged in activity to aid daughter's career rather than make a profit).
(petitioner traveled from home to worksite four times weekly, a 320-mile roundtrip; petitioner argued that due to lack of public transportation and extraordinary nature of trip, he could deduct travel-related expenses as miscellaneous itemized deduction; court ruled for IRS on basis that petitioner didn't cite any exception to application of Coombs doctrine).
(petitioners were two children of 1994 decedent and were beneficiaries of residuary testamentary trust that received most of decedent’s estate, including 13/16 interest in cattle ranch; ranch value reported on estate tax return at substantially below FMV in accordance with I.R.C. Sec. 2032A; petitioners signed consent agreement (one via guardian ad litem) agreeing to personal liability for any additional taxes imposed as result of sale of elected property or cessation of qualified use; IRS disputed reported value but matter settled; years later, trust sold easement on ranch restricting development; gain on sale of easement reported with reference to Sec. 2032A value and K-1s issued showing proceeds had been distributed to beneficiaries; beneficiaries did not report gain as reflected on K-1s and then asserted that ranch undervalued on estate tax return and that gain reportable should be reduced by using FMV tax basis; court determined that Sec. 2032A value pegs basis via I.R.C. Sec. 1014(a)(3); court upheld consent agreement; accuracy-related penalty imposed because advice sought only after petitioners failed to report any gain).
(decedent was grantor and sole beneficiary of annuity trust, and served as co-trustee with some of her children; decedent held 50 percent of trust's voting rights; decedent transferred two rental properties to trust in return for 180-month annuity that were subject to mortgages; trust paid mortgages, but did non assume mortgages; trust language allowed trust income in excess of periodic payment to be distributed to decedent or be accumulated in trust; upon later of end of term or decedent's death; trust to pass to decedent's surviving children or grandchildren; decedent, as trustee, managed properties after transfer; decedent filed Form 709 reporting transfer of properties with portion of value retained; decedent also trustee as sole beneficiary of "residence trust" with trust terms giving decedent right to use trust property as personal residence and right to receive income from trust; Form 709 filed reporting transfer of residence and reporting portion retained; decedent later amended trust and upon decedent's death, residence transferred to charitable remainder trust at decedent's prior direction; decedent's Form 706 excluded properties from estate and claimed charitable deduction; IRS argued for estate inclusion of properties transferred to annuity trust via I.R.C. Sec. 2036(a); court agreed with IRS; annuity trusts not sufficiently similar to FLPs such that Estate of Bongard v. Comr., 124 T.C. 95 (2005) inapplicable; not sufficient non-tax reasons for transfer present; full value of residence included in decedent's estate under I.R.C. Sec. 2036(a); estate not entitled to charitable deduction because term of residence trust ended before decedent's death and should have been distributed under terms of trust to children and grandchildren rather than as directed by will).
(plaintiff was injured while sledding on mound of topsoil at defendant's park; topsoil had been excavated from construction site and dumped at park along with railroad tie and other construction material due to lack of storage space at defendant's maintenance facility; plaintiff slid down mound covered with snow and hit head on railroad tie breaking neck and rendering self paraplegic; court upheld trial court and appellate court dismissals of case on defendant's summary judgment motion on basis that state recreational use statute barred suit; character of property not changed and defendant's alleged creation of hazard immaterial; court noted that property owner owes no duty to recreational user (which plaintiff admitted he was) to keep property safe for entry or use; court noted that creating exception to that rule was domain of legislature and not the court - court stated, "we will not create an exception by judicial fiat").
(legal malpractice case against lawyer who drafted will that contained reference to separate written memorandum in which decedent was to list specific bequests of tangible personal property; attorney gave decedent separate written memorandum form; decedent did not sign the form or have it witnessed and attorney never saw form after giving it to decedent; post-death, decedent's heirs and estate entered into settlement declaring that form was invalid and heirs sued attorney for malpractice; trial court ruled for attorney on basis that he did not owe unknown beneficiaries any duty; appellate court reversed on basis that attorney owed duty to unknown, intended beneficiaries because he provided her with the separate written memorandum and knew decedent intended to benefit third parties by means of the form).
(plaintiff contracted with defendant to transport raw milk from farms to plaintiff’s processing facility; upon delivery, milk discovered to be contaminated with unidentified black particles and all loads rejected and milk ultimately destroyed; plaintiff sued for damages from defendant for contaminated milk; court determined that genuine issues of material fact remained at to whether plaintiff had made prima facie case under Carmack Amendment (amendment to Interstate Commerce Act holding carrier of goods in interstate commerce liable for loss, damage or injury to property transported); both parties’ motion for summary judgment denied).
(plaintiff contracted to sell potatoes to defendant and claimed that defendant breached contract, and defendant brought counterclaim that plaintiff breached contract; both parties sought summary judgment and defendant claimed that plaintiff was required to build railway spur via contract so that potatoes could be loaded on railway cars the defendant supplied; court determined that contract required defendant to furnish railcars or trucks to take delivery of potatoes and that contract did not give defendant to take delivery solely by rail or require that plaintiff build private spur to deliver potatoes).
(married couple sold rental real estate to son for $28,000 in return for promissory note in wife's name; note could not be sold or assigned; husband entered nursing home and made Medicaid application; state Medicaid agency determined that note was available resource and, as a result, husband ineligible for Medicaid benefits; trial court determined that note was an available resource on basis that promissory notes are available resources; appellate court reversed on basis that not assignable and could not be sold and could not, therefore, be converted to cash).
(plaintiff owned 13 acres containing his residence, barns, lake and 11 acres of woods; property assessed at $192,600 and plaintiff challenged appeal on basis that 2009 assessment was more than 5 percent greater than 2008 assessment and because bulk of tract categorized as residential excess acreage rather than agricultural land that he used to grow trees for firewood (and neighbor’s similar tract classified as ag; assessor noted that plaintiff did not use his tract for ag purposes and that assessment correct because it was less than 2005 purchase price and 2008 list price; Indiana Board of Tax Review’s determination that plaintiff bore burden to establish invalidity of assessment incorrect, but Board’s determination supported by evidence).
(in condemnation action, gas company sought to compel defendant drilling company to allow gas company to enter onto drilling company’s leased property to collect gas samples; court denied gas company’s motion, finding that gas company had not shown that the requested discovery was relevant to the claims or defenses in the condemnation action because the leased property was not part of the property to be condemned; the court found that a determination of a migration pathway was not relevant to the valuation issue, that the gas company had not shown the relevance of gas sampling outside of the area to be condemned, and that the requested well testing would delay the completion of expert discovery in the case).
(trial court improperly entered summary judgment in favor of estate in action seeking to quiet title to certain property in favor of the estate; a niece and her husband moved onto her uncle’s farm to take care of her uncle in his last days; the niece alleged that the uncle intended to leave the farm to her and her husband if they would pay $100,000; subsequent to this alleged promise, the uncle amended his trust twice and then passed away; in the final amendment the trust provided for a $150,000 distribution to the niece for the purpose of purchasing a house; however, the trust was to retain an interest in the house, to the extent that the niece used trust funds to purchase the property; the niece received a $150,000 distribution, purchased a $342,000 house, and failed to grant the trust any interest in the property; in reversing summary judgment for the estate, the court found that there was a genuine issue of material fact as to whether the payment to the niece was, as she contended, made in settlement of her claims against the estate or, as the estate contended, a distribution in accordance with the terms of the trust).
(plaintiff divested itself of certain soybean assets in 2003, granting licenses for its soybean technology to two different seed development companies; in 2007, one licensee and defendant entered into an agreement to develop and sell E3, a triple stack soybean event conferring tolerance in soybeans to three different herbicides; pursuant to the agreement, the licensee granted a sublicense to defendant, but the licensee retained ownership of E3; plaintiff filed an action against defendant, alleging that defendant’s work with E3 was infringing plaintiff’s intellectual property; plaintiff argued that the licensee had no authority to sublicense commercialization rights; in granting summary judgment to defendant, the court ruled that the plain and ordinary language of the licensing agreement did not, as plaintiff alleged, strip the licensee of commercialization rights granted to the other licensee, instead, the agreement provided that those rights would be shared by the two licensees; as such, the licensee had the authority to sublicense full commercialization rights to defendant).
(case involves hog production contract between parties; plaintiff to provide weaned pigs every nine weeks over 14 month period and defendant, pig farmer, agreed to pay for pigs received; plaintiff delivered pigs and defendant paid via check, but check bounced and plaintiff sued; defendant claimed that plaintiff could have mitigated damages by repossessing pigs and reselling them; court determined that transaction involved sale of goods covered by state (MN) version of UCC Article 2 and that plaintiff need not mitigate damages once buyer accepts goods; under MN version of Article 9 (which applied because plaintiff had security interest in pigs), plaintiff could repossess or seek to recover purchase price; thus plaintiff not required to repossess pigs; plaintiff awarded summary judgment for purchase price plus interest as contract required).
(plaintiff environmental group challenged a decision by defendant (Kansas Department of Health and Environment (KDHE)) to issue an air emission construction permit to a power company for the construction of an 895-megawatt coal-fired power plant; in reversing and remanding to KDHE, the Court found that plaintiff had both statutory and common law standing because individual members did allege injury in fact; KDHE erred in finding that new EPA regulations establishing one-hour emission limits for NO2 and SO2 did not apply since Kansas had not yet amended its state implementation plan in light of the new regulations; the Clean Air Act required application of these regulations and KDHE was ordered to apply them on remand; the Court also instructed KDHE on remand to apply EPA’s new hazardous air pollutants (HAP) emission limits that were explicitly retroactive to the permit).
(plaintiff distributor filed an action against defendants, alleging that they violated the antitrust laws by conspiring to fix anti-competitive prices in the school district and nursing home markets, causing consumers to pay inflated prices and causing the distributor to sustain damages; the court found that the distributor’s complaint contained “just enough allegations” to set forth (1) a conspiracy between the defendants (2) which caused an unreasonable restraint of trade in the relevant markets, and (3) resulted in injury to the distributor, so as to adequately plead an antitrust injury under Section 1 of the Sherman Act; the distributor sufficiently alleged an injury of the type the antitrust laws were designed to prevent because it alleged that consumers were damaged by higher prices).
(defendant sold seed potatoes to a party who prepared the seed and sold it to plaintiff; seed allegedly failed to germinate in timely manner and plaintiff removed crop, planted mitigation crop, and sued defendant for deceptive descriptions of seed, breach of contract and breach of express and implied covenants; defendant moved to dismiss; seed was certified as “blue tag”; defendant’s motion to dismiss denied).
(plaintiff’s zoning board denied defendant’s request for a special land-use permit to construct a motocross complex on a parcel of land; after plaintiff received complaints that defendant proceeded with its plan despite the denial, plaintiff sought an injunction preventing defendant from constructing and operating the complex; the trial court denied defendant’s claims that the zoning ordinance violated its due process and equal protection rights, but amended its preliminary injunction to allow defendant to construct one track on the property and to ride up to six machines on the track every second and fourth weekend of the month; in affirming, the court ruled that the trial court did not err in determining that defendant’s planned activities constituted a public nuisance and nuisance per se; the zoning board’s actions were rationally related to the legitimate purpose of protecting the public health, safety, and welfare of its residents, and defendant was not treated in a dissimilar manner from similarly-situated businesses; denial of the special use permit did not constitute a regulatory taking).
(Kansas State University obtained a “Certificate of Plant Variety Protection,” pursuant to the Plant Variety Protection Act, 7 U.S.C. §§2321-2582, for a new variety of wheat seed; the University granted a license to the Kansas Wheat Alliance to enforce its protected rights; the Act prohibits those who are not certificate holders from “conditioning” certified seed to use it for reproductive purposes without permission; the Alliance filed an action against defendants, alleging that they had violated the Act by illegally conditioning protected seed intended to be sold by unauthorized farmers; in denying summary judgment to defendants, the court found that there were genuine issues of material fact as to whether defendants “knew or should have known” that its actions were in violation of the Act; evidence gathered during an undercover investigation could not serve as a violation of the Act because the investigator had legal authority to request the conditioning).
(an insurer issued a fertilizer company a $1 million commercial general liability (CGL) policy and a $10 million commercial umbrella liability policy; a customer and his lessor sued the fertilizer company, alleging that its pest control advisor gave them erroneous chemical application advice, leading to the destruction of their grape crop; the insurer partially accepted the fertilizer company’s tender for defense, but only pursuant to the CGL policy; the customer obtained a $9.5 million judgment against the fertilizer company, of which the insurer paid $1 million; the fertilizer company then filed an action against the insurer, alleging that the insurer had improperly denied umbrella policy coverage under a professional services exclusion and an applicator exclusion; in ruling on cross-motions for summary judgment, the court granted summary judgment for the insurer on a reformation claim, but denied summary judgment on breach of contract, declaratory judgment, fraud, and bad faith claims; the court found that a triable issue existed as to whether the damage was caused by an “accident,” which would have triggered coverage under the umbrella policy; it was possible for the fertilizer company to have been liable for the injuries and for the injuries to have arisen out of an accident).
(the Washington Department of Ecology has authority to set minimum stream flows in the Skagit River system to protect fish, game, birds, recreational, and aesthetic values; Ecology promulgated a rule subjecting new water uses to shutoff when stream flows fell below a certain minimum; after the county brought an action alleging that the new rule would inhibit development, Ecology issued an amended in-stream flow rule to provide that new uses of water for domestic, municipal, commercial and industrial, agricultural irrigation, and stock watering would not be subject to shutoff; the Tribe challenged the validity of the amended rule, arguing that it conflicted with water code provisions prohibiting the withdrawal of water when such withdrawal would impair minimum flows; the lower court denied the Tribe’s petition for review, but the Supreme Court reversed, declaring that the amended rule was invalid; the Court found that a minimum flow set by rule was an existing water right that could not be impaired, the exception for “overriding considerations of the public interest” found in RCW 90.54.020(3)(a) was to be construed narrowly; Ecology had improperly reallocated in-stream flow to encourage development; such policy change could only arise through legislative action).
(plaintiff was injured as a result of colliding with defendants’ dog while riding bicycle; while state law bars negligence claims in cases involving animal injuries, this case involved facts where dog at issue under complete control of defendants’ at all times up to split second before accident; as such, it was defendants’ actions rather than the dog’s instinctive, volitional behavior that proximately caused the accident; defendants’ motion for summary judgment denied).
(trial court determined that defendants had acquired 28 acres via adverse possession; defendants were children who grew up on the property on land adjacent to the disputed tract and had made various uses of the property from 1926 to 1957; children had later inherited the adjacent property; uses of disputed tract included enclosing portions with fencing, keeping livestock, picking berries, picnicking, etc.; sufficient evidence present to support trial court’s determination).

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