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Recent Court Decisions

10th Circuit Court of Appeals

(1)   Corde Finance Corp. v. Commissioner of Internal Revenue (10/23/1998)

In Corde Finance Corp. v. Commissioner of Internal Revenue, the Tenth Circuit Court of Appeals affirmed a Tax Court decision that petitioner failed to prove that its accountants had advised it to report its income under an erroneous method of accounting or that the errors in the 1990 income tax return resulted from advice of its accountants. Therefore, the petitioner failed to show reasonable cause to avoid the substantial understatement penalty under 26 U.S.C. § 6662(a).

 

(2) U.S. Energy Corp. v. Nukem Inc. (10/22/1998)

            In  U.S. Energy Corp. v. Nukem Inc., the Tenth Circuit Court of Appeals affirmed an arbitration award against the defendant, Nukem, Inc., under the Federal Arbitration Act (9 U.S.C. § 10).  The court held that errors in the arbitrator's "interpretation of the law or findings of fact do not merit reversal" unless they rise to a "manifest disregard of the law." Bowles Financial Group, Inc. v. Stifel, Nicolaus & Co., Inc., 22 F.3d 1010, 1012 (10th Cir. 1994). Manifest disregard means "willful inattentiveness to the governing law," and clearly requires more than mere error or misunderstanding of the law. See ARW Exploration Corp. v. Aguirre, 45 F.3d 1455, 1463 (10th Cir. 1995)

 

(3) Metropolitan Life Insurance Co. v. Bush (08/31/1998)

In Metropolitan Life Insurance Co. v. Bush (08/31/1998), the Tenth Circuit Court of Appeals held that, in light of its ambiguity in § 8705 Federal Employees Group Life Insurance Act (FEGLIA)”, 5 U.S.C. §§ 8701-16; 5 C.F.R. § 870.104 (1995), the term “employing office” is not limited to a regional office or an office with "jurisdiction and responsibility for life insurance actions" 5 C.F.R. § 870.104 (1995), but extends to an office where the insured files an insurance policy with the personnel officer at “the agency in which [the insured is] employed” (emphasis added).