Susan P. Kechijian, T. C. Memo. 2022-127, filed 12/28/22, watched from the gallery as both the trial of her late husband’s and her deficiency case was tried and then affirmed on appeal to 4 Cir. But she was represented by the same trusty attorney who represented her late husband in life and thereafter his estate (of which she was co-ex’r). And that’s enough for Judge David Gustafson to find claim preclusion (res judicata) barring Section 6015(g)(2) innocent spousery.

For the backstory, see my blogpost “Unvested Stock, Vested,” 4/24/17.

Susan never raised innocent spousery during the previous litigation. Representation by counsel does show participation, but that’s not enough. There are cases when the non-requesting spouse ran the show and shut out the requesting spouse, despite requesting spouse having the same attorney.

“…here Mr. Kechijian had died a year and a half before the trial in this case. He was not able thereafter to restrict Ms. Kechijian’s pursuit of her interests and, in particular, her pursuit of a claim under section 6015. She was no longer under the shadow of Mr. Kechijian but rather was in a position to control the litigation however she wished—both as a petitioner in her own right and as the co-executor of Mr. Kechijian’s estate.

“As to her co-executor, Mr. H, we assume it is true, as Ms. Kechijian alleges, that only he and not she gave instructions to counsel for the handling of the deficiency case after Mr. Kechijian’s death. However, that was by Ms. Kechijian’s choice.” T. C. Memo. 2022-127, at p. 14. (Name omitted).

Judge Gustafson says this may have been a wise tactical move, but Ms. Kechijian never claimed conflict of interest on her attorney’s part, nor that she was left out of the loop. Besides, says Judge Gustafson, once the late Mr Kechijian was the late Mr Kechijian, her attorney’s loyalty was to her; but Taishoff says, what about the estate? Were there heirs, legatees, or beneficaries whose interests might have been adverse to Ms. Kechijian’s?

Howbeit, Ms. Kechijian could have taken the helm, and chose not to.

No innocent spousery for her.

Takeaway- Attorneys, watch out for conflicts. Interspousals can be dangerous to your professional health.