Court Opinion

ID: 162642
Source: CourtListenerOpinion
Date Created: 2010-08-14 07:37:40+00
Date Added: 2024-06-11T17:24:41.036027
License: Public Domain

F I L E D
                                                         United States Court of Appeals
                                                                 Tenth Circuit

                                                                OCT 11 2002
            UNITED STATES COURT OF APPEALS
                                         PATRICK FISHER
                     TENTH CIRCUIT            Clerk

ALAN R. MESSER; DRENDA L.
MESSER; ALTA HOLDINGS; ARMI
ENTERPRISES TRUST, FRED
SALISBURY, Trustee; BAKER
HOLDINGS 1; BAKER HOLDINGS
2; COFFMAN HOLDINGS;
COFFMAN 2; EMERY HOLDINGS;
HEALER TRUST, AN ASSOCIA-               Nos. 00-9013, 00-9014, 00-9015,
TION; HEALER TRUST, also known              00-9016, 00-9017, 00-9018
as Healer Investments Trust; JUDSON         00-9019, 00-9020, 00-9021
HOLDINGS; MESSER                            00-9022, 00-9023, 00-9024
CHIROPRACTIC CENTER, P.C.; MT.              00-9025, 00-9026, 00-9027
VIEW HOLDINGS; TERRY                           00-9028, 00-9029
HOLDINGS; WEDGEWOOD                   (Tax Court Nos. 11882-99, 11883-99,
HOLDINGS 1; WEDGEWOOD                    11884-99, 11885-99, 11886-99,
HOLDINGS 2; WISCONSIN,                   11887-99, 11888-99, 11889-99,
LIMITED,                                 11890-99, 11891-99, 11892-99,
                                         11893-99, 11894-99, 11895-99,
     Petitioners - Appellants,          11896-99, 11897-99, 11898-99)

v.

COMMISSIONER OF INTERNAL
REVENUE,

     Respondent - Appellee.
                        ORDER AND JUDGMENT *

Before SEYMOUR, HENRY, and BRISCOE, Circuit Judges.

      This order and judgment deals with seventeen consolidated cases

concerning redeterminations of deficiencies and penalties, all of which were

settled shortly before trial in the Tax Court. The court entered stipulated

decisions in each of the seventeen cases. These decisions were final orders that

disposed of all claims of all parties. Petitioners consented to their entry, without

reserving a right to appeal them, or making them in any way conditional. The

petitioners filed no post-decision motions for a new trial or to vacate or revise any

of the decisions, as they might have done under Rules 161 and 162 of the Tax

Court Rules of Practice and Procedure.

      Fourteen of the seventeen decisions gave petitioners all the relief they had

sought, thus defeating appellate jurisdiction in those cases. 1 In the remaining

      *
       After examining appellant’s brief and the appellate record, this panel has
determined unanimously that oral argument would not materially assist the
determination of this appeal. See Fed. R. App. P. 34(a)(2) and 10th Cir. R.
34.1(G). The case is therefore submitted without oral argument. This order and
judgment is not binding precedent, except under the doctrines of law of the case,
res judicata, or collateral estoppel. The court generally disfavors the citation of
orders and judgments; nevertheless, an order and judgment may be cited under the
terms and conditions of 10th Cir. R. 36.3.
      1
       Petitioners in these cases (Nos. 00-9014 through 00-9020, 00-9022, 00-
9023, and 00-9025 through 00-9029) have conceded that they “obtained [a]

                                         -2-
three, we conclude that there is appellate jurisdiction to rule on these cases and

we affirm the stipulated decisions entered by the tax court.

      “[A] decree, which appears by the record to have been rendered by consent

is always affirmed, without considering the merits of the cause.” Swift & Co. v.

United States, 276 U.S. 311, 324 (1928) (quoting Nashville, Chattanooga & St.

Louis Ry. Co. v. United States, 113 U.S. 261, 266 (1885)); see also Mock v. T.G.

& Y. Stores Co., 971 F.2d 522, 526 (10th Cir. 1992). There are three exceptions

to this general rule barring appeal of consent judgments. A party may appeal

where he can establish he did not actually consent, where he can show fraud in

the procurement, or where the court entering the judgment lacked subject matter

jurisdiction over the case. Swift, 276 U.S. at 324. None of these exceptions apply

to the cases before us.

      Moreover, while one may reserve the right to appeal a consent decree,

Mock, 971 F.2d at 5275, the parties did not do so here. Rather, they settled

without expressing any reservations. As the Supreme Court has explained, a

settlement is a compromise to end the litigation.

      Consent decrees are entered into by parties to a case after careful
      negotiation has produced agreement on their precise terms. The
      parties waive their right to litigate the issues involved in the case and
      thus save themselves the time, expense, and inevitable risk of

finding in conformity with the Settlement Agreement . . . [and] do not oppose
dismissal of their respective appeals.” Aplt’s Resp. at 2, ¶ 3.

                                         -3-
      litigation. Naturally, the agreement reached normally embodies a
      compromise; in exchange for the saving of cost and elimination of
      risk, the parties each give up something they might have won had
      they proceeded with the litigation. Thus the decree itself cannot be
      said to have a purpose; rather the parties have purposes, generally
      opposed to each other, and the resultant decree embodies as much of
      those opposing purposes as the respective parties have the bargaining
      power and skill to achieve. For these reasons, the scope of a consent
      decree must be discerned within its four corners, and not by
      reference to what might satisfy the purposes of one of the parties to
      it. Because the defendant has, by the decree, waived his right to
      litigate the issues raised, a right guaranteed to him by the Due
      Process Clause, the conditions upon which he has given that waiver
      must be respected, and the instrument must be construed as it is
      written, and not as it might have been written had the plaintiff
      established his factual claims and legal theories in litigation.

United States v. Armour Co., 402 U.S. 673, 681-82 (1971) (emphasis added).

      Notwithstanding they have settled the matter, petitioners nonetheless

contend that after entering into the consent judgments, they discovered further

information that would alter the calculation of the deficiencies owed. They argue

that it would constitute a manifest injustice to prevent them from reopening the

case to reassess these calculations. Aplt. Br. at 5. As support for this argument,

petitioners rely on cases holding that a court has discretion to consider on appeal

issues not raised in the court below. However, none of the cases cited by

petitioners involved judgments ordered by consent; they are therefore all

distinguishable from the cases at issue here. Petitioners have no right to appeal

simply because they subsequently decided they could have reached a better

outcome than the one to which they agreed.

                                         -4-
      Accordingly, as to the fourteen cases over which we do not have

jurisdiction, we DISMISS the appeals. As to the three cases over which we do

have jurisdiction, we AFFIRM the decisions of the Tax Court.

                                     ENTERED FOR THE COURT

                                     Stephanie K. Seymour
                                     Circuit Judge

                                       -5-