Opinion ID: 461000
Heading Depth: 2
Heading Rank: 3

Heading: The May 7, 1984 Hearing and Subsequent Dismissal

Text: 19 On April 1, 1984, Mr. Margolis fell ill. Soon thereafter, doctors hospitalized him and placed him under heavy medication. It soon became apparent to ABC's attorneys that he would not be able to appear at the evidentiary hearing. The lawyers evidently deemed this development a serious blow to ABC's strategy, for Mr. Margolis was to testify about the existence of the documents on the basis of his intricate knowledge of the trusts. Mr. Margolis requested Mr. Dunnett, a former associate, to represent the trusts at the hearing. Mr. Dunnett was the fifth attorney to represent ABC in this litigation. Mr. Dunnett interviewed Mr. Margolis in an attempt to prepare, but he soon realized that Mr. Margolis' memory and speech were greatly affected by his medication. When this path became blocked, Mr. Dunnett approached all of the attorneys who had previously represented ABC in an attempt to prepare for the hearing. Soon, it became obvious to all that this too was fruitless. 20 On April 30, one week prior to the evidentiary hearing, Mr. Dunnett, Mr. Denier--counsel for the Commissioner--and the Tax Court judge held a conference call. During that telephone conversation, the judge expressly stated that he would not continue the May 7 hearing. Mr. Dunnett did not state that Mr. Margolis' presence at the hearing was crucial because of Mr. Margolis' legal talents. Rather, Mr. Margolis was to be only a witness in the hearing. The Tax Court judge had been informed of Mr. Margolis' sickness but stated that he would not grant a continuance. The Tax Court did offer to hold the record open beyond the May 7 hearing date in order to add Mr. Margolis' subsequent testimony. But the court made it clear that the hearing would go forward with or without Mr. Margolis. 21 On May 7, Mr. Dunnett officially entered his appearance on behalf of ABC, as did Mr. Harlee, a Washington lawyer. Mr. Harlee appeared alone at the hearing and asked for a continuance. The court denied the motion, stating: 22 I would like the record to show that [sic] the conference call with Mr. Dunnett and Mr. Denier, on April 30th, I made it quite clear that I would not continue this hearing. And that if Mr. Margolis' testimony were needed that I would consider holding the record open after the hearing to take his testimony. At that time no claim was made by Mr. Dunnett that Mr. Margolis's presence was necessary to try the case, except as a witness. He made no claim that Mr. Margolis had to be present at the hearing as an attorney. At that time I made it clear that I expected Mr. Dunnett to provide the Court with an offer of proof as to what evidence Mr. Margolis would testify to or what evidence he would offer. That has not been furnished to the Court. 23 In the file there are statements by Mr. Coffin as to the witnesses he intends to call at this evidentiary hearing. It would appear to me that if Mr. Coffin is representing to the Court that he knows how to proceed and he knows who to call as witnesses that there is no excuse for Mr. Coffin not appearing to present this matter. 24 Mrs. Frahm entered her appearance in this case. She hasn't seen fit to withdraw or explain why she isn't ready to proceed with this hearing. 25 All we have now is another attorney entering his appearance the morning of the hearing asking for a continuance because Counsel isn't prepared. 26 This discovery motion was filed on us four years ago. And this Court and Respondent have patiently waited for this evidence--this information and it has not been forth coming. The Court will deny Petitioners [sic] motion for continuance. 27 Appellant's Br.App. (App.) at 60-61. 28 On June 15, 1984, the Tax Court entered orders granting the Commissioner's November 12, 1982 motion for sanctions, pursuant to Tax Court Rule 104(c). The cases were dismissed. 29 Our jurisdiction to review the Tax Court's order is based on 26 U.S.C. Sec. 7482 (1982).