Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_03-cv-01606/USCOURTS-azd-2_03-cv-01606-0/pdf.json

Nature of Suit Code: 870
Nature of Suit: Tax Suits
Cause of Action: 28:1346 Recovery of IRS Tax

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

REVEREND ROBERT W. SCHLICHT, )

) No. CIV 03-1606 PHX RCB

Plaintiff, ) 

) O R D E R

vs. ) 

)

UNITED STATES of AMERICA, )

)

Defendant. ) )

This matter arises out of a tax refund suit filed by Plaintiff

on August 19, 2003. Compl. (doc. # 1). On October 21, 2003, the

United States filed its answer and a counterclaim seeking to

collect the balance of penalties previously assessed against

Plaintiff pursuant to 26 U.S.C. § 6672. Answer (doc. # 8). The

parties filed cross-motions for summary judgment (doc. ## 63, 67),

and on July 6, 2005, the Court issued an order (doc. # 81) denying

Plaintiff's motion (doc. # 67) and granting the Government's motion

(doc. # 63). Judgment was entered accordingly on August 17, 2005. 

Judgment (doc. # 82). Plaintiff now seeks reconsideration of the

Court's July 6 order. Mot. (doc. # 84). Having carefully 

Case 2:03-cv-01606-RCB Document 85 Filed 01/30/06 Page 1 of 7
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

 The Government's counterclaim sought to collect the remainder

of a penalty assessed against Plaintiff as a person responsible for

the collection, truthful accounting, and paying over of employee

trust fund taxes who "willfully attempt[ed] in any manner to evade or

defeat" payment of the taxes. 26 U.S.C. § 6672; Answer (doc. # 8).

- 2 -

considered the arguments raised, the Court now rules.

I. MOTION FOR RECONSIDERATION

The decision to grant or deny a motion for reconsideration is

left to the sound discretion of the trial court. See Sch. Dist.

No. 1J, Multnomah County v. ACandS, Inc., 5 F.3d 1255, 1263 (9th

Cir. 1993). Such motions are disfavored and, absent exceptional

circumstances, are generally only appropriate "if the district

court (1) is presented with newly discovered evidence; (2)

committed clear error or the initial decision was manifestly

unjust; or (3) if there is an intervening change in controlling

law." Id.

In his motion for reconsideration, Plaintiff does not maintain

that there has been an intervening change in controlling law. Nor

does he argue that the Court committed clear error in its

resolution of the cross-motions based on the evidence presented at

that time. Rather, as the sole basis for reconsideration,

Plaintiff contends that certain deposition testimony creates a

genuine issue of material fact as to the "willfulness" of his

conduct such as would preclude summary judgment on the Government's

counterclaim.1 Mot. (doc. # 84) at 2-6. Therefore, to prevail,

Plaintiff must establish first that the proffered testimony is

indeed "newly discovered evidence" under Federal Rule of Civil

Procedure 60(b)(2); second, that he exercised due diligence to

obtain the testimony; and third, that the testimony is of such a

Case 2:03-cv-01606-RCB Document 85 Filed 01/30/06 Page 2 of 7
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

 Inman's deposition was apparently concluded on April 21, 2005,

more than two months prior to the Court's ruling on July 6, 2005.

Am. Notice of Dep. (doc. # 80); Order (doc. # 81).

- 3 -

magnitude that it would have changed the Court's ruling on the

parties' cross-motions. See Coastal Transfer Co. v. Toyota Motor

Sales, Inc., 833 F.2d 208, 211 (9th Cir. 1987). Because Plaintiff

fails to clear either of the first two hurdles, it is unnecessary

for the Court to reach the third prong by reexamining the summary

judgment motions with the aid of Plaintiff's belatedly offered

evidence.

A. Newly Discovered Evidence

Plaintiff's argument fails from the start, because the

proffered testimony is not "newly discovered evidence." Under the

Federal Rules, evidence is not "newly discovered" if it was in the

moving party's possession before the judgment was rendered. 

Feature Realty, Inc. v. City of Spokane, 331 F.3d 1082, 1093 (9th

Cir. 2003) (citing Coastal Transfer Co., 833 F.2d at 212); accord

11 Charles Alan Wright & Arthur R. Miller, Federal Practice &

Procedure § 2859 (West 1995) (". . . [I]f [evidence] was in the

possession of the party before the judgment was rendered it is not

newly discovered and does not entitle the party to relief."). 

Plaintiff apparently believes that his own deposition testimony, as

well as that of IRS Revenue Officer Larry Inman, constitutes newly

discovered evidence because it was not obtained until after the

parties' summary judgment motions had been filed and fully briefed. 

Id. at 3; see also Am. Notice of Dep. (doc. # 80); Second Notice of

Dep. (doc. # 78). Yet Plaintiff was in possession of this evidence

for over two months2 prior to the Court's ruling. The Ninth

Case 2:03-cv-01606-RCB Document 85 Filed 01/30/06 Page 3 of 7
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 4 -

Circuit has held that a party possessing evidence for as little as

eight days prior to a court's summary judgment ruling could not

invoke Rule 60(b)(2). See Feature Realty, Inc., 331 F.3d at 1093

(affirming district court's denial of Rule 60(b)(2) motion); see

also Gonzalez-Pina v. Rodriguez, 407 F.3d 425, 433-34 (1st Cir.

2005) (affirming district court's denial of Rule 60(b)(2) motion

where movant had obtained deposition testimony two weeks prior to

summary judgment and failed to exercise due diligence to bring

evidence to district court's attention). Similarly, Plaintiff

cannot now seek refuge in Rule 60(b)(2) for his own failure to

present his evidence when it mattered most.

Moreover, the fact that the parties' summary judgment motions

were fully briefed by the time the depositions were taken does not

render the resulting testimony "newly discovered" for purposes of

Rule 60(b)(2). It is the litigants' responsibility to introduce

evidence for the court's consideration on summary judgment, whether

in original or supplemental filings. See, e.g., Rossi v. Troy

State Univ., 330 F. Supp. 2d 1240, 1249-50 (M.D. Ala 2002) (denying

Rule 60(b)(2) motion because movant never requested leave to

supplement its response to summary judgment motion with new

evidence while the motion was under consideration); Wagner v. Toys

"R" Us, Inc., 114 F.R.D. 18, 19 (E.D. Mich. 1986) (same). Postjudgment relief under Rule 60(b) is a powerful and exceptional

remedy to be exercised in the discretion of the trial court. It

was not intended to reward the lackadaisical or unscrupulous

litigant who fails to make a timely offer of evidence. Otherwise,

Rule 60(b) would be relegated to a tool of litigation gamesmanship

by which parties could withhold evidence from the courts,

Case 2:03-cv-01606-RCB Document 85 Filed 01/30/06 Page 4 of 7
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 5 -

emboldened with the knowledge that they would have a second bite at

the apple on account of their "newly disclosed evidence."

Plaintiff had access to the deposition testimony for over two

months while the summary judgment motions were under consideration. 

He made no effort during that time to bring the evidence to the

Court's attention. Furthermore, Plaintiff offers no explanation

for his failure to supplement his response or to request an

extension of time to submit additional evidence. See Fed. R. Civ.

P. 56(f); Resp. (doc. # 72); Mot. (doc. # 84). Therefore, the

proffered deposition testimony cannot be accepted as "newly

discovered evidence," and Plaintiff's request for relief pursuant

to Rule 60(b)(2) must be denied.

B. Due Diligence

The fact that the testimony is not "newly discovered evidence"

under the Federal Rules is enough to end the inquiry. However,

this requirement is closely related to the second requirement of

due diligence, see Gonzalez-Pina, 407 F.3d at 433, and in the case

at hand, Plaintiff's lack of due diligence in obtaining the

deposition testimony poses an additional bar to the relief sought.

The Ninth Circuit spoke to the due diligence requirement in

Coastal Transfer Co., a case cited by Plaintiff in his motion. In

that case the Ninth Circuit rebuked a Rule 60(b)(2) movant for its

failure to exercise due diligence in discovering the inaccuracy of

its own expert's testimony, because other evidence the movant

possessed prior to the district court's ruling could have revealed

the inaccuracy. Coastal Transfer Co., 833 F.2d at 212. In other

words, due diligence assumes at least some level of deductive

reasoning in an active effort to discover evidence based on the

Case 2:03-cv-01606-RCB Document 85 Filed 01/30/06 Page 5 of 7
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

 Plaintiff's lack of due diligence in obtaining Inman's

testimony is particularly troubling in light of the fact that it was

upon Plaintiff's request that the Court extended the discovery

deadline which Plaintiff ignored. See Mot. (doc. # 40); Order (doc.

# 75). Indeed, Plaintiff's unilateral disregard for the pretrial

order is reason enough to exclude Inman's testimony. See Fed. R.

Civ. P. 16(f); cf. Cato v. Fresno City, 220 F.3d 1073, 1074-75 (9th

Cir. 2000) (affirming Rule 16(f) sanction in the amount of $7,500

against attorney who violated district court's pretrial order).

- 6 -

knowledge and information already possessed by the litigants.

In the case at hand, Plaintiff's assertion that he exercised

due diligence in obtaining the testimony now offered is dubious to

say the least. First, his willingness to characterize his own

testimony as "newly discovered evidence" is simply astounding. It

usually defies all reasonable explanation why a party could not

produce his own testimony at any time in the proceeding. Second,

as to the testimony of IRS Officer Inman, the fact that Plaintiff

did not commence the deposition until nearly one month after the

discovery deadline had passed likewise belies his claim of due

diligence.3 See Order (doc. # 75) at 13 (extending the discovery

deadline to March 28, 2005); Am. Notice of Dep. (doc. # 80).

Because Plaintiff has not met his burden under the first and

second requirements of Coastal Transfer Co., there can be no relief

under Rule 60(b)(2). No other bases for relief from the Court's

judgment are argued or present. Therefore, 

IT IS ORDERED that Plaintiff's Motion for Reconsideration

(doc. # 84) is DENIED. 

DATED this 30th day of January, 2006.

Case 2:03-cv-01606-RCB Document 85 Filed 01/30/06 Page 6 of 7
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 7 -

Copies to counsel of record

Case 2:03-cv-01606-RCB Document 85 Filed 01/30/06 Page 7 of 7