McNeill v United States

McNeill appealed the dismissal of his petition for partial refund of taxes arguing he should be allowed to raise a good faith defense. The panel, 2-1, reversed and remanded. It held that under the plain language of the partnership and partner reasonable cause/good faith defenses provisions of Tax equity and fiscal Responsibility Act of 1982, the fact that managing partners are not excluded from the defenses provision, case law which adopted the government positon that partners can raise the good faith defenses and the controlling regulations which also allow partners to raise good faith defenses, McNeill can raise the good faith defense and the district court’s contrary conclusion is wrong and the must be reversed. The dissent argued that, in this case, McNeill is bound by the earlier district court rejection of the partnership good faith defense as he owned 99% of the partnership and allowed the finding to become final by failing to reopen the earlier partnership case after notice and the mental state issues are the same in both cases as it is McNeill’s state of mind as managing partner that was at issue in the partnership case and his state of mind in this case.

Sundance Energy Oklahoma, LLC v Dan D. Drilling Corporation

Drilling appealed the jury verdict against it, the denial of its new trial motion and an award of attorney fees to Sundance. The panel affirmed. It held the district court properly instructed the jury that if Drilling was grossly negligent, there was no need to determine if an implied contract existed between the parties and if that contract placed liability for damage to the oil or gas well in question on Sundance through an exculpatory provision because the Oklahoma Supreme Court has expressly excluded gross negligence claims from exculpatory provisions in answer to a certified question on the validity of such provisions. It held that any error in failing to instruct the jury that Sundance owed a non-delegable duty to drilling was harmless as contributory neglected is not a defense to a breach of contract claim and the jury returned a verdict for Sundance on both gross negligence and breach of contract grounds. It held any error in admitting narratives of the accident at the well site and eth presence of methamphetamine in the system of the deceased worker were harmless given the evidence of the OSHA citation, technical report and admission of Drilling’s president that Drilling failed to follow safety procedures and eh deceased worker attempted to remove equipment form the well after orders to stop all efforts of recovery.  It finally affirmed the attorney fee award holding the deterioration of the well site during the period of the OSHA investigation is the kind of physical injury to property that triggers a mandatory fee ward under Oklahoma statute.