From approximately October 1994 until November 2002, this action was stayed at the request of the parties, pending the resolution of related litigation involving Mrs. O'Neal. See O'Neal v. Comm'r, 102 T.C. 666 (1994); Estate of Elizabeth O'Neal, et al v. United States, 81 F. Supp.2d 1205 (N.D. Ala. 2000), aff'd in part and vacated in part, 258 F.3d 1265 (11th Cir. 2001).
The refund action was based upon claims made against plaintiffs for transferee gift tax and generation-skipping transfer tax liabilities asserted against the donees of certain gifts made by Elizabeth P. O'Neal ("Mrs. O'Neal"). The facts of the case were not disputed, and have previously been sent forth by this court and the Eleventh Circuit Court of Appeals. Estate of O'Neal v. U.S., 81 F. Supp.2d 1205 (N.D.Ala. 1999); O'Neal v. U.S., 258 F.3d 1265 (11th Cir. 2001). Upon cross-motions for summary judgment, this court made the following rulings: 1) on the issue of whether the estate was entitled to a deduction of $563,314.00, the amount awarded the donees as claims against the estate in probate court, the court entered judgment in favor of the plaintiffs and against the United States and allowed the estate a deduction in the amount of $563,314.
INGE P. JOHNSON, United States District Judge. This case is before the Court on remand from the Court of Appeals for the Eleventh Circuit for further consideration consistent with its opinion in O'Neal v. United States, 258 F.3d 1265 (11th Cir. 2001), affirming in part, vacating in part, and remanding with instructions this Court's decision reported at 81 F. Supp.2d 1205 (N.D. Ala. 1999). The central issue in this case involves the estate tax deduction by the Estate of Elizabeth P. O'Neal, deceased, ("Mrs.
However, the state court decision is entitled to "proper regard" when the underlying substantive rule involved is based on state law and when there is no decision on point by the highest court in that state. Id. at 465; see also Miglionico v. United States, 323 F. Supp. 197, 200 (N.D. Ala. 1971); Estate of O'Neal v. United States, 81 F. Supp.2d 1205, 1271-18 (N.D. Ala. 2000), aff'd in part, vacated in part, 258 F.3d 1265 (11th Cir. 2001). In Estate of Salter v. Comm'r, 545 F.2d 494 (5th Cir. 1977), the former Fifth Circuit held that "[i]n the absence of a case specifically on point, the best measure of the `[proper] regard,' we think, would be to determine; from existing precedent, in our best judgment, whether the [state] Supreme Court . . . would have affirmed the [lower court's] decree had there been an appeal."