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granted with respect to a legal issue, if there is “no genuine
issue as to any material fact and * * * a decision may be
rendered as a matter of law.” Rule 121(a) and (b); Craig v.
Commissioner, 119 T.C. 252, 259-260 (2002); Sundstrand Corp. v.
Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th
Cir. 1994). There is no disagreement between the parties as to a
material fact, and therefore this matter is ripe for summary
judgment.
I. New Mexico Law: Are the Supply Contracts Real Property?
Petitioner argues that the supply contracts are real property
under New Mexico law, whereas respondent argues the contracts are
not real property but some type of intangible right.
A. Petitioner’s Arguments
Petitioner contends that the supply contracts are real
property under New Mexico law. Petitioner asserts that each
contract established a servitude under which Santa Fe and
successive owners of the Lee Ranch mine land have the obligation
to mine and supply the coal needed pursuant to that contract to
operate the utility’s power plant. This servitude, petitioner
maintains, is a real property interest under New Mexico law.
B. Respondent’s Arguments
Respondent contends that the supply contracts are not real
property under New Mexico law, relying on the fact that the
contracts did not result in a transfer of ownership of the coal
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Last modified: May 25, 2011