Supreme Court Asked to Review Deficiency Case, Appeal Dismissal

Steven T. Waltner and Sarah V. Waltner,
Petitioners,
v.
United States,
Respondent.

In the
Supreme Court of the United States

On Petition for Writ of Certiorari to the United States Court of Appeals for the Ninth Circuit

PETITION FOR WRIT OF CERTIORARI

DONALD W. WALLIS
Counsel of Record
Upchurch, Bailey & Upchurch, P.A.
780 N. Ponce de Leon Blvd.
Post Office Drawer 3007
St. Augustine, FL 32085
(904) 829-9066
dwallis@ubulaw.com
Counsel for Petitioners

August 24, 2019

QUESTIONS PRESENTED

The Court of Appeals in the case below held that the return Petitioners filed for tax year 2008 was not a “valid return” for purposes of the exception to the statute of limitations on tax assessments, § 6501(a), that applies when a return is not filed at all, and then held that the IRS therefore may assess the tax at any time. However, the phrase “valid return” appears nowhere in the statutory exception at § 6501(c)(3) or in any other provision of the United States Code.

The first question presented for review is:

1. Whether the court below, in conflict with its own precedents as well as those of this Court and five other Circuit Courts of Appeal, erred in holding that Petitioners' timely-filed tax return (which the IRS examined, processed, and later relied upon to issue a late-mailed notice of deficiency) did not start the running of the 3-year statute of limitations on assessment.

Before the Tax Court's decision (“Decision”) was entered, Petitioners filed a Status Report in which their counsel clearly stated his intention to appeal the Tax Court's sanctions order. Splitting from a contrary decision of the Fifth Circuit, the Ninth Circuit gave no effect to counsel's informal notice and declared that it lacked jurisdiction over the portion of the Decision that imposed costs against counsel.

The second question presented for review is:

2. Whether, in conflict with the Fifth Circuit, the court below erred in finding an informal notice of intent to appeal ineffective to preserve the right of a party's counsel to appeal a sua sponte sanction against him that appears in the Decision.

RELATED CASES

• Waltner v. Commissioner, No. 1729-13, United States Tax Court. Judgment entered May 9, 2017.

• Waltner v. Commissioner, No. 17-72261, U.S. Court of Appeals for the Ninth Circuit. Judgment entered January 17, 2019.

---

TABLE OF CONTENTS

QUESTIONS PRESENTED

RELATED CASES

TABLE OF CONTENTS

TABLE OF AUTHORITIES

PETITION FOR A WRIT OF CERTIORARI

OPINIONS BELOW

STATEMENT OF JURISDICTION

CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED

STATEMENT OF THE CASE

REASONS WHY THIS PETITION SHOULD BE GRANTED

CONCLUSION

APPENDIX

ORDERS, DECISION, AND JUDGMENT

CONSTITUTIONAL AND STATUTORY PROVISIONS 

CONSTITUTIONAL PROVISIONS 

STATUTES

Cases

Allen v. McCurry, 449 U.S. 90 (1980) 

Badaracco v. Commissioner, 464 U.S. 386 (1984)

Borgeson v. United States, 757 F.2d 1071 (CA10 1985) 

Bryson v. Guarantee Reserve Life Insurance Company, 520 F.2d 563 (CA8 1975) 

Chase Securities Corp. v. Donaldson, 325 U.S. 304 (1945) 

Christian Legal Society v. Martinez, 561 U.S. 661, 130 S. Ct. 2971 (2010) 

Cincinnati Ins. Co. v. Beazer Homes Invs., LLC, 594 F.3d 441 (CA6 2010) 

Clark v. Bear Stearns & Co., Inc., 966 F.2d 1318 (CA9 1992)

Cobb v. Lewis, 488 F.2d 41 (CA5 1974) 

Columbia Gas System, Inc. v. U.S., 70 F.3d 1244 (Fed.Cir. 1995)

Conforte v. CIR, 692 F.2d 587 (CA9 1982) 

Congoleum Industries, Inc., v. Consumer Product Safety Commission, 602 F.2d 220, 223 (CA9 1979) 

Crump v. Hill, 104 F.2d 36 (CA5 1938)

Estate of Simpson v. Commissioner, 21 T.C.M. (CCH) 371 (1962) 

FDIC v. Congregation Poiley Tzedeck, 159 F.2d 163 (CA2 1946) 

General Electric Capital Corporation v. Lease Resolution Corporation, 128 F.3d 1074 (CA7 1997) 

Germantown Trust Co. v. Commissioner, 309 U.S. 304 (1940)

Gould v. Gould, 245 U.S. 151 (1917)

Grant v. Commissioner, 62 TCM 550 (1991) 

Griggs v. Provident Consumer Discount Co., 459 U.S. 56 (1982) 

Guam Investment Company v. Central Building, Inc., 288 F.2d 19 (CA9 1961) 

Haung Tang v. Aetna Life Insurance Co., 523 F.2d 811 (CA9 1975) 

Hernandez v. City of Los Angeles, 624 F.2d 935 (CA9 1980) 

Holmberg v. Armbrecht, 327 U.S. 392 (1946) 

Hydranautics v. FilmTec Corporation, 204 F.3d 880 (CA9 2000) 

In Re Taylor, 223 B.R. 747 (CA9 BAP 1998)

Kourtis v. Cameron, 419 F.3d 989 (CA9 2005) 

Lassiter v. Department of Social Servs. of Durham Cty., 452 U.S. 18 (1981) 

Lee v. City of Los Angeles, 250 F.3d 668 (CA9 2001) 

Liberty Mut. Ins. Co. v. Rotches Pork Packers, Inc., 969 F.2d 1384 (CA2 1992)

Lucas v. Pilliod Lumber Co., 281 U.S. 245 (1930) 

Montana v. United States, 440 U.S. 147 (1979) 

Plunkett v. Commissioner, 118 F.2d 644 (CA1 1941) 

Reaves v. Commissioner, 295 F.2d 336 (CA5 1961) 

Reddock v. Commissioner, 72 TC 21 (1979) 

Resolution Trust Corp. v. Keating, 186 F.3d 1110 (CA9 1999) 

Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741 (CA9 2006) 

RFC v. Prudence Group, 311 U.S. 579 (1941) 

Rittenbaum v. United States, 109 F.Supp. 480 (N.D. Ga. 1952) 

State of California v. Fred S. Renauld & Co., 179 F.2d 605 (CA9 1950)

Steel Co. v. Citizens for Better Environment, 523 U.S. 83 (1998) 

Taylor v. Charter Medical Corp., 162 F.3d 827 (CA5, 1998) 

Torres v. Oakland Scavenger Co., 487 U.S. 312 (1988) 

Trefry v. Commissioner, 10 BTA 134 (1928) 

United States v. Smith, 446 F.2d 200 (CA4 1971)

United States. v. Jones, 29 F.3d 1549 (CA11, 1994) 

United States. v. Lasky, 600 F.2d 765 (CA9 1979)

Zellerbach Paper Co. v. Helvering, 293 U.S. 172 (1934) 

Constitutional Provisions

United States Constitution, Amendment V 

United States Constitution, Article III, Section 2 

Statutes

26 U.S.C. § 6011(a) 

26 U.S.C. § 6061

26 U.S.C. § 6065 

26 U.S.C. § 6211 

26 U.S.C. § 6212 

26 U.S.C. § 6213(g)

26 U.S.C. § 6214(a) 

26 U.S.C. § 6501(a)

26 U.S.C. § 6501(c)(3)

26 U.S.C. § 6611(g)

26 U.S.C. § 6611(h) (1995)

26 U.S.C. § 6651

26 U.S.C. § 6673

26 U.S.C. § 6673(a)(2)

26 U.S.C. § 7482(a)(1)

28 U.S.C. § 1254(1)

Rules

Federal Rules of Appellate Procedure, Rule 2

Federal Rules of Appellate Procedure, Rule 3

Federal Rules of Appellate Procedure, Rule 3(c)

Federal Rules of Appellate Procedure, Rule 4

Federal Rules of Appellate Procedure, Rule 4(a)(2)

Federal Rules of Appellate Procedure, Rule 13(a)(1)(A)

Federal Rules of Evidence, Rule 201

Tax Court Rules of Practice and Procedure, Rule 91(e)

Other Authorities

21 C. Wright & K. Graham, FEDERAL PRACTICE AND PROCEDURE: Evidence § 5104 (1977 & Supp.1994)

46 Am.Jur.2d Judgments § 600 (1969)

Federal Rules of Appellate Procedure, Rule 3(c), Notes of Advisory Committee — 1993 Amendment

Federal Rules of Appellate Procedure, Rule 3, Notes of Advisory Committee on Rules — 1979 Amendment

Federal Rules of Appellate Procedure, Rule 4, Notes of Advisory Committee on Rules — 1993 Amendment, Note to Paragraph (a)(4)

---

PETITION FOR A WRIT OF CERTIORARI

Petitioners Steven T. Waltner and Sarah V. Waltner petition this Court for a Writ of Certiorari to review the final judgment of the United States Court of Appeals for the Ninth Circuit that Petitioners are liable for a late-noticed tax deficiency and penalties after timely filing their return, and that the Court of Appeals lacked jurisdiction over Petitioners' counsel's appeal.

OPINIONS BELOW

The Memorandum opinion of the United States Court of Appeals for the Ninth Circuit in Waltner v. Commissioner of Internal Revenue, No. 17-72261 (January 17, 2019) (“Judgment”) can be found at 748 Fed.Appx. 162 (Mem) and is reproduced in Petitioners' Appendix at A-44.¹ The following orders are also included in the Appendix:

• Ninth Circuit Order denying Petitioners' petition for rehearing (March 28, 2019), A-43;

• Tax Court Memorandum Opinion in Waltner v. Commissioner, Docket No. 1729-13, reported at T.C. Memo. 2014-133 (July 3, 2014)), A-1;

• Tax Court Order on Petitioner's motion for reconsideration (September 19, 2014), A-20.

• Tax Court Order imposing costs under § 6673(a)(2) against Petitioners' counsel (December 15, 2014), A-25;

• Tax Court Order and Decision (May 9, 2017), A-38.

STATEMENT OF JURISDICTION

Under Article III, Section 2 of the United States Constitution, this Court has appellate jurisdiction over this controversy to which the United States is a party. The Judgment for review was entered on January 17, 2019 by a panel of the Court of Appeals for the Ninth Circuit. A petition for rehearing was filed on March 4, 2019 and was denied on March 28, 2019. On June 14, 2019, the Honorable Justice Kagan of this Court issued an order granting Petitioners an extension of time until August 25, 2019 to file a petition for a writ of certiorari. The jurisdiction of this Court is invoked under 26 U.S.C. § 7482(a)(1)² and 28 U.S.C. § 1254(1).

CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED

26 U.S.C. § 6501:

(a) General Rule. Except as otherwise provided in this section, the amount of any tax imposed by this title shall be assessed within 3 years after the return was filed (whether or not such return was filed on or after the date prescribed) . . .

(c) Exceptions. . . . .

(3) No return.

In the case of failure to file a return, the tax may be assessed, . . . at any time.

Reproduced in the Appendix are relevant portions of the U.S. Constitution and the statutes cited in the Table of Authorities.

STATEMENT OF THE CASE

This case concerns a demonstrably processible tax return for tax year 2008 that the IRS, in fact, examined and processed (the “Return”). In processing the Return, the Commissioner calculated the tax to be the same as the amount shown on the Return, but found an error that caused it to reduce the amount of the overpayment shown on the Return, and credited the amount of the reduced overpayment to Petitioners' account for a different tax year. In Petitioners' subsequent refund action, the U.S. Court of Federal Claims (“Claims Court”), without considering the fact that the Return already had been processed without difficulty, declared that the Return was not valid as a claim for refund under that court's interpretation of the specificity requirements within two Treasury Regulations. On this and on alternative grounds, the Claims Court dismissed Petitioners' refund action for lack of subject matter jurisdiction.

Subsequently, and several months after the statute of limitations on assessment had expired, the IRS issued Petitioners a notice of deficiency for tax year 2008. Petitioners challenged the proposed deficiency in the Tax Court, asserting that the notice of deficiency was of no force and effect, that, as a matter of law, there was no deficiency, and that the Tax Court lacked authority to take any action other than to render judgment in favor of the Petitioners and to dismiss the case. §§ 6211 et seq. (A-53); 6501(a) (A-56); Trefry v. Commissioner, 10 BTA 134, 137-138 (1928). The Tax Court denied Petitioners' motion to dismiss. Petitioners then amended their Tax Court Petition to add the statute of limitations as a defense, and they also moved to strike portions of the Answer to that amended Tax Court Petition.

In the Tax Court case below, the Commissioner stipulated that the Waltners had timely filed their Return. After the court admitted evidence of the same, the Commissioner confirmed that the IRS had processed the Return. Nevertheless, in contravention of his own Stipulations of Fact, the Commissioner asserted that, because the court in the refund case had called the already-processed Return an “invalid” return, Petitioners were collaterally estopped from contending in the Tax Court case that the Return was a “return” for purposes of starting the statute of limitations on assessment.

But the Commissioner did not introduce into evidence a single page of the record of the Claims Court refund case to prove that the two issues (i) were identical in both cases (ii) under identical legal standards, (iii) were fully and fairly litigated in the prior action, and (iv) were a critical and necessary part of the prior court's judgment. The Commissioner argued that the exception to the statute of limitations when a return is not filed at all (IRC § 6501(c)(3)) allowed the IRS to assess a deficiency of tax on the Return at any time. In effect, the Commissioner urged the Tax Court to nullify the Return because, long after he had processed it, he determined that the amount of income reported therein was inaccurate.

The Tax Court — in contravention of Tax Court Rule 91(e), Ninth Circuit precedent in Congoleum Industries, Inc., v. Consumer Product Safety Commission, 602 F.2d 220, 223 (CA9 1979), and this Court's decision in Christian Legal Society v. Martinez, 130 S. Ct. 2971, 2983 (2010), — gave no effect to Stipulations of Fact Nos. 2-6. Instead, it accepted the Commissioner's position, even though that position was completely rebutted by (i) his own Stipulations of Fact, (ii) his prior judicial admission that the Return was a valid return [Fact 8, below], and (iii) his own processing and treatment of the Return. The Tax Court also (i) took judicial notice of legal characterizations in the Claims Court's final judgment (which courts consider improper when considering the application of the doctrine of collateral estoppel), and (ii) without any evidence to support the Commissioner's assertion of the doctrine of collateral estoppel, ruled that Petitioners were barred by the doctrine from taking the position that the filing of the Return started the limitations period.

In this way, the Tax Court, recognizing that the already-processed Return was the basis of the notice of deficiency, nevertheless treated the Return as a nullity under the exception to the statute of limitations, § 6501(c)(3). Furthermore, without holding the Commissioner to his burden of production under § 7491(c), the Tax Court also ruled that Petitioners therefore were liable under § 6651 for a failure-to-file penalty!

Lastly, the Tax Court imposed sanctions under § 6673 for Petitioners' supposed “original reporting position” on the Return, without allowing Petitioners to read, let alone to brief in opposition, the Commissioner's sanctions motion. ER293-296.³ The Tax Court also imposed sua sponte sanctions against Petitioners' counsel under § 6673(a)(2), finding bad faith on counsel's part (against his own clients, not against opposing counsel, A-33) by looking to conduct in other cases but without any showing of multiplication of the proceedings actually before the court, or of excess costs.

Petitioners filed a Notice of Appeal of the Decision and of all orders underlying the Decision, including the imposition of costs against their counsel. And on January 14, 2015 — after the Tax Court's issuance of the order imposing costs and before the entry of the Decision — Petitioners and their counsel filed Petitioners' Status Report, in which their counsel notified the Tax Court and the Commissioner of his intention to appeal the Opinion and Order and the Decision which imposed sanctions against him under § 6673. (FER1; A-48)

On appeal, without any record evidence of the prior case, the Court of Appeals for the Ninth Circuit nevertheless affirmed that the doctrine of collateral estoppel precluded Petitioners from rebutting the Commissioner's assertion in the Tax Court that the timely-filed and already-processed Return failed to start the limitations period. The Court of Appeals therefore affirmed that the notice of deficiency was timely, and then summarily affirmed the deficiency, the failure to file penalty, and the § 6673 sanctions against Petitioners and their counsel. As to these sanctions, Petitioners, on appeal by and through their counsel, pointed out that the Tax Court (i) did not identify a frivolous position, (ii) received no evidence of any excess costs, vexatious conduct, or multiplication of the proceedings attributable to Petitioners' counsel,⁴ and (iii) took an action sua sponte that did not comport with due process. But, giving no effect to the Status Report in which their counsel indicated his intention to appeal the sua sponte sanctions against him, the Court of Appeals dismissed that portion of the appeal for lack of subject matter jurisdiction.

Petitioners seek a writ of certiorari. The Ninth Circuit's affirmance of the application by the Tax Court of the doctrine of collateral estoppel, without any part of the record of the prior case being in evidence, directly contradicts its own decisions in Guam Investment Company v. Central Building, Inc., 288 F.2d 19, 23 (CA9 1961), U.S. v. Lasky, 600 F.2d 765, 769 (CA9 1979), Hernandez v. City of Los Angeles, 624 F.2d 935, 937 (CA9 1980); and Clark v. Bear Stearns & Co., Inc., 966 F.2d 1318, 1321 (CA9 1992). And the Ninth Circuit's reliance on judicial notice to support its application of collateral estoppel conflicts with decisions of the Second, Third, Sixth and Eighth Circuit Courts of Appeal and deprives Petitioners of the principle of fairness articulated by this Court in Allen v. McCurry, 449 U.S. 90 (1980).

The interpretation by the Tax Court, as affirmed by the Ninth Circuit, of the exception at § 6501(c)(3) to the statute of limitations on tax assessment (and, although not a statutory term, the interpretation of “valid return”) conflicts with this Court's decisions in Zellerbach Paper Co. v. Helvering, 293 U.S. 172 (1934), Germantown Trust Co. v. Commissioner, 309 U.S. 304 (1940), and Badaracco v. Commissioner, 464 U.S. 386, 396-397 (1984). However, to Petitioners' knowledge, this Court has not yet passed on the precise questions presented in this Petition.

The Court of Appeals' failure to give effect to Petitioners' counsel's informal notice of his intent to appeal conflicts with a decision of the Fifth Circuit in Cobb v. Lewis, 488 F.2d 41 (CA5.1974) which held that “the notice of appeal requirement may be satisfied by any statement, made either to the [trial] court or to the Court of Appeals, that clearly evinces the party's intent to appeal.”

A. The basis for federal jurisdiction in the trial and appellate courts.

Under § 6214(a), the Tax Court generally has subject matter jurisdiction over the case or controversy that is raised by petition for redetermination of the Commissioner's determination of a tax deficiency that is set forth in a timely-issued, statutory notice thereof — but only if that notice is mailed in accordance with § 6212. However, in this case, the notice of deficiency was not timely; therefore, Petitioners challenged the Tax Court's subject matter jurisdiction, which the Tax Court itself has held is limited to its power to declare the notice to have no force and effect and to declare that no deficiency exists.

If a notice of deficiency — even one that is valid in all other respects — is sent after the statute of limitations has run against the assessment and collection of the tax, it has no force or effect, and “there is no deficiency.”

Trefry v. Commissioner, 10 BTA 134, 137-138, (1928) (emphasis added); Reddock v. Commissioner, 72 TC 21, 27-28 (1979) (granting summary judgment because “there is no deficiency due from petitioners” from late-mailed notice). In the case below, the Tax Court held the issue to be merely an affirmative defense, and did not even consider its subject matter jurisdiction.

Under Federal Rules of Appellate Procedure (“FRAP”), Rule 13(a)(1)(A), Petitioners timely mailed their Notice of Appeal on August 5, 2017 (ER569). Under § 7482(a)(1), the Court of Appeals had exclusive jurisdiction to review the final Order and Decision of the Tax Court, entered on May 9, 2017 (ER1) (“Decision”). Alternatively, the Court of Appeals had jurisdiction to vacate the Tax Court's Decision if it determined that the lower court lacked subject matter jurisdiction. Steel Co. v. Citizens for Better Environment, 523 U.S. 83, 94-96 (1998).

2. The undisputed facts relevant to jurisdiction and material to the questions presented.

The following facts were stipulated, judicially admitted, and/or proved by evidence, and thus were firmly established in the case below:

(1) After receiving an automatic extension (ER135-136), Petitioners filed their 2008 individual income tax return, IRS Form 1040 (“Return”) on August 11, 2009 via U.S. Certified Mail with the Internal Revenue Service at its Fresno, California campus. ER176-178, 260-261.

(2) The Return was not circumscribed with, or accompanied by, any Constitutional objections or tax protester-type arguments. ER178 (Stipulation 3); ER181-189.

(3) The Return reported total income of $22,661 in IRA distributions and $0.00 in wages, taxable interest, and dividends, and the Return was accompanied by three IRS Forms 4852, Substitute for Form W-2 Wage and Tax Statement, each indicating a correction of Forms W-2. ER181-189.

(4) The Commissioner received the Return on August 17, 2009. ER178 (Stipulations 5-6); ER261. See also ER321.

(5) The Commissioner processed the Return on September 21, 2009. ER323-327; ER258, 261-263. See also ER321.

(6) The Commissioner mailed to Petitioners an IRS Notice CP16 that stated that the Commissioner found a mistake on the Return, changed the amount of the overpayment shown thereon, and applied the entire corrected amount of overpayment to Petitioners' tax account for 2006. ER323-325, 257-258, 261-262. See ER321. The notice included an explanation of the specific changes made to the amount of federal income tax withheld and reported on the Return. The Commissioner's calculations of $0.00 of taxable income and $0.00 of total tax shown thereon were identical to the corresponding amounts reported on the Return. ER325.

(7) On October 17, 2012, the Commissioner mailed to the Waltners a letter purporting to be a statutory notice of deficiency for tax year 2008 (“NOD”). ER178, 200-215.

(8) In September of 2013 in Docket No. 21953-13L, during oral argument on Mr. Waltner's motion for summary judgment in that case, the Commissioner's counsel affirmed to the Tax Court that the Commissioner's position was that the Return was a valid return. ER262-263, 434, 441-442. He did not deny that judicial admission in the case below.

(9) The government never alleged, and the court never found: (i) that the Return was fraudulent; (ii) that any factual item declared on the Return was false; or (iii) that any tax calculation made on the Return was substantially incorrect.

(10) The Tax Court ordered Petitioners' counsel to pay costs under § 6673(a)(2). Thereafter, but before entry of the court's decision, Petitioners' counsel filed a Status Report in which he stated his intention to appeal the § 6673(a)(2) sanction. FER1; A-48

REASONS WHY THIS PETITION SHOULD BE GRANTED

I. Revealing no legal standard for applying the doctrine of collateral estoppel, and, instead, relying on an impermissible interpretation of § 6501(c)(3), the Judgment conflicts with decisions of the court below, of this Court, and of six other Circuit Courts of Appeal.

In the appeal below, the Ninth Circuit upheld the Tax Court's reckless disregard of long-standing rules for applying the doctrine of collateral estoppel, including the requirements (i) that the party that asserts the doctrine must establish that the parties in both the prior and current cases were identical or in privity, and (ii) that the issue to be precluded (a) was identical to an issue raised in a prior case under identical legal standards, (b) was actually litigated in the prior case, (c) was finally decided on the merits of the issue asserted to be precluded, and (d) was a critical and necessary part of the judgment in the prior case. Clark v. Bear Stearns & Co., Inc., 966 F.2d 1318, 1320 (CA9 1992); Hydranautics v. FilmTec Corporation, 204 F.3d 880, 885 (CA9 2000); Cincinnati Ins. Co. v. Beazer Homes Invs., LLC, 594 F.3d 441, 445 (CA6 2010) (“different legal standards as applied to the same set of facts create different issues.” Emphasis the court's.).

This Court has held that courts may further inquire “whether other special circumstances warrant an exception to the normal rules of preclusion.” Montana v. U.S., 440 U.S. 147, 155 (1979). However, the Ninth Circuit was guided neither by the “normal rules of preclusion” nor by “other special circumstances warrant[ing] an exception” thereto. The government never raised the issue of the Return's “validity” in any case until it did so in the Tax Court in its effort to avoid Petitioners' statute of limitations defense. The issue precluded was not relevant to the law that the court misinterpreted in this case.

By ruling without adhering to any legal standard, the Ninth Circuit created a conflict between it and its sister Circuits, created uncertainty for courts within its own Circuit in applying the doctrine, and set a dangerous example for the Tax Court.

A. By relying on judicial notice to support an application of collateral estoppel, the Ninth Circuit departed from its own precedents and from those of the Second, Fifth, Seventh, Eighth and Eleventh Circuits.

The court below affirmed the Decision, which was grounded on the Tax Court's judicial notice of a prior ruling by the Claims Court. See ER266. But taking judicial notice, and then relying on the fact so noticed, was improper for two reasons: (1) the trial court impermissibly noticed much more than an adjudicative fact as required by Federal Rules of Evidence (“FRE”), Rule 201 and (2) the trial court effectively relieved the Commissioner of having to meet his well-established burden of proof in his assertion of the collateral estoppel doctrine.

In Allen v. McCurry, supra, 449 U.S. at 94-95, this Court articulated the fundamental principle of fairness that guides the application of collateral estoppel:

[O]ne general limitation the Court has repeatedly recognized is that the concept of collateral estoppel cannot apply when the party against whom the earlier decision is asserted did not have a "full and fair opportunity" to litigate that issue in the earlier case.

Therefore, the Tax Court and the Court of Appeals were not permitted to presume that Petitioners had a “full and fair opportunity” (i) to litigate in a prior case, (ii) under the same legal standards, (iii) the precise issue sought to be precluded in the case below, every one of which elements Petitioners had disputed. Op.Br. 30-33; Rep.Br. 14-16 (e.g., “the United States never alleged or argued in the refund case that the Return was “invalid” for any purpose and thus the “validity” matter never was fully and fairly litigated”).

As the Ninth Circuit has rightly held in other cases, “the Court may not take [judicial] notice of disputed matters.” Lee v. City of Los Angeles, 250 F.3d 668, 689 (CA9 2001), and, quoting the Seventh Circuit's articulation of the rule, “a court cannot judicially notice that the matters in issue are the same as those in a former suit. Such matters must be pleaded and proved.” Guam, supra, 288 F.2d at 23. Accord U.S. v. Jones, 29 F.3d 1549, 1553 (CA11, 1994) (“If it were permissible for a court to take judicial notice of a fact merely because it has been found to be true in some other action, the doctrine of collateral estoppel would be superfluous,” citing 21 C. Wright & K. Graham, FEDERAL PRACTICE AND PROCEDURE: Evidence § 5104 at 256-257 (1977 & Supp.1994)).

However, in Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, fn. 6 (CA9 2006) — the case on which the Tax Court relied — the Ninth Circuit inexplicably abandoned its reasoning and its holding in Guam. In Reyn's Pasta, though, the Ninth Circuit's judicial notice and consideration of the prior case at least was addressed to the content of actual court documents from the prior case that had been admitted into evidence in the case below “[t]o determine what issues were actually litigated.” However here, in contrast, nothing from the prior case was in the record of the case below. Therefore, there was nothing that either the Tax Court or the Ninth Circuit properly could have considered in their respective attempts to apply the doctrine of collateral estoppel.

Besides the Eleventh Circuit, the Second, Fifth and the Eighth Circuits have ruled that “even though a court may take judicial notice of a 'document filed in another court . . . to establish the fact of such litigation and related filings,' a court cannot take judicial notice of the factual findings of another court.” Taylor v. Charter Medical Corp., 162 F.3d 827, 831 (CA5, 1998) quoting Liberty Mut. Ins. Co. v. Rotches Pork Packers, Inc., 969 F.2d 1384, 1388-89 (CA2 1992) and citing Holloway v. A.L. Lockhart, 813 F.2d 874, 878-79 (CA8 1987) (a judicially-noticed fact “used as a predicate for the application of collateral estoppel . . . is inappropriate”) and Jones, supra.

As the Fifth Circuit discussed in Taylor, the Seventh Circuit had considered it “conceivable that a finding of fact may satisfy the indisputability requirement of Fed.R.Evid. 201(b),” but agreed that “courts generally cannot take notice of findings of fact from other proceedings for the truth asserted therein because these are disputable and usually are disputed.” Taylor at 830, quoting General Electric Capital Corporation v. Lease Resolution Corporation, 128 F.3d 1074, 1082, fn. 6 (CA7 1997). In Taylor, the Fifth Circuit expressly held that “a court cannot (at least as a general matter) take judicial notice of a judgment for other, broader purposes” than “for the limited purpose of taking as true the action of the . . . court in entering judgment for [one party] against [the other party]. . . . The judicial act itself was not a fact 'subject to reasonable dispute.'”

Here, the trial court took judicial notice not only of the prior court's action, but also of its findings of fact and of its legal determinations. “Relevant considerations include whether there is a substantial overlap between the evidence in the two cases and whether both suits involve application of the same rule of law. See Resolution Trust Corp. v. Keating, 186 F.3d 1110, 1116 (9th Cir.1999).” Kourtis v. Cameron, 419 F.3d 989, 995 (CA9 2005). Another court's legal determination “is neither an adjudicative fact within the meaning of Rule 201 nor beyond 'reasonable dispute.'” Taylor, supra, 162 F.3d at 831.

This Court should clarify for all federal courts that the Second, Fifth, Seventh, Eighth and Eleventh Circuits (and the Ninth itself previously in Guam, supra) correctly held that judicial notice is improper in the context of determining whether the elements of the doctrine of collateral estoppel have been met.

B. The Ninth Circuit's application of collateral estoppel without evidence is contrary to its own precedents and to those of the Fourth and Eighth Circuits on which the Ninth previously has relied.

In accordance with national standards of fairness and the Rules of Evidence, the Ninth Circuit previously has held that, if a party seeking to preclude an issue fails to introduce sufficient portions of the record of a prior proceeding to show what issues were fully and fairly litigated and necessarily determined, (i) that party has failed to meet his burden to plead and to prove the identity of issues, and (ii) he is barred from raising the doctrine of collateral estoppel on appeal. Clark, supra, 966 F.2d at 1320-1321; Hernandez, supra, 624 F.2d at 937; and Lasky, supra, 600 F.2d at 769.

The burden of pleading and proving the identity of issues rests on the party asserting the estoppel. Haung Tang v. Aetna Life Insurance Co., 523 F.2d 811, 813 (9th Cir. 1975). To sustain this burden a party must introduce a record sufficient to reveal the controlling facts and pinpoint the exact issues litigated in the prior action. United States v. Lasky, 600 F.2d 765, 769 (9th Cir. 1979).

Hernandez, supra, 624 F.2d at 937.

It is not enough that the party introduce the decision of the prior court; rather, the party must introduce a sufficient record of the prior proceeding to enable the trial court to pinpoint the exact issues previously litigated.” Id. Where the record before the district court was inadequate for it to determine whether it should apply the doctrine of collateral estoppel, we will not consider the issue on appeal.

Clark, supra, 966 F.2d at 1321(quoting Lasky, supra, 600 F.2d at 769).

In Lasky, the trial court relied upon opinions from the Fourth and Eighth Circuits: Bryson v. Guarantee Reserve Life Insurance Company, 520 F.2d 563 (CA8 1975) and U.S. v. Smith, 446 F.2d 200, 203 (CA4 1971). Bryson articulated “the general rule that a party who wishes to avail himself of a prior judgment as res judicata must introduce the whole record of the prior proceeding. 46 Am.Jur.2d Judgments § 600 (1969).” Bryson, supra, 520 F.2d at 566. Discussing “the limited record before the trial court and upon appeal,” the Eighth Circuit Court of Appeals determined that “the record before the trial court will not support the application of res judicata principles . . . being deficient in establishing both the identical nature of the causes of action and parties or their privies to the state case.” Id. at 567-568.

Here, neither the Tax Court nor the Court of Appeals had any record before it of the prior case. The insufficiency of the record was absolute.

In Smith, as the Ninth Circuit ruled in Clark, the Court of Appeals for the Fourth Circuit held that, “where the appellant had similarly failed to establish a record in the trial court as to the issues necessarily determined . . . in a prior trial, he was barred from raising the issue of collateral estoppel on appeal.” 446 F.2d at 203.

In contrast, the Ninth Circuit in the instant case did not bar the Commissioner from raising the doctrine of collateral estoppel on appeal, nor did it otherwise adhere to these nationally-recognized legal standards. Instead and in contravention of its own precedents and those of its sister Circuits on which it previously has relied, the Ninth arbitrarily and unfairly applied the doctrine of collateral estoppel in this case despite the total absence of any evidence in the record in support of it. The Ninth Circuit thus completely relieved the Commissioner of his burden to prove any of the elements of the doctrine. In so doing, the Ninth Circuit decided the case adversely to Petitioners and in favor of the Commissioner on the basis of nothing more substantial or less arbitrary than whim.

A court that does not follow its own precedents is unpredictable, unreliable, and arbitrary. Hapless litigants in the Ninth Circuit whose adversary asserts but fails to prove any element of the doctrine of collateral estoppel now have a disadvantage in a way that litigants in almost every other Circuit do not have to contend.

C. The Ninth Circuit's gymnastic re-framing of the issues and misstatement of the governing law created conflict with decisions of this Court and the First and Eleventh Circuits.

The Tax Court held that the notice of deficiency that the Commissioner issued months after the expiration of the three-year statute of limitations was not untimely because of the exception to the statute of limitations “[i]n the case of failure to file a return.” § 6501(c)(3). It arrived at this conclusion after taking judicial notice of the Claims Court's legal determination that the Return was not a “valid return,” as if Petitioners or the government ever had raised any issue involving this term, and as if § 6501(c)(3) uses this term.

Petitioners never raised the issue of whether the Return was a “valid” return because the statutory exception invoked by the Commissioner in his Answer to Amendment to Petition (ER168-169) in the Tax Court below does not apply when, as here, a return was filed. The “valid return” issue is a red herring. But even if it were not so, the courts below, in conflict with precedents in this Court and in the First and Eleventh Circuits, misrepresented the statutory exception, itself, and enlarged the criteria that courts historically have applied to determine a return's validity.

1. The Judgment rests on a statutory interpretation that is in conflict with precedents of this Court that construe § 6501(c)(3).

This Court has held, “If Congress explicitly puts a limit upon the time for enforcing a right which it created, there is an end of the matter. The Congressional statute of limitation is definitive.” Holmberg v. Armbrecht, 327 U.S. 392, 395 (1946). And the exceptions thereto should not be interpreted more broadly than their plain and unambiguous language. Badaracco, supra, 464 U.S. at 391-392 (strictly construing §§ 6501(a) and (c)(3)); Hartford v. Gibbons & Reed Co., 617 F.2d 567, 569 (CA10 1980) (“exceptions to statutes of limitations must be construed strictly.” Citation omitted.). As this exception allows for a limitless period for assessing taxes, it must be construed strictly in favor of the citizen. Gould v. Gould, 245 U.S. 151, 153 (1917).

Contrary to the assertions of the Commissioner, which were adopted in whole by the courts below, Congress did not say, in § 6501(c)(3), “in the case of failure to file a 'valid return.'” The absence of this adjective must be presumed to be intentional and legally significant. See In Re Taylor, 223 B.R. 747, 753 (CA9 BAP 1998) (“where Congress has failed to include language in statutes, it is presumed to be intentional when the phrase is used elsewhere in the Code.”)⁵ Therefore, Congress did not intend the statute to read “failure to file a valid return.” So, to add a qualifying adjective that is not present in the statute is an impermissible interpretation. As this Court aptly stated, “Courts are not authorized to rewrite a statute because they might deem its effects susceptible of improvement.” Badaracco, supra, 464 U.S. at 398. And yet this statutory misrepresentation lies at the heart of the Commissioner's assertion of the doctrine of collateral estoppel.

This Court stated that § 6501(c)(3), strictly construed, specifically describes the situation where no return is filed “at all.” Badaracco, supra, 464 U.S. at 392 (“Subsection (c)(3) covers the case of a failure to file a return at all (whether or not due to fraud)”). This Court found that the provisions of § 6501(c)(3) “appear to be unambiguous on their face.” Id. at 392.

Section 6501(c)(3) applies to a “'failure to file a return.” It makes no reference to a failure to file a timely return (cf. § § 6651(a)(1) and 7203), nor does it speak of a fraudulent failure to file. The section literally becomes inapplicable once a return has been filed.

Id. at 401.

The interpretation by the courts below of § 6501(c)(3) to read “valid return” where Congress chose not to use the phrase introduces subjectivity to the law in the Ninth Circuit that cannot be squared with national interests of fundamental fairness,⁶ consistent application of the law, or orderly court administration.

The Judgment is based on an impermissible revision of a statutory exception to the statute of limitations on assessment, and, therefore, tax litigants in the Ninth Circuit who assert a statute of limitations defense in deficiency cases are now deprived of certainty, finality and consistency in the administration of income tax law. This Court has the opportunity to establish for the lower courts much-needed consistency in the interpretation of these statutes.

2. The Judgment conflicts with precedents of this Court and the First and Eleventh Circuits that consider a return that starts the limitations period.

The Court of Appeals affirmed the Tax Court's Decision without any clarification in the record of what either court meant by adding the term “valid return” to the statute. Even if adding language to a statute were permissible, the import of the Judgment is that these courts meant something more than a processible return on the prescribed form executed under penalty of perjury. § 6011(a); § 6061, § 6065, § 6611(g). The Decision is thus in conflict with those of its sister Circuits. E.g., Columbia Gas System, Inc. v. U.S., 70 F.3d 1244, 1245 (Fed.Cir. 1995) (“A taxpayer establishes a filing date upon filing a return in processible form. I.R.C. § 6611(h).”)⁷

[A] return . . . is processible if (1) filed on a permitted form; (2) filed in proper form with the taxpayer's name, address, identifying number, and the required signature; and (3) filed with sufficient information (whether on the return or required attachments) to permit the mathematical verification of tax liability on the return. See I.R.C. § 6611(h)(2)(B)(i)(ii).

Columbia, supra, at 1246 (on what is now § 6611(g)).

The Return was processible, as the Commissioner amply demonstrated by processing it. Id. at 1246 (“IRS's successful processing of the returns supports [a] determination that [the filer] submitted processible and mathematically verifiable returns.”) And the Commissioner never alleged that the Return was false or fraudulent.

In order to reach their erroneous conclusions about the exception to support the Commissioner's untimely assertion of underreported income, the courts below had to simply and wantonly nullify the already-filed, already-processed Return. But, in Germantown, supra, construing the earlier enactment of sections 6501(a) and (c)(3), this Court held that the nullification of purportedly incorrect returns is unallowable.

It cannot be said that the petitioner, whether treated as a corporation or not, made no return of the tax imposed by the statute. Its return may have been incomplete in that it failed to compute a tax, but this defect falls short of rendering it no return whatever.

Id. at 310. As this Court said in Chase Securities Corp. v. Donaldson, 325 U.S. 304, 314 (1945), the operation of statutes of limitation “does not discriminate between the just and the unjust claim.”

It is axiomatic that whether a filed return establishes a meritorious claim for refund, or whether it contains errors or omissions, has no bearing on whether it was filed “at all.” Such determinations can be made only after the filing, and during the examination and processing, of the return.

The Ninth Circuit has previously determined what constitutes a return on which a notice of deficiency may be based:

If the forms submitted show the amount of tax owed, as in this case, or otherwise permit the Service to calculate the tax liability claimed by the taxpayer, they are sufficient to be considered a “return” for purposes of section 6211(a)(1)(A).

Conforte v. CIR, 692 F.2d 587, 592 (CA9 1982).

This Court should clarify that Congress intended to give the IRS three years in which to make accuracy and deficiency determinations, and that, therefore, a return on which the Commissioner bases a notice of deficiency must be a return for purposes of the period of limitations for assessing that deficiency. Any other conclusion is illogical and confusing.

This view finds support in the definition of “deficiency” at § 6211, and in this Court's discussion of the predecessor to sections 6501(a) and (c)(3):

We think the language of the sections is such that it cannot be said the fiduciary return filed by the petitioner was a return of the tax in respect of which the liability arises but was no return of the tax imposed by the statute. . . . if the return in question complies with the one description, it equally complies with the other. We find no adequate reason for attributing a different meaning to the two phrases. 

Germantown, supra, 309 U.S. at 308-309. See § 6213(g). Forty-five years later, this Court reiterated this common-sense approach to statutory construction in Badaracco, supra, discussing § 6501:

The word "return," however, appears no less than 64 times in § 6501. Surely, Congress cannot rationally be thought to have given that word one meaning in § 6501(a), and a totally different meaning in §§ 6501(b) through (q).

464 U.S. at 397.

Even assuming, arguendo, that the phrase “valid return” actually appeared in the statutory exception at issue here, the courts below still would be improperly construing the phrase as referring to a subjective evaluation of the completeness or accuracy of the information contained in the filed return. This construction conflicts with settled law in other circuits and in trial courts that construes statutory criteria for returns.

In Plunkett v. Commissioner, 118 F.2d 644, 647 (CA1 1941), the petitioner's return was determined to be deficient and “not a proper return” because it was not “properly executed” — i.e., signed or verified. In so holding, the First Circuit made clear that the amount of income reported on the return had no bearing on whether the return itself was valid as a return:

It is true that if a properly executed return be filed within the time prescribed by law, though it be incorrect as to the amount of taxable income, there can be no penalty for failure to file a return . . .

Id. at 650. This Court has held that “assent [of the United States] that the statute [of limitations] might begin to run was conditioned upon the presentation of a return duly sworn to.” Lucas v. Pilliod Lumber Co., 281 U.S. 245, 249 (1930). Cf. Reaves v. Commissioner, 295 F.2d 336, 338 (CA5 1961) (return filed was not signed and therefore “no return was filed”); Moore, supra, 627 F.2d at 834 (without deciding whether a tax could be computed from the “incomplete and inaccurate” returns replete with Constitutional objections and protest material filed in that case, the court found the forms supplied “were not returns for another reason: they were not verified.”); Borgeson v. United States, 757 F.2d 1071, 1073 (CA10 1985) (absence of perjury clause renders return a nullity); Rittenbaum v. United States, 109 F.Supp. 480, 483 (N.D. Ga. 1952) (forms claiming an overpayment and election that it be credited to estimated tax for the following year were valid returns and refund claims); Estate of Simpson v. Commissioner, 21 T.C.M. (CCH) 371 (1962) (return considered not valid because it was not subscribed under penalties of perjury); Grant, supra.

This Court has held that,

a document which on its face plausibly purports to be in compliance, and which is signed by the taxpayer, is a return despite its inaccuracies. . . . The Court in Zellerbach held that an original return, despite its inaccuracy, was a "return" for limitations purposes.

Badaracco, supra, 464 U.S. at 396-397 citing Zellerbach, supra. “Perfect accuracy or completeness is not necessary to rescue a return from nullity . . .” Zellerbach, supra, 293 U.S. at 180. Therefore, the courts below ignored this Court's precedents by declaring that, in the Ninth Circuit, all non-fraudulent returns that purportedly underreport income, even those that were filed and were processed without difficulty, nevertheless are subject to an interminable assessment period, and to failure-to-file penalties, as though they never had been filed at all.

The Judgment does not comport with settled law, and instead devolves to arbitrary subjectivity which breads confusion, inconsistency, and injustice that can be resolved only by this Court's review.

II. Only this Court can resolve the split between the Ninth Circuit from the Fifth Circuit on the issue of whether an early informal notice is adequate to establish a right to appeal.

The Ninth Circuit dismissed, for lack of jurisdiction, Petitioners' appeal of the portion of the Decision that imposed costs against their counsel. But as Petitioners argued:

The Status Report constitutes an early-filed notice of Mr. Wallis's intent to appeal the sanctions orders under FRAP 4(a)(2) (“A notice of appeal filed after the court announces a decision or order — but before the entry of the judgment or order — is treated as filed on the date of and after the entry.”) See the discussion and cases cited in Cobb v. Lewis, 488 F.2d 41 (5th Cir.1974) (cited with approval in Advisory Committee Note to Rule 3, 1979 Amendment, and by the Supreme Court in Torres [v. Oakland Scavenger Co., 487 U.S. 312, 318 (1988)].

Rep.Br. 18-19.

This Court's interpretation of FRAP Rule 3(c) prompted the amendment and liberalization of the Rule “in order to prevent the loss of a right to appeal through inadvertent omission of a party's name or continued use of such terms as 'et al.'” FRAP 3(c), Advisory Committee's Note — 1993 Amendment. The notes to the amendment further explain that a designation in a notice of appeal is sufficient under Rule 3(c) if “it is objectively clear that a party intended to appeal.” Id. “If a court determines it is objectively clear that a party intended to appeal, there are neither administrative concerns nor fairness concerns that should prevent the appeal from going forward.” Id. See FRAP 3(c)(4).

This Court has held that “[a]mbiguities in statutory language should not be resolved so as to imperil a substantial right which has been granted,” and that, where a litigant files an irregular notice of his intent to appeal a judgment, “the defect is not jurisdictional in the sense that it deprives the court of power to allow the appeal. The court has discretion, where the scope of review is not affected, to disregard such an irregularity in the interests of substantial justice.” RFC v. Prudence Group, 311 U.S. 579, 582 (1941).⁸

In a decision of the Second Circuit Court of Appeals relying on RFC, Judge Learned Hand held that:

some paper must be filed in at least one court or the other, to constitute a notice of appeal. . . . The least requirement, which will be tolerable, is that some paper shall be accessible in the records of a court upon which both judges and parties can rely. Crump v. Hill, [104 F.2d 36 (CA5 1938)] is entirely in accord with this; the appellant had filed in the district court a paper which indicated his intent to appeal. True, it was a waiver of notice of appeal by the appellee; but that was unanswerable evidence of the appellant's purpose.”

FDIC v. Congregation Poiley Tzedeck, 159 F.2d 163, 166 (CA2 1946) (finding a mere notice served between the parties, but not filed, to be insufficient).

In the case below, the imposition of costs against Petitioners' counsel was included in the Decision against Petitioners. Petitioners' counsel filed, “after the court announce[d] a decision or order — but before the entry of the judgment or order,” a Status Report in which he explicitly stated his intention to appeal the portions of the Order and the Decision in which costs were imposed against him. Petitioners filed their Notice of Appeal in which they specifically included their intention to appeal both of the § 6673 sanctions included in the Order and the Decision. Nevertheless, the Ninth Circuit failed to address — or even to mention — the Status Report which enunciated counsel's intention to appeal, and ruled that it lacked jurisdiction to review that portion of the Decision. In so ruling, the Ninth Circuit split with the Fifth Circuit in Cobb, supra.

Cobb was cited in the Notes of Advisory Committee on Rules — 1979 Amendment to FRAP Rule 3:

[I[t is important that the right to appeal not be lost by mistakes of mere form. In a number of decided cases it has been held that so long as the function of notice is met by the filing of a paper indicating an intention to appeal, the substance of the rule has been complied with [citing Cobb]. The proposed amendment would give recognition to this practice.

Cobb also was cited with approval by Justice Brennan in his dissenting opinion in Torres, supra, which case sparked further amendment of Rule 3 in 1993. And Justice Marshall, in his dissenting opinion in Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 64 (1982),⁹ considered the Cobb decision to be “particularly instructive.”

Taken together, the Cobb decision and the several amendments to FRAP Rules 3 and 4 protect litigants from the loss of substantive rights due to technical oversights or failures. In contrast, the Judgment of the Ninth Circuit in this case results in a grievous loss of the right to appeal based on a cavalier refusal to acknowledge the record or to consider that the opposing party was duly notified and not prejudiced.

The split between the Circuits concerning how a non-party included in a judgment can appeal the portion of the judgment concerning him places all individuals similarly situated in the position of having to forum shop for the vindication of rights and for justice. To ensure national consistency in court administration, and to ensure that the interpretation of the Federal Rules are construed so as to effect substantial justice, this Court should clarify which Circuit Court of Appeals — the Ninth, or the Fifth — has correctly stated the Rule and its underlying principle.

The Tax Court's sua sponte action against Petitioners' counsel also raises a procedural conundrum — is a party's counsel, by that action, made a party to the case with the right to appeal independently of his clients? Or is a party determined to have standing to appeal orders against its counsel because of the financial and agency relationship between them? To Petitioners' knowledge, the courts below have not answered such questions, and the resulting ambiguity, in this case, worked to deprive Petitioners and their counsel of their right to appeal this substantial (indeed, for Petitioners, financially ruinous) order. The Court should accept certiorari and remand this issue for appellate review.

CONCLUSION

In its disregard of the general rules governing the application of the doctrine of collateral estoppel, the Ninth Circuit now stands alone in conflict with precedents of six other Circuit Courts of Appeals and of this Court. This conflict creates inconsistency, and it affects all litigants. A lack of clarity and national consistency regarding whether the accuracy or completeness of a processible tax return can affect whether it is considered to have been “filed,” so as to start the statute of limitations on assessment, or whether it can be nullified, so as to subject the filer to a failure-to-file penalty, are equally problematic.

And the split between the Ninth Circuit and the Fifth Circuit creates uncertainty with respect to when and how a non-party included in a judgment should be allowed to notify the parties and the court of his intention to appeal.

This Court's supervisory power is rightly invoked to resolve these splits and to settle these matters.

Petitioners' Petition for Writ of Certiorari should be granted.

Dated: August 24, 2019.

Respectfully submitted,

DONALD W. WALLIS
Counsel of Record
UPCHURCH, BAILEY & UPCHURCH, P.A.
780 North Ponce de Leon Blvd.
Post Office Drawer 3007
St. Augustine, FL 32085-3007
(904) 829-9066 dwallis@ubulaw.com

Counsel for Petitioners
Steven and Sarah Waltner