Cave Buttes, LLC v. Comm’r of Internal Revenue, 2016 U.S. Tax Ct. LEXIS 27; 147 T.C. No. 10 (U.S. Tax Court Sept. 20, 2016):
Cave Buttes, LLC owned 11 acres on a hill that in the distance overlooked downtown Phoenix. But up close it overlooked a dam owned by the Maricopa County Flood Control District. The District staff did not want Cave Buttes to build anything close to its dam, but Cave Buttes insisted it had the right and ability to build at least three luxury homes on the property. After running into a tangle of obstacles thrown up by the District, Cave Buttes decided to sell. Cave Buttes says the sale was at less than fair market value and wants a charitable-contribution deduction for the difference. The Commissioner says we shouldn't give Cave Buttes any deduction because it failed to comply with the charitable-contribution regulations and, even if it did comply, the property wasn't worth what it claimed.
1. Access by Express Easement
Cave Buttes ... argues that it had an express easement by virtue of the 1976 Warrant Deed reservation. Express easements must be expressly [*38] conveyed. McFarland v. Kempthorne, 545 F.3d 1106, 1112 (9th Cir. 2008); Fitzgerald Living Tr. v. United States, 460 F.3d 1259 (9th Cir. 2006). In Fitzgerald and McFarland, the Ninth Circuit rejected express easements where the respective patents conveyed the property "with the appurtenances thereof." McFarland, 545 F.3d at 1111. The court in Fitzgerald explained that the word "appurtenances" implies there is an existing easement but does not create one. Fitzgerald Living Tr., 460 F.3d at 1267 (citing United States v. Jenks, 129 F.3d 1348, 1355 (10th Cir. 1997)). The issue then hinged on whether an easement existed at the time of the grant. And in both cases, the court found it did not. The taxpayer in McFarland undermined his own argument through his representations that his predecessor's access into the property was not protected by any easement or other guaranty of continued access. But in Fitzgerald the court cited a standard treatise on easements for the proposition that "[t]he intent to grant an easement must be so manifest on the face of the instrument . . . that no other construction can be placed on it." Fitzgerald Living Tr., 460 F.3d at 1267 (quoting 25 Am. Jur. 2d Easements And Licenses In Real Property § 15 (2004)).
The 1976 Warranty Deed states "Grantors shall have access from remaining property in St. Paul Lode Mining Claim to low water mark of above described property." (Emphasis added.) The parties agree that the "low water mark" was located at the northern section of the 40-acre parcel near the base of the Cave Creek [*39] Dam. But they disagree about whether a road through the 29-acre parcel transferred to the District existed at the time that would have given access to the Robinsons to the remaining part of their land. This is an important difference--if there used to be a road right to the subject property over the District's land, then the deed's language "shall have access" would lead us to find that Cave Buttes did indeed have an express easement over the District's land.
But was there such a road? Cave Buttes offered old maps as proof that the Cave Creek Dam Road used to be a state highway that was regularly used to access the property when it was part of the larger 40-acre parcel. The admissibility of this evidence is pivotal in determining whether "access" existed at the time of the 1976 deed and thus at the time Cave Buttes donated and sold its property.
These old maps are hearsay, of course, and we'd normally have to exclude them. But Cave Buttes argues they are within the little-used ancient-document exception to the rule. A properly authenticated ancient document (one in existence 20 years or more) must meet three requirements to avoid exclusion: The document must be (1) more than 20 years [*40] old; (2) regular on its face with no signs of obvious alterations; and (3) found in a place of natural custody, or in a place where it would be expected to be found. If these requirements are met, then the document is prima facie authenticated and therefore admissible. Fed. R. Evid. 901(b)(8). Rule 901(b) of the Federal Rules of Evidence, example 8, extends the rule to electronically stored data, and stresses the importance of custody or place where it is found. Here, the maps are from 1937 and were converted into a digital format accessible online. Cave Buttes obtained the maps from the Arizona State Library, a state-maintained website. The maps declare they are part of the Arizona Memory Project:15 "A service of Arizona State Library, Archives and Public Records, a division of the Secretary of State." Cave Buttes argues that the maps are at least 20 years old, in a condition that create no suspicion about authenticity, and were obtained from a place where if authentic they would likely be (i.e., a library). The Commissioner responds that what Cave Buttes wants into evidence isn't the actual old and crinkly map, but a 21st-century digitized image of an old and crinkly map. That image, and certainly not the downloaded printout of that image, is not [*41] 20-years old and so there's nothing ancient about it. Without some credible live testimony about the conversion process (which Cave Buttes did not present), he argues, the maps are inadmissible as ancient documents.
15 This is an initiative made possible in part by a grant from the United States Institute of Museum and Library Services to help Arizona cultural institutions make their digital holdings available online. The goal is to create a repository of government documents, photographs, maps, and objects that "chronicle Arizona's past and present." http://azmemory.azlibrary.gov/cdm/about .
This may seem like a newfangled issue, but it's not. The Commissioner cites Martinez v. American's Wholesale Lender, 446 F. App'x 940, 944 (9th Cir. 2011) for the proposition that private websites are not self-authenticating. But the website here belongs to the Arizona State Library. Rule 902(5) of the Federal Rules of Evidence provides that "[a] book, pamphlet, or other publication purporting to be issued by a public authority" is self-authenticating. See Hansen v. PT Bank Negara Indonesia (Persero), 706 F.3d 1244, 1250 (10th Cir. 2013). And the Seventh Circuit has explained that "[a] document posted on a government website is presumptively authentic if government sponsorship can be verified by visiting the website itself ". Qiu Yun Chen v. Holder, 715 F.3d 207, 212 (7th Cir. 2013). We choose to follow the Seventh Circuit and hold that a document posted to a government website is self-authenticating [*42] if government sponsorship of the site can be verified by visiting the website itself. Here, we find it can be. The website is a .gov website and declares it is a "division of the Secretary of State." The title of the page is "Historic Arizona County Road Maps" and above the map portion of the document, the caption states "Maricopa County Arizona: General Highway and Transportation Map. 1937. . . Prepared by the Arizona State Highway Department in cooperation with the U.S. Department of Agriculture, Bureau of Public Roads. Data obtained from state-wide highway planning survey." Historic Arizona County Road Maps, Arizona Memory Project (2015), http://azmemory.azlibrary.gov/cdm/search/collection/har/page/4 . We are satisfied that the information contained in the document is sufficient to meet all three requirements of the ancient-document rule, and the downloaded image meets the standard of the self-authentication rule of rule 902(5) of the Federal Rules of Evidence as being from a website issued by a public authority.
With the introduction of the old maps we find that Cave Creek Dam Road existed at the time the Robinsons transferred the northern portion of the land to the District. See Jenks, 129 F.3d at 1355. We are persuaded that Cave Buttes' predecessors in title received express-access easements over the Cave [*43] Creek Dam Road. And we thus find that an express easement existed at the time Cave Buttes sold its remaining 11-acre portion to the District.
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