SBP Petroleum, Inc. v. Indiana Department of State Revenue

MEMORANDUM DECISION
FILED
Pursuant to Indiana Tax Court Rule 17, this Sep 29 2016, 1:41 pm
Memorandum Decision shall not be regarded
CLERK
as precedent or cited before any court except Indiana Supreme Court
Court of Appeals
for the purpose of establishing the defense of and Tax Court

res judicata, collateral estoppel, or the law of
the case.

PETITIONER APPEARING PRO SE: ATTORNEYS FOR RESPONDENT:
SBP PETROLEUM, INC. GREGORY F. ZOELLER
Brownsburg, IN INDIANA ATTORNEY GENERAL
EVAN W. BARTEL
KYLE C. FLETCHER
ANDREW T. GREIN
GRAHAM T. YOUNGS
DEPUTY ATTORNEYS GENERAL
Indianapolis, IN

IN THE
INDIANA TAX COURT

SBP PETROLEUM, INC. )
)
Petitioner, )
)
v. ) Cause No. 49T10-1409-TA-00057
)
INDIANA DEPARTMENT OF STATE )
REVENUE, )
)
Respondent. )

ORDER ON RESPONDENT’S MOTION TO DISMISS OR COMPEL DISCOVERY

September 29, 2016

WENTWORTH, J.

The Indiana Department of State Revenue has requested that the Court dismiss
SBP Petroleum, Inc.’s case for failing to diligently prosecute the matter. In the

alternative, the Department asks the Court to compel SBP Petroleum to respond to its

discovery requests. The Court finds that this case should be dismissed.

FACTS AND PROCEDURAL HISTORY

SBP Petroleum is a gasoline and convenience store merchant. In 2014, the

Department issued best information available proposed assessments (“BIA

assessments”) against SBP Petroleum for the 2010 through 2012 tax years (“years at

issue”). The BIA assessments provided that SBP Petroleum owed additional sales tax,

interest, and penalties in the total amount of $236,717.88, additional corporate income

tax, interest, and penalties in the total amount of $10,267.68, and additional withholding

tax, interest, and penalties in the total amount of $21,936.98 for the years at issue. SBP

Petroleum protested the BIA assessments. On July 31, 2014, the Department denied

all of SBP Petroleum’s administrative protests.

On September 27, 2014, SBP Petroleum (through its president) filed three

verified petitions for review asserting that the Department used the wrong methodology

to determine the purported tax liabilities.1 On November 20, 2014, after the Department

filed its answer, the Court conducted a telephonic case management conference and

ordered the parties to file a joint case management plan within 90 days unless the case

had settled. On February 26, 2015, the Court approved the parties’ timely filed joint

case management plan. Just over seven months later, on October 8, 2015, the

Department filed an agreed motion to vacate the joint case management plan in which it

asked to file a new case management plan (“CMP”) within 30 days. On November 16,

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SBP Petroleum’s appeals were subsequently consolidated under the above-captioned cause
number.
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2015, the Court approved the parties’ new CMP.

On January 15, 2016, the Department served SBP Petroleum with discovery

requests that sought, among other things, the production of “all notes, documents,

payroll records, billing records, written correspondences, and copies of e-mails” that

supported SBP Petroleum’s position within 30 days. (See Resp’t Mot. Dismiss or

Compel Disc. (“Resp’t Mot. Dismiss”), Ex. A at 8.) On March 1, 2016, after the

discovery deadline lapsed, SBP Petroleum sent a document to the Department merely

stating that: “Petitioner is gathering the documents and will provide as soon as

possible.” (See Resp’t Mot. Dismiss, Ex. B at 2-4.) The Department subsequently

agreed to give SBP Petroleum additional time to produce the requested documentation.

As a result, SBP Petroleum filed an agreed motion to amend the CMP, which the Court

granted.

On June 2, 2016, the Department sent notices of deposition and subpoenas to

SBP Petroleum and its president requiring SBP’s designated 30(B)(6) witness and its

president to appear for depositions with specific documentation on June 16, 2016.

When that day arrived, counsel for both SBP Petroleum and the Department attended

the depositions, but neither SBP Petroleum’s 30(B)(6) witness nor its president

appeared.

On June 22, 2016, the Department filed a “Motion to Dismiss or Compel

Discovery” (“Motion”). In its Motion, the Department requested that SBP Petroleum’s

case be dismissed pursuant to Indiana Trial Rule 41(E) because SBP Petroleum had

impeded discovery for months and failed to take any action on its claims for more than

80 days. (See Resp’t Mot. Dismiss ¶¶ 11-14.) Alternatively, the Department requested

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that the Court compel SBP Petroleum to respond to its discovery requests by producing

the previously requested documentation and ensuring that its witnesses attended their

depositions. (See Resp’t Mot. Dismiss ¶ 15.)

One day later, on June 23, SBP Petroleum’s attorney filed a motion to withdraw

because SBP Petroleum had stopped communicating with him as of March 15, 2016,

and had refused to participate in the discovery process. On June 30, 2015, the Court

denied that motion because it did not comply with Indiana Trial Rule 3.1(H). That same

day, SBP Petroleum’s attorney filed additional information together with a second

motion to withdraw, which the Court granted. The Court also advised SBP Petroleum

that it had until August 8, 2016, to obtain new counsel.

On September 7, 2016, the Court ordered that the Department’s Motion be set

for hearing as required by Indiana Trial Rule 41(E). While the Department appeared at

the September 19, 2016, Trial Rule 41(E) hearing, neither SBP Petroleum nor its

president appeared. Additional facts will be supplied as necessary.

LAW AND ANALYSIS

The authority of the Court to dismiss an action for failure to prosecute is

grounded in Indiana Trial Rule 41(E), which provides:

Whenever there has been a failure to comply with [the Trial R]ules
or when no action has been taken in a civil case for a period of sixty
[60] days, the [C]ourt, on motion of a party or on its own motion
shall order a hearing for the purpose of dismissing [the] case. The
[C]ourt shall enter an order of dismissal at [petitioner’s] costs if the
[petitioner] shall not show sufficient cause at or before such
hearing. Dismissal may be withheld or reinstatement of dismissal
may be made subject to the condition that the [petitioner] comply
with [the Trial R]ules and diligently prosecute the action and upon
such terms that the [C]ourt in its discretion determines to be
necessary to assure such diligent prosecution.

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Ind. Trial Rule 41(E). Trial Rule 41(E)’s purpose is to ensure that petitioners will

diligently pursue their claims by providing respondents and courts with an enforcement

mechanism that forces a recalcitrant petitioner to push his case to resolution. See Lee

v. Pugh, 811 N.E.2d 881, 885 (Ind. Ct. App. 2004). Indeed, the burden of moving a

case forward rests with the petitioner and this Court “has no duty to urge or require

counsel to go to trial, even where it would be within the [C]ourt’s power to do so.” See

id. (citation omitted). Determining whether a Trial Rule 41(E) dismissal is warranted

requires the Court to consider the rights of an adverse party, who “‘should not be left

with a lawsuit hanging over his head indefinitely[,]’” in light of the Court’s long-standing

policy of deciding cases on their merits. See id. (citation omitted); see also e.g., Jones

v. Jefferson Cnty. Assessor, 6 N.E.3d 1048, 1049 (Ind. Tax Ct. 2014). The Court also

must consider principles of judicial economy as it cannot be expected to carry cases on

its docket indefinitely. See Lee, 811 N.E.2d at 885.

When the Department moved to dismiss on June 22, 2016, this case had been

pending on the Court’s docket for 634 days. (See Resp’t Mot. Dismiss ¶ 11.) Moreover,

it had been 84 days since SBP Petroleum had taken any action to prosecute its claims.

(Resp’t Mot. Dismiss ¶ 12.) SBP Petroleum (not its former counsel) had already

violated Trial Rules 30 and 34 by failing to respond to the Department’s discovery

requests, particularly, its notices of deposition and request for production of documents.

(See Resp’t Mot. Dismiss ¶¶ 2-9, 13, Exs. A-F.) The subsequent withdrawal of SBP

Petroleum’s counsel did not compel it to take any action to retain counsel despite being

given ample time to do so. See Order, July 8, 2016; Chronological Case Summary for

Cause No. 49T10-1409-TA-00057. Furthermore, not even the Court’s scheduling of

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the Trial Rule 41(E) hearing to determine whether the case should be dismissed with

prejudice spurred SBP Petroleum into action, as neither SBP Petroleum nor its

president appeared at the hearing to explain any of the litigation delays. See Order,

Sept. 7, 2016. (See also Hr’g Tr.) Consequently, the Court GRANTS the Department’s

Motion and DISMISSES this case with prejudice.

SO ORDERED this 29th day of September 2016.

Martha Blood Wentworth
Judge, Indiana Tax Court

Distribution: SBP Petroleum, Inc. c/o Kishankumar Patel, president; Evan W. Bartel,
Kyle C. Fletcher, Andrew T. Grein, Graham T. Youngs.

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