Court Opinion

ID: 3209176
Source: CourtListenerOpinion
Date Created: 2016-06-03 17:03:06.943768+00
Date Added: 2024-06-11T14:29:11.099935
License: Public Domain

FILED
MEMORANDUM DECISION                                      Jun 03 2016, 11:55 am

Pursuant to Indiana Tax Court Rule 17, this                   CLERK
                                                          Indiana Supreme Court
                                                             Court of Appeals
Memorandum Decision shall not be regarded                      and Tax Court

as precedent or cited before any court except
for the purpose of establishing the defense of
res judicata, collateral estoppel, or the law of
the case.

ATTORNEYS FOR PETITIONERS:                             ATTORNEYS FOR RESPONDENT:
RANDAL J. KALTENMARK                                   GREGORY F. ZOELLER
ZIAADDIN MOLLABASHY                                    INDIANA ATTORNEY GENERAL
BARNES & THORNBURG LLP                                 JESSICA R. GASTINEAU
Indianapolis, IN                                       ANDREW T. GREIN
                                                       KYLE C. FLETCHER
                                                       DEPUTY ATTORNEYS GENERAL
                                                       Indianapolis, IN

                                 IN THE
                           INDIANA TAX COURT

JOHN AND SYLVIA                                    )
VON ERDMANNSDORFF,                                 )
                                                   )
       Petitioners,                                )
                                                   )
                      v.                           )     Cause No. 49T10-1112-TA-00093
                                                   )
INDIANA DEPARTMENT OF STATE                        )
REVENUE,                                           )
                                                   )
       Respondent.                                 )

                   ORDER ON PETITIONERS’ MOTIONS TO STRIKE

                                       June 3, 2016

WENTWORTH, J.

       John and Sylvia von Erdmannsdorff have moved to strike certain statements and
designated evidence that support the Indiana Department of State Revenue’s motion for

summary judgment.      (See Pet’rs’ Br. Opp’n Resp’t Mot. Summ. J. & Supp. Pet’rs’

[Counter-]Mot. Partial Summ. J. (“Pet’rs’ Br.”) at 28-31; Pet’rs’ Mot. Strike Resp’t Supp’l

Des’g Evid. at 1.) More specifically, the von Erdmannsdorffs claim that two depositions

as well as the statements and designated evidence regarding their income tax returns,

their inventory records, and BizStats are not admissible. (See, e.g., Pet’rs’ Br. at 28-31;

Pet’rs’ Mem. Supp. Pet’rs’ Mot. Strike Resp’t Supp’l Des’g Evid. (“Pet’rs’ Mem”) at 1-3.)

The Court, having held a hearing thereon and being duly advised, grants the von

Erdmannsdorffs’ motions in part and denies them in part.

                                    The Depositions

      The von Erdmannsdorffs first claim that the deposition transcripts of Mr. John von

Erdmannsdorff and Mr. Kurk Bright must be disregarded because neither was

published. (See Pet’rs’ Br. at 28-29.) When a party wants to use a deposition for

evidentiary purposes in connection with a motion, as the Department does here, the

Court may, upon its own motion or that of any party, order a party to file the original

deposition. See Ind. Trial Rule 5(E)(2)(b). The filing of any deposition amounts to its

“publication.” T.R. 5(E)(5). See also Griffin v. State, 698 N.E.2d 1261, 1267 (Ind. Ct.

App. 1998) (explaining that a party no longer needs to file a motion to publish and

obtain an order thereto pursuant to Indiana Trial Rule 5(E)(5)), trans. denied. In this

case, the Department published both depositions on September 14, 2015, the date it

filed them with the Clerk of the Indiana Tax Court. (See Resp’t Des’g Evid. Supp. Mot.

Summ. J. at Exs. B, D.) See also T.R. 5(F)(1) (providing that a document is filed when

it is delivered to the clerk of the court). Accordingly, the Court declines to strike the

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depositions of Mr. von Erdmannsdorff and Mr. Bright.

                                  The Income Tax Returns

       Next, the von Erdmannsdorffs claim that the statements and designated

evidence regarding their purported failure to file income tax returns for dates before the

2000 through 2009 tax years (“years at issue”) must be stricken as not relevant. (See

Pet’rs’ Br. at 29 (citing Resp’t Br. Supp. Resp’t Mot. Summ. J. (“Resp’t Br.”) at 1-2, 12);

Pet’rs’ Mem. at 2-3; Hr’g Tr. at 6-11, Mar. 16, 2016.) The Department, on the other

hand, claims that the information is relevant because it not only shows a pattern of

noncompliance and lax recordkeeping, but also indicates that the Department both

properly    issued   its   best   information   available   proposed   assessments     (“BIA

assessments”) and imposed negligence penalties. (See Resp’t Resp. Pet’rs’ Mot. Strike

Resp’t Supp’l Des’g Evid. at 1-2; Hr’g Tr. at 13-14, 17-18.)

       In moving for summary judgment, the Department claimed it was entitled to

judgment as a matter of law because the von Erdmannsdorffs’ post audit documentation

could not rebut the statutory presumption of correctness afforded to the Department’s

BIA assessments. (See, e.g., Resp’t Br. 6-13.) In response, the von Erdmannsdorffs

argued that their documentation rebutted the Department’s BIA Assessments and

created a genuine issue of material fact regarding their actual tax liabilities for the years

at issue.     (See Pet’rs’ Br. at 21-28; Hr’g Tr. at 9.)           Consequently, the von

Erdmannsdorffs’ purported failure to file income tax returns for dates before the years at

issue is not relevant because that fact will not aid in the resolution of the Department’s

summary judgment motion. See Ind. Evidence Rule 401 (explaining that evidence is

relevant if it has any tendency to make a fact of consequence in determining the action

                                                3
more or less probable than it would be without the evidence). Accordingly, the Court

will not consider this fact in resolving the Department’s motion for summary judgment.

                                    The Inventory Records

       The von Erdmannsdorffs have also claimed that the Department’s statements

regarding their purported failure to provide inventory records to the Department are

inconsistent with the von Erdmannsdorffs’ designated evidence and, thus, must be

stricken.   (See Pet’rs’ Br. at 30-31 (compare, e.g., Resp’t Br. at 10 (where the

Department states that the von Erdmannsdorffs did not provide inventory records to the

Department) with Pet’rs’ Br. at 31 (where the von Erdmannsdorffs state they did provide

inventory records to the Department)).) The Court declines to strike these statements

because the von Erdmannsdorffs’ claim indicates that the parties have merely

characterized certain facts differently. See Popovich v. Indiana Dep’t of State Revenue

(Popovich VII), No. 49T10-1010-TA-00053, 2016 WL 1533493, at *2 (Ind. Tax Ct. Apr.

14,   2016)      (declining   to   disregard   designated   evidence   when   the   parties’

characterizations of that evidence differed).

                                           BizStats

       Finally, the von Erdmannsdorffs contend that the Department’s statements

regarding BizStats must be stricken because the designated evidence does not support

them. (See, e.g., Pet’rs’ Br. at 30 (citing Resp’t Br. at 2 (“The Department, using the

best information available in its audit, used IRS data to determine a favorable cost of

goods sold ratio, correcting the von Erdmannsdorffs’ failure to the best of its ability”)).)

The Department’s designation of evidence includes a website page regarding BizStats

that provides:

                                                4
          BizStats is the leading free online source for small business
          statistics.   BizStats collects and adds value to public data,
          delivering it without cost in an easy-to-read, easy-to-understand
          format . . . . We select raw data to develop value-added
          calculations and publish the results in an easily accessible format
          for business owners, valuation professionals, accountants and
          consultants.

          BizStats content reflects the latest available IRS financial
          information in a useful, readable format. BizStats does not edit,
          filter or clean raw IRS data. As a result, BizStats content may
          contain errors, omissions and anomalies such as asset or liability
          negative line items, where these are consistent with IRS data. We
          are not responsible for any errors in calculation or presentation on
          BizStats.

(See     Resp’t     Br.    at     10     (citing      About   BizStats,   BIZSTATS.COM,

http://www.bizstats.com/about.php (last visited April 15, 2016)).)    See also Elmer v.

Indiana Dep’t of State Revenue, 42 N.E.3d 185, 189 (Ind. Tax Ct. 2015) (providing that

a party may designate evidence in its brief). The information on the website page

supports the Department’s statements.              Therefore, the Court denies the von

Erdmannsdorffs’ motions to strike as to this issue.

                                       CONCLUSION

       For the above-stated reasons, the Court GRANTS the von Erdmannsdorffs’

motions to strike with respect to the Department’s statements and designated evidence

regarding the von Erdmannsdorffs’ purported failure to file income tax returns for dates

before the years at issue.      The Court, however, DENIES the von Erdmannsdorffs’

motions to strike with respect to the depositions, the statements regarding the inventory

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records, and the statements regarding BizStats.

      SO ORDERED this 3rd day of June 2016.

                                              Martha Blood Wentworth, Judge
                                              Indiana Tax Court

Distribution: Randal J. Kaltenmark, Ziaaddin Mollabashy, Jessica R. Gastineau,
Andrew T. Grein, Kyle C. Fletcher.

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