Opinion
1434-23W
06-26-2023
HEATHER M HOGAN, Petitioner(s) v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Kathleen Kerrigan Chief Judge.
On June 20, 2023, respondent filed a Motion for Leave to File Out of Time First Amendment to Answer (motion for leave) and concurrently lodged the First Amendment to Answer. In his motion, respondent asks to amend his Answer in order to correct an admission of fact made therein that respondent claims was inaccurate based on a subsequent review of the administrative record for this case.
On June 23, 2023, petitioner filed a Response opposing the granting of respondent's motion for leave. In support of her opposition, petitioner states that she has proof that respondent's admission in the original Answer was accurate.
Rule 41(a), Tax Court Rules of Practice and Procedure, provides that, except in certain circumstances not relevant here, a party may amend a pleading only by leave of Court or written consent of the adverse party, and "leave shall be given freely when justice so requires." This rule reflects "a liberal attitude towards amendment of pleadings." 60 T.C. 1089 (explanatory note accompanying promulgation of Rule 41). However, the decision of whether to grant such a motion lies within the sound discretion of the Court. Estate of Quick v. Commissioner, 110 T.C. 172, 178 (1998); Law v. Commissioner, 84 T.C. 985, 990 (1985). When evaluating a motion to amend, important factors include "whether an excuse for the delay exists and whether the opposing party would suffer unfair surprise, disadvantage, or prejudice if the motion to amend were granted." Estate of Quick v. Commissioner, 110 T.C. at 178. Even when trial was less than two months away, this Court has been reversed for not granting respondent leave to amend. See Gulig v. Commissioner, 293 F.3d 279 (5th Cir. 2002), aff'g in part and rev'g in part 115 T.C. 478 (2000).
Rule 41(a) is similar to Rule 15(a) of the Federal Rules of Civil Procedure and both state that leave is to be freely given when justice so requires. In interpreting this language, the Supreme Court has held that "[i]n the absence of any apparent or declared reason - such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. - the leave sought should, as the rules require, be 'freely given.'" Foman v. Davis, 371 U.S. 178, 182 (1962).
Here, justice requires that we allow the First Amendment to Answer because it does not result in "unfair surprise, disadvantage, or prejudice" to petitioner. This case is still in its very early stages, and petitioner will have ample opportunity during the course of this litigation to prove the allegations made in her petition. Furthermore, respondent provided a credible reason for seeking the amendment.
Upon due consideration, it is
ORDERED that petitioner's Response to the Court's Order issued June 22, 2023, is recharacterized as an Objection Motion for Leave to File Out of Time First Amendment to Answer. It is further
ORDERED that respondent's Motion for Leave to File Out of Time First Amendment to Answer is granted. It is further
ORDERED that respondent's First Amendment to Answer, lodged June 20, 2023, shall be filed as of the date service of this Order.