Opinion
11108-18 11108-18
06-29-2021
M. David Fesko, Petitioner v. Commissioner of Internal Revenue, Respondent
ORDER
Joseph W. Nega, Judge
This case was calendared for a remote trial at the session of the Court that was previously scheduled for February 22, 2021, for cases in which Las Vegas, Nevada, was listed as the place of trial.
On January 19, 2021, respondent filed a Motion for Continuance requesting that, due to the death of petitioner and the absence of a representative of petitioner's estate substituting in for petitioner, the trial in this case be removed from the Court's remote trial session scheduled to commence on February 22, 2021. By Order dated February 16, 2021, (the February 16th Order) the Court granted respondent's Motion for Continuance filed January 19, 2021, and the undersigned retained jurisdiction. In the February 16th Order, the Court additionally afforded each of petitioner's heirs-at-law, including his three surviving sons John D. Fesko, Matthew C. Fesko, and Michael D. Fesko, an opportunity to protect their interests in petitioner's assets or property. To that end, the Court directed the Clerk of the Court to send a copy of the February 16th Order to the heirs-at-law, i.e., the three surviving sons, at the addresses provided by respondent.
On April 9, 2021, pursuant to the February 16th Order, respondent filed a Status Report informing the Court, inter alia, that Douglas D. Gerrard is the attorney of record for petitioner's surviving spouse in the bankruptcy case and probate case of petitioner. On May 25, 2021, Jon R. Vaught filed a Limited Entry of Appearance, entering a limited appearance on behalf of John D. Fesko for the sole purpose of responding to the Court's February 16th Order, and filed a concurrent Response to the February 16th Order (Response). In his Response, Mr. Vaught informed the Court that John D. Fesko filed a petition with the local probate court seeking to have Taylor Waite appointed as the Special Administrator of petitioner's estate.
On March 2 and March 3, 2021, the Court received notification that the February 16th Order was returned as non-deliverable on petitioner's three surviving sons, John D. Fesko, Matthew C. Fesko, and Michael D. Fesko, at the Court's address of record for each of them. In a continued attempt to afford each of petitioner's surviving sons the opportunity to protect their interests in petitioner's assets or property, we request that respondent, petitioner's counsels of record, and Douglas D. Gerrard provide current addresses for John D. Fesko, Matthew C. Fesko, and Michael D. Fesko.
Accordingly, it is
ORDERED that respondent, petitioner's counsels of record (Jon R. Vaught, Cory Stigile, and Edward M. Robbins, Jr.), and Douglas D. Gerrard shall file on or before July 28, 2021, a written response to this Order setting forth either: (1) the current address and telephone number for John D. Fesko, Matthew C. Fesko, and Michael D. Fesko, or (2) a statement that they do not have such information. It is further
ORDERED that, in addition to regular service, the Clerk of the Court shall serve a copy of this Order on Douglas D. Gerrard at the address below:
2450 St. Rose Parkway Suite 200 Henderson, NV 89074It is further
ORDERED that, in addition to regular service, the Clerk of the Court shall serve a copy of this Order to Michael D. Fesko at the address below:
2531 Q St. NW, #163 Washington, DC 20007It is further
ORDERED that the Clerk of the Court shall attach to the copies of this Order served on the persons in the above preceding Ordered paragraphs copies of this Court's Order dated February 16, 2021.
ORDER
This case is presently calendared for a remote trial at the session of the Court scheduled to commence on February 22, 2021, for cases in which Las Vegas, Nevada, is listed as the place of trial.
Background
This is a deficiency case involving tax years 2007, 2008, 2009, 2010, and 2011 (years at issue). On March 13, 2018, the IRS issued to petitioner a notice of deficiency determining income tax deficiencies totaling more than $250,000 for the years at issue, and fraud penalties pursuant to section 6663 totaling more than $150,000 for those years.
Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the taxable years at issue, and all Rule references are to the Tax Court Rules of Practice and Procedure.
On April 26, 2019, respondent filed a Notice of Proceeding in Bankruptcy informing this Court that petitioner filed a bankruptcy petition under Chapter 11 of the Bankruptcy Code with the United States Bankruptcy Court for the District of Nevada (U.S. Bankruptcy Court) on April 8, 2019, after the petition in this case was filed. By Order dated April 29, 2019, the Court stayed all proceedings in this case, pursuant to 11 U.S.C. section 362(a)(8). On August 15, 2019, respondent filed a status report informing this Court that, on August 9, 2019, the U.S. Bankruptcy Court for the District of Nevada entered an order granting relief from the automatic stay to permit the continuation and completion of the instant Tax Court proceeding. As a result of that filing, the automatic stay was lifted by our order dated August 16, 2019, and proceedings in this Tax Court case resumed. On October 23, 2019, the U.S. Bankruptcy Court entered an order converting petitioner's Chapter 11 bankruptcy case to a Chapter 7 bankruptcy case.
On January 19, 2021, respondent filed a Motion for Default and Dismissal, in which respondent moves the Court to hold petitioner in default and sustain the determinations set forth in the notice of deficiency dated March 13, 2018.
On January 19, 2021, respondent also concurrently filed a Motion for Continuance, in which respondent requests that, due to the death of petitioner and the absence of a representative of the decedent estate substituting in for the petitioner, the trial in this case be removed from the session of the Court scheduled to commence on February 22, 2021.
Respondent's Motion for Default and Dismissal states, among other things, that: (1) petitioner M. David Fesko died on June 2, 2020, in Managua, Nicaragua, after the petition in this case was filed, (2) petitioner's counsel of record, Edward M. Robbins Jr., acknowledged that he does not represent the Estate of M. David Fesko and that he had no objection to an order requiring that a representative of the decedent estate substitute in for the deceased petitioner, (3) Mr. Fesko's ascertainable heirs at law are his surviving spouse, Ethel Goddard Merriman, and his three surviving sons, John David Fesko, Matthew Christian Fesko, and Michael D. Fesko, (4) on July 10, 2020, Ethel Goddard Merriman filed an ex-parte petition for appointment of special administrator with the District Court for Clark County, Nevada, (district court), and (5) on January 14, 2021, the district court appointed Ethel Goddard Merriman as the special administrator for the Estate of M. David Fesko with the limited power and authority to research, investigate, locate, and identify all assests of decedent's probate estate and report them to the court without taking possession.
In his motion, respondent further states that, in his view, the terms of the order appointing a special administrator, read in conjunction with the transcripts of hearings and minutes, create uncertainty as to whether the special administrator can or will substitute in for the petitioner in the present case. Attached to respondent's motions are, inter alia, copies of Ethel Goddard Merriman's ex-parte petition filed with the district court on July 10, 2020, the district court's order dated January 14, 2021, and the transcripts of the hearings conducted before the district court on November 18 and December 3, 2020. Respondent's motion provided the names and addresses of decedent's heirs at law
Discussion
Rule 60(c) provides that the capacity of a fiduciary or other representative to litigate in the Court shall be determined in accordance with the law of the jurisdiction from which such person's authority is derived. It further well settled that the Court's jurisdiction over a case continues unimpaired by the death of a petitioner, and even if there has been no administration of that deceased petitioner's estate, this Court may formulate an appropriate procedure to bring such a case to a close, including affording a decedent's heirs at law an opportunity to take whatever action may be necessary to protect their interests. See Nordstrom v. Commissioner, 50 T.C. 30 (1968). Accordingly, we have found it appropriate to give notice of the proceedings to those whose interest stands to be affected, so that they may have an opportunity to be heard if they so desire. Id.
The Court will therefore afford each of decedent M. David Fesko's heirs at law an opportunity to protect their interest in decedent's assets or property. In view of the foregoing, it is
ORDERED that respondent's Motion for Continuance filed January 19, 2021, is granted, and this case is stricken from remote trial at the session of the Court scheduled to commence on February 22, 2021, and continued. It is further
ORDERED that jurisdiction is retained by this Division of the Court. It is further
ORDERED that, at a reasonable date and time, but no later than March 15, 2021, respondent shall confer with decedent's surviving spouse, Ethel Goddard Merriman, and decedent's three surviving sons, John David Fesko, Matthew Christian Fesko, and Michael D. Fesko, as to the litigation of this Tax Court case on behalf of decedent M. David Fesko, including: (1) whether decedent's estate has been or will be probated, (2) if decedent's estate has been probated, whether a court of competent jurisdiction appointed an executor, personal representative, or other fiduciary for decedent or decedent's estate, (3) if so, the name, address, and telephone number of such duly appointed executor, personal representative, or other fiduciary for decedent or decedent's estate, (4) if such duly appointed executor, personal representative, or other fiduciary for decedent or decedent's estate intends to prosecute this case on behalf of decedent's estate, and will file an appropriate motion to substitute parties with the Court in this case, and (5) if decedent's estate has not been or will not be probated, the names and address of any other potential heirs at law of petitioner M. David Fesko. It is further
ORDERED that on or before April 15, 2021, respondent shall file with the Court a status report concerning the aforementioned matters set forth in the preceding Ordered paragraph. It is further
ORDERED that any heirs at law or other successor in interest who wishes to prosecute this case on petitioner's behalf shall file with this Court, a written response to this Order on or before May 31, 2021, advising the Court whether any heirs at law chooses to prosecute this case on decedent's behalf, and if so, whether any heirs at law will seek to have decedent's estate probated and have a State Court of competent jurisdiction appoint a fiduciary qualififed under applicable State law to litigate this Tax Court Case on behalf of decedent or decedent's estate in accordance with the provisions of Rule 60(c), Tax Court Rules of Practice and Procedure.
Petitioner's heirs at law are hereby advised that failure to respond to this Order may result in the granting of respondent's motion for default and the entry of a decision in favor of respondent sustaining the determinations set forth in the notice of deficiency dated March 13, 2018. It is further
ORDERED that, in addition to regular service, the Clerk of the Court shall serve a copy of this Order on each of decedent's heirs at law (i.e., decedent's surviving spouse, Ethel Goddard Merriman, and decedent's three surviving sons, John David Fesko, Matthew Christian Fesko, and Michael D. Fesko) at the addresses appearing for each of them in paragraph 13 of respondent's motion for default and dismissal. It is further
ORDERED that the Clerk of the Court shall attach to the copies of this Order served on each of the heirs at law in the above preceding Ordered paragraph, copies of (1) respondent's motion for default and dismissal filed January 19, 2021, and (2) respondent's motion for continuance filed January 19, 2021. It is further
ORDERED that respondent's Motion for Default and Dismissal filed January 19, 2021, shall be held in abeyance.