Walter E. Hess and Helen L. Hess - Page 9

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          future earnings representing the amount petitioner would have               
          earned if he had worked for Balfour until age 65, and (6) $2                
          million in emotional distress.                                              
               Shortly after the additional interrogatory responses were              
          served on Balfour's attorney, but before she had read them,                 
          Balfour and petitioner agreed to settle the litigation by having            
          Balfour pay petitioner $550,000.  Balfour intended that this                
          payment would compensate petitioner for commissions purportedly             
          owed him, primarily on the AT&T account; it was not intended to             
          compensate petitioner for a purported constructive discharge or             
          physical or emotional injury.  At the time of settlement, neither           
          Balfour nor its attorney knew that petitioner was claiming                  
          damages for an emotional injury, and petitioner had never given             
          Balfour any reports detailing such an injury.                               
               Beginning in mid-September 1993, the attorneys for Balfour             
          and petitioner began discussing the language to be used in the              
          settlement agreement, and the attorneys exchanged drafts of the             
          agreement.  Petitioner's attorney asked that the agreement                  
          allocate $425,000 of the $550,000 settlement payment to a claim             
          for constructive discharge and that the remaining $125,000 be               
          allocated to attorney's fees.  Petitioner's attorney made this              
          request because petitioner's accountant had advised the attorney            
          that such an allocation would render the settlement proceeds                

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