                        T.C. Memo. 2000-258



                      UNITED STATES TAX COURT



              PATRICIA R. CARPENTIER, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 2430-96.                      Filed August 16, 2000.


     Douglas D. Potratz, for petitioner.

     Ralph W. Jones, for respondent.



                        MEMORANDUM OPINION


     ARMEN, Special Trial Judge:   This matter is before the Court

on respondent's Motion for Summary Judgment filed pursuant to

Rule 121(a).1   As explained in detail below, we will grant



     1
        All Rule references to the Tax Court Rules of Practice
and Procedure.
                               - 2 -

respondent partial summary judgment with respect to all matters

deemed admitted as a consequence of petitioner's failure to

respond to respondent's Second Request for Admissions and

petitioner's failure to file a reply to respondent's Amendment to

Answer.

Background

     On November 6, 1995, respondent issued notices of deficiency

to Patricia R. Carpentier (petitioner) determining deficiencies

in and additions to her Federal income taxes for 1989, 1990,

1991, 1992, and 1993.   Respondent determined that petitioner

failed to file tax returns for the years in issue, failed to

report various items of income (including interest, dividends,

rents, capital gains, and a tax refund), and failed to pay

estimated taxes.   Petitioner filed a timely petition for

redetermination with the Court.

     On October 22, 1996, Kevin O'Hara filed an entry of

appearance on behalf of petitioner.    On March 4, 1997, Mr. O'Hara

filed a motion to withdraw from the case, citing petitioner's

interference in his efforts to settle the case.   The Court

granted Mr. O'Hara's motion to withdraw.

     On April 3, 1997, Timothy P. Peabody filed an entry of

appearance on behalf of petitioner.

     On August 31, 1999, respondent filed a Second Request for

Admissions requesting that petitioner admit the following:
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a.   During the year 1989 you sold securities resulting
in a net capital loss in the aggregate amount of
$14,437.00.

b.   During the year 1990 you sold securities resulting
in a net capital loss in the aggregate amount of
$34,623.00.

c. During the year 1992, you did not have any capital
gains or losses.

d.   During the year 1993 you sold securities resulting
in a net capital loss in the aggregate amount of
$17,588.00.

e.   During the year 1989 you received taxable interest
income in the amount of $23,046.00.

f.   During the year 1990 you received taxable interest
income in the amount of $24,421.00.

g.   During the year 1991 you received taxable interest
income in the amount of $17,156.00.

h.   During the year 1992 you received taxable interest
income in the amount of $9,769.00.

i.   During the year 1993 you received taxable interest
income in the amount of $6,025.00.

j.   During the year 1989 you received taxable dividend
income in the amount of $4,468.00.

k.   During the year 1990 you received taxable dividend
income in the amount of $1,102.00.

l.   During the year 1991 you received taxable dividend
income in the amount of $552.00.

m.   During the year 1992 you received taxable dividend
income in the amount of $2,674.00.

n.   During the year 1993 you received taxable dividend
income in the amount of $977.00.
                         - 4 -

o.   During the year 1989 you received an income tax
refund from the State of California in the amount of
$4,577.00. The refund is includable in your taxable
income for 1989.

p.   During the year 1991 you received taxable Form K-1
distribution(s) in the amount of $3,798.00.

q.   During the year 1992 you received taxable Form K-1
distribution(s) in the amount of $1,939.00.

r.   During the year 1993 you received taxable Form K-1
distribution(s) in the amount of ($69.00).

s.   During the year 1989 you received taxable ground
rent income in the amount of $75,000.00.

t.   During the year 1990 you received taxable ground
rent income in the amount of $75,000.00.

u.   During the year 1991 you received taxable ground
rent income in the amount of $81,115.89.

v.   During the year 1992 you received taxable ground
rent income in the amount of $75,891.62.

w.   During the year 1993 you received taxable ground
rent income in the amount of $77,910.94.

x.   Your filing status for the taxable year 1989 is
single with one exemption.

y.   Your filing status for the taxable year 1990 is
single with one exemption.

z.   Your filing status for the taxable year 1991 is
single with one exemption.

aa. Your filing status for the taxable year 1992 is
single with one exemption.

ab. Your filing status for the taxable year 1993 is
single with one exemption.

ac. You failed to file an income tax return for the
taxable year 1989.
                              - 5 -

     ad. You failed to file an income tax return for the
     taxable year 1990.

     ae. You failed to file an income tax return for the
     taxable year 1991.

     af. You failed to file an income tax return for the
     taxable year 1992.

     ag. You failed to file an income tax return for the
     taxable year 1993.

     ah. Your failure to file an income tax return for the
     taxable year 1989 was not due to reasonable cause.

     ai. Your failure to file an income tax return for the
     taxable year 1990 was not due to reasonable cause.

     aj. Your failure to file an income tax return for the
     taxable year 1991 was not due to reasonable cause.

     ak. Your failure to file an income tax return for the
     taxable year 1992 was not due to reasonable cause.

     al. Your failure to file an income tax return for the
     taxable year 1993 was not due to reasonable cause.

     am. You failed to pay estimated tax for the taxable
     year 1989.

     an. You failed to pay estimated tax for the taxable
     year 1990.

     ao. You failed to pay estimated tax for the taxable
     year 1991.

     ap. You failed to pay estimated tax for the taxable
     year 1992.

     aq. You failed to pay estimated tax for the taxable
     year 1993.

     Paragraphs a., b., c., and d. of respondent's Second Request

for Admissions, as quoted above, represent concessions by

respondent that, contrary to respondent's determinations in the
                               - 6 -

notices of deficiency, petitioner did not realize capital gains

during the taxable years 1989, 1990, 1992, and 1993.   Respondent

conceded that petitioner either incurred capital losses or had no

capital gains during those years.

     Petitioner failed to file a response to respondent's Second

Request for Admissions.   As a consequence, the matters quoted

above were deemed admitted pursuant to Rule 90(c).   See

Marshall v. Commissioner, 85 T.C. 267, 272 (1985); Freedson v.

Commissioner, 65 T.C. 333 (1975), affd. 565 F.2d 954 (5th Cir.

1978).

     On August 31, 1999, respondent filed a Motion for Leave to

File an Amendment to Answer and lodged an Amendment to Answer

with the Court.   On October 1, 1999, the Court granted

respondent's Motion for Leave and filed respondent's Amendment to

Answer.   The Amendment to Answer included affirmative allegations

that petitioner had received income in the form of ground rents

during the years in issue as follows:

          a. During each of the years 1989 through 1993,
     petitioner owned an interest in certain real estate
     that was managed in her behalf by Charles Dunn Company.

          b. Petitioner was entitled to receive ground
     rents from tenants leasing the real estate during each
     of the years 1989 through 1993.

          c. Charles Dunn Company collected the ground
     rents from the tenants. After subtracting amounts paid
     for the maintenance of the property and its management
     fee, Charles Dunn Company paid net amounts to
     petitioner in each of the years 1989 through 1993.
                                - 7 -

            d. Petitioner received rents from the real estate
       managed by Charles Dunn Company for 1989 through 1993
       in the respective amounts of $75,000.00, $75,000.00,
       $81,115.89, $75,891.62 and $77,910.94.

            e. Petitioner received rents from the real estate
       in amounts greater than determined in the notices of
       deficiency issued to the petitioner, in the respective
       amounts of $34,800.00, $34,800.00, $40,915.89,
       $35,691.62 and $37,710.94.

            f. Because of concessions by respondent with
       regard to the capital gains income received by
       petitioner in the years in question, the increased
       income will not result in deficiencies greater than the
       amounts determined by respondent in the notices of
       deficiency.

       Petitioner failed to file a reply to respondent's Amendment

to Answer.

       On December 13, 1999, respondent filed a motion pursuant to

Rule 37(c) requesting that all undenied allegations set forth in

respondent's Amendment to Answer be deemed admitted.    Although

petitioner was notified of respondent's motion, petitioner failed

to file either a response to the motion or a reply to

respondent's Amendment to Answer.    On January 10, 2000, the Court

granted respondent's Rule 37(c) motion.

       On February 1, 2000, Mr. Peabody filed a motion to withdraw

from the case, citing petitioner's failure to communicate with

him.    The Court granted Mr. Peabody's motion on March 3, 2000.

Prior thereto, on February 24, 2000, Douglas D. Potratz filed an

entry of appearance on behalf of petitioner.    Mr. Potratz is

petitioner’s current counsel.
                                - 8 -

     As indicated, respondent filed a Motion for Summary

Judgment.    Respondent contends that petitioner's dilatory conduct

in this litigation, considered in conjunction with the matters

that petitioner is deemed to have admitted pursuant to Rules

37(c) and 90(c), justifies entry of summary judgment in

respondent's favor.

     Petitioner filed an opposition to respondent's motion,

blaming Mr. Peabody for failing to respond to respondent's Second

Request for Admissions and Amendment to Answer.   Petitioner

further asserts that respondent's motion should be denied insofar

as petitioner intends to show that she is entitled to deductions

for real estate taxes and other miscellaneous expenses incurred

during the years in issue.

     This matter was called for hearing at the Court's motions

session in Washington, D.C.   Counsel for respondent appeared at

the hearing and offered argument in support of respondent's

motion.   Although petitioner did not attend the hearing, she did

file a written statement with the Court pursuant to Rule 50(c).

Discussion

    Summary judgment is intended to expedite litigation and avoid

unnecessary and expensive trials.   See Florida Peach Corp. v.

Commissioner, 90 T.C. 678, 681 (1988).   Summary judgment may be

granted with respect to all or any part of the legal issues in

controversy "if the pleadings, answers to interrogatories,
                                - 9 -

depositions, admissions, and any other acceptable materials,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that a decision may be

rendered as a matter of law."   Rule 121(b); Sundstrand Corp. v.

Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th

Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753, 754 (1988);

Naftel v. Commissioner, 85 T.C. 527, 529 (1985).   The moving

party bears the burden of proving that there is no genuine issue

of material fact, and factual inferences will be read in a manner

most favorable to the party opposing summary judgment.   See

Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985); Jacklin v.

Commissioner, 79 T.C. 340, 344 (1982).

     As previously discussed, petitioner is deemed to have

admitted the various matters set forth in respondent's Second

Request for Admissions and respondent's Amendment to Answer.

There is no dispute as to any material fact as to the matters set

forth therein.   The allegations deemed admitted, quoted above in

their entirety, establish the nature and amount of various items

of income that petitioner failed to report during the years in

issue.   The allegations deemed admitted also establish that

petitioner is liable for the additions to tax determined in the

notices of deficiency.

     Petitioner opposes respondent's Motion for Summary Judgment

on the ground that she is entitled to deductions for real estate
                              - 10 -

taxes and other miscellaneous expenses incurred during the years

in issue.   Respondent's Second Request for Admissions and

respondent's Amendment to Answer are silent with respect to the

nature and amount of the deductions to which petitioner may be

entitled for the years in issue.

     Under the circumstances, we will grant respondent partial

summary judgment in that petitioner will be precluded from

contesting the matters set forth in respondent's Second Request

for Admissions and respondent's Amendment to Answer.    However, we

hold that respondent is not entitled to full summary judgment

insofar as material issues of fact remain in dispute with respect

to petitioner's entitlement to various deductions for the years

in issue.   Any trial in this case will therefore be limited to

the issue of the nature and amount of petitioner's deductions for

the years in issue.

     To reflect the foregoing,



                                      An order granting respondent

                                 partial summary judgment will be

                                 issued.
