Pollei v. Comm'r of Internal Revenue

• Citation: 94 T.C. No. 35,94 T.C. 595
• Decision Date: 18 April 1990
• Docket Number: Docket Nos. 28737-84,28738-84.
• Parties: JON R. POLLEI AND CAROL J. POLLEI, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, RespondentHARRY W. PATRICK AND RENEE L. PATRICK, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
• Court: United States Tax Court

94 T.C. 595

94 T.C. No. 35

JON R. POLLEI AND CAROL J. POLLEI, Petitioners

v.COMMISSIONER OF INTERNAL REVENUE, RespondentHARRY W. PATRICK AND RENEE L. PATRICK, Petitioners

v.COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket Nos. 28737-84

28738-84.

United States Tax Court

Filed April 18, 1990.

Ps petitioned this Court to contest R's determination that Ps' travel between their homes and office was commuting. Ps were unsuccessful in this Court and appealed to the Court of Appeals, which reversed and entered judgment for Ps. Because Ps were not the ‘prevailing part[ies]‘ in this Court, they were precluded from seeking fees and costs under sec. 7430, I.R.C. Following their successful appeal, Ps filed a motion with the Court of Appeals requesting that they be awarded their costs and attorneys' fees incurred during the appeal and that the appellate court issue an order directing ‘the United States Tax Court to award [Ps] their costs and attorneys fees incurred in the trial of this matter * * * pursuant to [sec.] 7430.‘ Ps filed a similar motion with this Court requesting that we award them their trial court costs. The Court of Appeals denied the application for attorneys' fees and only awarded a portion of Ps' appellate court costs. The Court of Appeals provided no other commentary with respect to Ps' motion, did not expressly or implicitly issue a mandate regarding trial court fees and costs, and did not otherwise remand these cases back to this Court to consider this or any other issue, although Ps had requested them to do so. HELD: This Court is without authority to consider Ps' motion for costs and attorneys' fees under sec. 7430 because the ‘law of the case‘ doctrine precludes our reexamination of matters considered and acted upon (either expressly or by implication) by a Court of Appeals. Steven D. Woodland, for the petitioners.

Ronald J. Gardner, for the respondent.

OPINION

GERBER, JUDGE:

Petitioners have moved for litigation costs under section 7430. ¹ This otherwise routine type of motion becomes unique here because we (the trial court) decided the case in favor of respondent and the appellate court reversed, finding in favor of petitioners. Petitioners were unable to seek fees at the trial level ² and the appellate court did not expressly or implicitly remand the cases for any purpose other than entry of decision. Accordingly, petitioners now seek our jurisdiction and ask us to decide the litigation costs and fees issue. In these circumstances, we must first decide whether we have jurisdiction or authority to consider whether petitioners are entitled to costs and fees under section 7430. A brief chronological review of the underlying litigation is helpful to frame and focus upon this issue.

Respondent determined deficiencies in the 1981 Federal income tax of petitioners Jon R. Pollei and Harry W. Patrick. ³ Petitioners were captains with the Salt Lake City Police Department. The income tax deficiencies resulted solely from the disallowance of tax credits and maintenance and operating expense deductions arising from petitioners' daily use of personally owned, unmarked police cars to travel between their residences and police headquarters. Respondent's position was that petitioners' daily round-trip travel between their homes and headquarters was a nondeductible personal commuting expense. Secs. 162, 262; sec. 1.262-1(b)(5), Income Tax Regs. This Court was petitioned to redetermine those tax deficiencies. Petitioners argued that their situation varied from the usual commuting case because, under police regulations, they were required to be on duty any time they entered their private, police- equipped cars and to provide police services during the time they were traveling between their homes and police headquarters. After a trial, we held for respondent, in essence, as follows:

Commuting is essential to most employees' employment, but is not a deductible expense. Commuting is one of the expenses that is so inherently personal that it cannot qualify for deductibility, irrespective of its role in the taxpayer's trade or business. Moss v. Commissioner, 80 T.C. 1073, 1080 (1983), affd. 758 F.2d 211 (7th Cir. 1985); Fred W. Amend Co. v. Commissioner, 55 T.C. 320, 325, 326 (1970), affd. 454 F.2d 399 (7th Cir. 1971); Bakewell v. Commissioner, 23 T.C. 803, 805 (1955).

Petitioners did not argue or prove that they incurred additional expense in driving to and from headquarters and their residences due to the requirement to call in or begin their ‘tour of duty.‘ They simply argue that the travel time had been designated by the department as occurring during their ‘tour of duty.‘ [Pollei v. Commissioner, 87 T.C. 869, 873 (1986). Fn. ref. omitted.]

Our opinion was filed and served upon the parties on October 28, 1986. Petitioners appealed our decision to the United States Court of Appeals for the Tenth Circuit. The Court of Appeals, relying upon Christey v. United States, 841 F.2d 809 (8th Cir. 1988), and Sibla v. Commissioner, 611 F.2d 1260 (9th Cir. 1980), affg. 68 T.C. 422 (1977) and 67 T.C. 870 (1977), reversed, holding that ‘the employment conditions imposed upon petitioners caused them to incur expenses in maintaining and operating their personally-owned vehicles while traveling to and from [police] headquarters and that such expenses should be deductible under section 162(a).‘ Pollei v. Commissioner, 877 F.2d 838, 842 (10th Cir. 1989). On June 13, 1989, the Court of Appeals entered judgment for petitioners.

Soon after judgment was entered, petitioners filed a motion with the Court of Appeals requesting that they be awarded their costs under 28 U.S.C. sections 1920 and 2412 (1982) and attorneys' fees incurred in the appeal under section 7430, and that the court issue an order directing ‘the United States Tax Court to award [petitioners] their costs and attorneys fees incurred in the trial of this matter in the United States Tax Court pursuant to [section] 7430.‘ ⁴ On August 4, 1989, petitioners also filed a similar motion with this Court requesting that we award them their trial court costs. ⁵ By an order filed August 30, 1989, the Court of Appeals ‘denied[d] the application for attorneys fees‘ and ‘award[ed] [petitioners] costs for docket fees and brief reproduction [incurred during the appeal] in the amount of $335.63.‘ The Court of Appeals issued no other commentary with respect to petitioners' motion.

Our jurisdiction or authority to consider petitioners' motion is a fundamental and threshold issue which neither party has addressed. Our sua sponte inquiry was prompted because the Court of Appeals was asked to decide and/or to remand on the issue of litigation costs and fees; it issued an order with respect to that request; and it did not issue a mandate or otherwise remand these cases back to this Court to consider any issue or take any further action, other than the implicit requirement that we enter a decision for petitioners. ⁶ Although petitioners requested that the Court of Appeals direct us to award petitioners the costs they incurred in litigating at the trial level, the Court of Appeals (without explanation) did not grant petitioners' request and only awarded petitioners a portion of the costs incurred during the appeal.

Pursuant to section 7482(a), the United States Courts of Appeals ⁷ have exclusive jurisdiction to review the decisions of the Tax Court. Such review shall be in the same manner and to the same extent as decisions of the District Courts in civil actions tried without a jury. Sec. 7482(a)(1). Upon such review, the Courts of Appeals ‘shall have power to affirm or, if the decision of the Tax Court is not in accordance with law, to modify or to reverse the decision of the Tax Court, with or without remanding the case for a rehearing, as justice may require.‘ Sec. 7482(c); see also 28 U.S.C. sec. 2106 (1982).

The general rule is that perfection of an appeal operates to transfer jurisdiction of the case to the Court of Appeals -- that is, the jurisdiction of the trial court ceases and that of the Court of Appeals begins. Once an appeal is commenced, the trial court is generally without authority to act upon matters relating to the subject matter of the appeal until the mandate from the appellate court is returned. Marrese v. American Academy of Orthopaedic Surgeons, 470 U.S. 373 (1985); Griggs v. Provident Consumer Discount, Co., 459 U.S. 56 (1982); Garcia v. Burlington Northern Railroad, 818 F.2d 713 (10th Cir. 1987); Hunter Douglas Corp. v. Lando Products 235 F.2d 631, 632-633 (9th Cir. 1956). The purpose underlying this general rule is to avoid confusion and inefficient use of limited judicial resources that may result from two courts simultaneously considering the same issues. Matter of Thorp, 655 F.2d 997 (9th Cir. 1981); Matter of Combined Metals Reduction Co., 557 F.2d 179 (9th Cir. 1977); see also Griggs v. Provident Consumer Discount Co., supra at 58-59.

There are, however, limited exceptions to this general rule. Even though a judgment on the merits has been properly appealed and is pending in the Court of Appeals, the lower court may retain jurisdiction over certain matters, without appellate court approval or sanction, such as those that are collateral to the appeal, in aid of the appeal, to correct clerical mistakes, in aid of execution of a judgment that has not been superseded, and to maintain the status quo between the parties pending the appeal. See, e.g., N.L.R.B. v. Cincinnati Bronze, Inc., 829 F.2d 585 (6th Cir. 1987); Krull v. Celotex Corp., 827 F.2d 80 (7th Cir. 1987); Garcia v. Burlington Northern Railroad, supra; Piamco, Inc. v. Shell Oil Co., 799 F.2d 262 (7th Cir. 1986); Island Creek Coal Sales Co. v. City of Gainesville, 764 F.2d 437 (6th Cir. 1985); Venen v. Sweet, 758 F.2d 117 (3d Cir. 1985); National Service Industries, Inc. v. Vafla Corp., 694 F.2d 246 (11th Cir. 1982); Davis v. United States, 667 F.2d 822 (9th Cir. 1982); Matter of Thorp...