Source: https://case-law.vlex.com/vid/sahara-mart-inc-v-743765821
Timestamp: 2019-04-19 19:18:56+00:00

Document:
Party Name: SAHARA MART, INCORPORATED, Petitioner, v. INDIANA DEPARTMENT OF STATE REVENUE, Respondent.
Sahara Mart, Incorporated, has challenged the Indiana Department of State Revenue's final determination assessing it with unpaid Indiana sales tax liabilities for the 2013, 2014, and 2015 tax years (the years at issue). The matter is currently before the Court on the Department's "Motion for Sanctions and Contempt" ("Motion"). The Court, being duly advised in the premises, grants the Department's Motion.
Sahara Mart protested the Proposed Assessments and provided the Department with copies of a federal audit report that documented its gross sales for the 2008 through 2011 tax years. (Pet. ¶ 9.) On January 13, 2017, the Department issued a Letter of Findings directing a supplemental audit in light of the federal report. (See Pet., Ex. C at 4.) After the supplemental audit was completed, the Department issued revised Proposed Assessments reducing Sahara Mart's total sales tax liabilities for the years at issue to approximately $1.5 million. (Pet. ¶¶ 11-12, Ex. F.) Believing the revised Proposed Assessments were still incorrect, Sahara Mart filed an original tax appeal on September 25, 2017.
On May 22, 2018, the Department filed its Motion, asserting that Sahara Mart and Noorihoseini were "engaged in a fraudulent scheme to avoid paying taxes" and had committed perjury and witness tampering. (See, e.g., Resp't Proposed Findings and Conclusions ("Dep't Findings") ¶¶ 10-12.) Consequently, the Department requested the Court find them in contempt and sanction them - pursuant to both the Court's inherent power and the power granted to it under Trial Rule 37 - by dismissing the case with prejudice and awarding the Department its attorney fees. (See Dep't Br. at 20-26.) (See also Dep't Findings ¶¶ 1, 3.) As support for its Motion, the Department submitted Noorihoseini's deposition, the affidavits of the four individuals who claimed they were Sahara Mart employees, and the affidavit of one of the Department's attorneys.
The Court conducted a show cause hearing on the Department's Motion on July 12, 2018. On August 6, 2018, the parties filed proposed findings of fact and conclusions of law. Additional facts will be supplied as necessary.
Contempt involves a disobedience that undermines a court's authority, justice, and dignity. Witt v. Jay Petroleum, Inc., 964 N.E.2d 198, 202 (Ind. 2012). There are two types of contempt: direct contempt and indirect contempt.2 Henderson v. Henderson, 919 N.E.2d 1207, 1210 (Ind.Ct.App. 2010). Indirect contempt, which is at issue in this case, involves acts that occur outside the court's presence and personal knowledge. Id. Pursuant to Indiana Code § 34-47-3-3, a person is guilty of indirect contempt when he influences, or attempts to influence, a witness to give or abstain from giving testimony in a case before the court. See Ind. Code § 34-47-3-3 (2018). A party's failure to make or cooperate in discovery may also be regarded as an act of indirect contempt. See Ind. Trial Rule 37(B)(2)(d). These instances of indirect contempt are sanctionable by fines, imprisonment, or the payment of reasonable attorney's fees. See Ind. Code § 34-47-3-6(c) (2018); T.R. 37(B).
"Discovery is the process by which the parties to an action ascertain the existence of material facts previously unknown." Jacob v. Chaplin, 639 N.E.2d 1010, 1012 (Ind. 1994) (citation omitted). Indiana's discovery rules are designed to allow a liberal exchange of information essential to litigate all relevant issues and to promote settlement. See Whitaker v. Becker, 960 N.E.2d 111, 115 (Ind. 2012); Trost-Steffen v. Steffen, 772 N.E.2d 500, 512 (Ind.Ct.App. 2002), trans. Denied. Pretrial discovery procedures are intended to "'make a trial less a game of blindman's bluff and more a fair contest with the basic issues and facts disclosed to the fullest practicable extent.'" Whitaker, 960 N.E.2d at 115 (citations omitted).

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