- 17 - Here, we have a situation in which the jury award, which was not reversed by the court because of its amount, but rather because of an improper jury instruction as to burden of proof, gave five times as much in punitive damages to petitioner as in compensatory damages, and an award of two and one- half times as much in punitive as compensatory damages that would be reinstated on the claim for tortious interference with future employment if the libel case of petitioner were unsuccessful. Also, there existed the possibility that an additional $1.5 million of punitive damages might be reinstated on the invasion of privacy claim. Based on these facts, we conclude that some of the $1.5 million is properly allocable to punitive damages. However, we do not agree with the amount respondent allocated. The parties were negotiating for an amount in lieu of the overall amount petitioner might recover if the case went to trial. They were considering the risk of trial, as well as items unrelated to the money that petitioner might recover, such as the return of the Bagley documents and the confidentiality of the settlement. All of these factors were important to IBP. Also, it is clear that there would have been, in any event, a $350,000 payment to petitioner for the tortious interference with future employment award, of which $250,000 were punitive damages if petitioner was unsuccessful in the libel suit. Probably there would have been interest on that award. However, clearly IBP did not want to acknowledge a payment of punitive damages. Under these circumstances, it is reasonable to assume that IBP would have paid in settlement to petitioner the entire $1 million that the jury had found he was due as compensatory damages. However, in our view, the remaining $500,000 was in settlement of possible punitive damages petitioner might have recovered. We, therefore, hold that of the $1.5 million settlement amount, $1 million was for compensatory damages and $500,000 was for punitive damages. Petitioner argues that the amounts received by petitioner as punitive damages, which we have found total $1 million, are properly excludable fromPage: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
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