ATTORNEYS FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
RANDAL J. KALTENMARK CURTIS T. HILL, JR.
ZIAADDIN MOLLABASHY ATTORNEY GENERAL OF INDIANA
BARNES & THORNBURG LLP EVAN W. BARTEL
Indianapolis, IN JESSICA REAGAN GASTINEAU
WINSTON LIN
DEPUTY ATTORNEYS GENERAL
Indianapolis, IN
IN THE
FILED
INDIANA TAX COURT Aug 01 2017, 4:18 pm
CLERK
Indiana Supreme Court
Court of Appeals
RICHARDSON’S RV INC., ) and Tax Court
)
Petitioner, )
)
v. ) Cause No. 49T10-1504-TA-00016
)
INDIANA DEPARTMENT OF STATE )
REVENUE, )
)
Respondent. )
ORDER ON PETITIONER’S
MOTION TO STRIKE
FOR PUBLICATION
August 1, 2017
WENTWORTH, J.
Richardson’s RV Inc. moved to strike certain evidence designated by the
Department of State Revenue in response to Richardson’s motion for summary
judgment, which the Court granted in an order handed down concurrently with this
order. See generally Richardson’s RV Inc. v. Ind. Dep’t of State Revenue, No. 49T10-
1504-TA-00016, Slip. op., (Ind. Tax Ct. August 1, 2017). The Court grants
Richardson’s’ Motion to Strike in part and denies it in part.
FACTS
On September 18, 2015, Richardson’s filed a motion for summary judgment in its
appeal of the Department’s final determination assessing additional sales tax liabilities
for the 2010, 2011, and 2012 tax years. In its response, the Department designated the
following evidence that is the subject of this Motion: 1) Kyle Richardson’s deposition and
2) written statements by three of Richardson’s’ customers and specific references to
them in David Strom’s affidavit. (See Resp’t Br. Opp’n Pet’r Mot. Summ. J. (“Resp’t
Br.”) at 4-6 (citing Resp’t Des’g Evid., Ex. R-7, Ex. R-4, Ex. R-9, ¶ 11).) Richardson’s
moved to strike this evidence claiming it was lacking foundation, irrelevant, and
inadmissible hearsay. (See Pet’r Reply Br. Supp. Mot. Summ. J. (“Pet’r Reply Br.”) at 5-
7.) The Court heard the parties’ argument on Richardson’s’ Motion during the summary
judgment hearing on April 7, 2016.
ANALYSIS AND ORDER
Standard of Review
This Court acts as a trial court when reviewing the Department’s assessments.
See IND. CODE § 6-8.1-5-1(i) (2017). As a result, the Court is afforded broad discretion
in resolving motions to strike. See, e.g., Vernon v. Kroger Co., 712 N.E.2d 976, 982
(Ind. 1999). “Moreover, when ruling on a motion for summary judgment, this Court will
only consider properly designated evidence that would be admissible at trial.” Miller
Pipeline Corp. v. Indiana Dep’t of State Revenue, 995 N.E.2d 733, 736 (Ind. Tax Ct.
2013) (citations omitted).
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Discussion
1. Kyle Richardson’s Deposition
The Department’s designated evidence included the deposition of Kyle
Richardson, who had attested to Richardson’s’ business practices. (See Resp’t Br. at
4-6 (citing Resp’t Des’g Evid., Ex. R-7).) Richardson’s moved to strike Kyle’s deposition
arguing that the Department failed to lay a foundation establishing that Kyle had
personal knowledge of Richardson’s’ business practices during the years at issue. (See
Pet’r Reply Br. at 5.) Moreover, Richardson’s argues that Kyle’s deposition testimony is
irrelevant because he became a Richardson’s employee beginning in 2013, after the
years at issue. (See Pet’r Reply Br. at 5; Hr’g Tr. at 12-13.)
Kyle testified from his personal knowledge of Richardson’s’ business practices in
2013. His testimony, however, was related back to the years at issue through
Richardson’s’ Vice President and Chief Financial Officer’s testimony, establishing that
Richardson’s had not changed its business practices from the years at issue through
the period of Kyle’s employment. (See Resp’t Des’g Evid., Ex. R-8 at 155.) See also
Ind. Evidence Rule 104(b) (stating that “[w]hen the relevance of evidence depends on
whether a fact exists, proof must be introduced sufficient to support a finding that the
fact does exist”). Accordingly, Kyle’s deposition testimony is relevant because it tended
to make the facts of Richardson’s business practices more or less probable than they
would have been otherwise and because the facts about these business practices are
of consequence in determining the outcome of the case. See Ind. Evidence Rule 401
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(explaining that “[e]vidence is relevant if . . . it has any tendency to make a fact more or
less probable than it would be without the evidence . . . [and] the fact is of consequence
in determining the action”). Accordingly, Kyle Richardson’s deposition is relevant and
admissible.
2. Written Statements
The Department also designated as evidence written statements from three of
Richardson’s’ customers that were not attested to under the penalties for perjury. (See
Resp’t Br. at 4-6 (citing Resp’t Des’g Evid., Ex. R-4).) During its audit, the Department
mailed letters to 28 of Richardson’s’ out-of-state customers requesting that they either
check a box if they took delivery of their RV in Indiana or write in the delivery address if
they took delivery outside Indiana. (See e.g., Resp’t Des’g Evid., Ex. R-9 ¶ 10; Ex. R-
3.) In addition, the Department designated as evidence Tax Audit Supervisor David
Strom’s affidavit, which stated that the Department received thirteen responses to its
letters and that three of the responses indicated that delivery took place in Indiana.
(See Resp’t Br. at 4-6 (citing Resp’t Des’g Evid., Ex. R-9 ¶ 11; Hr’g Tr. at 70).)
Richardson’s moved to strike the statements, claiming they are inadmissible
unsworn hearsay that does not fall within an exception to the rule. (See Pet’r Reply Br.
at 6-7; Hr’g Tr. at 13-16.) In addition, Richardson’s moved to strike references to the
statements in Strom’s affidavit, claiming they were inadmissible because they were
made without personal knowledge. (See Pet’r Reply Br. at 6-7; Hr’g Tr. at 13-16.)
On the other hand, the Department contends that neither the written statements
nor the references to them in Strom’s affidavit are inadmissible hearsay because they
were not offered for the truth of the statements made. (See Hr’g Tr. at 42-43, 70.)
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Rather, the Department asserts that the statements were offered as prior inconsistent
statements to rebut and impeach Richardson’s’ designated evidence, demonstrating
that a genuine issue of material fact exists regarding the location of delivery. (See Hr’g
Tr. at 42-43, 70.)
“Hearsay” is a statement “not made by the declarant while testifying at the trial or
hearing” that is “offered in evidence to prove the truth of the matter asserted.” Ind.
Evidence Rule 801(c). The written statements at issue here are hearsay because they
are not made by declarants who were sworn and subject to cross-examination and
because the declarant-customers are not parties in this case. See Evid. R. 801(d)(1),
(2) (explaining that prior statements made by a declarant-witness or an opposing party’s
statements are not hearsay). Also, this evidence is inadmissible hearsay because the
Department did offer it for the truth of the statements asserted to cast doubt on the
place where the RVs were delivered and demonstrate that there is a genuine issue of
material fact. See Evid. R. 801(c)(2). Accordingly, the three written statements and the
parts of Strom’s affidavit referring to them are inadmissible hearsay.
CONCLUSION
For the above-stated reasons, the Court DENIES Richardson’s’ Motion regarding
Kyle Richardson’s deposition, and GRANTS Richardson’s’ Motion regarding the three
written statements and the parts of Strom’s affidavit referring to them.
SO ORDERED this 1st day of August, 2017.
Martha Blood Wentworth, Judge
Indiana Tax Court
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Distribution: Randal J. Kaltenmark, Ziaaddin Mollabashy, Evan W. Bartel, Jessica
Reagan Gastineau, Winston Lin
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