Nebraska Supreme Court will hear oral arguments December 5, 2007 in two cases presented by Domina Law Group pc llo, each raising an issue of first impression under Nebraska law, and each posing an issue about which there is little appellate precedent elsewhere.
Both cases were handled by David Domina in the trial court.
"Our accountant client was sued for professional negligence for a substantial sum, and the jury returned a modest verdict for under $40,000," Domina said. But, Domina and the client contend the verdict should have been zero." The case involves the use of tax credits. There is no question the client kept the credits, paid the tax with cash, and has been able to use the credits on subsequent tax returns. We contend that 1) this means the client suffered no loss. The credits and the dollars had identical value, and 2) even if dollars and tax credits are not perfectly interchangeable, no proof of the difference in value was presented."
A land transaction involving claims about a Section 1031 exchange, or the opportunity to make an exchange, are at the core of the case, tried in District Court in early 2006. Domina noted that the measure of damages for acts or omissions adversely affecting the right to defer, but not avoid, income tax is a complicated area about which little appellate precedent has been written. "The federal tax law allows one to defer, but not avoid, income taxes by making exchanges of one property for another," Domina noted. "But," he said, "the tax must be paid eventually. Here, we contend there was no proof of the deferral's probable duration or value. The burden of proof on these issues was on the claiming party. We contend the case should not have been submitted to the jury on these points.".
Since the issues presented are novel, Domina offered no prediction about how soon the Supreme Court will decide the case.
A second case, also involving an issue of first impression, arises from a family dispute. At its center is a power of attorney, prepared using the Nebraska "short form power of attorney act." No case involving a short form POA has reached Nebraska's appellate courts previously.
"The short form statute permits one to prepare a POA that provides for plenary authority," Domina said. The statute makes it clear that "plenary" powers authorize one holding a POA to engage in any business act, whatsoever, that the person making the POA could commit personally.
"Our client farmed with his brother for many years. They were very close. His brother was a bachelor, and our client's family was his," Domina said. We contend the new short form act does not require that a power of attorney contain express language permitting the holder to make gifts of the maker's property to himself for his family," Domina continued. This contention is "based on the statute's language that clearly permits an all encompassing, widely expansive power, not limited by rules governing POAs prepared without the benefit of the short form act's provisions.
The first impression issue will decide whether the short form act eliminates requirements in past decisions of the Nebraska appellate courts requiring that a power of attorney must expressly authorize its holder to engage in self-interested transactions if the POA's powers are as broad as the new statute permits.
November, 2007
Domina Law Group pc llo is a firm of trial lawyers. We specialize in complex litigation on a national basis. Our lawyers are ethical, aggressive, and committed to providing spirit and vitality to the judicial system and our client’s legal rights.