Court Opinion

ID: 8595623
Source: CourtListenerOpinion
Date Created: 2022-11-23 16:02:47.428684+00
Date Added: 2024-06-11T16:54:54.782522
License: Public Domain

Kunzig, Judge,
dissenting:
In good conscience, I must dissent. This court has been treated to a lengthy oral argument of facts by plaintiffs, followed by an even more vehement discussion of confusing, conflicting and even opposite facts by defendant. Clearly, the present posture of this case calls for a trial to resolve relevant facts in two crucial areas, once and for all.
First, the majority’s decision permits defendant to amend its answer some two years after the original answer was filed.1 The amendment allows defendant to plead the defense of es-toppel, quasi-estoppel or duty of consistency. The conclusion of the majority is premised upon its opinion that amendment should be granted “in the interests of justice” under Ct. Cl. Rule 39. Normally, I would agree with the court. Leave to amend should be freely granted where one party presents a valid claim or defense and the other party is not prejudiced by the amendment. Foman v. Davis, 371 U.S. 178, 182 (1962). However, I believe that defendant must be *498compelled to do justice in order to reap its benefits. In the instant case plaintiffs allege that defendant’s conduct has caused them to undertake expensive discovery procedures which could have been avoided had defendant submitted a proper answer. Accordingly, I would, at least, condition defendant’s leave to amend on repayment of any additional costs caused by its erroneous course of conduct. A trial to determine such amounts is necessary.
Second, the majority finds plaintiffs bound to use the estate tax values for computation of gain on subsequent stock redemptions under a “duty of consistency.” The majority distinguishes Ford v. United States, 149 Ct. Cl. 558, 276 F. 2d 17 (1960), on the basis that the plaintiffs in that case were sufficiently removed from earlier representations as to alleviate any estoppel or duty of consistency. The majority in the present action, without the benefit of a tried on the of era-time facts, finds that the plaintiffs are either identical or so closely related to those who made earlier representations as to be bound by the earlier declarations. The court would apparently give only lip service to the admonition of Ford that:
[Application of the doctrine of estoppel and related doctrines with an equitable fiamor, * * * be proceeded with cautiously, and with careful ¡regard to the circumstances of the case.
Although the majority states that it has given such careful consideration to the circumstances of this case, the detailed factual disputes which 'highlighted oral argument have apparently been resolved in. favor of the Government. This is especially crucial with regard to the International Trust in which different taxpayers are being held to the “duty of consistency” without key findings as to the closeness of their relationship or without other crucial determinations (important in Ford) as to actions taken by the IKS at the time of the estate tax filings. Again, I would remand the case to the trial division for resolution of relevant facts and the applicability of the Ford case to the present action.
I, therefore, dissent from the decision of the majority and would remand this entire matter to the trial judge for appropriate action not inconsistent with the above.

 Even more serious is the majority’s dicta to the effect that defendant need not have entered a motion to amend its answer in order to rely on the “duty of consistency” defense. The court bottoms this idea on its notion that the duty is more in the nature of a legal defense rather than an equitable one. However, the court’s characterization ignores the dictates of Ct. Cl. Rule 37 and the philosophy of notice pleading. Rule 37(b) requires that affirmative defenses or matters constituting an avoidance be specifically set forth in the pleadings. The “duty of consistency” is clearly in the nature of an avoidance. As such it must be set forth affirmatively in defendant’s answer, or waived under Ct. Cl. Rule 38(h). Otherwise defendant could “trap” unwary plaintiffs by failure to put them on notice that they will have to resist the “duty of continuity” avoidance.