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any of the intercompany loan money personally; rather, the money
was borrowed to finance ongoing corporate operations.
B. Collateral Estoppel Argument
Henry and Esther base their collateral estoppel argument
solely on language in the State court journal entry, which stated
in part:
4. To settle and resolve certain conflicts
which have arisen in regards to the amount payable
pursuant to the * * * Modified Judgment, the
Parties, in open Court, have indicated their
agreement to the following:
* * * * * * *
(b) The note of First Bank (f/k/a
FirsTier Bank), referenced in
the “side letter agreement,”
dated March 15, 1990, to which
Henry Misle was an
accommodating Party, has been
paid by the Defendants, in
full, * * * [Emphasis added].
HJA responds that collateral estoppel cannot be applied against
it because the issue of whether Henry was an accommodation party
was never litigated in the State litigation, and a final and
binding judgment was not entered on the merits with respect to
that issue.
The doctrine of collateral estoppel applies to Federal
income tax cases. See United States v. International Bldg. Co.,
345 U.S. 502, 505 (1953); Commissioner v. Sunnen, 333 U.S. 591,
598 (1948). “Under collateral estoppel, once an issue is
actually and necessarily determined by a court of competent
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