Stuller et al v. USA
Filing
24
OPINION by U.S. Magistrate Judge Byron Cudmore: Plaintiffs' Motion to Determine the Sufficiency of an Objection to Plaintiffs' Request for Admission (filed as motion to compel) 21 DENIED. See written order. (LB, ilcd)
E-FILED
Tuesday, 28 August, 2012 03:10:36 PM
Clerk, U.S. District Court, ILCD
IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
Estate of Harold Stuller,
deceased, et al.,
Plaintiff,
v.
UNITED STATES OF AMERICA
and its Agency, Secretary,
Treasury Department,
Internal Revenue Service,
Defendant.
)
)
)
)
)
)
)
)
)
)
)
)
)
No. 11-cv-3080
OPINION
BYRON G. CUDMORE, U.S. MAGISTRATE JUDGE:
This matter comes before the Court on Plaintiffs, Estate of Harold
Stuller, deceased (Estate); Wilma Stuller, individually and as Executor or
the Estate; and L.S.A., Inc.’s (collectively Stuller), Motion to Determine the
Sufficiency of an Objection to Plaintiffs’ Request for Admission (d/e 21)
(Motion). For the reasons set forth below, the Motion is respectfully
DENIED.
BACKGROUND
Stuller filed this action to secure a refund of income taxes, interest
and penalties paid for the taxable years 2003, 2004, and 2005. Stuller
Page 1 of 11
challenges the Internal Revenue Service’s (IRS) denial of Stuller’s income
tax deductions for ordinary and necessary business expenses for Stuller’s
horse farm breeding business operation located in Eagleville, Tennessee
(Farm). Complaint for Refund of Income Taxes, Penalty and Interest
(d/e 1) (Complaint) ¶¶ 15-17. Stuller seeks $104,057.49 for taxable year
2003 and the sum of $132,947.53 for the taxable years 2004, and 2005,
together with interest. Complaint ¶ 22.
On December 15, 2011, the Court issued the Scheduling Order
(d/e 17) in this case. The Scheduling Order set March 30, 2012, as the
deadline for Stuller to identify expert witnesses and provide Rule 26 expert
reports, and May 31, 2012, as the deadline for the Defendant United States
to identify experts and provide expert reports. Scheduling Order ¶ 3.
The Scheduling Order set deadlines for completion of discovery as
follows:
4.
The parties have until June 29, 2012, to complete
fact discovery. Any written discovery served subsequent to the
date of this Order to be served by a date that allows the served
party the full 30 days provided by the Federal rules of Civil
Procedure in which to comply. The parties have until July 31,
2012 to complete expert discovery.
Scheduling Order ¶ 4. The Scheduling Order further stated, “All motions to
compel must contain the certification required by Rule 37 that the parties
met and conferred and attempted to resolve the discovery dispute. If the
Page 2 of 11
certification is not included, the motion to compel will be denied.”
Scheduling Order ¶ 5.
On December 28, 2011, Stuller made their initial disclosures under
Federal Rule of Civil Procedure 26(a)(1) to the United States. Stuller
disclosed F. Marc Headden as a witness on the subject of “Farm values in
and around Franklin, Tennessee.” Defendant United States’ Response to
Motion to Compel (d/e 22) (United States Response), Exhibit B, Plaintiffs’
Initial disclosures Pursuant to FRCP 26(a)(1), at 2. Headden authored an
appraisal report dated May 28, 2008 (Appraisal), which appraised the fair
market value of the Farm. Headden prepared the Appraisal in connection
with a refinancing of the Farm in 2008. Motion ¶¶ 1-3, 5. Stuller previously
provided the IRS with a copy of the Appraisal during the examination of
Stuller’s returns. Motion ¶ 4.
On March 29, 2012, Stuller’s counsel sent a letter to the United
States’ counsel disclosing Stuller’s expert witness. Plaintiffs’ Motion to
Clarify Record and Respond to Defendant United States’ Motion to Extend
Time for Discovery and Modify the Scheduling Order (d/e 20), Exhibit A,
Letter dated March 29, 2012 (March 29 Letter). The March 29 Letter
stated, in part, “Pursuant to the Scheduling Order and Fed. R. Civ. P. 26(a)
(2)(B), the Plaintiffs disclose Mack M. Motes as an expert witness . . . .”
Stuller’s counsel enclosed with the March 29 Letter an affidavit from Motes
Page 3 of 11
in which he opined about the business operations of the Farm. The March
29 Letter did not disclose Headden as an expert witness.
On March 30, 2012, Wilma Stuller responded to the United States’
First Set of Interrogatories. The United States’ Interrogatory number 4
asked the following:
4.
Identify the persons who have any knowledge or
information relating to the purchase and maintenance of
the property located at 1489 Cheatham Springs Road,
Eagleville, TN 37060, and any other property used for
your horse farm, and for each such person provide their
name, address, telephone number, email address, and a
description of the information or knowledge possessed by
each such person.
Motion, Exhibit B, Plaintiffs’ Answers to Defendant United States’ First Set
of Interrogatories to Wilma Stuller (Response to Interrogatories), at 2-3.
Wilma Stuller listed Headden along with other individuals in her response.
Wilma Stuller stated, in part:
(d)
Mark Headden, Appraiser, . . . – has knowledge of
purchase of Tennessee farm and land values in
Tennessee.
Response to Interrogatories, at 3.
On April 6, 2012, Stuller responded to the United States’ Request to
Produce. Motion, Exhibit C, Plaintiffs Stuller’ Response to Defendant
United States’ First Request for Production (Response to Request to
Produce). The United States’ Request number 3 asked for the following:
Page 4 of 11
3.
All documents relating to Wilma Stuller, Harold Stuller
and/or L.S.A., Inc.’s interest in the property located at
1489 Cheatham Springs Road, Eagleville, TN 37060,
including, but not limited to, deeds to the property, local
real estate tax bills, mortgages, appraisals, sale
contracts, HUD-1 forms, and leases for the property since
Wilma Stuller, Harold Stuller and/or L.S.A., Inc., obtained
an interest in the property.
Response to Interrogatories, at 2. Stuller responded:
RESPONSE: Enclosed is a copy of the appraisal.
The Plaintiffs require some additional time to obtain
and forward local real estate bills, mortgages, etc.
for the identified property.
Id.
On May 21, 2012, this Court allowed, in part, the parties’ motions to
extend discovery. The Court extended fact discovery to July 31, 2012, the
United States’ deadline to disclose expert witnesses to September 3, 2012,
and the close of discovery to September 28, 2012. Text Order entered
May 21, 2012.
On July 12, 2012, counsel for the parties discussed stipulating to the
Appraisal, but the counsel for the United States, “did not formally respond
to the request.” Motion ¶ 8. On July 17, 2012, Stuller’s counsel sent the
United States’ counsel correspondence requesting a stipulation to the
Appraisal. Counsel for the United States did not respond. Motion ¶ 9.
On July 24, 2012, Stuller served Plaintiffs’ Request for Admission
(Request to Admit) on the United States. United States Response,
Page 5 of 11
Exhibit A, Request to Admit. The Request to Admit recited part of the
discovery history regarding the Appraisal and concluded with the following:
WHEREFORE, the Plaintiffs respectfully request as
follows:
(a)
That the Defendants admit the genuineness of the
identified appraisal document and the opinion of F.
Marc Headden as to the fair market value of the
Plaintiffs’ Tennessee horse farm as of May 28,
2008;
(b)
To the extent that the Defendants object that this
request for Admission in untimely, order the
Defendants to respond on or before July 31, 2012;
(c)
To the extent that the Defendants will not stipulate
to this Appraisal Report, allow the witness to testify
as an expert witness and introduce the appraisal at
trial; and,
(d)
Grant whatever other relief the court deems just and
proper.
Request to Admit, at 2-3. The United States’ counsel received the Request
to Admit on August 3, 2012. United States Response ¶ 3.
On August 6, 2012, counsel for the United States sent a letter to
counsel for Stuller. Motion, Exhibit D, Letter dated August 6, 2012 (August
6 Letter). The August 6 Letter objected to the Request to Admit on the
three grounds: (1) the Request to Admit was not timely because the United
States only had seven days to respond before discovery closed on July 31,
2012; (2) the Appraisal was not relevant since it was from 2008; and
Page 6 of 11
(3) Stuller had not disclosed Headden as an expert witness under Federal
Rule of Civil Procedure 26(a)(2). The August 6 Letter stated that, “the
United States will not respond to your request.” August 6 Letter, at 1.
Stuller responded by filing this Motion on August 9, 2012. The
Motion asked for the following relief:
WHEREFORE, the Plaintiffs respectfully request as follows:
(a)
That the Court schedule a telephone conference
and find the Defendants' Objection unjustified and
order the Defendants to Answer the Request for
Admission;
(b)
That the Defendants stipulate to the genuineness of
the identified appraisal document and the opinion of
F. Marc Headden as to the fair market value of the
Plaintiffs' Tennessee horse farm as of May 28, 2008
but reserve a relevancy objection, if at all;
(c)
To the extent that the Defendants object that this
Request for Admission is untimely, find that the
Defendants should have responded on or before
July 31, 2012 (a shorter response time as provided
in Fed. R. Civ. P. 36(a)(3)) because the Defendants
had a copy of this appraisal in its file and a
duplicate copy was provided to the Defendants on
April 6, 2012. Moreover, the Defendants knew of
this request to stipulate as early as July 12, 2012,
but stonewalled the request until recently
responding on August 6, 2012;
(d)
To the extent that the Defendants will not stipulate
to the factual nature and genuineness of this
Appraisal Report, amend the Scheduling Order to
allow the witness to testify as an expert witness and
introduce the appraisal at trial; and,
Page 7 of 11
(e)
Grant whatever other relief the Court deems just
and proper.
Motion, at 2-3.
ANALYSIS
This Court will not allow the Motion. No hearing is necessary
because the parties have fully briefed the issues. The Motion seeks to
overrule the United States’ objections to the Request to Admit and to
compel a response. Such motions are governed by Federal Rule of Civil
Procedure 37. Stuller has failed to certify that they have in good faith
conferred or attempted to confer with the United States to obtain a
response to the Request to Admit without court action. Such a certification
is required by the Scheduling Order and Rule 37. Scheduling Order ¶ 4;
Fed. R. Civ. P. 37(a)(1). Stuller’s counsel received the August 6 Letter
objecting to the Request to Admit and filed this Motion three days later.
Nothing indicates that Stuller’s counsel made any effort to confer with
opposing counsel to resolve the objections. The Motion is therefore
improper.
In addition, the United States’ timeliness objection is well-taken. The
Court set the July 31, 2012, as the deadline for fact discovery. The Court
directed that all written discovery be served to allow thirty days to respond.
Scheduling Order ¶ 4. Stuller served the Request to Admit on July 24,
Page 8 of 11
2012, one week before the deadline for the end of fact discovery. Stuller
failed to comply with the Scheduling Order. The Request to Admit was not
timely served as part of fact discovery.
The Request to Admit was not properly part of expert discovery
because Stuller did not disclose Headden as an expert witness. Stuller
disclosed Headden as a fact witness under Rule 26(a)(1), but Stuller did
not disclose him as an expert witness under Rule 26(a)(2). Rule 26
requires disclosure even though Headden was not specially retained as an
expert in this case. Fed. R. Civ. 26(a)(2)(C). Stuller needed to disclose
Headden as an expert witness in order to serve the Request to Admit as
part of expert discovery.
Stuller states repeatedly that the United States was aware of the
Appraisal and so was not unfairly surprised by Stuller’s plan to use the
Appraisal as evidence. The Court disagrees. Headden’s opinion of fair
market value in the Appraisal is an expert opinion. If Stuller intended to
use the Appraisal to prove value, then they should have disclosed
Headden as an expert witness in accordance with Rule 26(a)(2). The
United States could have then deposed Headden, and decided whether to
secure another expert opinion on value. Because Stuller did not provide
the required Rule 26(a)(2)(C) disclosure, the United States could have
properly concluded that Headden’s expert opinions would not be presented
Page 9 of 11
in court as expert opinion evidence of value. The Court will not compel the
United States to respond to the Request to Admit as part of expert
discovery when Headden was not properly disclosed.
Stuller also asks the Court to order the United States to stipulate to
the genuineness of the Appraisal and to Headden’s opinions. Stuller cites
no authority for the proposition that the Court can order a party to stipulate,
and the Court is not aware of any such authority. Stuller also fails to
explain why the United States must agree to Headden’s opinions. Stuller
states that the IRS had a copy of the Appraisal before the case began.
The United States was not required to agree with the Appraisal just
because the IRS had a copy. The United States could have disagreed with
Headden’s opinions and could have retained its own expert to respond to
Headden’s opinions if Headden had been properly disclosed. Under these
circumstances, the Court will not compel a stipulation, even assuming it
has authority to do so.
Lastly, Stuller asks the Court to amend the Scheduling Order to
authorize Stuller to use Headden as an expert witness and to allow Stuller
to introduce the Appraisal at trial. Scheduling orders are only to be
amended for good cause. Fed. R. Civ. P. 16(b)(4). Stuller presents no
good cause to amend the Scheduling Order. Stuller had the Appraisal
before the case began. Stuller had ample time to decide whether to
Page 10 of 11
disclose Headden as an expert witness before the March 30, 2012,
deadline.
Stuller indicates that Headden has not agreed to testify. Reply to
Response by Defendant United States of America and its Agency,
Secretary, Treasury Department, Internal Revenue Service to Plaintiffs’
Request for Admission (d/e 23) ¶ 3. Stuller, however, did not need
Headden’s cooperation. Stuller could have deposed Headden under
subpoena in Tennessee and presented the deposition testimony at trial.
Fed. R. Civ. P. 32(a)(4)(B) & (D). Stuller presents no good cause to
explain why they did not disclose Headden as an expert witness in a timely
fashion. In the absence of such good cause, the Court cannot amend the
Scheduling Order to allow late disclosure.
The Court also will not amend the Scheduling Order to decide the
admissibility of the Appraisal. Matters of admissibility will be decided at the
appropriate time, either at trial or through pre-trial motions in limine. The
undersigned will not decide admissibility at this juncture.
WHEREFORE Plaintiffs’ Motion to Determine the Sufficiency of an
Objection to Plaintiffs’ Request for Admission (d/e 21) is respectfully DENIED.
ENTER: August 28, 2012
s/ Byron G. Cudmore
BYRON G. CUDMORE
UNITED STATES MAGISTRATE JUDGE
Page 11 of 11
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?