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Thor Industries, Inc. v. Indiana Department of State Revenue

Tax Court of Indiana

September 23, 2016

THOR INDUSTRIES, INC. AND SUBSIDIARIES, Petitioners,
v.
INDIANA DEPARTMENT OF STATE REVENUE, Respondent.

          ATTORNEYS FOR PETITIONER: NATHAN J. HAGERMAN JEFFREY D. STEMERICK TAFT STETTINIUS & HOLLISTER LLP Indianapolis, IN

          ATTORNEYS FOR RESPONDENT: GREGORY F. ZOELLER INDIANA ATTORNEY GENERAL EVAN W. BARTEL WINSTON LIN DEPUTY ATTORNEYS GENERAL Indianapolis, IN

          ORDER ON PETITIONERS' MOTION TO WITHDRAW ADMISSIONS

          Martha Blood Wentworth Judge

         Thor Industries, Inc. and Subsidiaries (collectively "Thor") has moved to withdraw twenty-nine separately numbered requests for admissions that were conclusively admitted by operation of law when Thor failed to timely respond to the Indiana Department of State Revenue's First Request for Admissions. The Court grants Thor's motion.

         FACTS AND PROCEDURAL HISTORY

         On August 6, 2015, Thor initiated an original tax appeal challenging the Department's Proposed Assessments of additional adjusted gross income tax, interest, and penalties for the tax periods ending on July 31, 2008, July 31, 2009, and July 31, 2010. On June 9, 2016, about a week before settlement negotiations commenced, the Department served Thor with its First Request for Admissions that asked Thor in effect to repudiate the allegations in its petition within 30 days. On July 18, 2016, after the time for responding lapsed, the Department contacted Thor to inquire about the status of its response. Four days later, the Department moved for summary judgment and designated as evidence, among other things, its First Request for Admissions. On July 27, 2016, Thor filed a Motion to Withdraw Admissions and Request for Oral Argument. On August 26, 2016, the Court held an attorney's conference to discuss matters associated with the pending motions. That same day, the Court denied Thor's request for oral argument. Additional facts will be supplied as necessary.

         LAW AND ANALYSIS

         Indiana Trial Rule 36(B) governs requests to withdraw admissions. See Ind. Trial Rule 36(B). Specifically, Trial Rule 36(B) provides that "the court may permit withdrawal or amendment [of admissions] when the presentation of the merits of the action will be subserved thereby and the party who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice him in maintaining his action or defense on the merits." T.R. 36(B). "The party seeking withdrawal has the burden of demonstrating that the presentation of the merits will be subserved by withdrawal, and the party who has obtained the admissions has the burden of demonstrating that it will be prejudiced if the [] court permits withdrawal." Cross v. Cross, 891 N.E.2d 635, 640 (Ind.Ct.App. 2008) (citation omitted). Even if both of these conditions are satisfied, however, the Rule does not compel the Court to grant withdrawal or amendment. See General Motors Corp., Chevrolet Motor Div. v. Aetna Cas. & Sur. Co., 573 N.E.2d 885, 889 (Ind. 1991).

         I. Would Withdrawal Subserve the Presentation of the Merits

         Thor claims that the presentation of the merits will be subserved by the withdrawal of its admissions because it would prevent the litigation from ending without addressing matters that are the basis of the Department's Proposed Assessments. (See Pet'rs' Br. Supp. Their Mot. Withdraw Admis. ("Pet'rs' Br.") at 7-9.) Indeed, a comparison of Thor's petition with Thor's deemed admissions supports this claim. (Compare Pet'rs' Br., Ex. A ¶¶ 8-27 with Pet'rs' Br., Ex. F at 5-13.) The Department, however, asserts that Thor cannot meet its burden by 1) simply claiming that the admissions go to the core issues or 2) making a blanket request for withdrawal. (See Resp't Mem. Opp'n Pet'rs' Mot. Withdraw Admis. ("Resp't Mem.") at 8-9.)

         A. The Core Issues

         The Department first claims that Thor cannot demonstrate that the merits of the case will be subserved solely by showing that the admitted matters concern the core issues in the case. (See Resp't Mem. at 8 (citing Bryant v. County Council of Lake County, 720 N.E.2d 1, 6 (Ind.Ct.App. 1999), trans. denied).) More recently, however, the Court of Appeals has clarified that a litigant may meet its burden of establishing that withdrawal will subserve the presentation of the merits in this manner. See generally Costello v. Zavodnik, 55 N.E.3d 348 (Ind.Ct.App. 2016). Nonetheless, even if the proposition in Bryant on which the Department relies were not suspect, it is well settled that Court of Appeals' decisions are persuasive, but not controlling, authority by which the Court is bound. See, e.g., LeSea Broad. Corp. v. State Bd. of Tax Comm'rs, 512 N.E.2d 506, 509 (Ind. Tax Ct. 1987), adopted by 511 N.E.2d 1009 (Ind. 1987) (demonstrating, among other things, that decisions of the Indiana Court of Appeals are persuasive, not controlling authority in the Tax Court). Accordingly, the Department's argument that Thor has not shown that withdrawal will subserve the presentation of the merits on this basis is not persuasive.

         B. The Blanket Request for Withdrawal

         The Department has also asserted that Thor cannot meet its burden to establish that the presentation of the merits of its case will be subserved by the withdrawal of its admissions because blanket requests for the withdrawal of deemed admissions are prohibited by Trial Rule 36(A). (See Resp't Mem. at 8-9 (citing T.R. 36(A); General Motors, 573 N.E.2d at 886-89; Larson v. Karagan, 979 N.E.2d 655 (Ind.Ct.App. 2012); Mullins v. Parkview Hosp., Inc., 830 N.E.2d 45 (Ind.Ct.App. 2005), aff'd in part and vacated in part by865 N.E.2d 608 (Ind. 2007)).) Neither the language of Trial Rule 36(A) nor the holdings in the cases analyzing the Rule prohibit, however, blanket requests to withdrawal deemed admissions. Specifically, Trial Rule 36(A) sets forth only the procedures for propounding and responding to requests for admissions, not the procedures for filing motions to withdraw admissions. See T.R. 36(A). Furthermore, while the cited cases concern the withdrawal of some, but not all, of the litigants' admissions, none suggests that the specificity was due to a prohibition against raising blanket requests for withdrawal or a requirement that litigants "must separately identify why withdrawal is appropriate for each admission[, ]" as the Department urges. (Compare Resp't Mem. at 8 with General Motors, 573 N.E.2d at 886 (indicating that appeal involved the withdrawal of three admissions only); Larson, 979 N.E.2d at 659-60 (indicating that appeal involved the grant of summary judgment, not the withdrawal of admissions); Mullins, 830 N.E.2d at 60 (linking the number of admissions at issue to the appellant's arguments and the ...


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