## United States Bankruptcy Appellate Panel **For the Eighth Circuit**

___________________________ No. 16

- 6022

___________________________ In re: David Eugene Yuska

lllllllllllllllllllll Debtor

------------------------------ David Eugene Yuska

lllllllllllllllllllll Plaintiff

- Appellant

v. Iowa Department of Revenue

lllllllllllllllllllll Defendant

- Appellee

____________ Appeal from United States Bankruptcy Court for the Northern District of Iowa

- Cedar Rapids

____________ Submitted: Apr il 19, 2017 Filed: May 8 , 2017

____________ Before SALADINO, Chief Judge, KRESSEL and NAIL, Bankruptcy Judges.

____________ Kressel, Bankruptcy Judge.2 David Eugene Yuska appeals from an order of the bankruptcy court 1 granting the Iowa Department of Revenue’s motion for summary judgment and dismissing
his adversary proceeding . We affirm.

BACKGROUND

Yuska filed a C hapter 13 bankruptcy petition on September 29, 2014. The case was later converted to a Chapter 7 case. On February 9, 2015, Yuska filed a complaint against the Iowa Department of Revenue , ask ing the bankruptcy court to
set aside the department’s tax assess ments for tax years 2004

- 2013

. The department filed an answer and asserted defenses of issue and claim preclusion among others. It also filed a motion asking the bankruptcy court to abstain from hearing the constitutional question and the legality of the department’s assessment procedure. It filed a nother motion asking the court to dismiss Yusuka’s claim regarding the 2007 tax assessment based on claim preclusion because on November 29, 2012, an administrative law judge already decided the issue and
Yuska did not appeal that decision. It later moved for summary judgment of the
entire proceeding arguing that there were no genuine issues of material fact about
the amount of taxes assessed.
Yuska filed numerous responses to the department’s motions. Yuska mad e general legal argument as to the constitutionality of the Iowa income tax statute. He argued that the income tax statute was unconstitutional under Article VII, Section 7 of the Iowa constitution. He argued that Iowa Code 422.5 that imposes taxes is

unco nstitutionally vague because it does not state the object of the tax as required by the constitution but instead another section of C hapter 422 provides the object.

1 The Honorable Thad J. Collins, Chief Judge, United States Bankruptcy Court for The Northern District of Iowa.3 He also argued that the department improperly relied on information from the Internal Reven ue Service because that information doesn’t show that it was derived from the United States Internal Revenue Code and he doesn’t owe income tax under
the I nternal R evenue C ode . He also argue d that he is no longer a citizen because he

r enounced his U.S. cit izenship and Iowa residency and appeared in court on behalf of “ens legis , ” a legal entity that does not owe taxes.
After many continued hearing s and extensions for submissions requested by
Yuska and granted by the bankruptcy court, the court held a hea ring on April 26, 2016 and took the matter under advisement. On May 12, 2016 , before the court made
a determination o f the motion, Yuska filed a motion to file new evidence. The court
denied the motion and entered a n order stating that no further briefing or supplements would be considered by the court.

In its July 6, 2016 order , t he bankruptcy court concluded that there were no genuine issues of material fact. Yuska resided in Iowa and received rental income, wages, salaries, interest, dividends, capital gains and other income while living in Iowa for the tax years in question , but h e did not pay Iowa income tax es. The bankruptcy court concluded that , in Iowa, an administrative determination is given the same preclusive effect as the judgment of a court. The court held that Yuska’s claim that he does not owe income tax liability for 2007 is barred by claim preclusion because the bankruptcy court cannot determine the taxes or the legality of the 2007 tax liability that have been decided by the administrativ e law judge . The court also held that Yuska’s challenge to the department’s right and authority to tax or the department’s assessme nt procedure is barred by issue preclusion because those arguments were also considered and rejected by the
administrative law judge

.4 The bankruptcy court also considered and rejected Yuska’s other legal arguments. The court held that Yuska’s argument that the income tax statute is unconstitutional because it does not state the object to which the tax is to be applied and req uired looking to multiple sections to find the tax and object , unpersuasive because Iowa income statute has been upheld by the Iowa Supreme Court as
constitutional.
The court also rejected Yuska’s argument that the department did not properly
calculate hi s tax liability because he doesn’t owe any taxes under the I nternal
R evenue C ode . The court held that the “Iowa income tax uses the federal taxable income number to determine the amount of tax owing” and Yuska’s “Iowa tax liability is not tie d to his feder al tax liability.” The court also held that the fa ct that
Yuska declared that he r enounced his U.S. citizenship does not excuse tax lia bility and is not an effective r enunciation of citizenship. Anyway, t he court found Yuska is a tax payer for the tax yea rs in question.
The court also rejected Yuska’s argument that it was improper for the department to impose the “75% fraud penalty for tax years 2011

- 2013 because the department found that he had a clear pattern of intentionally and repeatedly concealing h is income, continuously failing to submit income tax returns, and evading paying taxes when ” assessed. The court held that the department provided clear and convincing evidence that showed the fraud penalties were proper. The court also rejected Yuska’s ar gument that the bankruptcy court did not have jurisdiction over him because he was a minor during the adversary proceeding and when the department made the assessment. The court granted the department’s summary judgment motion and dismiss ed the adversary p roceeding.5 ISSUE S ON APPEAL
Yuska appeals the bankruptcy court’s order granting summary judgment to the department

. 2 Yuska raises three main issues on appeal. He asserts that the bankruptcy court improperly denied his motion to file newly discovered evide nce. He argues that the Iowa income tax statute is unconstitutional because the statute
does n o t have an object for the tax in the same statute as required by the Iowa
constitution. He also states that the income tax statute is void for vagueness and
there fore unconstitutional.

ANALYSIS
Standard of Review
We review a bankruptcy court’s grant of summary judgment de novo

. In re Farmland Indus., Inc. , 408 B.R. 497, 503 (B.A.P. 8th Cir. 2009) (8th Cir. 2011) ( Citing Schaaf v. Residential Funding Corp., 517 F.3d 544, 549 (8th Cir.2008)). The applicability of collateral estoppel is a question of law which we also review de novo

. Id . (Citing United States v. Brekke, 97 F.3d 1043, 1046

– 47 (8th Cir.1996); Osborne v. Stage (In re Stage), 321 B.R. 486, 491 (8t h Cir. BAP 2005) )

. Denial of Motion to Submit New Evidence
Yuska argues that it was improper for the bankruptcy court to deny his motion
to file newly discovered evidence. Because the motion would be untimely under either Fed. R. Civ. P. 52 or 59, we cons true that motion as one under Fed. R. Civ. P. 60(b)(2) made applicable through Fed. R. Bank. P. 9024. The court’s denial of the
motion to submit new evidence is reviewed for abuse of discretion. Harley v. Zoesch, 413 F.3d 866, 870 (8th Cir.2005); Broadway v. Norris, 193 F.3d 987, 989 (8th

2 Yuska requested an oral argument. We hold that it will not be helpful to this appeal.6 Cir.1999). A moving party must show that newly discovered evidence is material and would probably produce a different result

. Greyhound Lines, Inc. v. Wade, 485 F.3d 1032, 1036 (8th Cir. 2007)

.
Yuska’s motion did not dea l with newly discovered evidence at all , but w as just an attempt to make more argument s for why the income stat ute was void for
vagueness . The bankruptcy court did not abuse its discretion in denying the motion. Additionally, Yuska was given ample time t o supplement his case. He had from November 16, 2015, when the department filed its motion and until April 26, 2016’s hearing date, to file additional documents. Yuska was afforded numerous extensions to file additional documents and rescheduled hearings. We think the bankruptcy court’s patience re sembled that of J ob.
Motion for Summary Judgment
“Summary judgment is appropriate only when all the evidence presented demonstrates that there is no genuine issue as of any material fact and the moving party is entitled to judgment as a matter of law.” Jafarpour v. Shahrokhi , ( In re Shahrokhi ), 266 B.R. 702, 706 (B.A.P. 8 th Cir. 2001). In a summary judgment motion, t he initial burden of proof is on the mov ing party to demonstrate “that there is an absence of evidence to support the nonmoving party's case.” Jafarpour 266
B.R. at 706 (Quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325(1986)). Once this
is met, the burden then shifts to the nonmoving party “to go beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific fact s showing that ther e is a genuine issue for
trial. ” Id . (Internal quotation omitted). The bankruptcy court carefully considered the facts asserted by both parties and determined that the facts were undisputed

. We
agree

.7 Claim Preclusion

The doctrine of res judicata , also known as claim preclusion is a question of
law which we review de novo. United States v. Brekke, 97 F.3d 1043, 1046

– 47 (8th Cir.1996); Osborne v. Stage (In re Stage), 321 B.R. 486, 491 ( B

. A

. P

. 8th Cir. 2005). Claim preclusion “provides a valid and final judgment on a claim precludes a second action on that claim or any part of it.” Spiker v. Spiker , 708 N.W.2d 347, 353 (Iowa 2006) . Therefore, the rule “applies to every matter which was offered and received
to sustain or defeat the claim o r demand.” Id . It also applies to any other admissible matter which could have been offered for that purpose, foreclosing litigation of matters that have been litigate d

. Id . The party against whom preclusion is asserted had a “full and fair opportunity” to litigate the claim or issue in the first action. Id

. Thus, the party seeking to invoke the doctrine of claim preclusion must establish three elements: (1) “the parties in the first and second action were the
same” ; (2) “the claim in the second suit coul d have been fully and fairly adjudicated in the prior case” ; and (3) “there was a final judgment on the merits in the first
action.” Id . (Citing Arnevik v. Univ. of Minn. Bd. of Regents , 642 N.W.2d 315, 319 (Iowa 2002) (citations omitted).

We hold that t he bankruptcy court did not err when it gave a res judicata effect
to Yuska’s claim. Under Iowa law, the administrative law judge’s determinations are given the same preclusive effect as the judgment of a court. George v. D.W.
Zinser Co. , 762 N.W.2d 865, 868 (Iowa 2009). The court properly held that the administrative law judge’s decision was a prior judgment rendered by a court of competent jurisdiction that was a final judgment on the merits. Yuska raised the same cause of action as he did when he challenge d the 2007 assessment in the8 administrative proceeding , and both parties in that action and this case were the

same.

Issue Preclusion
The doctrine of collateral estoppel or issue preclusion “prevents parties to a prior action in which judgment was entere d from relitigating in a subsequent action issues raised and resolved in the previous action.” Hunter v. City of Des Moines , 300 N.W.2d 121, 123 (Iowa 1981) . Therefore, “when an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.” Id

. The party seeking to invoke the doctrine of issue preclusion must est ablish the following four elements: (1) “ the issue concluded must be identical ” ; (2) “ the issue must have been raised and litigated in the prior action ” ; (3) “ the issue must have been material and relevant to the disposition of the prior action ” ; and (4) “ the determination made of the issue in the prior action must have been necessary and essential to the resulting judgment .” Id

.
We hold that the bankruptcy court did not err when it applie d collateral estoppel to Yuska’s claim regarding the constitutionality of Iowa’s income statute and the department’s assessment procedures because that same issue was litigated before and decided by the administrative law judge. The administrative law judge
made a determination about the issue that was an essential decision in that action. Its determinations have the same preclusive effect as the judgment of a court. George , 762 N.W.2d at 868. Yuska’s challenge to the income statute and the department’s procedure are collaterally estopped

.9 Void for Vagueness
Yuska argues that the Iowa income statute is void for vagueness and therefore
unconstitutional. Yuska is making this argument for the first time on appeal

. We normally do not consider new arguments on appeal. Krigel v. Sterling Natio nal Bank ( In re Ward ), 230 B.R. 115, 118 (B.A.P. 8 th Cir. 1999) (Citing Forbes v. Forbes ( In re Forbes ), 218 B.R. 48, 51 (B.A.P. 8 th Cir. 1998). However, we may consider the new argument if it merely constitutes a shift in approach

. Id . (Citing Universal Title Uns. Co. v. United States , 942 F. 2d 1311, 1314 (B.A.P. 8 th Cir. 1991)) . We also have discretion to consider an issue for the first time on appeal “when the argument involves a purely legal issue in which no additional evidence or argument would
affe ct the outcome of the case.” Id

. Yuska’s argument that the Iowa income statute is not constitutional because it is void for vagueness is not merely a shift in approach. This argument requires factual support . Nevertheless his argument still fails because the Iowa Supreme Court has upheld the income statute as constitutional on numerous occasions

. Hale v. Iowa Bd. Of Assessment and Revenue , 271 N.W. 168, 174 (Iowa 1937); Vilas v. Iowa State Bd. o f Assessment and Revenue , 273 N.W. 338, 346 (Iowa 1937).
Addi tionally, the Rooker

- Feldman doctrine prevents the bankruptcy court and us from reviewing the state supreme court’s decisions.
Other Arguments
Yuska argues that Iowa is not a state and therefore he doesn’t owe taxes. We disagree. We hold that Iowa is a st ate

. He also argues that he is not a citizen of the
U.S. o r a resident of Iowa and therefore doesn’t owe taxes. But even if that were
true, non

- citizens must pay taxes, too. Yuska’s other arguments are frivolous and we reject them

.10 CONCLUSION

We find no error in the bankruptcy court’s legal conclusion s or its decision

. Accordingly, we affirm.

___________________________