Sаmuel T. GINDES and Joan L. Gindes, et al., Appellants, v. The UNITED STATES, Appellee.
Appeal No. 84-700.
United States Court of Appeals, Federal Circuit.
Aug. 8, 1984.
Certiorari Denied Dec. 3, 1984.
740 F.2d 947 | See 105 S.Ct. 569.
All parties and the trial court agreed that the third factor, whether the agent transmits money received to the principal, is not particularly relevant to this case. As to the fourth factor, whether receipt of income is attributable to the assets or employees of the partnership or the corporation, the trial court concluded that the corporation owned the assets because it could not have obtained financing unless it owned the property. We see no basis to disturb that conclusion in this case.
Finally, is the question оf whether the corporation‘s activities were consistent with the normal duties of an agent. Although we agree with taxpayer‘s assertion that the trial court misstated the issue as being whether use of the corporation as an agent of the partners served the partner‘s purpose, this does not alter the result of this case. We conclude that the corporation‘s activities were not consistent with its claims of agency. As we pointed out above, the corporation failed to reveal any agency status both to creditors and other individuals; the corporation assumed full liability on the note; and the corporation defended lawsuits and obtained insurance in its own name. Such activities are not the normal duties of an agent.5
We do not conclude that a controlled corporation may never hold title to property as an agent of its owners. We do conclude that under the particular facts of this case, where the corporation frequently failed to reveal any agency status, where none of the partners were personally liable on the note, where in effect the corporation asserted to the outside world that it owned the property, that taxpayer has fаiled to meet his heavy burden of showing that a true agency relationship existed. We, therefore, affirm the decision of the trial court that the corporation was the owner of the property for federal tax purposes.
AFFIRMED.
George L. Hastings, Jr., Washington, D.C., argued for appellee. With him on the brief were Glеnn L. Archer, Jr., Asst. Atty. Gen., Michael L. Paup and Richard Farber, Washington, D.C.
Before FRIEDMAN and RICH, Circuit Judges, and NICHOLS, Senior Circuit Judge.
FRIEDMAN, Circuit Judge.
This is an appeal from a judgment of the United States Claims Court insofar as that judgment failed to grant the appellants recovery on certain tax refund claims. The judgment was in accord with the prior decision of thе Court of Claims that granted summary judgment for the United States on those claims. Gindes v. United States, 228 Ct.Cl. 632, 661 F.2d 194 (1981). In this appeal the appellants seek to relitigate the identical issues that that decision resolved against them. We hold that the prior decision of the Court of Claims is the law of the case, and affirm.
I
The will of Charles I. Kaplan, who died in Junе 1964, created a number of trusts for the benefit of his wife and children. (The appellants here are the children.) The corpus of each trust consisted of interests Mr. Kaplan had upon his death in 19 real estate partnerships. With minor exceptions here irrelevant, the assets of those partnerships consistеd of real property upon which substantial depreciation had been taken in the federal partnership tax returns.
The federal estate tax return of Charles I. Kaplan was filed in April 1965. The Commissioner assessed a deficiency, ruling that the gross estate also included the interests in certain of those partnerships that Charles I. Kaplan had transferred to inter vivos trusts before his death. The estate challenged in the United States Tax Court the assessment of that deficiency and also another deficiency resulting from the Commissioner‘s redetermination of the value of the decedent‘s interest in one of the partnеrships. The Tax Court suit was settled in 1969 when the government accepted the estate‘s valuation of the partnership and the estate accepted the Commissioner‘s inclusion in the gross estate of the partnership interest transferred to the inter vivos trusts.
Following and apparently as a result of the settlemеnt of the Tax Court case, the appellants became aware that if the partnerships made an “election” under
Nine of the partnerships filed elections under
The court ruled that
The court remanded the case to the trial division for further proceedings consistent with its opinion. The court denied rehearing and a suggestiоn for rehearing en banc. See 228 Ct.Cl. 632, 661 F.2d 194.
On October 1, 1982, the Court of Claims ceased to exist. Its appellate functions were assumed by this court, and its trial functions were assumed by the newly created United States Claims Court.
The parties settled those issues. On October 27, 1983, the Claims Court entered a judgment in accordance with that settlement, determining the amounts the appellants were to recover. The present appeal is from that judgment.
The appellants presumably challenge that judgment for its failure to rulе in their favor on the issues on which the Court of Claims had granted summary judgment for the United States. We assume arguendo that the appellants may do so, despite the determination in the prior decision that the petitions were “dismissed to [the] extent” that the government‘s motion for partial summary judgment was granted. 661 F.2d at 203.
II
A. “The doctrine of law оf the case ‘expresses the practice of courts generally to refuse to reopen what has been decided.’ Messinger v. Anderson, 225 U.S. 436, 444, 32 S.Ct. 739, 740, 56 L.Ed. 1152 (1912). Thus, ‘once a case has been decided on appeal, the rule adopted is to be applied, right or wrong, absent exceptional circumstances, in the disposition of the lawsuit.’ Schwartz v. NMS Industries, Inc., 575 F.2d 553, 554 (5th Cir.1978).” United States v. Turtle Mountain Band of Chippewa Indians, 222 Ct.Cl. 1, 612 F.2d 517, 520 (1979). The doctrine rests upon the important public policy that “[n]o litigant deserves an opportunity to go over the same ground twice, hoping that the passage of time or changes in the composition of the court will provide a more favorable result the second time.” Id. “The purpose of the law-of-the-case principle is to provide finality of judicial decisions.” Id. 612 F.2d at 521; see also Northern Helex Co. v. United States, 225 Ct.Cl. 194, 634 F.2d 557, 561-62 (1980).
This court treats the decisions of its two predecessor courts as binding precedents. South Corp. v. United States, 690 F.2d 1368 (Fed.Cir.1982). Although the prior decision of the Court of Claims in this case was not rendered in an appeal, we nevertheless conclude that, considering all the circumstances, it is appropriate to treat that decision as the law of the case.
The Court of Claims also functioned as an appellate tribunal in reviewing decisions of various administrative agencies such as the Indian Claims Commission and the Boards of Contract Appeals. Finally, the court decided a substantial number of cases by ruling on dispositive motions, such as the motions for partial summary judgment involved in the prior decision in this case. The court normally decided those cases after full briefing and oral argument, as it did here. See Gindes, 661 F.2d at 195.
The decisions the Court of Claims rendered on dispositive motions that decided the case are sufficiently analogous to decisions rendered on appeal to justify treating them as the law of the case. This conclusion accords with and serves the policies underlying that doctrine set forth above. The appellants give no convincing reason why the law-of-the-case doctrine should not be applied here, other than the technical and unconvincing point that the prior decision was rendered not on an appeal, but on cross-motions for summary judgment under the unique procedure the Court of Claims followed in deciding legal issues in сases involving no material factual disputes. Indeed, the Court of Claims described the law of the case as the rule that “a decision by the court on a point in a case becomes the law of the case unless or until it is reversed or modified by a higher court.” Raylaine Worsteds, Inc. v. United States, 146 F.Supp. 723, 726 (1956).
B. Although law of the case “is not an inexorable command” (White v. Murtha, 377 F.2d 428, 431 (5th Cir.1967)), as a matter of sound judicial practice, a court generally adheres to a decision in a prior appeal in the same case unless one of three “exceptional circumstances” exists: “the evidence on a subsequent trial was substantially different, controlling authority has since made a contrary decision of the law applicable to such issues, or the decision was clearly erroneous and would work a manifest injustice.” Id. at 432. Turtle Mountain Band, 612 F.2d at 521.
The appellants argue that their case comes within the third exception because the prior decision “was clearly erroneous and would work a manifest injustice.” “The standard under this exception is a stringent one.... A mere suspicion of error, no matter how well supported, does not warrant reopening an already decided point. Only if we were convinced to a certainty that our prior decision was incorrect would we be warranted in now reexamining [it].” Northern Helex, 634 F.2d at 562 (citation omitted).
The appellants have not made the “strong showing of clear error [that] is required before a court should reexamine its decision in the prior appeal.” Turtle Mountain Band, 612 F.2d at 521. As the appellants admitted at oral argument, all of the contentions they now make were made when the case prеviously was before the Court of Claims on the identical issues. That court carefully considered and rejected those arguments. This is an important reason for applying law of the case. As the Court of Claims explained in Northern Helex, in language equally applicable here:
Our lengthy and detailed opinion in that case addressed the plaintiff‘s material arguments and explained why we rejected them. The plaintiff has not presented any new arguments that were not fully canvassed and evaluated before, nor placed the issues in a different context that provides insights and illuminations not previously available.
Here, as in Northern Helex, “[w]e have no reason not to treat that earlier decision as the law of the case.” Id.
The judgment of the United States Claims Court is affirmed.
AFFIRMED.
The appellant here had the curious idea that the appeal it took to us was an appeal not only from the Claims Court decision, but also from the decision by the panel in Gindes v. United States, 228 Ct.Cl. 632, 661 F.2d 194 (1981). This idea was contrary to the basic structure of the
When this court decided in South Corp. v. United States, 690 F.2d 1368 (Fed.Cir.1982) that it would treat all Court of Claims appellate division decisions as binding precedents, this necessarily was a holding that this court would not sit in appellate review on any Court of Claims appellate division decisions. If it is a binding precedent, it hardly needs the Law of the Case doctrine to immunize it from the kind of reexamination this appellant wanted us to make. Even should we think the Court of Claims decision “was clearly erroneous and would work a manifest injustice,” it would seem we could act on this view only by recommending an en banc review under our rules.
Appеllant also argued that there was a clear error and manifest injustice in applying