The opinion of the court was delivered by: SWEET
Respondent William E. Kirksey ("Kirksey") has moved pursuant to Rule 60(b) Fed.R.Civ.P. for relief from an order issued by this court directing Kirksey to comply with an Internal Revenue Service ("IRS") summons. Petitioners, the United States of America and Revenue Officer James F. Spillane (the "government") have cross-moved for an order holding Kirksey in civil contempt for his failure to comply with the IRS summons which directed him to produce certain records in his possession. For the reasons set forth below, Kirksey's Rule 60(b) motion is denied, and the government's motion for civil contempt sanctions is granted.
On March 1, 1985, Revenue Officer James F. Spillane ("Spillane") served an IRS summons on Kirksey in connection with a civil investigation to determine his tax liability for the years 1980, 1981, 1982, and 1983. On March 21, 1985 Kirksey failed to produce the documents and records specified in the summons, and on May 20, 1985 the District Director of the IRS advised Kirksey by letter that a new June 10, 1985 summons date would be set and a second failure to comply would prompt the IRS to institute legal proceedings in the federal district court. Kirksey did appear for his June 10, 1985 appointment, but informed Spillane that he did not have the summoned documents, his records were in disarray, and requested an extension of time for the filing of his tax returns. This request was denied, and the IRS secured an order from this court on August 8, 1985 directing Kirksey to appear on September 3, 1985 and show cause why he should not comply with the summons.
On September 3, 1985, Kirksey appeared pro se and requested an adjournment of the order to enable him to retain counsel, claiming that medical problems prevented him from obtaining counsel earlier, and that he anticipated problems meeting the compliance schedule set by the summons. The government consented to adjourn the hearing until September 24, 1985.
The depositions of Mr. Tiberio Schwartz ("Schwartz") and Ms. Rosemary Carroll ("Carroll"), attorneys of the firm of Phillips, Nizer, Benjamin, Krim & Ballon ("Phillips, Nizer" or the "firm"), established that Kirksey then contacted Carroll on September 16, 1985 requesting that she represent him in this summons enforcement proceeding. On September 20, 1985 Kirksey, Carroll and Schwartz, a tax partner at the firm, met to discuss Kirksey's efforts to comply with the IRS investigation. The deposition testimony of both attorneys reveals that Kirksey did not wish to oppose the government's order to show cause but wanted Carroll and Schwartz to obtain additional time for him to arrange his personal and corporate records. Schwartz also stated that although he considered opposing the order to show cause and any defenses which Kirksey might have had to the summons, "Mr. Kirksey told us the records were clean. There was no crime whatsoever based on what he was telling me. There was no reason for anyone to take the Fifth Amendment . . . he just needed additional time and he wanted us to determine whether the returns took into account all of the advantages to which he was entitled." Schwartz also stated that he did not personally examine the documents, as they were in a state of disorder.
On or about September 23, 1985, Carroll telephoned Mr. Elliot Horowitz ("Horowitz"), Kirksey's accountant, to determine how long it would take to arrange Kirksey's compliance with the IRS summons. According to Carroll, who relies on contemporaneous notes of the conversation, Horowitz informed her that Kirksey was ready to turn over records and receipts from all years, and that it would take him at least thirty days to complete the returns after these records were delivered. Horowitz claims in his affidavit that he told Carroll that Kirksey's records required organization, and that he would need approximately forty-five days in which to prepare the tax returns. Both Horowitz and Kirksey contend that Carroll's belief that the records were ready for return preparation was a misunderstanding.
On October 8, 1985, the adjourned date of the order to show cause hearing, Carroll appeared on behalf of Kirksey and consented to the entry of the enforcement order on condition that the government grant Kirksey forty-five days in which to respond to the summons. Carroll's deposition testimony reveals that she informed Kirksey of this hearing prior to October 8, 1985 and later informed him of the November 19, 1985 compliance date set by the enforcement order. Carroll also testified that she met with Kirksey and Horowitz on October 18, 1985 and that neither Kirksey nor Horowitz indicated that any of the responsive documents were subject to a Fifth Amendment privilege, and that Kirksey never told her that document preparation would be a massive undertaking.
At the beginning of November, 1985, Kirksey telephoned Carroll to inform her that another attorney would be representing him in the tax matters in question, and that there had been a "misunderstanding" regarding the time it would take to comply with the enforcement order. Kirksey stated that he and Horowitz needed considerably more time than they had indicated previously.
At Kirksey's request, Carroll prepared an affidavit of December 6, 1985 to be submitted in connection with the instant motion for relief. Carroll states that she based her consent to the October 8, 1985 enforcement order on representations from Kirksey and Horowitz that Kirksey's presentation of records had begun and that Horowitz would be able to prepare tax returns and comply with the summons within thirty days of receiving the materials. The Carroll affidavit also states that on October 8, 1985 she had not seen a copy of an affidavit which Kirksey submitted to the United States Attorney's office in September, 1985 in which he claims to have stated that the reconciliation of his accounts would take several months and could not be completed until December 31, 1985 at the earliest. Although no copy of this alleged affidavit appears in the papers submitted, Kirksey refers to his "previous projection" that the records could be prepared no earlier than December 31, 1985, a projection he now terms "somewhat premature."
Kirksey seeks relief from the October 8, 1985 enforcement order under Rule 60(b)(1), Fed.R.Civ.P., which provides that a court may relieve a party from an order because of "mistake, inadvertence, surprise, or excusable neglect." Kirksey contends that his former counsel mistakenly consented to a summons enforcement order which set an unrealistic compliance date, a date which did not take into account the enormous time and effort required to assemble Kirksey's records before turning these documents over to his accountant for preparation of the tax returns. According to the Kirksey affidavit, the compliance date of November 19, 1985 was not "fully disclosed" to him until he was so informed by his new counsel and he states in his supplementary affidavit that he was not informed of any commitment that Carroll intended to make on his behalf. However, a review of the supporting affidavits and depositions, and the relevant standards for granting Rule 60(b)(1) relief demonstrates that Kirksey cannot establish neglect or mistake of counsel.
A motion under Rule 60(b) "is addressed to the sound discretion of the trial court." Matter of Emergency Beacon Corp., 666 F.2d 754, 760 (2d Cir. 1981); Altman v. Connally, 456 F.2d 1114 (2d Cir. 1972), and a district court has broad discretion to deny or grant relief in light of the particular circumstances of the case." 7 Moore's Federal Practice para. 60.19 (1983).
While Kirksey claims that Phillips, Nizer's projected timetable was a "misunderstanding," his own affidavit established that he possessed the knowledge of the allegedly massive nature of this undertaking long before he retained Carroll and Schwartz to represent him, as evidenced by his September, 1985 affidavit to the United States Attorney's office setting December 31, 1985 as his earliest possible compliance date. Both Kirksey and Horowitz had several opportunities to convey this assessment of the task in the September 20, 1985 meeting at Phillips, Nizer, in subsequent telephone calls with Carroll concerning the upcoming enforcement order proceeding, and in the October 18, 1985 meeting among Carroll, Horowitz and Kirksey to discuss the compilation of the summons documents. In light of ...