Federal Courts of Appeals

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

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

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

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

Dispute Over Sale of Gold Bars Ends With Fifth Circuit Affirmance of Jury Verdict Favoring Dillon Gage

Dispute Over Sale of Gold Bars Ends With Fifth Circuit Affirmance of Jury Verdict Favoring Dillon Gage

February 29, 2016 in Case Summaries

Jeff Levinger successfully represented Dillon Gage Metals, a large wholesaler of rare coins and bullion, in its long-running dispute with the Gagosian Gallery, a prominent New York art gallery, over the acquisition of 100 bars of gold. In 2009, the Gallery paid $3 million to Stanford Coins & Bullion, a business owned by the now-disgraced financier Allen Stanford, to acquire the gold for a major art installation. SCB, in turn, ordered the gold from Dillon Gage. Before the transaction could be completed, however, SCB was placed into federal receivership, and when the Gallery did not receive the gold, it sued Dillon Gage on the theory that the Gallery was a third-party beneficiary of the sales contract between SCB and Dillon Gage. After a multi-day trial, a jury found that the Gallery was not a third-party beneficiary of the SCB-Dillon Gage contract. The Fifth Circuit affirmed the judgment in favor of Dillon Gage, agreeing with Levinger’s arguments that sufficient evidence supported the verdict and that the jury charge accurately expressed Texas law on third-party beneficiary status. Pre-War Art, Inc. v. Stanford Coins and Bullion, Inc., No. 1510033, 2016 WL 791042 (5th Cir. Feb. 29, 2016).

Courts: Federal Courts of Appeals
Subject Matter: Business Litigation

Comments Off on Dispute Over Sale of Gold Bars Ends With Fifth Circuit Affirmance of Jury Verdict Favoring Dillon Gage

Fifth Circuit Revives Antitrust Suit Against Monopolistic Broker of Veterinary Insurance

Fifth Circuit Revives Antitrust Suit Against Monopolistic Broker of Veterinary Insurance

September 23, 2015 in Case Summaries

In a 2-1 opinion, the Fifth Circuit reversed the summary judgment dismissal of an antitrust suit brought by Levinger PC client Sanger Insurance Agency against HUB International, an insurance broker that sells professional liability and other types of insurance products to veterinarians across the country. Although the Court held that HUB’s anti-competitive conduct was exempt from federal antitrust scrutiny under the McCarran-Ferguson Act, it revived Sanger’s claims under the Texas Free Enterprise and Antitrust Act and various common law theories and remanded them for trial. Over the dissent of Judge Edith Jones, Judges Gregg Costa and Jerry Smith held that Sanger had established that it was sufficiently prepared to enter the market for selling veterinary insurance, and thus reversed the district court’s determination that Sanger lacked standing to challenge HUB’s conduct. Sanger Insurance Co. v. HUB Int’l, Ltd., 802 F.3d 732 (5th Cir. 2015)

Courts: Federal Courts of Appeals
Subject Matter: Business Litigation

Comments Off on Fifth Circuit Revives Antitrust Suit Against Monopolistic Broker of Veterinary Insurance

Fifth Circuit Vacates Order of Contempt and Incarceration Against Dallas Attorney

Fifth Circuit Vacates Order of Contempt and Incarceration Against Dallas Attorney

August 21, 2015 in Case Summaries

Jeff Levinger successfully represented well-known Dallas attorney Daniel Sheehan in his appeal of an order of civil contempt and incarceration that a federal district judge issued against him while he was defending his client against a charge that it was in contempt of a prior injunction. The Fifth Circuit vacated the order in its entirety, holding that Sheehan “was not provided adequate due process” and that “there was insufficient evidence to find that he personally violated the injunction” previously issued by the district court. Sheehan’s successful challenge to the contempt order received extensive coverage in the Texas Lawyer and other legal publications. Robin Singh Educational Services, Inc. v. Testmasters Educational Services, Inc. v. Sheehan, 799 F.3d 437 (5th Cir. 2015).

Courts: Federal Courts of Appeals
Subject Matter: Ethics & Professional Malpractice

Comments Off on Fifth Circuit Vacates Order of Contempt and Incarceration Against Dallas Attorney