Court Opinion

ID: 9459465
Source: CourtListenerOpinion
Date Created: 2023-08-04 21:21:15.52218+00
Date Added: 2024-06-11T17:36:10.409831
License: Public Domain

PELL, Circuit Judge
(concurring).
While I am of the opinion that in all probability the majority opinion has reached a correct result on this appeal, I am troubled by certain aspects of the litigation below and the application of the principles of res judicata therein. I have phrased the matter in terms of “probability” because the matter of the nature of the litigation in the district court which has proved troublesome to me was not explored in the briefs or arguments of the parties. My own independent research merely confirms that the Internal Revenue Code possesses labyrinthine aspects into which one ventures with some uncertainty as to the correctness of his course.
The litigation between Sylvia Zimmerman and the Government apparently was proceeding in side-by-side eases in the Tax Court and the district court. When suit was originally filed in the district court the Government sought to recover in Count II a judgment for the years 1959 and 1961. I am unable to understand how these two years could properly have been the basis for the Government’s seeking a judgment in the district court when those two years plus 1960 and 1962 were in litigation in the Tax Court. 26 U.S.C. § 6213(a) would seem to state that no “proceeding in court” for a collection should be prosecuted “if a petition has been filed with the Tax Court, until the decision of the Tax Court has become final.” Although a decision was entered in the Tax Court on July 8, 1970, for the four years in question, the decision of the Tax Court under 26 U.S.C. § 7481 would not become final until the expiration of the time allowed for filing an appeal. Apparently the Government waited 30 days and, no notice of appeal having been filed, then filed its motion to amend the district court complaint “to permit all issues between the interested parties to be litigated in one action thus saving unnecessary litigation.” [Emphasis supplied.] In the amendment to the complaint accompanying the motion to amend, the Government prayed as follows:
“(a) That this Court adjudge and decree that the defendants, Abraham F. and Sylvia Zimmerman, are jointly and severally liable and indebted to the plaintiff, United States of America, for unpaid taxes, penalties and interest assessed against them in the amount of $304,233.56, plus interest according to law.”
The amount specified was that which was claimed to be due for the four years covered by Count II, and the amendment to the complaint concerned Count II only. All of the language in the Government’s motion and the amended complaint appears to be couched in terms of some sort of a new action in which the Government is seeking a judicial determination that a deficiency was owing by the Zimmermans for the four years in question.
Taking the Government’s allegations at face value, if there was new litigation it would appear to me that res judicata would not be applicable because a change of law had occurred. The general principle thus applicable is set forth in 50 C.J.S. Judgments § 650, at 95 (1947) as follows:
“In accordance with the general rule stated supra this section that the estoppel of a judgment extends only to the facts and conditions as they were at the time the judgment was ren*64dered, it has been broadly held that res judicata is no defense where, between the time of the first judgment and the second, there has been an intervening decision or a change in the law creating an altered situation, as where the second suit seeks an adjudication of rights under a statute enacted subsequent to the determination of the first action.” [Footnotes omitted.]
It seems clear that the Zimmermans intended the decision of the Tax Court entered July 8, 1970, to be a final decision, although Sylvia Zimmerman was not aware of the “innocent spouse” statute at that time because it had not yet become law. The stipulation which she signed reads in part as follows:
“It is further stipulated that, effective upon the entry of this decision by the Court, petitioner waives the restrictions, if any, contained in the applicable Internal Revenue laws on the assessment and collection of the deficiencies, plus statutory interest.”
This stipulation would seem to be a waiver of her rights under 26 U.S.C. § 6213(d) to assert the restrictions provided for in 26 U.S.C. § 6213(a).
Nevertheless, if the amended complaint in the district court was in the nature of a second or new suit it would appear that she should be entitled, pursuant to the principle set forth herein-before, to assert the “innocent spouse” statute as being applicable to her without being barred by res judicata.
I have been unable to discern from the statutes the exact purpose of the proceedings in the district court since the Government already apparently had a final decision in the Tax Court. It would appear, however, taking the reference in 26 U.S.C. § 6213(a) to “proceeding in court for its collection” and noting the general pronouncements of district court jurisdiction in tax matters both in 26 U.S.C. § 7402, and 28 U.S.C. § 1340 and § 1345, that the litigation in the district court subsequent to the filing of the amendment to the complaint was in essence nothing more than an effort to enforce the collection of what was tantamount to a final judgment. To reach this result it is, of course, necessary to ignore the plain language of the prayer to the amendment to the complaint, but since the amount of the deficiency in taxes for the four years in question had already been determined with the decision having become final nothing more remained for the Government to do except to seek a district court judgment enforcing payment since the taxpayer had declined to pay voluntarily.
To the extent that it is arguable that there was new litigation here which would have permitted the assertion of the “innocent spouse” statute in the proceedings in the district court, it is to be noted that although the statute had become effective at the time the district court entered its judgment the statute was not asserted in the district court. In my opinion, the contention should not be permitted to be asserted for the first time on this appeal.
For the reasons hereinbefore set out, I concur in the result reached in the majority opinion of this court.