Opinion
13757-20
02-25-2025
SCOTT L. REED AND STACY N. REED, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Emin Toro Judge
Now before the Court is petitioners' Motion for Reconsideration of Order Denying Motion for Continuance (Doc. 66) filed on February 23, 2025. The Court will deny the motion.
Background
This case has been pending for more than four years and has been continued three times. Initially, the case was calendared for trial during the Court's April 11, 2022, Portland, Oregon trial session. At petitioners' request, the Court struck the case from the trial session and continued it generally. The case was then scheduled for trial during the Court's December 11, 2023, Portland, Oregon session. It was again continued generally on September 11, 2023, at the parties' joint request.
Petitioners Scott L. Reed and Stacy N. Reed filed their petition on November 23, 2020.
The case was scheduled for trial yet again, this time during the Court's September 30, 2024, Portland, Oregon session. The undersigned judge was scheduled to preside over that trial session.
Following the scheduling of the case for trial, petitioners sought a third continuance. Petitioners also requested that the trial be moved from Portland to Little Rock, Arkansas. Petitioners represented that their (now former) counsel had contacted the U.S. Bankruptcy Court in Little Rock and that the Clerk of that court reported that "it regularly hosts the U.S. Tax Court and has availability" on dates set out in the parties' Joint Status Report (Doc. 34). Petitioners estimated the length of trial would be a minimum of three days, while the Commissioner estimated two days. The parties requested in their Joint Status Report (Doc. 34) that "the Court schedule an in-person trial for a minimum of three days for one of [three listed date ranges]," which included March 3, 2025, to March 5, 2025.
By Order served September 20, 2024, the Court granted petitioners' request for a third continuance. To further accommodate petitioners, the Court secured space for an in-person trial session in Little Rock, Arkansas, and calendared the case for trial beginning March 3, 2025, the earliest of the sets of dates requested by the parties.
After trial was set, petitioners changed counsel. Current counsel entered an appearance on behalf of petitioners on October 22, 2024, more than a month after the Little Rock trial had been calendared. Six days later, on October 28, 2024, the Court issued its Standing Pretrial Order (Doc. 43), ordering the parties to file motions for continuance, if at all, no later than 31 days before the beginning of the Little Rock trial session.
According to the Motion now before us, on November 13, 2024, after petitioners' counsel entered his appearance in this case, the U.S. District Court for the Southern District of Florida scheduled a sentencing hearing in Fort Lauderdale, Florida, for March 7, 2025, in another case (one not involving petitioners) in which petitioners' counsel is counsel of record.
As other filings in this case have explained, on January 23, 2025, the Supreme Court of Arkansas granted a request for oral argument filed by petitioners' counsel in a third case (also not involving petitioners) in which petitioners' counsel is counsel of record. On February 3, 2025, that court scheduled the oral argument for March 6, 2025.
During telephonic conferences held with the parties on November 23, 2024, and January 30, 2025, the Court reminded the parties that the trial was scheduled for four days, from March 3, 2025, to March 6, 2025. The Court further cautioned the parties that it had been informed that the Little Rock, Arkansas, courtroom would not be available after March 6, 2025, so the trial could not go over the scheduled time. During the January 30, 2025, conference call, petitioners' counsel suggested that another continuance might be useful to the parties, citing in part the sentencing hearing scheduled for March 7, 2025. The Commissioner indicated that he would oppose any further continuances, and the Court agreed that it was not inclined to continue the case for a fourth time.
Petitioners' Motion states: "On January 17, 2025, the Court held a video conference with counsel for the parties. During the conference, the Court stated that space was available for trial in Little Rock all day on March 3-March 5, 2025. The Court further stated that space would not be available all day on March 6, 2025." Doc. 66, para. 3. The Motion is mistaken on two counts. First, the conference call was held on January 30 (not January 17). And, second, during the January 30 conference call, the Court observed that the courtroom was reserved for four days, which included all of March 6. The Court also observed that a three-to-four day trial (which is what the parties still estimated at the time) would permit petitioners' counsel to get to his hearing on March 7 after trial concluded.
Petitioners filed a fourth Motion for Continuance on February 4, 2025 (Doc. 52). The Motion provided that "Petitioners' counsel was notified by the Arkansas Supreme Court that oral arguments in [an action brought by another of counsel's clients] were scheduled to occur on March 6, 2025, at 9:00am in Little Rock, Arkansas." Petitioners' counsel noted that the oral argument presented a conflict because trial in this case was "anticipated to last from 3 to 4 days." We denied that motion on February 5, 2025, without prejudice to its renewal if petitioners' counsel could not obtain a change in the date of oral argument, on the ground that petitioners' counsel had not exhausted the remedies available to him from the Arkansas Supreme Court.
Petitioners filed a fifth Motion for Continuance on February 10, 2025, after hearing that the Arkansas Supreme Court would not continue their counsel's other case. We denied that motion as well, but provided for "[s]uitable recess to be taken on 3/6 in view of [the] Arkansas case[.]" Doc. 65.
The Court has held two telephonic status conferences with the parties since the filing of petitioners' fourth and fifth Motions for Continuance. During one of the conferences, on February 20, 2025, petitioners' counsel informed the Court that his trial duration estimate had changed. Rather than three or four days, as represented in the parties' pretrial memoranda, petitioners' motions for continuance, and in telephonic conferences, petitioners' counsel contended that trial could last upwards of two weeks. The Court, which had recently been notified that the Little Rock, Arkansas, courtroom could be reserved for one more day, offered to accommodate some expansion in the length of trial by using the courtroom on March 7, 2025, as well as the dates previously scheduled.
Despite the Court's acknowledgment of petitioners' counsel's busy schedule, and the Court's willingness to recess on March 6, 2025, in order for petitioners' counsel to argue before the Arkansas Supreme Court, petitioner now moves for reconsideration of the February 10, 2025, order denying petitioners' fifth Motion for Continuance. As we now explain, reconsideration is not warranted.
The Motion fails to comply with Rule 50(a) of this Court's Rules of Practice and Procedure. Rule 50(a) provides that a motion "shall show that prior notice thereof has been given to each other party or counsel for each other party and shall state whether there is any objection to the motion." "If a motion does not include such a statement, the Court will assume that there is an objection to the motion." Id. Because the Motion lacks a statement concerning the Commissioner's position, we assume the Commissioner objects to the Motion.
Discussion
The decision to grant a motion to reconsider lies within the discretion of the Court. See Estate of Quick v. Commissioner, 110 T.C. 440, 441 (1998), supplementing 110 T.C. 172 (1998); Vaughn v. Commissioner, 87 T.C. 164, 166-67 (1986), supplementing 81 T.C. 893 (1983). Motions to reconsider are typically not granted in the absence of substantial error or unusual circumstances, such as mistake, inadvertence, surprise, excusable neglect, newly discovered evidence, or fraud. See Bedrosian v. Commissioner, 144 T.C. 152, 156 (2015); see also Knudsen v. Commissioner, 131 T.C. 185 (2008); Brannon's of Shawnee, Inc. v. Commissioner, 69 T.C. 999 (1978). "Reconsideration is not the appropriate forum for rehashing previously rejected legal arguments or tendering new legal theories to reach the end result desired by the moving party." Estate of Quick, 110 T.C. at 441-442; see also Brannon's of Shawnee, Inc. v. Commissioner, 69 T.C. 999 (1978).
Petitioners present two possible sources of scheduling conflict for their counsel: the Arkansas Supreme Court argument on March 6, 2025, and the sentencing hearing on March 7, 2025, before the United States District Court for the Southern District of Florida. Neither potential conflict suffices for us to reconsider our February 10, 2025, Order. See Rule 133.
1. Oral Argument Before the Arkansas Supreme Court
Counsel's argument that a conflict exists between this Court's trial and the Arkansas Supreme Court's oral argument simply restates points already made in petitioners' fourth and fifth Motions for Continuance and rejected by this Court. We need not reiterate why we rejected the argument initially. See generally Estate of Quick, 110 T.C. at 441-42. But we do offer a couple of additional observations.
First, the Motion's characterizes the oral argument before the Arkansas Supreme Court as "mandatory." Doc. 66, para. 16. Petitioners' prior filings make clear that the oral argument was not mandated by the Arkansas Supreme Court but was requested by petitioners' counsel on behalf of his clients in that case.
Second, with respect to counsel's argument before the Arkansas Supreme Court, our February 10, 2025, Order resolves any conflict. That Order specifies that we will take a "suitable recess" from trial on March 6, 2025, so that petitioners' counsel may attend his other clients' argument. During the telephonic status conference on February 20, 2025, we further clarified that we would not resume trial on March 6-assuming that the trial has not already concluded-until approximately 2:00 pm. Because our trial and counsel's argument before the Arkansas Supreme Court will both take place in Little Rock, a recess until the afternoon should provide counsel enough time to appear at both.
2. Sentencing Hearing in the Southern District of Florida
Nor does counsel's appearance at a sentencing hearing in the Southern District of Florida provide proper grounds for us to continue petitioners' trial. Petitioners' counsel has known of the March 7, 2025, sentencing hearing since November 13, 2024-approximately six weeks after this case was calendared for trial. During multiple telephonic conferences, and in petitioners' fourth and fifth Motions for Continuance, petitioners' counsel failed to raise any concern that the sentencing hearing would generate a scheduling conflict. Counsel's appearance at the sentencing hearing is not a surprise, and counsel's failure to maintain a manageable schedule is not excusable neglect. See Bedrosian v. Commissioner, 144 T.C. 152, 156 (2015). While we empathize with counsel's busy schedule, a sentencing hearing scheduled well after this trial was on the calendar, and not addressed with this Court until the eve of trial, is not an unusual circumstance that justifies reconsideration.
3. Petitioners' Inapposite Authorities
Petitioners rely on Morris v. Slappy, 461 U.S. 1 (1983), United States v. Burton, 584 F.2d 485 (D.C. Cir. 1978), and Linton v. Perini, 656 F.2d 207 (6th Cir. 1981), to illustrate that a denial of a continuance can constitute reversable error and can, in some cases, raise constitutional concerns. These criminal cases reflect a different legal context than exists in the case before us today. Criminal defendants have a constitutional right to effective assistance from counsel, and denying a continuance, in some instances, can effectively deny a defendant their constitutional right. Petitioners here are not criminal defendants and are not constitutionally entitled to counsel. See Cupp v. Commissioner, 65 T.C. 68, 85-86 (1975).
And the cases petitioners cite recognize that, even when restrained by the constitutional protections familiar to criminal law, continuances are "traditionally within the discretion of the trial judge . . . ." Linton, 656 F.2d at 210 (quoting Ungar v. Sarafite, 376 U.S. 575, 589 (1964)). Put simply, even in the criminal context, "only an unreasoning and arbitrary 'insistence upon expeditiousness in the face of a justifiable request for delay' violates the right to the assistance of counsel." Morris v. Slappy, 461 U.S. at 11-12 (quoting Ungar, 376 U.S. at 589).
Most importantly, unlike the defendants in the cases petitioners cite, petitioners here have had nearly five months to prepare for the current trial and current counsel has represented petitioners for more than four months. That is a far cry from the plight of a criminal defendant forced to go to trial in a complicated case in ten days. See Linton, 656 F.2d at 208; see also Ungar, 376 U.S. at 588-91 (holding that "five days' notice given petitioner was not a constitutionally inadequate time to hire counsel and prepare a defense" in the circumstances of that case).
Counsel has also had more than three months to prepare for the sentencing hearing in the Florida case and four months since the time he requested argument (and more than a month since oral argument was scheduled) to prepare for the oral argument in the Arkansas case.
In short, petitioners' counsel's difficulties regrettably are of his own making. This trial has been on counsel's schedule since he took on this case in October, and it predates both of counsel's other commitments. Based on petitioners' request for a trial in Little Rock, Arkansas, on these dates, the Court arranged for borrowed space at the U.S. Bankruptcy Court, blocked off its own schedule, and booked the necessary travel. Similarly, the Commissioner prepared for trial, subpoenaed witnesses who now plan to attend, and made travel arrangements for his counsel. Petitioners have already received three continuances, and this Court has consistently told petitioners' counsel that no further continuances would be forthcoming. That petitioners' counsel made other commitments he now finds it difficult to keep is unfortunate, but does not constitute proper grounds for reconsideration of our prior denial of a continuance. Rule 133 ("Conflicting engagements of counsel or employment of new counsel ordinarily will not be regarded as ground for continuance."). See also generally Model Rules of Pro. Conduct r. 1.3 cmt. [2] ("A lawyer's work load must be controlled so that each matter can be handled competently.").
Upon due consideration, it is hereby
ORDERED that petitioners' Motion for Reconsideration of Order Denying Motion for Continuance (Doc. 66) filed February 23, 2025, is denied.