Horowitz v. Commissioner ( 1998 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
LESLIE C. HOROWITZ, personal
representative of the estate of
Milton W. Horowitz,
Petitioner-Appellant,
No. 95-3020
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent-Appellee.
Appeal from the United States Tax Court.
(Tax Ct. No. 93-18332)
Argued: December 5, 1996
Decided: March 26, 1998
Before NIEMEYER, Circuit Judge, HALL, Senior Circuit Judge,
and DAVIS, United States District Judge for the
District of Maryland, sitting by designation.
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Affirmed by unpublished per curiam opinion.
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COUNSEL
ARGUED: David Charles Masselli, MASSELLI & LANE, P.C.,
Arlington, Virginia, for Appellant. Marion Elizabeth Erickson, Tax
Division, UNITED STATES DEPARTMENT OF JUSTICE, Wash-
ington, D.C., for Appellee. ON BRIEF: Loretta C. Argrett, Assistant
Attorney General, Gary R. Allen, Bruce R. Ellisen, Tax Division,
UNITED STATES DEPARTMENT OF JUSTICE, Washington,
D.C., for Appellee.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
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OPINION
PER CURIAM:
This is an appeal from an order of the United States Tax Court. The
Appellant, Leslie C. Horowitz, the personal representative of the
estate of Milton W. Horowitz, has been substituted for her decedent,
who died during the briefing of the appeal.1 The taxpayer, a retiree
(hereinafter "Mr. Horowitz"), failed to file federal income tax returns
for tax years 1988, 1989, 1990 and 1991. After the Commissioner of
Internal Revenue issued a statutory notice of deficiency for those
years, Mr. Horowitz filed in August 1993 a timely pro se petition for
redetermination of income tax deficiencies in the Tax Court, which
had jurisdiction under 26 U.S.C. §§ 6213, 6214 and 7442. Inexplica-
bly, Mr. Horowitz, notwithstanding his indisputable financial ability
to do so, and despite several health-related physical limitations, never
retained counsel in connection with the Tax Court proceedings. Mr.
Horowitz failed to persuade the Tax Court that the Commissioner's
determinations were incorrect, and Appellant now prosecutes this
appeal.2 We affirm.
I.
As mentioned above, Mr. Horowitz filed the case in August 1993.
In January 1994, the Tax Court docketed the case for trial on June 20,
1994, and issued its "Standing Pre-Trial Order." Therein, the parties
were admonished:
Continuances will be granted only in exceptional
circumstances. See Rule 134, Tax Court Rules of Practice
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1 See Fed. R. App. P. 43(a).
2 Mr. Horowitz had the burden of proof before the Tax Court. Welch
v. Helvering, 290 U.S. 111, 115 (1933); Faulconer v. Commissioner, 748
F.2d 890, 893 (4th Cir. 1984).
2
and Procedure. Even joint motions for continuance will not
routinely be granted.3
On June 16, 1994, a mere four days before the scheduled trial date,
Mr. Horowitz filed a motion for a six month continuance because of
alleged health problems, i.e., degraded vision from diabetes and the
lingering effects of surgery on his knee (which had been completed
many months previously), and because his tax preparer was shortly
expecting a child, and might not be able to assist him prepare for trial.
The Tax Court denied the request for a continuance on the same day
it was filed by marginal order upon Mr. Horowitz's hand-drawn
request.
Thus, trial commenced on June 21, 1994, having been carried over
from June 20, 1994. At the outset, the parties entered into a stipula-
tion of facts, which included an agreement as to Mr. Horowitz's basis
in certain securities that he had sold in 1989, 1990 and 1991.4 The
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3 Rule 134 provides as follows, in relevant part:
A case or matter scheduled on a calendar may be continued by
the Court upon motion or at its own initiative. A motion for con-
tinuance shall inform the Court of the position of the other par-
ties with respect thereto, either by endorsement thereon by the
other parties or by a representation of the moving party . . . .
Continuances will be granted only in exceptional circumstances.
Conflicting engagements of counsel or employment of new coun-
sel ordinarily will not be regarded as ground for continuance. A
motion for continuance, filed 30 days or less prior to the date to
which it is directed, may be set for hearing on that date, but
ordinarily will be deemed dilatory and will be denied unless the
ground therefor arose during that period or there was good rea-
son for not making the motion sooner . . . .
Rule 134, Rules of the United States Tax Court, 26 U.S.C.A. foll. § 7453
(West 1997) (emphasis added).
4 On April 4, 1994, the Commissioner had served Mr. Horowitz with
his request for admissions, to which Mr. Horowitz never responded.
Accordingly, he was deemed to have admitted receiving the amounts of
income indicated by the Commissioner for the years in question, and to
have paid no taxes on that income. Nevertheless, as a result of the evi-
dentiary proceedings before the Tax Court, his income was reduced
below that which would have been justified on the admissions alone.
3
parties also stipulated that Mr. Horowitz was entitled to certain item-
ized deductions for mortgage interest and real estate taxes, and that
he was entitled to certain prepayment credits for 1991.
After a recess, taken to afford Mr. Horowitz an opportunity to
review and marshal his documents, and as trial continued, the court
allowed Mr. Horowitz to testify as to other deductions to which he
believed himself entitled. He was unable to give specific information
for any of these claimed deductions, however, stating variously that
his supporting documentation was "readily available at home" or that
he had given "the figures to his tax preparer" or that he simply "did
not have the figures here." He did admit, however, that his medical
insurance plan had reimbursed him for "a very large part" of his medi-
cal expenses during the years in issue. He also admitted that he had
received pension, dividend and interest income in all the years under
review.
The Tax Court issued its opinion and order in May 1995. The court
found that Mr. Horowitz had failed to prove his entitlement to any
deductions in excess of those that had been conceded or stipulated at
trial. The court also sustained the Commissioner's imposition of addi-
tions to tax under I.R.C. § 6651 for failure to file returns. The court
held that Mr. Horowitz's health problems did not constitute "reason-
able cause" for failure to file under the statute. Upon the Tax Court's
denial of Mr. Horowitz's motion for reconsideration, he noted an
appeal to this Court.
II.
On appeal, Appellant mounts no challenge whatsoever to the sub-
stantive rulings or findings of the Tax Court. Rather, Appellant asks
us to find reversible error in the lower court's refusal to grant a con-
tinuance to Mr. Horowitz, or (in what amounts to the same thing) to
hold open the evidentiary record post-trial.5 We find no such error.
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5 Appellant also argues that because Mr. Horowitz was "consistently
badgered, hectored and berated" during the Tax Court evidentiary hear-
ing, he was denied a fundamentally fair trial. We have carefully exam-
ined the trial transcript and we find that this claim of unfair treatment is
4
The standard of review of a trial judge's actions in denying contin-
uances is abuse of discretion. What we said in the context of continu-
ances in criminal cases is fully applicable in the present case:
The Supreme Court has defined "abuse of discretion" in
the context of a denial of a motion for continuance as "an
unreasoning and arbitrary insistence upon expeditiousness in
the face of a justifiable request for a delay."[Morris v.]
Slappy, 461 U.S. at 11-12, 103 S.Ct. at 1616-17. The
Supreme Court has also indicated that the test for whether
a trial judge has "abused his discretion" in denying a contin-
uance is not mechanical; it depends mainly on the reasons
presented to the district judge at the time the request is
denied. Ungar v. Sarafite, 376 U.S. 575, 589, 84 S.Ct. 841,
849, 11 L.Ed.2d 921 (1964).
The Supreme Court has opined that a broad and deferential stan-
dard is to be afforded to district courts in granting or denying continu-
ances: the burdensome task of assembling a trial counsels against
continuances, and, therefore, the trial courts must be granted broad
discretion. Slappy, 461 U.S. at 11. Furthermore, the district court
alone has the opportunity to assess the candidness of the movant's
request. Ungar, 376 U.S. at 591; see also United States v. Hutchison,
352 F.2d 404, 405 (4th Cir. 1965) (granting continuance within sound
discretion of trial judge; reasonable latitude must be allowed). United
States v. LaRouche, 896 F.2d 815, 823-24 (4th Cir.) (emphasis
added), cert. denied, 496 U.S. 927 (1990).
Applying this standard in the case at bar, it is clear to us that the
Tax Court was wholly justified in denying Mr. Horowitz's requests
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wide of the mark by a substantial margin. To the contrary, the transcript
shows that the trial court extended every courtesy to Mr. Horowitz,
repeated her statements and questions numerous times (and finally had
the clerk sit next to Mr. Horowitz and repeat into his ear the court's state-
ments) in deference to his demonstrated inability to hear and/or under-
stand, and generally sought to bring to the proceedings a structure and
coherence which less care would not have achieved. In our view, com-
mendation, not censure, is the only appropriate response to the trial
judge's sensitive handling of the proceedings.
5
for a continuance. Mr. Horowitz had ten months from the time he
filed his petition in the Tax Court to the trial date to prepare his case,
yet, not until just a few weeks before trial did he hire a commercial
tax preparation firm (H & R Block) to assist him. For reasons not
shown in the record, the particular individual assigned to or selected
by Mr. Horowitz was in the late stages of her pregnancy, and thus her
availability to work closely with Mr. Horowitz in preparing for trial
was uncertain at best, even when the engagement was effected. Thus,
the record shows that there was a manifest lack of diligence in Mr.
Horowitz's leisurely trial preparation during the ten months the case
was pending on the docket.
Furthermore, the additional reason Mr. Horowitz provided as justi-
fying his belated request for a continuance -- his alleged health prob-
lems -- had little relevance to the tasks of trial preparation and
document-assembling necessary to go forward on the assigned trial
date. Tellingly, as the trial judge noted, Mr. Horowitz's health prob-
lems did not hinder his ability to manage his real estate holdings, or
to make careful investment decisions.6 Indeed, at trial, when he reiter-
ated his request for a continuance, Mr. Horowitz did not rely initially
upon any alleged health problem but, instead, asserted that he needed
more time to hire an attorney. This borders upon the frivolous, con-
sidering that the record discloses that Mr. Horowitz had no difficulty
hiring investment advisors and real estate agents when and as the
need arose for help in managing his holdings (including three or four
rental properties), and considering that, as the record shows, he had
total gross income during the four tax years in dispute in excess of
$175,000. See J.A. at 82-87, 100-02, 187.
III.
A busy adjudicatory tribunal is not required to permit litigants to
set the timing and pace of proceedings unilaterally to fit their individ-
ual preferences. Mr. Horowitz essentially sought an open-ended
schedule for the Tax Court proceedings which he had instituted, and
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6 See J.A. at 90-91, 193. Mr. Horowitz also admitted at trial that a week
before the proceedings under review here, he was involved in state court
litigation against one of his tenants in which he was represented by coun-
sel. Id. at 68.
6
he sought it at the eleventh hour, at that. We discern no abuse of dis-
cretion in the Tax Court's rejection of that endeavor; we conclude that
the lower court's interpretation and application of its own Rule 134
relating to continuances fell well within a proper exercise of its broad
discretion. Accordingly, the order of the United States Tax Court is
AFFIRMED.
7