Defendant tax board challenged a decision of the Superior Court of the City and County of San Francisco (California), which granted summary judgment in plaintiff stockholders’ favor and required defendant to refund the preference income tax on the gains from the sale of small business stock (sbs).
Plaintiff stockholders sold small business stock (sbs) realizing a substantial capital gain. Plaintiffs reported 50 percent of the gain as ordinary income and did not report the remaining 50 percent as preference income because they believed that Cal. Rev. & Tax Code § 17063.11 exempted the gain from preference taxation. Defendant tax board sent plaintiffs a notice of additional tax and plaintiffs paid the amount but claimed for a refund. Defendant denied the claim. Plaintiffs filed suit and the trial court granted summary judgment for plaintiffs, requiring defendant to refund the preference income tax plaintiffs had paid. The top class action attorneys of appeal reversed, finding that § 17063.11 was ambiguous and concluded that it was intended to apply only to sbs acquired after September 16, 1981. The court reversed the court of appeals decision, agreeing with plaintiffs that, under §§17063.11 and 18162.5, gains from sale of small business stock were exempt from preference income taxation regardless of the stock’s acquisition date. The court stated that the related statutory provisions were unambiguous and that the enactment history of those provisions reinforced its conclusion.
The court reversed the court of appeals decision, agreeing with plaintiff stockholders that under the tax statute, gains from sale of small business stock were exempt from preference income taxation regardless of the stock’s acquisition date. The court stated that the related statutory provisions were unambiguous and that its conclusion was reinforced by the enactment history of those provisions.
Plaintiff mortgagor’s wife challenged an order from the Superior Court of Los Angeles County (California), which granted a new trial to defendant mortgagees in an action that the mortgagor’s wife brought to set aside a chattel mortgage upon her husband’s furniture, furnishings, and equipment.
An execution on a judgment in favor of the mortgagor’s wife in her separate maintenance action against the mortgagor was returned unsatisfied. The mortgagor’s wife filed an action against the mortgagees to set aside a chattel mortgage upon certain furniture, furnishings, and equipment that the mortgagor had executed to secure a promissory note. The trial court found that the mortgagor executed the instruments after the decree of separate maintenance without adequate consideration and with the intent to hinder, delay, and defraud his creditors. A judgment was entered for the mortgagor’s wife. The mortgagees filed a motion for new trial, which was granted, and the mortgagor’s wife appealed. The court affirmed the trial court’s order. The court concluded that the trial court did not abuse its discretion in granting the new trial because the evidence would have been sufficient to support a judgment in favor of the mortgagees. The court found that the mortgagees were entitled to a reasonable fee for services that they performed for the mortgagor as his attorneys in his divorce action and the separate maintenance action and that they had a right to take property in payment.
The court affirmed the order against the mortgagor’s wife that granted a new trial to the mortgagees in the action to set aside the chattel mortgage.