The Indiana Tax Court will not do a party’s work for it. The party is responsible for walking the Court through its arguments and the evidence supporting those arguments. In Miller Pipeline Corporation v. Indiana Department of State Revenue, Cause No. 49T10-1012-TA-64 (August 9, 2013), the Court denied Miller Pipeline’s summary judgment motion because it failed to properly designate its evidence and to explain how the evidence supported its claim that the Department erroneously denied a sales tax refund claim.
Miller Pipeline appealed the Department’s denial of its sales and use tax refund claims for the 2005 – 2007 tax years. In requesting a partial summary judgment, Miller Pipeline raised ten issues and designated 15 documents to show there were no genuine issues of material fact. (To prevail on a summary judgment motion, the moving party must establish (a) there are no genuine issues of material fact and (b) the party is entitled to judgment as matter of law, see Ind. Trial Rule 56(C).) To “conserve judicial resources,” the Court addressed only two of Miller Pipeline’s ten issues, noting that the “exhibits specifically designated by Miller Pipeline with respect to those two issues suffer from particular problems that permeate all of Miller Pipeline’s designated evidence.” Slip op. at 4.
First, Miller Pipeline asserted that it was entitled to a refund of use tax incorrectly remitted on a casual sale transaction. At the heart of this claim was Miller Pipeline’s self-assessment of use tax on its acquisition of approximately $949,000 of rolling stock, equipment and tools from a company it contended was not engaged in the business of selling such property in the ordinary course of business; because this transaction was a non-taxable casual sale, the Department was wrong to deny the refund claim. Trial Rule 56(C) requires a party to identify the “parts” of any document upon which it relies for summary judgment, so the party “may not designate various pleadings, discovery material, and affidavits in their entirety.” Slip op. at 4 (citations omitted). Specific references to the relevant portions of documents are required, and “a proper designation should also include an explanation as to why those specifically designated facts are material.” Slip op. at 5 (citations omitted). And the Court “will only consider properly designated evidence that would be admissible at trial.” Id. This means that “unsworn statements or unverified exhibits will not be considered” and “portions of affidavits that merely set forth conclusory facts or conclusions of law will not be considered.” Id. Miller Pipeline designated three exhibits to supports this claim, but it didn’t identify the “specific parts of those exhibits that contain the material fact or facts upon which it relies.” Slip op. at 6 (emphasis in original). Miller Pipeline’s exhibits had other deficiencies:
- They were between six and eleven pages long but were not paginated.
- The three exhibits contained multiple documents, but Miller Pipeline identified only the first document within each exhibit.
- None of the exhibits (or the documents within each exhibit) had “been sworn to in any way.”
Slip op. at 6. Accordingly, the exhibits were “inadmissible and must be stricken.” Slip op. at 7. (In a footnote, the Court explained that six other exhibits had similar issues, see Slip op. at 7 n.7.)
Second, Miller Pipeline argued that it deserved a refund of use tax remitted on a “lump-sum” contract. In a contract to replace field tile, Miller Pipeline explained that the Farm had paid sales/use tax on the materials used to complete the project; because Farm had paid the tax, the Department erred in denying Miller Pipeline’s refund claim for use tax remitted under the contract. Miller Pipeline designated a photocopy of a one page form letter directed to the Farm, which has an “X” in the box next to the statement that the “questioned invoice involved a ‘lump-sum’ contract for improvement to reality.” Slip op. at 7-8. A material and labor invoice from the Farm to Miller Pipeline for field tile replacement is attached to the letter. But the letter contained no facts supporting the “legal conclusion that the subject transaction involved a ‘lump-sum’ contract” or showing that the Farm had paid tax on the materials used to complete the project. Slip op. at 8-9 (emphasis in original). That “the letter was signed and affirmed does not make it an affidavit.” Slip op. at 9 (citations omitted). The letter, signed by the Farm’s President, didn’t show that it was based on the President’s personal knowledge or that that the President was competent to testify. Consequently, the letter was inadmissible and was also stricken. Id.
The Court expressed frustration with the evidence in this case, stating that the lack of proper designation “essentially has the effect of placing a stack of paperwork before the Court and leaving [the Court] to figure out for itself the identity of the documents contained in each of the exhibits, what the relevant portions of each document are and why, and whether those documents are reliable and trustworthy.” Slip op. at 7 n.5. “This task, however, does not belong with the Court and, as a result, the Court will not do the work that [Miller Pipeline] should have done.” Id.
In a footnote, the Court also observed that Miller Pipeline supported its tenth issue by designating various pleadings and the Department’s audit report, which was previously submitted by the Department. Miller Pipeline also cited to – but failed to provide copies of – three documents, including sampling/auditing manuals from California and Texas; it did not explain how the manuals apply in Indiana. The Court declined to “figure it out” for itself. Slip op. at 9 n.9.
Finally, the Department requested summary judgment in its favor. The Department designated as evidence its proposed assessments of tax against Miller Pipeline. Miller Pipeline had paid the assessments in full and then filed a separate claim for refund. The Court denied the request, “given that Miller Pipeline is appealing the Department’s denial of a refund claim.” Slip op. at 10 n.10.
This is the second ruling by the Court in this appeal; in an earlier decision, the Court denied the Department’s motion to dismiss the appeal on grounds of res judicata and accord and satisfaction. A summary of that decision can be viewed in my post here.