Opinion
Case No. A2-02-44
January 27, 2004
ORDER AWARDING COSTS
Before the Court is Plaintiff's Motion to Award Costs (doc. #50). Defendant has also filed a motion for costs (doc. #51). Both parties have filed briefs objecting to awarding costs to the other party.
Under Rule 54(d) of the Federal Rules of Civil Procedure, a court may award costs to the prevailing party in the case. Costs against the United States may only be imposed to the extent permitted by law. Fed.R.Civ.P. 54(d)(1). In tax law cases, a prevailing party against the United States may receive costs. 26 U.S.C. § 7430(a)(2001). In order to be a prevailing party, that party had to prevail with respect to the amount in controversy or with respect to the most significant issue or set of issues presented. 26 U.S.C. § 7430(c)(4)(A). A "prevailing party" under Rule 54(d) is one who prevails "as to the substantial part of the litigation." Northbrook Excess Surplus Ins. Co. v. Procter Gamble Co., 924 F.2d 633, 641 (7th Cir. 1991) (quoting First Commodity Traders, Inc. v. Heinold Commodities, Inc., 766 F.2d 1007, 1015 (7th Cir. 1985)).
There were three different issues in the case: stock valuation, attorney fees, and personal representative fees. The jury's verdict on the attorney fees and personal representative fees did not result in a clear victory for either party because the jury did not award either amount the parties requested. Instead, the jury awarded amounts that were approximately in the middle. Therefore, a determination of which side was the prevailing party rests on the remaining issue of the stock valuation.
Plaintiff argues that the stock valuation issue was not a significant issue because the result created an increase in the basis, which is favorable for the estate's heirs. The real issue is whether the determination on the stock valuation issue was favorable for the litigant, which was the estate. The government prevailed on the stock valuation issue, and this result meant higher taxes for the estate. The government was the prevailing party in this case, and it is awarded its costs.
The Court previously ruled that Plaintiff would bear the costs of the Rosenvold deposition because the expert report was not as detailed as Rule 26(a)(2) of the Federal Rules of Civil Procedure required. The Kennedy report contains conclusory statements similar to those found in the Rosenvold report, so Plaintiff will bear the costs of the Kennedy deposition as well.
Plaintiff's Motion for Costs is DENIED. Defendant's Motion for Costs is GRANTED, and Defendant is awarded costs in the amount of $1,493.72.