In Uncategorized on 04/09/2019 at 18:46

This is disfavored in the courtroom of that Obliging Jurist, Judge David Gustafson, who upbraids in Trilogy Inc. & Subsidiaries, Docket No. 12097-16, a designated hitter filed 4/9/19.

IRS and the Trilogists have had three (count ‘em, three) years to discover, and with trial six weeks away, the Trilogists want Judge Gustafson to suss out eight (count ‘em, eight) responses to requests for admissions. I love requests for admissions, but Judge Gustafson decides enough is enough already.

In five of the eight, IRS says it doesn’t now contend, but might in future, depending upon how the trial goes.

“It is true that in this case the Commissioner can point out that he has imperfect knowledge of the facts, that he may yet learn additional facts before or at trial, and that the petitioner has the burden of proof. But these propositions are true in nearly every case, and while they are relevant considerations for setting and revising deadlines, they do not constitute reasons that the Commissioner cannot be required to give reliable answers to questions about his contentions.

“The possibility of mistake does not relieve a party from disclosing his contentions. Rather, a party who has in good faith answered questions about his contentions and later learns that his answer was mistaken may ask to be permitted to revise his answer (e.g., by requesting to withdraw an admission under Rule 90(f) or by amending his pleading to conform to the evidence under Rule 41(b)). As the Court decides whether to permit such a revision, the Court will take into account the culpability (if any) of the party who made the mistake and the prejudice (if any) to the party objecting to the revision. We need not now attempt to anticipate whether or how that might hereafter occur in this case.” Order, at p. 3.

As for the back three, “[T]he Commissioner has made unequivocal denials, and if his reasons for those denials are erroneous, Rule 90 is not the means by which the merits of the Commissioner’s position will be litigated. Rather, if his denials later prove to have been ‘unjustifiabl[e]’, then the sanctions of Rules 90(g) and Rule 104 may be available. However, Trilogy is entitled to more information about the Commissioner’s denials, and we will order the Commissioner to give that information.” Order, at p. 3.

Judge Gustafson gives them a month to sort it out, and he will enforce that time limit “with rigor.” Order, at p. 4.



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