Cedric K. and Madelyn D. Nunn - Page 7




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          used at trial “in a fashion that will allow the Court to relate             
          each record to an expense deduction” on the various Schedules C.            
          The Court ordered petitioners to supply the organized documents             
          to respondent not later than 60 days prior to the next scheduled            
          trial date.  Further, the Court held that failure to comply with            
          the order would constitute grounds for respondent to renew the              
          motion to dismiss for failure to prosecute.                                 
               On June 12, 2001, respondent sent petitioners a letter                 
          requesting that the organized documents be submitted to                     
          respondent in accordance with the February 5, 2001, order.                  
          Respondent warned petitioners that failure to submit the                    
          organized documents in accordance with the Court’s order would              
          result in respondent’s renewing the motion to dismiss for failure           
          to prosecute.  This letter was sent to petitioners by certified             
          mail and was signed for by Mr. Nunn.                                        
               On August 1, 2001, the case was again scheduled for trial at           
          the Houston trial session beginning on October 22, 2001.  The               
          notice setting the case for trial explained that before trial the           
          parties must cooperate fully and “must agree in writing to all              
          facts and all documents about which there should be no                      
          disagreement.”  Petitioners refused to stipulate any facts in               
          this case.                                                                  
               On August 8, 2001, respondent sent another letter to                   
          petitioners requesting the documents in an organized manner.                






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