Appeals

Dallas Court of Appeals Reverses Trial Court’s Assertion of Personal Jurisdiction Over Mexican Reinsurance Broker.

Dallas Court of Appeals Reverses Trial Court’s Assertion of Personal Jurisdiction Over Mexican Reinsurance Broker.

August 22, 2017 in Case Summaries

Levinger PC teamed with trial lawyer Thomas Cook of Zelle LLP to persuade the Dallas Court of Appeals to reverse the trial court’s assertion of personal jurisdiction over Cooper Gay Mexico, a reinsurance broker based in Mexico City. Elamex, S.A. de C.V., a Mexican food manufacturer with plants in Juarez and El Paso, had sought to hold Cooper Gay Mexico liable for more than $25 million as a result of an excess insurer’s refusal to pay Elamex for fire damages to its Juarez plant. After an extensive analysis of Cooper Gay Mexico’s efforts in seeking to obtain the excess insurance and in placing the reinsurance for the excess policy, the court of appeals concluded that Cooper Gay Mexico neither had any contacts with Texas nor sought any benefit by trying to avail itself of jurisdiction in Texas. Rather, the evidence showed that all of Cooper Gay Mexico’s relevant contacts were either with its affiliate in Florida or the excess insurer in Mexico. Cooper Gay Martinez del Rio y Asociados Intermediaros de Reaseguro S.A. de C.V. v. Elamex, S.A. de C.V., No. 05‑16‑01436‑CV, 2017 WL 359960 (Tex. App. ‑‑ Dallas Aug. 22, 2017, no pet.).

Courts: Texas Intermediate Appellate Courts

Subject Matter: Business Litigation, Procedural and Evidentiary Issues

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Fifth Circuit Vacates Entirety of Tax Court Ruling Against Owners of the Bosque Canyon Ranch in West Texas

Fifth Circuit Vacates Entirety of Tax Court Ruling Against Owners of the Bosque Canyon Ranch in West Texas

August 11, 2017

In a ruling that attracted national attention, a tax court in 2015 disallowed over $15 million in charitable contribution deductions taken by the owners of the 3700-acre Bosque Canyon Ranch. The tax court also imposed a 40 percent gross valuation misstatement penalty and held that the entirety of the limited partners’ contributions were made in exchange for “disguised sales” subject to taxation as ordinary income. The owners appealed, and Levinger PC successfully convinced the Fifth Circuit to vacate all of these tax court rulings. First, over the dissent of Judge Dennis, Judges Wiener and Haynes held that the owners’ donation of conservation easements satisfied the “perpetuity” requirement of IRC section 170, notwithstanding the reserved right to modify the boundaries of homesite parcels within the easements. Second, the panel unanimously held that the tax court clearly erred in finding the “baseline documentation” relating to the easements to be inadequate. Third, the panel vacated the gross valuation misstatement penalty because the tax court’s disallowance of the deduction was not based on the easements’ values. And fourth, the panel rejected the tax court’s determination that the entirety of the partners’ contributions were made in exchange for “disguised sales” of partnership property. The Fifth Circuit remanded the case to the tax court to consider certain issues raised by the IRS but not decided in the first proceeding. Bosque Canyon Ranch v. Commissioner of Internal Revenue, 867 F.3d 547 (5th Cir. 2017).

Courts: Federal Courts of Appeals
Subject Matter: Business Litigation, Oil & Gas/Real Estate

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Fifth Circuit Upholds Jury’s Vindication of Dillon Gage in Fraudulent Transfer Suit Bought by Stanford Receiver

Fifth Circuit Upholds Jury’s Vindication of Dillon Gage in Fraudulent Transfer Suit

Bought by Stanford Receiver

May 5, 2017 in Case Summaries

In a published opinion addressing numerous aspects of the Texas Uniform Fraudulent Transfer Act, the Fifth Circuit upheld a July 2015 jury verdict in favor of Levinger PC client Dillon Gage Incorporated of Dallas in a long-running dispute with Ralph Janvey, the court-appointed receiver in the Stanford Ponzi scheme litigation.  The Court held that the evidence was sufficient to support the jury’s finding that Stanford Coins & Bullion did not have an intent to hinder, delay, or defraud creditors when it made six payments totaling $5.1 million to Dillon Gage, a coin and bullion wholesaler, in the weeks leading up to the receivership.  In particular, the Court emphasized evidence showing that SCB intended to satisfy its obligations to all of its retail customers, as well as the Receiver’s failure to establish that SCB was insolvent at the time of the transfers.  Finally, the Court rejected the Receiver’s complaints about four aspects of the jury charge, including an instruction that a fraudulent intent cannot be inferred from a debtor’s mere intent to prefer one creditor over another.  Janvey v. Dillon Gage Incorporated of Dallas, 856 F.3d 377 (5th Cir. 2017).

Courts: Federal Courts of Appeals
Subject Matter: Business Litigation, Procedural & Evidentiary Issues

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Dallas Court of Appeals Again Stops Forced Sale of Valuable Partnership Property

Dallas Court of Appeals Again Stops Forced Sale of Valuable Partnership Property

April 6, 2017 in Case Summaries

For a second time, Levinger PC persuaded the Dallas Court of Appeals to reject a trial court order requiring the forced sale of valuable real property over the objection of client Steven Spiritas, a 50% partner in the entity that owns the property.  The trial court had granted partial summary judgment declaring the occurrence of a winding-up event, and then appointed a winding-up representative to sell the partnership’s property.  Spiritas brought a petition for writ of mandamus to challenge the winding-up orders, arguing that the trial court’s appointment of a winding-up representative impermissibly allowed execution on a nonappealable, interlocutory order.  The court of appeals granted Spiritas’s petition, holding that the trial court had abused its discretion by allowing the execution of a non-final order, and that mandamus relief was available to prevent the property from being sold before Spiritas could exercise his appellate rights.  In re Steven Spiritas, Individually and as Trustee of the Spiritas SF 1999 Trust, No. 05-16-00791-CV, 2017 WL 1281394 (Tex. App.-Dallas Apr. 6, 2017) (orig. proceeding).

Courts: Texas Intermediate Appellate Courts
Subject Matter: Business Litigation, Oil & Gas/Real Estate

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Amarillo Appellate Court Upholds Vacatur of Multi-Million Dollar Arbitration Award.

Amarillo Appellate Court Upholds Vacatur of Multi-Million Dollar Arbitration Award.

February 14, 2017 in Case Summaries

Working closely with Michael Gruber and his trial team at Gruber Elrod Johansen Hail Shank, Jeff Levinger wrote the appellee’s brief that persuaded the Amarillo Court of Appeals to uphold the vacatur of a $2.3 million arbitration award against Raeanne Martin in a dispute among the shareholders of a closely-held Texas corporation.  Although the Court noted that review of an arbitration award is “extraordinarily narrow,” it held that the three-member arbitration panel had exceeded its powers by hearing and deciding the dispute even though the parties had previously signed a Rule 11 settlement agreement.  Having affirmed the vacatur of the award on that ground, the Court did not reach the second basis for vacatur  that the panel also had exceeded its powers by granting relief that was not authorized under the parties’ shareholder agreement.  Higginson v. Martin, No. 07-15-00343-CV, 2017 WL 603626 (Tex. App.-Amarillo Feb. 14, 2017, pet. filed).

Courts: Texas Intermediate Appellate Courts
Subject Matter: Business Litigation, Procedural and Evidentiary Issues

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