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In 2007-2010, the Hargises bought and operated nursing homes. Bobby was the sole owner of corporations that operated the homes (Operating Corporations), which were S corporations. Brenda owned interests in companies that bought and leased the homes to the Operating Corporations (Nursing Home LLCs). The Nursing Home LLCs were partnerships under 26 C.F.R. 301.7701-3(a). All the entities had net operating losses, which the Hargises deducted on their joint tax returns for 2009 and 2010. The Commissioner issued the Hargises a notice of deficiency, disallowing their deduction of most of the nursing home losses, due to the Hargises’ insufficient basis in their companies. The Hargises owed $281,766. The Tax Court ruled for the Commissioner. The Eighth Circuit affirmed. The Tax Court correctly denied Bobby any basis in the indebtedness of the Operating Corporations, finding “no convincing evidence that any of the lenders looked to [Bobby] as the primary obligor on the loans.” The Commissioner properly calculated Brenda’s basis from the Nursing Home LLCs’ tax returns (Schedule K-1). Her deduction of their losses is limited to “the adjusted basis of [her] interest in the partnership.” View "Hargis v. Koskinen" on Justia Law

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When Goplin began working at WeConnect, he signed the “AEI Alternative Entertainment Inc. Open Door Policy and Arbitration Program,” which referred to AEI throughout; it never mentioned WeConnect. Goplin brought a collective action under the Fair Labor Standards Act. WeConnect moved to compel arbitration, Fed.R.Civ.P. 12(b)(3), attaching an affidavit from its Director of Human Resources stating, “I am employed by WeConnect, Inc.—formerly known as Alternative Entertainment, Inc. or AEI.” Goplin claimed that WeConnect was not a party to the agreement and could not enforce it. He cited language on WeConnect’s website: WeConnect formed when two privately held companies, Alternative Entertainment, Inc. (AEI) and WeConnect Enterprise Solutions, combined in September 2016… we officially became one company. WeConnect asserted that WeConnect and AEI were two names for the same legal entity, stating: This was a name change, not a merger. The court held that WeConnect did not establish that it was a party to the agreement or otherwise entitled to enforce it. The court rejected subsequently-submitted corporate-form documents and affidavits, stating that new evidence cannot be introduced in a motion for reconsideration unless the movant shows “not only that [the] evidence was newly discovered or unknown to it until after the hearing, but also that it could not with reasonable diligence have discovered and produced such evidence.” The Seventh Circuit affirmed. View "Goplin v. WeConnect, Inc." on Justia Law

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Many states tax the retail sales of goods and services in the state. Sellers are required to collect and remit the tax; if they do not in-state consumers are responsible for paying a use tax at the same rate. Under earlier Supreme Court decisions, states could not require a business that had no physical presence in the state to collect its sales tax. Consumer compliance rates are low; it is estimated that South Dakota lost $48-$58 million annually. South Dakota enacted a law requiring out-of-state sellers to collect and remit sales tax, covering only sellers that annually deliver more than $100,000 of goods or services into the state or engage in 200 or more separate transactions for the delivery of goods or services into the state. State courts found the Act unconstitutional. The Supreme Court vacated, overruling the physical presence rule established by its decisions in Quill (1992), and National Bellas Hess (1967). That rule gave out-of-state sellers an advantage and each year becomes further removed from economic reality and results in significant revenue losses to the states. A business need not have a physical presence in a state to satisfy the demands of due process. The Commerce Clause requires “a sensitive, case-by-case analysis of purposes and effects,” to protect against any undue burden on interstate commerce, taking into consideration the small businesses, startups, or others who engage in commerce across state lines. Without the physical presence test, the first inquiry is whether the tax applies to an activity with a substantial nexus with the taxing state. Here, the nexus is sufficient. Any remaining Commerce Clause concerns may be addressed on remand. View "South Dakota v. Wayfair, Inc." on Justia Law

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In 2003, Pain Center contracted with SSIMED for medical-billing software and related services. In 2006, the parties entered into another contract, for records-management software and related services. In 2013, Pain Center sued SSIMED for breach of contract, breach of warranty, breach of the implied duty of good faith, and four tort claims, all arising out of alleged shortcomings in SSIMED’s software and services. The district judge found the entire suit untimely. The Seventh Circuit affirmed on all but the claims for breach of contract. The judge applied the four-year statute of limitations under Indiana’s Uniform Commercial Code (UCC), holding that the two agreements are mixed contracts for goods and services, but the goods (i.e., the software) predominate. The Seventh Circuit disagreed. Under Indiana’s “predominant thrust” test for mixed contracts, the agreements in question fall on the “services” side of the line, so the UCC does not apply. The breach-of-contract claims are subject to Indiana’s 10-year statute of limitations for written contracts and are timely. Pain Center licensed SSIMED’s preexisting, standardized software but received monthly billing and IT services for the life of both contracts. View "Pain Center of SE Indiana, LLC v. Origin Healthcare Solutions LLC" on Justia Law

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In 2003, Pain Center contracted with SSIMED for medical-billing software and related services. In 2006, the parties entered into another contract, for records-management software and related services. In 2013, Pain Center sued SSIMED for breach of contract, breach of warranty, breach of the implied duty of good faith, and four tort claims, all arising out of alleged shortcomings in SSIMED’s software and services. The district judge found the entire suit untimely. The Seventh Circuit affirmed on all but the claims for breach of contract. The judge applied the four-year statute of limitations under Indiana’s Uniform Commercial Code (UCC), holding that the two agreements are mixed contracts for goods and services, but the goods (i.e., the software) predominate. The Seventh Circuit disagreed. Under Indiana’s “predominant thrust” test for mixed contracts, the agreements in question fall on the “services” side of the line, so the UCC does not apply. The breach-of-contract claims are subject to Indiana’s 10-year statute of limitations for written contracts and are timely. Pain Center licensed SSIMED’s preexisting, standardized software but received monthly billing and IT services for the life of both contracts. View "Pain Center of SE Indiana, LLC v. Origin Healthcare Solutions LLC" on Justia Law

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Appellant Maxim Cabaret, Inc. d/b/a Maxim Cabaret was a strip club in Sandy Springs, Georgia, and appellant Theo Lambros was the club’s operator, sole shareholder, and president (collectively “Maxim”). Maxim appealed the superior court's order granting summary judgment to the City of Sandy Springs on Maxim’s legal challenges to city ordinances. The Georgia Supreme Court held that Maxim’s challenges to prior versions of the City’s ordinances that have since been replaced or amended were moot; current adult business ordinances prohibiting the sale of alcohol at businesses that offer live nude entertainment constitutionally regulate negative secondary effects of strip clubs without unduly inhibiting free speech or expression; and because the City may constitutionally prohibit Maxim from obtaining a license to sell liquor on its premises under the City’s adult business licensing ordinances, Maxim lacked standing to challenge the City’s alcohol licensing regulations. View "Maxim Cabaret v. City of Sandy Springs" on Justia Law

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Appellant Maxim Cabaret, Inc. d/b/a Maxim Cabaret was a strip club in Sandy Springs, Georgia, and appellant Theo Lambros was the club’s operator, sole shareholder, and president (collectively “Maxim”). Maxim appealed the superior court's order granting summary judgment to the City of Sandy Springs on Maxim’s legal challenges to city ordinances. The Georgia Supreme Court held that Maxim’s challenges to prior versions of the City’s ordinances that have since been replaced or amended were moot; current adult business ordinances prohibiting the sale of alcohol at businesses that offer live nude entertainment constitutionally regulate negative secondary effects of strip clubs without unduly inhibiting free speech or expression; and because the City may constitutionally prohibit Maxim from obtaining a license to sell liquor on its premises under the City’s adult business licensing ordinances, Maxim lacked standing to challenge the City’s alcohol licensing regulations. View "Maxim Cabaret v. City of Sandy Springs" on Justia Law

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U.S. Welding sought review of the court of appeals’ judgment affirming the district court’s order awarding it no damages whatsoever for breach of contract with Advanced Circuits. Notwithstanding its determination following a bench trial that Advanced breached its contract to purchase from Welding all its nitrogen requirements during a one-year term, the district court reasoned that by declining Advanced’s request for an estimate of lost profits expected to result from Advanced’s breach prior to expiration of the contract term, Welding failed to mitigate. Because an aggrieved party is not obligated to mitigate damages from a breach by giving up its rights under the contract, and because requiring Welding to settle for a projection of anticipated lost profits, rather than its actual loss, as measured by the amount of nitrogen Advanced actually purchased from another vendor over the contract term, would amount to nothing less than forcing Welding to relinquish its rights under the contract, the Colorado Supreme Court concluded the district court erred. The court of appeals’ judgment concerning failure to mitigate was therefore reversed, and the case was remanded for further proceedings. View "U.S. Welding, Inc. v. Advanced Circuits, Inc." on Justia Law

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The issue this case presented for the Georgia Supreme COurt's review centered on whether the contract involved in this case between the City of Atlanta and a private business for the lease of retail concession space at Hartsfield-Jackson Atlanta International Airport created a taxable interest subject to ad valorem taxation by Clayton County. The City of Atlanta owned the Airport, which was partially in Clayton County outside the City’s boundaries. Appellee Aldeasa Atlanta Joint Venture entered into the written agreement with the City to lease space on two different concourses at the Airport for the non-exclusive rights to operate two duty free retail stores. Appellant Clayton County Board of Tax Assessors (“County”) issued real property tax assessments to Aldeasa for the 2011 and 2012 tax years on Aldeasa’s purported leasehold improvements on the two parcels involved in the Concessions Agreement and also on Aldeasa’s purported possessory interest in the two parcels. Aldeasa appealed the assessments and paid the tax pending the outcome of the appeal. The trial court found the Concessions Agreement created a usufruct interest in the property, and not an estate in real property; it rejected the County’s assertion that it was legally authorized to impose a property tax on usufructs located at the Airport; and it also rejected the County’s assertion that the Concessions Agreement created a taxable franchise. Accordingly, the trial court granted Aldeasa’s motion for summary judgement and denied the motion filed by the County. The County appealed, asserting four different taxable interests were created by the Concessions Agreement. The Supreme Court disagreed with the State's assertions and affirmed the trial court. View "Clayton County Bd. of Assessors v. Aldeasa Atlanta Joint Venture" on Justia Law

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The issue this case presented for the Georgia Supreme COurt's review centered on whether the contract involved in this case between the City of Atlanta and a private business for the lease of retail concession space at Hartsfield-Jackson Atlanta International Airport created a taxable interest subject to ad valorem taxation by Clayton County. The City of Atlanta owned the Airport, which was partially in Clayton County outside the City’s boundaries. Appellee Aldeasa Atlanta Joint Venture entered into the written agreement with the City to lease space on two different concourses at the Airport for the non-exclusive rights to operate two duty free retail stores. Appellant Clayton County Board of Tax Assessors (“County”) issued real property tax assessments to Aldeasa for the 2011 and 2012 tax years on Aldeasa’s purported leasehold improvements on the two parcels involved in the Concessions Agreement and also on Aldeasa’s purported possessory interest in the two parcels. Aldeasa appealed the assessments and paid the tax pending the outcome of the appeal. The trial court found the Concessions Agreement created a usufruct interest in the property, and not an estate in real property; it rejected the County’s assertion that it was legally authorized to impose a property tax on usufructs located at the Airport; and it also rejected the County’s assertion that the Concessions Agreement created a taxable franchise. Accordingly, the trial court granted Aldeasa’s motion for summary judgement and denied the motion filed by the County. The County appealed, asserting four different taxable interests were created by the Concessions Agreement. The Supreme Court disagreed with the State's assertions and affirmed the trial court. View "Clayton County Bd. of Assessors v. Aldeasa Atlanta Joint Venture" on Justia Law