TARA C. TRENT, EXECUTRIX OF ESTATE OF PATRICK R. COLLINS, DECEASED,
PETITIONER V. UNITED STATES OF AMERICA

   No. 89-1820

   In The Supreme Court Of The United States

   October Term, 1990

   On Petition For A Writ Of Certiorari To The United States Court Of
Appeals For The Sixth Circuit

   Brief For The United States In Opposition

            TABLE OF CONTENTS
   Questions presented
   Opinions below
   Jurisdiction
   Statement
   Argument
   Conclusion

                            OPINIONS BELOW

   The opinion of the court of appeals (Pet. App. 39a-55a) is reported
at 893 F.2d 846.  The opinion of the district court (Pet. App.
16a-28a) is unreported.

                             JURISDICTION

   The judgment of the court of appeals was entered on January 11,
1990.  A petition for rehearing was denied on February 21, 1990 (Pet.
App. 56a).  The petition for a writ of certiorari was filed on May 21,
1990.  The jurisdiction of this Court is invoked under 28 U.S.C.
1254(1).

                          QUESTIONS PRESENTED

   1. Whether the court below correctly held that an Ohio trial
court's attempted post-mortem modification of its prior marital
dissolution decree was void under Ohio law.

   2. Whether certain property was owned entirely by the decedent,
rather than owned in part by the decedent and in part by his former
wife, and was therefore includable in its entirety in the decedent's
gross estate.

                               STATEMENT

   1. Patrick R. Collins and Norma Jean Collins were married in 1952.
During their marriage, Patrick and Norma Jean had two children:  Tara
C. Trent (who in her capacity as executrix of her father's estate is
the petitioner here) and Tamara L. Collins.  On July 27, 1976, Patrick
and Norma Jean executed a separation agreement (prepared by their
attorney, J. R. Nieberding) providing for the disposition of "their
mutual property rights to which either might be entitled in the event
of dissolution" of their marriage (Pet. App. 3a, 40a).  The agreement
provided, inter alia, that Norma Jean would receive the couple's
residence in Florida, that Patrick would receive the residence in
Ohio, and that all other real estate owned "either individually or
jointly" would be conveyed to a trust "for the use and benefit of
Patrick" (id. at 5a).  The separation agreement further provided that
Norma Jean would receive alimony in the form of a $15,000 lump sum
payment, $13,000 per year in equal, monthly payments, and a $5,000
payment every third year (id. at 6a-7a).  The periodic alimony
payments were to be adjusted for changes in the cost of living and
reduced if Norma Jean remarried (id. at 6a).

   Patrick and Norma Jean executed a trust agreement on September 3,
1976 (Pet. App. 9a-11a).  The trust agreement recited that Patrick and
Norma Jean had conveyed ten pieces of real property to J. R.
Nieberding as trustee "for the use and benefit of Patrick and to
secure the payment of Alimony" (id. at 9a-10a).  The trust agreement
provided that Patrick would be responsible for all expenses relating
to the real estate held in trust, that the trustee could not sell the
real estate without the consent of Norma Jean and Patrick, and that
the trust would terminate upon the death of Patrick or Norma Jean (id.
at 10a).

   With Mr. Nieberding acting as counsel for both parties, Norma Jean
and Patrick obtained a dissolution of marriage decree on September 8,
1976, in the Court of Common Pleas, in Hamilton County, Ohio.  The
separation agreement was adopted by the decree, and both parties were
ordered to comply with the agreement.  Pet. App. 1a-2a.

   Shortly thereafter, on November 18, 1976, Patrick executed a will
prepared by Mr. Nieberding.  The will declared that Patrick is "the
owner of certain real estate held by my attorney, J. R. Nieberding, as
Trustee, pursuant to the Separation Agreement executed on July 27,
1976, by and between my former wife, Norma Jean Collins, and myself"
(Pet. App. 42a).  The will also provided that if Norma Jean was living
at the time of Patrick's death and did not consent to a settlement of
her alimony claim, "all of said real estate held by J. R. Nieberding,
as Trustee * * * shall be transferred to the Trustee hereinafter named
(Tara C. Trent)" (id. at 41a-42a).  Finally, the will provided that,
upon the death of Norma Jean, this second trust would terminate and
the trust property would go to the two daughters (id. at 42a).

   2. Patrick Collins died on August 2, 1981.  On April 9, 1982, Norma
Jean filed a motion in the Court of Common Pleas to modify the
dissolution decree's alimony provision (Pet. App. 12a-13a).  /1/
Petitioner and her sister, the residual heirs of the estate, were
represented by counsel (Mr. Nieberding), but did not oppose the motion
(id. at 14a, 42a).  The United States was not notified of the
proceeding and did not become a party.  The Court of Common Pleas, on
April 27, 1982, entered a "modifying decree" in which the court found
that, at the time the trust was created in 1976, Norma Jean and
Patrick were joint owners of all the property conveyed to the trustee,
which had a value of almost $3 million (id. at 14a-15a).  The court
awarded Norma Jean a lump-sum alimony payment of $1,412,228, an amount
equal to one-half of the value of the real estate placed in trust
(without regard to any mortgages), minus the amount of alimony that
had already been paid to her (ibid.).

   On April 30, 1982, three days after the date of the modifying
decree, Mr. Nieberding filed an estate tax return on behalf of
Patrick's estate.  On this return, the estate claimed a $1,412,228
deduction for alimony owed to Norma Jean -- the amount set by the
Court of Common Pleas in its "modifying decree." Pet. App. 20a.

   3. The Commissioner determined that the estate was not entitled to
an alimony deduction in the amount claimed.  He allowed instead a
$273,190 deduction, which reflected the actuarial value of the
periodic alimony payments still to be made to Norma Jean following
Patrick's death, according to the 1976 separation agreement.  /2/ The
estate paid the resulting deficiency and filed an administrative claim
for refund, which was denied.  Pet. App. 20a.

   Thereafter, petitioner brought this refund suit in the United
States District Court for the Southern District of Ohio.  Petitioner
presented alternative arguments in support of her position:  first,
that an amount equal to one-half of the trust property could not
properly be included in the gross estate of Patrick because the
property was in fact owned equally by Patrick and Norma Jean;  and,
second, that the amount deducted on the estate tax return represented
a bona fide alimony claim against the estate and therefore was
properly deductible from the gross estate.  The district court ruled
for petitioner on the second ground (Pet. App. 22a-26a).  /3/ The
district court held that the Court of Common Pleas retained
jurisdiction to modify the alimony award (id. at 24a) and that, under
Ohio law, the modification of the separation agreement gave Norma Jean
a bona fide claim against the estate (id. at 25a-26a).  The district
court ruled, however, that the amount awarded by the Court of Common
Pleas, reflecting the fair market value of the trust property, was
excessive;  the district court reduced the deduction by the amount of
the mortgages attached to the property (id. at 26a-27a).

   4. The court of appeals reversed and remanded the case for
dismissal (Pet. App. 39a-55a).  Relying on McClain v. McClain, 15 Ohio
St. 3d 289, 473 N.E.2d 811 (1984), the court of appeals first held
that under Ohio law the Court of Common Pleas was without jurisdiction
to render the "modifying decree" (Pet. App. 47a).  Accordingly, the
court of appeals agreed with the Commissioner that only the actuarial
amount of the periodic payments as set forth in the 1976 separation
agreement ($273,190), and not one-half of the value of the property as
set forth in the modifying decree ($1,412,228), was allowable as a
claim against the estate for alimony (ibid.).  The court of appeals
then considered petitioner's alternative argument that Norma Jean was
in fact the owner of one-half of the property conveyed to the trust.
The court analyzed the various documents executed by the parties at or
about the time the property was conveyed by Patrick and Norma Jean to
the trustee and determined that they "demonstrate beyond doubt that
Norma Jean retained only a security interest to guarantee payment of
her alimony payments" (id. at 48a).  The court accordingly concluded
that it "would have been clearly erroneous" for the district court to
find that, at the time of Patrick's death, Norma Jean owned one-half
of the trust property (id. at 49a).

   Judge Nelson dissented (Pet. App. 50a-55a).  Judge Nelson stated
that, because Norma Jean was an unsophisticated woman who worked at
her husband's side for many years, he thought that her case "would
look very appealing" to "an Ohio common pleas court judge, elected by
the voters to exercise all of the powers of a court of equity" (id. at
50a).  More specifically, although Judge Nelson agreed that the Court
of Common Pleas generally lacks jurisdiction to modify a prior
separation agreement under Ohio law, he concluded that the order here
was not such a modification because the separation agreement and trust
agreement were silent with respect to the disposition of the property
upon termination of the trust.  Judge Nelson therefore concluded that
the Court of Common Pleas here had the power to supply the "missing"
provision, and that it correctly determined that the property should
be equally divided between Patrick and Norma Jean or their
testamentary representatives upon the termination of the trust.  Id.
at 54a-55a.

                               ARGUMENT

   The court of appeals correctly held that the amount excludable from
the decedent's estate as a claim for alimony is limited to the claim
based on the 1976 separation agreement.  This decision is quite
fact-bound, and it does not conflict with any decision of this Court
or of another court of appeals.  Indeed, the legal question presented
by petitioner is one of state law.  Accordingly, there is no reason
for review by this Court.

   1. The tax base against which the estate tax is imposed is the
gross estate minus allowable deductions (e.g., expenses, taxes, claims
against the estate, and charitable and marital deductions).  See 26
U.S.C. 2053.  The value of the gross estate includes the value of
property to the extent of the decedent's interest therein at the time
of death.  26 U.S.C. 2033.  In this case, the government has argued,
and the court of appeals agreed, that the gross estate includes the
full value of the trust property minus the value of Norma Jean's claim
against the estate for alimony based on the 1976 separation agreement.
 Petitioner has argued that an amount equal to one-half of the value
of the trust property must be subtracted from the gross estate, based
on two alternative theories:  (1) that the modifying decree entered by
the Court of Common Pleas was valid and established a deductible claim
for alimony against the estate in the amount of one-half of the value
of the property;  or (2) that Norma Jean owned a one-half interest in
the trust property at the time of Patrick's death and therefore half
of the value should never have been included in the gross estate under
Section 2033.  The court of appeals correctly rejected both of these
theories.

   a. This Court has established that, where federal estate tax
consequences follow from a determination regarding property interests,
that determination is made under state law.  In making that
determination, however, a federal court is not bound by a state trial
court's ruling, but rather must follow what it determines the state
law to be, based on the rulings of the highest court of the state.
Commissioner v. Estate of Bosch, 387 U.S. 456 (1967).  Although
petitioner praises Justice Douglas's dissent in Bosch, she does not
appear to dispute that Bosch is controlling here.  See Pet. 9-15.  /4/

   Following the principles of Bosch, the court of appeals concluded
that the modification of the decree did not establish a valid claim
for alimony under state law.  The court reasoned that, under the
precedent of the Ohio Supreme Court in McClain v. McClain, 15 Ohio St.
3d 289, 473 N.E.2d 811 (1984), the Court of Common Pleas lacked
jurisdiction to make the modification.  Petitioner disputes the
correctness of this holding (Pet. 21-23), arguing that the court of
appeals misconstrued Ohio law.  /5/ This contention plainly does not
warrant further review.

   First, a dispute that turns solely on a construction of state law
does not present an issue that warrants the exercise of this Court's
certiorari jurisdiction.  Indeed, even when reviewing a case on the
merits, this Court ordinarily does not disturb the construction of
state law made by the court of appeals.  See Butner v. United States,
440 U.S. 48, 57-58 (1979);  Bosch, 387 U.S. at 462.

   In any event, the court of appeals correctly determined and applied
Ohio law.  In McClain v. McClain, 15 Ohio St. 3d at 290, 473 N.E.2d at
813, the Supreme Court of Ohio held that "a court * * * lacks
authority to modify the amount of alimony payments originally agreed
to by the parties." That is precisely what happened in this case.
Asserting that she and the executrix could not agree on a settlement
of the outstanding alimony obligation, Norma Jean filed a motion in
the Court of Common Pleas to modify the original decree (Pet. App.
12a-13a).  The motion was unopposed, and the court ordered that "the
Decree of Dissolution entered herein on September 8, 1976, be modified
and that Norma Jean Collins be awarded the sum of $1,496,875.00 as and
for her alimony as of September 8, 1976" (id. at 14a-15a).  Thus,
there is no merit to petitioner's contention (Pet. 21-22) that the
order of the Court of Common Pleas was merely a clarification of
uncertainties arising under the separation agreement.  Rather, it was
a modification of the clear terms of that agreement specifying the
alimony obligation, and the court of appeals correctly held that the
Court of Common Pleas was without jurisdiction under Ohio law to make
such a modification.  /6/

   b. Petitioner also disputes (Pet. 15, 23-27) the court of appeals'
conclusion that Norma Jean did not own one-half of the trust property.
 This contention is entirely factbound and presents an issue of state
law having little or no significance beyond this case;  clearly, it
does not merit review by this Court.  See, e.g., NLRB v. Hendricks
County Rural Electric Membership Corp., 454 U.S. 170, 176 n.8 (1981);
United States v. Johnston, 268 U.S. 220, 227 (1925).  In any event,
the court of appeals carefully examined the relevant documents and
concluded that it was the intent of the parties that Norma Jean not
retain an ownership interest in the trust property (see Pet. App.
47a-49a.  Petitioner presents no convincing evidence to the contrary;
indeed, even the district court indicated its belief that such was the
intent of the parties (see id. at 21a).

   2. Petitioner errs in contending (Pet. 16-20) that the decision
below conflicts with Natchez v. United States, 705 F.2d 671 (2d Cir.
1983).  In that case, the Second Circuit held that payments required
by a separation agreement that is incorporated, but not merged, into a
valid divorce decree are valid claims against the estate deductible
under Section 2053(a)(3), even though the separation agreement itself
would be unenforceable without the decree.  The decision below is
fully consistent with Natchez;  the court of appeals gave full effect
to the separation agreement incorporated into the original decree of
dissolution by allowing the estate to deduct the present value of the
periodic payments due under the separation agreement.  The refusal of
the court below to allow the deduction sought by petitioner is
attributable to its holding that the Court of Common Pleas here
(unlike the local court in Natchez) lacked jurisdiction to modify the
separation agreement, not to any unwillingness to recognize the
validity of an alimony obligation contained in a separation agreement.
 The decision below thus does not turn upon a legal issue addressed by
the Second Circuit in Natchez, but rather upon a determination under
Ohio law.  /7/

                              CONCLUSION

   The petition for writ of certiorari should be denied.

   Respectfully submitted.

   KENNETH W. STARR

      Solicitor General

   SHIRLEY D. PETERSON

      Assistant Attorney General

   DAVID I. PINCUS

   DAVID A. HUBBERT

      Attorneys

   JULY 1990

   /1/ The motion indicated that in calculating the appropriate amount
of alimony to be paid to Norma Jean, the parties had mistakenly valued
the real estate in question at $1.5 million, when it was in fact worth
almost $3 million (Pet. App. 12a-13a).

   /2/ The estate does not contest the computation of the actuarial
value (Pet. App. 43a n.2).

   /3/ The court accordingly did not fully consider the first
argument.  It noted, however, that petitioner's contention that Norma
Jean owned one-half of the trust property at the time of Patrick's
death was "problematic" because the estate did not report on the
estate tax return that Norma Jean was a joint owner of the trust
property, although it did list other property as being jointly owned
(Pet. App. 21a).

   /4/ Petitioner never argued below, and does not argue here, that
Bosch should be overruled.  Petitioner notes that Bosch involved the
marital deduction under 26 U.S.C. 2056, whereas the estate tax dispute
in this case involves the ownership of property to be included in the
gross estate under Section 2033 and the amount of deduction for an
alimony claim under Section 2053.  Petitioner correctly acknowledges,
however, that "the rules established by Bosch * * * are not limited to
cases involving the marital deduction statute" (Pet. 11).  See
generally 1 B. Bittker & L. Lokken, Federal Taxation of Income,
Estates & Gifts Paragraph 4.2.1, at 4-16 n.44 (2d ed. 1989);  Estate
of Rowan v. Commissioner, 54 T.C. 633, 637 (1970).

   /5/ Petitioner also briefly suggests (Pet. 15) that, in rejecting
the modification of the alimony award by the Court of Common Pleas,
the court of appeals failed to follow Bosch's injunction to give
"proper regard" (387 U.S. at 464) to the decisions of lower state
courts.  This suggestion is clearly mistaken.  First, the court of
appeals properly considered the lower court's determination and
concluded that it was inconsistent with the Supreme Court of Ohio's
decision in McClain v. McClain, supra.  Moreover, even two of the
three dissenters in Bosch would have agreed that no weight should be
given to the decree of the Court of Common Pleas here because that
decree did not result from a "genuinely adversary proceeding." 387
U.S. at 481 (Harlan, J., dissenting);  see also id. at 483-484
(Fortas, J., dissenting).  Indeed, even the dissent below and the
district court refused to accept the decision of the Court of Common
Pleas, finding that the amount awarded by that court exceeded that
allowable under state law.  See Pet. App. 27a, 55a.

   /6/ Moreover, Ohio law has been amended in a way that renders the
state law question presented here of little continuing importance.
For dissolutions of marriage after May 2, 1986, the Ohio statutes now
provide that a court retains jurisdiction to modify the amount and
terms of alimony if the separation agreement contains a provision
authorizing the court to modify the alimony and the court determines
that the circumstances of either party have changed.  Ohio Rev. Code
Ann. Sections 3105.65(B), 3105.18(D)(2) (Page 1989);  see Colley v.
Colley, 43 Ohio St. 3d 87, 538 N.E.2d 410, 412 (1989).

   /7/ Similarly, the decision below is fully consistent with this
Court's decision in Harris v. Commissioner, 340 U.S. 106 (1950).  The
court below did not suggest that an alimony obligation contained in a
separation agreement incorporated in a divorce decree could not give
rise to a deduction under Section 2053.  It simply disagreed with
petitioner as to the amount of that alimony obligation -- because it
concluded that the attempted modification of the separation agreement
by the Court of Common Pleas was ineffective.