T.C. Memo. 1999-308
UNITED STATES TAX COURT
AGAPITO FAJARDO AND CLARA S. FAJARDO, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 11960-97. Filed September 16, 1999.
Agapito Fajardo, pro se.
Michael H. Salama, for respondent.
MEMORANDUM OPINION
MARVEL, Judge: This case is before the Court on
respondent's motion for summary judgment filed pursuant to Rule
121.1
1
All section references are to the Internal Revenue Code in
effect for the years at issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure. For convenience, all
(continued...)
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Background
In his notice of deficiency dated March 5, 1997, respondent
determined the following deficiencies in income tax and an
addition to tax:
Addition to tax
Year Deficiency sec. 6651(a)(1)
1
1991 $50,118 $14,107
1993 23,700 ---
1
The first page of the notice of deficiency shows an
addition to tax under sec. 6651(a)(1) with respect to 1993, not
1991. However, our review of the notice in its entirety reveals
that the determination regarding the addition to tax was made
with respect to 1991. In his motion for summary judgment,
respondent confirmed that a typographical error was made in the
notice, and that the addition to tax was determined with respect
to 1991.
Petitioners filed a timely petition and designated Los
Angeles, California, as the place of trial. Petitioners resided
in Carson, California, on the date their petition was filed.
References to petitioner are to Agapito Fajardo.
On November 26, 1997, respondent's counsel sent petitioners
a Branerton letter, see Branerton Corp. v. Commissioner, 61 T.C.
691 (1974), advising them of the Court's policies and
requirements regarding informal exchange of documentation and
stipulation of facts and inviting petitioners to attend a
conference for that purpose on December 19, 1997. Petitioners
1
(...continued)
monetary amounts have been rounded to the nearest dollar.
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did not attend the conference or otherwise respond to the letter
from respondent's counsel. Respondent's counsel mailed a second
Branerton letter on January 16, 1998, which repeated the same
information regarding the Court's policies and requirements
regarding discovery. The second letter invited petitioners to
meet with respondent's counsel on January 30, 1998, at 2 p.m.
The second letter encouraged petitioners to contact respondent's
counsel by telephone to reschedule the January 30 meeting if they
could not attend on that date. Petitioners failed to attend the
proposed conference or otherwise to respond to the second letter.
On April 8, 1998, notice was served on the parties that the
case was calendared for trial during the Los Angeles, California,
trial session beginning September 8, 1998. Attached to the
notice was a copy of the Court's Standing Pre-Trial Order,
advising the parties of the Court's policies and requirements
regarding discovery, stipulations of fact, and other pretrial
matters and ordering the parties to comply with those
requirements.
On April 27, 1998, respondent's counsel mailed petitioners a
third Branerton letter, requesting that petitioners contact
counsel for respondent by telephone to schedule a meeting. As
with the previously scheduled conferences, the stated purpose of
the meeting was to discuss documentation and other evidence so
that the parties could begin to develop a stipulation of facts
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and comply with the Court's policies and requirements regarding
pretrial preparation. Petitioners did not respond to this
letter.
On June 5, 1998, respondent served petitioners with requests
for admission pursuant to Rule 90. The requested admissions were
as follows:
1. For the 1991 and 1993 taxable years
petitioners are not entitled to dependency exemptions
in the amounts of $10,750.00 and $9,400.00,
respectively.
2. For the 1991 and 1993 taxable years
petitioners are not entitled [to] * * * deductions for
Schedule C expenses in the amounts of $86,560.00 and
$21,140.00, respectively.
3. In 1991 petitioners received a taxable
distribution from an I.R.A. in the amount of $1,121.00.
Petitioners failed to report this item on their 1991
return.
4. For the 1991 and 1993 taxable years
petitioners are not entitled to deductions for rental
expenses in the amounts of $36,944.00 and $30,440.00,
respectively.
5. For the 1991 and 1993 taxable years
petitioners are not entitled to itemized deductions in
the amounts of $28,594.00 and $35,925.00, respectively.
6. For the 1991 taxable [year], petitioners are
not entitled to an additional deduction for exemptions
in the amount of $2,064.00.
7. The petitioners are liable for the failure to
timely file penalty, pursuant to Internal Revenue Code
("I.R.C.") section 6651(a)(1) for the 1991 taxable
year.
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Petitioners failed to respond as required by Rule 90 and,
consequently, the requested findings were deemed admitted
pursuant to Rule 90(c). The deemed admissions essentially
concede petitioners' case.
On July 27, 1998, respondent filed his motion for summary
judgment, together with a memorandum of law in support thereof.
In his motion, respondent requests that summary judgment be
granted as to the deficiencies and addition to tax set forth in
the notice of deficiency. Respondent alleges that the
concessions deemed admitted under Rule 90(c) establish that there
is no genuine dispute of material fact, and that a decision in
favor of respondent may be entered as a matter of law.
On July 28, 1998, the Court ordered petitioners to file a
response to respondent's motion for summary judgment on or before
August 13, 1998. Petitioners did not file a response.
At the calendar call on September 8, 1998, this case was
called, and petitioner appeared on his own behalf. In response
to the Court's questions regarding his failure to respond to the
Branerton letters and to comply with the Court's Standing Pre-
Trial Order, petitioner explained that he had separated from his
wife, had changed job locations, and was dependent upon his wife
to inform him when he received mail at his Carson, California,
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mailing address.2 Petitioner informed the Court that he intended
to confer with respondent's counsel regarding stipulations and
requested that the case be recalled so that he might do so. The
Court granted his request, directed the parties to meet and
review whatever documents and information petitioner wanted to
present, and ordered that the case be recalled for a report
and/or trial on September 14, 1998.
On September 14, 1998, the case was recalled. Neither of
petitioners appeared. Respondent's counsel reported that
petitioner had met with respondent's counsel on Friday, September
11 and on Sunday, September 13. On September 11, petitioner did
not have any documentation with him, despite several earlier
requests that he produce whatever documents he had to support his
return positions and despite the Court's Standing Pre-Trial
Order, which required the parties to exchange documents at least
15 days before the beginning of the trial session. On September
13, petitioner finally presented some documentation purporting to
demonstrate his entitlement to the deductions and exemptions at
issue in this case. According to respondent's counsel, some of
the documents were clearly personal in nature, and the remaining
documents were not organized to facilitate review. After
approximately 4 hours, respondent's counsel offered petitioners
2
At the calendar call on Sept. 8, 1998, petitioner notified
the Court of his new address.
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"a nuisance settlement" and informed petitioner that he could
call him at any time up to 11 p.m. if petitioners decided to
accept the offer. Petitioners did not respond to the offer.
Petitioner Clara S. Fajardo did not appear at any time
during the trial session, nor did she respond to respondent's
counsel's repeated attempts by letter and telephone to contact
her concerning this case.
Discussion
Rule 121(a) authorizes either party to move for a summary
judgment in the moving party's favor upon all or any part of the
legal issues in controversy. Rule 121(b) requires that the
opposing party file a written response within such period as the
Court may direct and provides that a decision in favor of the
moving party shall be rendered "if the pleadings, answers to
interrogatories, depositions, admissions, and any other
acceptable materials, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that a
decision may be rendered as a matter of law." See also
Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd.
17 F.3d 965 (7th Cir. 1994); Naftel v. Commissioner, 85 T.C. 527,
529 (1985).
The moving party bears the burden of showing that no genuine
issue exists as to any material fact and that he is entitled to
judgment on the substantive issues as a matter of law. See
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Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (interpreting
Fed. R. Civ. P. 56 on which Rule 121 was modeled); Espinoza v.
Commissioner, 78 T.C. 412, 416 (1982). With respect to issues on
which the nonmoving party bears the burden of proof at trial, the
party moving for summary judgment may satisfy his burden "by
'showing'--that is, pointing out to the * * * [trial] court--that
there is an absence of evidence to support the nonmoving party's
case." Celotex Corp. v. Catrett, supra at 325. In deciding
whether to grant summary judgment, we view the facts and the
inferences drawn from them in the light most favorable to the
nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 255 (1986); Dahlstrom v. Commissioner, 85 T.C. 812, 821
(1985); Jacklin v. Commissioner, 79 T.C. 340, 344 (1982).
On this record, we must grant respondent's motion for
summary judgment. Respondent's motion is grounded upon a
complete lack of evidence in the record regarding the factual
issues raised by the petition and on concessions deemed admitted
under Rule 90.3 As the parties with the burden of proof at
trial, see Rule 142(a), petitioners could not defend against
respondent's motion for summary judgment by silence; they had an
3
Six out of the seven requests for admissions were requests
for concessions of legal liability. Whether such requests are
proper under Rule 90 is an issue we need not decide since the
record before us is sufficient to grant respondent's motion for
summary judgment without relying on the concessions.
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obligation to respond imposed both by Rule 121 and by Court
order. A motion for summary judgment under Rule 121 requires the
nonmoving party to demonstrate, by affidavit, deposition, answers
to interrogatories, and admissions or other evidentiary materials
satisfying the requirements of Rule 121, that there is a genuine
issue of material fact for trial. See Celotex Corp. v. Catrett,
supra at 324. Petitioners have failed to do so.
In Celotex Corp. the Supreme Court examined the burden
imposed on a party moving for summary judgment under rule 56 of
the Federal Rules of Civil Procedure with respect to issues on
which the nonmoving party had the burden of proof at trial. The
case involved an asbestos action in which one of the corporate
defendants had filed a motion for summary judgment without
attaching affidavits or other similar material negating the
plaintiff's claims. The District Court granted the motion for
summary judgment because there was no showing that the
plaintiff's deceased husband was exposed to the defendant's
product within the period of limitations. The plaintiff
appealed, and the Court of Appeals for the District of Columbia
Circuit reversed, holding that the motion for summary judgment
was defective because the moving party did not present any
evidence to support its motion.
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The Supreme Court granted certiorari and reversed, holding
that the plain language of rule 56 of the Federal Rules of Civil
Procedure compelled the result:
Under Rule 56(c), summary judgment is proper 'if the
pleadings, depositions, answers to interrogatories,
and admissions on file, together with the affidavits,
if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to
a judgment as a matter of law.' In our view, the plain
language of Rule 56(c) mandates the entry of summary
judgment, after adequate time for discovery and upon
motion, against a party who fails to make a showing
sufficient to establish the existence of an element
essential to that party's case, and on which that party
will bear the burden of proof at trial. In such a
situation, there can be 'no genuine issue as to any
material fact,' since a complete failure of proof
concerning an essential element of the nonmoving party's
case necessarily renders all other facts immaterial. The
moving party is 'entitled to a judgment as a matter
of law' because the nonmoving party has failed to make
a sufficient showing on an essential element of her
case with respect to which she has the burden of proof.
* * *
Celotex Corp. v. Catrett, supra at 322-323.
Rule 121(b) and rule 56(c) of the Federal Rules of Civil
Procedure impose identical standards using virtually identical
language. The Supreme Court's decision in Celotex Corp. v.
Catrett, supra, confirms that we may enter a summary judgment in
favor of the moving party where the nonmoving party has the
burden of proof at trial and fails to respond to a summary
judgment motion as required by Rule 121.
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For the reasons stated and to reflect the foregoing,
An appropriate order will
be issued, and decision will be
entered for respondent.