Estate of Curry v. United States, NA 80-186-C.

• Decision Date: 26 July 1982
• Docket Number: No. NA 80-186-C.,NA 80-186-C.
• Citation: 549 F. Supp. 47
• Parties: ESTATE OF Bernard L. CURRY, Union Bank and Trust of New Albany, Executor, Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — Southern District of Indiana

549 F. Supp. 47

ESTATE OF Bernard L. CURRY, Union Bank and Trust of New Albany, Executor, Plaintiff, v. UNITED STATES of America, Defendant.

No. NA 80-186-C.

United States District Court, S.D. Indiana, New Albany Division.

July 26, 1982.

Charles F. Cremer, Jr. & Co. by Charles F. Cremer, Jr., Indianapolis, Ind., for plaintiff.

Sarah E. Barker, U.S. Atty., Indianapolis, Ind. by Vicki G. Cheikes, Trial Div., Dept. of Justice, Washington, D.C., for defendant.

JUDGMENT AWARDING ATTORNEY FEES AND EXPENSES

HOLDER, District Judge.

The issues of the February 22, 1982 Application of the plaintiff, Estate of Bernard L. Curry, Union Bank and Trust of New Albany, Executor, for Fees and Other Expenses was noticed for an evidentiary hearing for May 14, 1982 in the United States Court House, New Albany, Indiana. The Court granted a continuance. Thereafter, the evidence on the issues was stipulated on June 14, 1982 and an evidentiary hearing was obviated by agreement of the parties.

The Court being advised in the matter by the briefs of the parties does now find, conclude and adjudge the issues of fact and law of the matter.

The Estate Tax Examiner of the Internal Revenue Service assigned to the audit of the Federal Estate Tax Return in the Bernard L. Curry Estate would not settle the issue of the valuation of all stock owned by the decedent in B.L. Curry & Sons, Inc. for a value less than $760,000.00, the value of the stock as determined by the National Valuation Company because he considered its appraisal to be correct, and because his settlement authority was limited and could not be based upon hazards of litigation. The taxpayer's representatives attempted to point out to the Estate Tax Examiner what were believed to be defects in the National Valuation Company appraisal. The taxpayer did not elect to protest to the Appeals Division of the Internal Revenue Service (which had greater settlement authority), the proposed assessed deficiency in estate taxes which deficiency was based upon the government claiming that the decedent's shares in B.L. Curry & Sons, Inc. had a value of $760,000.00 on the date of his death. Following the assessment of additional estate taxes based upon the Internal Revenue Service valuing the decedent's interest in B.L. Curry & Sons, Inc. at $760,000.00, the proper amount of taxes and interest thereon were paid, claim for refund was timely filed and denied and the within litigation therein timely commenced. Plaintiff filed its complaint against defendant on December 29, 1980 and the action was pending on October 1, 1981. Plaintiff, Union Bank and Trust of New Albany, is Executor of the Estate of Bernard L. Curry, an individual whose net worth did not exceed $1,000,000.00 at any time, and such Bank is a corporation having no more than 500 employees at the time the action was filed. Plaintiff is the prevailing party in the action in that the jury returned the verdict in its favor on October 22, 1981. In accordance with the verdict by the jury, the Court on January 22, 1982 rendered judgment in favor of plaintiff in the amount of $209,904.59 in tax plus $21,139.33 in assessed interest, plus statutory interest as allowed by law, with costs to plaintiff. Plaintiff has filed its Application for Fees and Other Expenses within thirty days of final judgment in the action. The government has timely filed its Notice of Appeal and the proper authorization for appeal has been granted.

Plaintiff in its answers to interrogatories propounded by the government pointed out what it believed to be defects in the government's appraisal by the National Valuation Company. The Court conducted a pre-trial conference in this matter on August 25, 1981 at which time the parties agreed, and the Court ordered, that all discovery be completed by October 1, 1981. The government employed an additional appraiser of the B.L. Curry & Sons, Inc. stock owned by the decedent at the time of his death sometime during the month of September, 1981. In an October 5, 1981 telephone conference between the attorneys for the government and the taxpayer, the taxpayer's attorney denied the government lawyer's request that its newly hired appraiser be permitted to visit the B.L. Curry & Sons, Inc. premises on October 7, 1981, because discovery in the case was concluded.

During the pendency of the litigation the Justice Department indicated a willingness to recommend a settlement of the case for a value of the decedent's stock in B.L. Curry & Sons, Inc. of $550,800.00, such value being arrived at by assigning a value of $255.00 per share to each of the decedent's 2,160 shares which was the liquidation value assigned to such shares by the plaintiff's expert witness. The taxpayer made no specific dollar amount of a settlement proposal.

At trial the government did not call the National Valuation Company appraiser or attempt to use at trial the valuation report of the National Valuation Company.

During trial and prior to the return of the jury verdict, the plaintiff taxpayer's attorneys approached the government concerning the possible settlement of the case but were told that there was insufficient administrative time for the government to enter into a settlement of the case.

At all relevant...