David A. Sturman and Celinda M. Sturman - Page 2

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          and the sole shareholder of Inter-Regional Service Corp.                    
          (Corporation), and (2) Harlan Sharpers, Corporation’s director.             
          Respondent objects to petitioners’ motion, arguing primarily that           
          a genuine issue of fact exists as to the applicability of res               
          judicata.  Respondent supports her objection with two affidavits,           
          one of which has attached exhibits, and a memorandum of law.                
          Respondent’s affiants are:  (1) Jerry Li, Associate Chief of                
          Appeals, Internal Revenue Service, in San Francisco, California,            
          and (2) Debra K. Estrem, respondent’s counsel herein.                       
               We agree with respondent that this case is not ripe for                
          summary adjudication due to differences in opinion as to material           
          facts, and we shall deny petitioners’ motion.                               
                                     Background1                                      
               Corporation was incorporated in the State of California on             
          October 24, 1983, and Mr. Sturman is its only shareholder.  Since           
          its incorporation, Corporation has been engaged in the adult                
          entertainment industry.  It owns and services arcade machines               
          that it places in adult book stores.  At all relevant times,                
          Mr. Sturman was Corporation’s general manager and chief executive           
          officer.  Mr. Sturman was indicted by a Federal grand jury in               
          1986.  In relevant part, the indictment charged that he had                 

               1 The “facts” presented in this Opinion are stated solely              
          for purposes of deciding the motion and are not findings of                 
          fact for this case.  Fed. R. Civ. P. 52(a); Sundstrand Corp. v.             
          Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965                    
          (7th Cir. 1994).  When they petitioned the Court, petitioners               
          resided in Hillsborough, California.                                        




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