For the uninitiated, this was a variant on the advertising slogan of a well-known, now defunct, local clothier: it meant, settle the case or pick a jury, I’m through with this.
In memory’s ear I hear again those words in the disgusted grunt of a judge’s law secretary, fed up with attorneys’ morning-of-trial gameplaying and motion-jousting, in the courtrooms of 60 Centre in my young day so long ago. State Court Judges never bothered with this stuff; they had crowded dockets and an administrative judge who bashed the indolent, so they sent their law secretaries to deal with this.
I remember one such moment thirty (count ’em, thirty) years ago, with a judge’s law secretary, now a distinguished jurist who recently presided over an ultra-high-profile case. He threw us out; we went to trial.
STJ Jennifer E. (“Publius”) Siegel is too young to remember this, or possibly never did much State court work on this Minor Outlying Island off the Coast of North America. See my blogpost “Everything That’s Wrong,” 2/21/24.
Likewise Judge Mark V. (“Vittorio Emanuele”) Holmes’ illustrious career took him to Federal court even in his young days. But after reading Ardan Holdings, LLC, Ardan Investors, LLC, Tax Matters Partner, Docket No.: 17483-21, filed 2/23/24, may I respectfully offer that which is first written at the head hereof for His Honor’s consideration?
The jousting and gameplaying go on unabated, with a bunch motions (hi, Judge Holmes).
IRS wants to toss one of the Ardans’ experts, an appraiser and instructor who has issues with USPAP (Uniform Standards of Professional Appraisal Practice, Congressional touchstone for appraisers) “before” standards, specifically whether to weigh potential HBU (Highest and Best Use) competitors. Said expert, who is also an attorney, wants to beat up on Reg Section 1.170A-14(h)(3)(i). IRS claims his report violates Rule 143 and Fed. R. Evid. 702, being improper legal conclusions. Judge Holmes is down with tossing the legalities, but the expert is qualified, so when he sticks to appraisal, he’s in.
So is Ardans’ other mayvinn (please pardon arcane technical term). It’s a two-handed report, but one of the hands is unavailable to testify. That can DQ the experts’ report, as one of the witnesses is unavailable for cross, and the one available can’t testify s/he wrote every word. But Tax Court has awakened (I daren’t say “awoke” in a nonpolitical blog) to the fact that there are firms of appraisers, experts working together, such as is the case here.
As Judge Halpern said in Carter, “Requiring every word in an expert report to be identified with an individual author who is available to testify would greatly hinder our ability to rely on experts who work in firms. The larger and more complex the matter, and the more participants needed to prepare a report, the less likely its admission into evidence would be.” Order, at p. 3. For the backstory on Carter, see my blogpost “Judge Holmes Got It Right,” 11/6/23.
And IRS’ counsel can sweat the available expert on cross-examination.
IRS wants to toss Ardans’ trusty attorneys’ testimony about good-faith reliance, because said attorneys invoked client-attorney privilege in discovery. But good-faith reliance was always on the menu, the attorneys were listed in IDRs, and Ardans’ invocation of their trusty attorneys’ advice makes the whole thing free-fire on the trial.
IRS filed a motion to amend the answer to raise its latest let’s-avoid-trial menu, namely, chain-of-title, disguised sale, and non-bona fide partnership. See my blogpost “When Fact Met Law,” 1/19/24 for more.
Judge Holmes: “We’re not persuaded that these issues require new evidence. While disguised sale, chain of title, and bona fide partnership may be, as petitioner argues, mixed issues of law and fact, we think that they’re just components of the valuation issue because they are logically related to petitioner’s basis in the property. They have also been the subject of extensive discovery, so we don’t find that petitioner has been surprised or put at a substantial disadvantage.” Order, at p. 5.
Note that this fandango is scheduled for trial in Columbia, SC, on Monday (2/26/24). So all this jive got dumped on Judges Holmes and STJ Siegel fourteen (count ’em, fourteen) days before trial, in a case commenced two-and-a-half years ago.
Had enough? But, as the telehucksters say at 3 a.m., wait, there’s more!
The Ardans moves to toss some witnesses IRS wants to wild-card in via a motion to amend its witness list.
“Three days after petitioner filed its motion [filed 2/12/24], respondent moved for leave to supplement his witness list. We’ll rule on both in a later order.” Order, at p. 5.
When?
Taishoff most respectfully suggests that the words first written at the head hereof be repeated, long and loud.
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