Opinion ID: 883250
Heading Depth: 1
Heading Rank: 2

Heading: admission of additional evidence

Text: Did the District Court err in failing to open the record and admit additional evidence? Leahys contend that they were misinformed about the reality of proceedings before the STAB and therefore, evidence which was vital to their case was excluded. They state that their nonlawyer representatives were not equipped to handle the objections made by the DOR to the evidence they proposed to be admitted. The Leahys claim these objections were sustained by the STAB and they were unfairly prevented from presenting their case. The DOR asserts that the Leahys were fully aware of the factual and legal elements necessary to prove their case and the Leahys should not be heard to complain. Moreover, the DOR states that the STAB admitted all the Leahys' testimony and evidence and the petitioners were represented by competent tax professionals. Section 15-2-303(4), MCA (1991), now numbered § 15-2-303(5), MCA (1993), provides: (4) Notwithstanding the provisions of 2-4-704(1), the court may, for good cause shown, permit additional evidence to be introduced. We discussed this subsection in O'Neill v. Department of Revenue (1987), 227 Mont. 226, 231, 739 P.2d 456, 459, and stated: Under Section 15-2-303(4), MCA, the court reviewing a STAB decision may, on its own initiative or upon motion of a party, find good cause and allow additional evidence to be introduced before the court.... We find that the showing of good cause under Section 15-2-303(4), is permissive, not mandatory. Any legally sufficient reason meets the good cause requirement of Section 15-2-303(4), MCA, and such sufficiency lies within the discretion of the reviewing court. (Citations omitted.) In the instant case, the District Court, in its order on Leahys' motion to add evidence, stated that the primary reason asserted for presenting additional evidence is that Petitioners were not represented by counsel at the administrative hearing before STAB, and that this reason does not constitute good cause within the meaning of § 15-2-303(4), MCA. Whether there is good cause to allow additional evidence to be introduced lies within the discretion of the reviewing court. O'Neill, 739 P.2d at 459. In this case, the District Court concluded there was not good cause to open the record to additional evidence. We agree. The Findings of Fact, Interpretations of Law, Opinion and Order of the Department of Revenue Hearing Examiner, dated November 17, 1989, sets forth all issues which would be considered during the hearing before the STAB. Moreover, the Leahys had over eight months to prepare for the hearing before the STAB. The Leahys chose as their representatives two CPAs who were well-qualified and had a complete grasp of the issues which would be considered by the STAB during the hearing; Leahys could have hired counsel to represent them, had they chosen to do so. The Leahys had every opportunity to adequately prepare for the hearing and present their case before the STAB. Although the Leahys contend that evidence they attempted to present during the STAB hearing was not admitted, a review of the transcript shows that the evidence was admitted, albeit with objection. There is nothing in the record to indicate that all evidence submitted to the STAB during the hearing was not considered by the STAB in its deliberations. Again, the Leahys were given every opportunity to fully present their case. The real problem at the hearing before the STAB was not with the admission of evidence but with the failure of the Leahys to appear and testify before the Board. Darlene was not available to provide testimony necessary to the Leahys' case. The District Court stated that the STAB was clearly influenced by the fact that Petitioners failed to appear to testify in person and that Petitioners' representatives were not acquainted with Petitioners during the tax years in question. The District Court quoted the STAB: [f]acts and circumstances must indicate that an intent for profit must exist. Mrs. Leahy's credibility, motivation and sincerity are key matters in this determination. Yet she did not make herself available for questioning by this Board or by the Department of Revenue. Significantly, her absence prevented the Department of Revenue from corroborating details, seeking relevant information exclusively in the taxpayer's possession (memory, thoughts, experiences), or from discerning intent and credibility. All evidence and testimony regarding her intent is therefore indirect and/or hearsay. (Emphasis in original.) The Leahys, themselves, failed to put forth the crucial evidence in their case  Darlene Leahy's testimony. It is not the obligation of the administrative agency or of the District Court to second-guess litigants' decisions in their preparation for and presentation of their case before the agency. Furthermore, litigants are not entitled to reopen their case on judicial review simply because, on 20/20 hindsight, they might have benefited from better preparation, different representation or an alternate theory or approach from that presented at the administrative hearing. The administrative hearing is not simply a dry-run for retrial in District Court on judicial review with more, better or different evidence. The District Court determined there was not good cause to open the record and allow additional evidence under § 15-2-303(5), MCA (1993). In doing so, the District Court properly exercised its discretion. O'Neill, 739 P.2d at 459. We hold that the District Court did not err in denying the Leahys' motion to present additional evidence in support of their petition for judicial review.