Court Opinion

ID: 4332664
Source: CourtListenerOpinion
Date Created: 2018-11-14 00:48:13.166533+00
Date Added: 2024-06-11T14:20:31.183989
License: Public Domain

BANTAM DOMESTIC TRUST, PRUDENT MAN TRUSTEE COMPANY, TRUSTEE, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, RespondentBantam Domestic Trust v. CommissionerNo. 16687-98United States Tax CourtT.C. Memo 2000-63; 2000 Tax Ct. Memo LEXIS 71; 79 T.C.M. 1565; February 29, 2000, Filed 2000 Tax Ct. Memo LEXIS 71">*71  An order denying petitioner's motion and an order of dismissal for lack of jurisdiction granting respondent's motion will be entered.  Jimmy C. Chisum, for petitioner.Richard A. Rappazzo, for respondent.  Chiechi, Carolyn P.CHIECHIMEMORANDUM OPINIONCHIECHI, JUDGE: This case is before the Court on respondent's motion to dismiss for lack of jurisdiction (respondent's motion) and petitioner's motion to substitute party and to change caption (petitioner's motion). We shall grant respondent's motion and deny petitioner's motion.BACKGROUNDFor purposes of respondent's motion and petitioner's motion, the parties do not dispute the following factual allegations that are part of the record. During its taxable year 1994, petitioner was a trust engaged in business in the State of Indiana. Petitioner filed a Federal income tax return for estates and trusts, Form 1041 (return), for that taxable year, which was signed by Jimmy C. Chisum as agent for the Prudent Man Trustee Co.Upon commencement of the examination of the 1994 return filed by petitioner, respondent requested petitioner to provide respondent with complete copies of the trust documents relating to it. Petitioner2000 Tax Ct. Memo LEXIS 71">*72  refused to provide respondent with the trust documents or any other type of documentary evidence regarding who was the first appointed trustee of petitioner.The notice of deficiency issued to petitioner was sent to the following two addresses:   Bantam Domestic Trust        Bantam Domestic Trust   aka Snyder Poultry Processing    aka Snyder Poultry Processing   Prudent Man Trustee Company,     Prudent Man Trustee Company,   Trustee               Trustee   Post Office Box 138         Post Office Box 204   Harlan, Indiana 46743-0138      Snyder, Nebraska 68664-0204Petitioner filed a petition in this Court which was signed on its behalf by Jimmy C. Chisum, as "Agent for Trustee Prudent Man Trustee Company", the purported trustee for petitioner.Respondent's motion contends in pertinent part:     14. In summary, Mr. Chisum lacks the capacity to bring   the instant suit directly on behalf of the trust because he   is not the trustee. Additionally, Mr. Chisum lacks the   capacity to represent the trustee or any other person in   this2000 Tax Ct. Memo LEXIS 71">*73  proceeding because he is not an attorney and is not   otherwise admitted to practice before this Court. * * *     15. Since the petition in this case was not brought by   a party with proper capacity as required by the Tax Court   Rules of Practice and Procedure, this case should be dismissed   for lack of jurisdiction.Petitioner filed an objection to respondent's motion in which it asks the Court to deny that motion. Petitioner's objection to respondent's motion asserts in pertinent part:     As there is a change in fiduciary simultaneous   with this * * * Objection and the change in fiduciary   answers the objection raised by the Respondent in the   Motion to Dismiss, this Court cannot dismiss as set forth in   Rule 60(a)(1), Rules of Practice and Procedure, United States   Tax Court. Any further objections by the Respondent must be done   either by an answer to the Petition or by other motions as set   forth in Rule 36, Rules of Practice and Procedure, United States   Tax Court.The Court had the document submitted by petitioner that purported to be a change in fiduciary filed2000 Tax Ct. Memo LEXIS 71">*74  as petitioner's "Motion to Substitute Party and to Change Caption". Petitioner's motion alleges in pertinent part:     Notice is hereby given that John P. Wilde has been   appointed as Co-Trustee of Bantam Domestic Trust along   with Jimmy C. Chisum * * * and Prudent Man Trustee Co.   has resigned * * *. John P. Wilde will be proceeding   in his capacity as a Co-Trustee of an Expressed [sic]   Trust. * * *Attached to petitioner's motion are two documents, one of which is entitled "APPOINTMENT OF SUCCESSOR TRUSTEE" and the second of which is entitled "MINUTE OF TRUSTEE RESIGNATION". The document entitled "APPOINTMENT OF SUCCESSOR TRUSTEE" states:     THE PRUDENT MAN TRUSTEE CO., does hereby appoint J   C Chisum & John Wilde, as the Successor Trustees for   BANTAM TRUST.     The appointment takes effect immediately and asks   that the Successor waive all time and notice require-   ments in the appointment and resignation.     Executed this 21(st) day of January, in the year of   Our Lord, 1999.             THE PRUDENT MAN TRUSTEE2000 Tax Ct. Memo LEXIS 71">*75  CO.               TRUSTEE             by: ns               Donna Chisum, F/A for Trustee      ACCEPTANCE OF APPOINTMENT AS SUCCESSOR TRUSTEE     THE PRUDENT MAN TRUSTEE CO., does hereby accept   the appointment of Successor Trustees and the resignation of J C   Chisum & John Wilde. The above resignation and waiver of time is   accepted, and with the accepting of SUCCESSOR TRUSTEES, J C   Chisum & John Wilde, assume the duties and responsibilities as   TRUSTEE for BANTAM TRUST.     Executed this 21(st) day of January, in the year of   Our Lord, 1999.               J C Chisum               TRUSTEE             by: ns               J C Chisum, Trustee               John Wilde             by: ns               John Wilde, Trustee   The document entitled "MINUTE OF TRUSTEE RESIGNATION"states: 2000 Tax Ct. Memo LEXIS 71">*76       THE PRUDENT MAN TRUSTEE CO., does hereby resign   the position as Trustee for BANTAM TRUST. By special   arrangement with the Successors, J. C. CHISUM & JOHN   WILDE, all the time clauses in this act are waived.   The resignation is immediate, final and irrevocable.     This resignation takes effect immediately upon the   signing and endorsement by the Successor Trustee.     This is intended to release THE PRUDENT MAN   TRUSTEE CO., from all responsibility associated with   the Trust.     Executed this 21(st) day of January, in the year of   Our Lord, 1999.             THE PRUDENT MAN TRUSTEE CO.               TRUSTEE             by: ns               Donna Chisum, F/A for Trustee     Ratified, Accepted, Acknowledged this 21(st) day of   January, in the year of Our Lord, 1999.               J C Chisum             by: ns         2000 Tax Ct. Memo LEXIS 71">*77        J C Chisum, Trustee               John Wilde             by: ns   Respondent filed an objection to petitioner's motion(respondent's objection). That objection asserts in pertinent part:     4. In response to respondent's Motion to Dismiss   for Lack of Jurisdiction, petitioner provided to this   Court copies of documents alleging that Prudent Man   Trustee Co. was removed as trustee and that Jimmy C.   Chisum and John P. Wilde have been appointed successor   trustees of the petitioner trust.     5. There is absolutely no evidence from which the   Court can adduce that the documents referred to in   paragraph 4., above, create a legal assignment of either Mr.   Chisum and/or Mr. Wilde as successor trustees. The documents   petitioner submitted appear to be self-serving and created   solely in response to respondent's original Motion to Dismiss   for Lack of Jurisdiction.     6. Petitioner has provided no evidence that said   assignments are valid or authorized under the terms2000 Tax Ct. Memo LEXIS 71">*78  of   the trust indenture (assuming one exists).     7. If the initial trustee or any successor trustees   thereafter were, in fact, an entity called Prudent   Man Trustee Co., petitioner should be required to   produce credible evidence establishing the legal existence and   validity of that entity.     8. Without the evidence described above in paragraph 7.,   petitioner has failed to demonstrate that either Mr. Chisum   and/or Mr. Wilde were legally appointed as subsequent trustees   authorized to act on behalf of the trusts [sic] and bring the   instant case before this Court. See T.C. Rule 60(c).     9. The capacity of Mr. Chisum and/or Mr. Wilde to   bring the instant suit in this Court has not been   established.The Court held a hearing on respondent's motion and petitioner's motion (hearing), at which Mr. Chisum appeared on behalf of petitioner.  1 At that hearing, respondent introduced into the record a document signed by the Secretary of State of Nebraska.  2 That document stated in pertinent part:2000 Tax Ct. Memo LEXIS 71">*79     I, Scott Moore, Secretary of State of Nebraska do   hereby certify that after a thorough search of all   records, I do not find a record of a corporation by the   name            PRUDENT MAN TRUSTEE CO.   ever having filed Articles of Incorporation or issued a   Certificate of Authority to transact business as a   foreign corporation in the state of Nebraska.               DISCUSSION  Rule 603 provides in pertinent part:     (a) Petitioner: (1) Deficiency or Liability   Actions: A case shall be brought by and in the name of   the person against whom the Commissioner determined the   deficiency (in the case of a notice of deficiency)   * * * or by and with the full descriptive name of the   fiduciary entitled to institute a case on behalf of   such person. See Rule 23(a)(1). A case timely brought   shall not be dismissed on the ground that it is not   properly brought on behalf of a party until a reasonable time   has been allowed after objection for ratification by such party   of2000 Tax Ct. Memo LEXIS 71">*80  the bringing of the case; and such ratification shall have   the same effect as if the case had been properly brought by such   party. * * *             *  *  *  *  *  *  *     (c) Capacity: * * * The capacity of a fiduciary   or other representative to litigate in the Court shall   be determined in accordance with the law of the jurisdiction   from which such person's authority is derived.The record is unclear as to whether petitioner was organized as a trust under the laws of Arizona or some other State, although the parties do not dispute that petitioner was carrying on business during its taxable year 1994 in the State of Arizona. At the hearing, Mr. Chisum asserted that the administration of the trust is governed by the laws of the State of Arizona and that the "sole jurisdiction or exclusive jurisdiction in determining the validity of the contract2000 Tax Ct. Memo LEXIS 71">*81  for trust and determining the validity of the trustee party, * * * [is] in Superior Court of State of Arizona."Assuming arguendo, as petitioner claims, that it is a trust, the administration of which is subject to the laws of the State of Arizona, under Arizona law, see Rule 60(c), a trustee has the power to commence litigation on behalf of a trust.  4 See Ariz.Rev. Stat. Ann. sec. 14-7233.C.25. (West 1995). In the instant case, petitioner has the burden of proving that this Court has jurisdiction, see Fehrs v. Commissioner, 65 T.C. 346">65 T.C. 346, 65 T.C. 346">348 (1975); National Comm. to Secure Justice in the Rosenberg Case v. Commissioner, 27 T.C. 837">27 T.C. 837, 27 T.C. 837">839 (1957), by establishing affirmatively all facts giving rise to our jurisdiction, see Wheeler's Peachtree Pharmacy, Inc. v. Commissioner, 35 T.C. 177">35 T.C. 177, 35 T.C. 177">180 (1960); Consolidated Cos., Inc. v. Commissioner, 15 B.T.A. 645">15 B.T.A. 645, 15 B.T.A. 645">651 (1929). In order to meet that burden, petitioner must provide evidence establishing that Mr. Wilde and Mr. Chisum have authority to act on its behalf.  5 See National Comm. to Secure Justice in the Rosenberg Case v. Commissioner, supra 27 T.C. 837">27 T.C. 839-840; Coca-Cola Bottling Co. v. Commissioner, 22 B.T.A. 686">22 B.T.A. 686, 22 B.T.A. 686">700 (1931).2000 Tax Ct. Memo LEXIS 71">*82 We reject petitioner's position that the validity of the purported appointment of Mr. Wilde and Mr. Chisum as trustees of petitioner falls within the exclusive jurisdiction of the Superior Court of the State of Arizona.2000 Tax Ct. Memo LEXIS 71">*83  We are not persuaded by the document relating to petitioner entitled "APPOINTMENT OF SUCCESSOR TRUSTEE" and "MINUTE OF TRUSTEE RESIGNATION" that Mr. Wilde and Mr. Chisum are duly appointed and authorized trustees of petitioner. On the record before us, we find that petitioner has failed to establish that Mr. Wilde and Mr. Chisum are authorized to act on its behalf. 6To reflect the foregoing,An order denying petitioner's motion and an order of dismissal for lack of jurisdiction granting respondent's motion will be entered.  Footnotes1. At the hearing, the Court informed Mr. Chisum that its allowing him to appear at the hearing as the alleged trustee of petitioner did not mean that the Court agreed that he in fact was a duly appointed and authorized trustee of petitioner.↩2. Presumably, respondent proffered the document in question at the hearing on respondent's motion and petitioner's motion because one of the addresses to which respondent sent the notice issued to petitioner was in Nebraska.↩3. All Rule references are to the Tax Court Rules of Practice and Procedure.↩4. Assuming arguendo, as respondent claims upon information and belief, that petitioner is a trust, the administration of which is subject to the laws of the State of Indiana, under Indiana law, see Rule 60(c), a trustee has the power to commence litigation on behalf of a trust. See Ind. Code Ann. sec. 30-4-3-3(a)(11)↩ (Michie 1989).5. Petitioner no longer contends that Mr. Chisum is authorized to act on its behalf in this proceeding as the agent of Prudent Man Trustee Co., and we conclude that it has abandoned any such argument. Even if it had not abandoned such an argument, on the record before us, we find that petitioner has not shown that Mr. Chisum was properly employed by the trustee of petitioner in accordance with the laws of either the State of Arizona, see Ariz. Rev. Stat. Ann. sec. 14-7233.C.24. (West 1995), or the State of Indiana, see Ind. Code Ann. sec. 30-4-3-3(a)(16) (Michie 1989). We further find that, unless Mr. Chisum is a duly appointed and authorized trustee of petitioner, Mr. Chisum is not authorized to represent or act in this proceeding on behalf of either petitioner or the trustee of petitioner. See Rules 60, 200↩.6. We have considered all of the contentions and arguments of petitioner that are not discussed herein, and we find them to be without merit and/or irrelevant.↩