- 24 -
alleged wrongful conduct, the basis on which petitioner received
his recovery, is not a personal injury. Cf. Commissioner v.
Schleier, 515 U.S. 323 (1995). Further, the focus of the
settlement in the class action was to make class members, such as
petitioner, "economically whole" from the effects of their loss
of employment. Therefore, economic factors were not merely used
as a yardstick to measure the extent of the injury; rather, they
were the harm for which petitioner received his compensation.
This is evidenced by the joint stipulation of settlement, by the
independent trustee's findings as reflected in the motion for
distribution of notice and release form, by the inquiries made in
the proof of claim form, and finally, by the proof of claim as
completed and submitted by petitioner.
D. The District Court's Orders
Finally, we consider the orders issued by the District Court
in December 1993 and March 1995. As a preliminary matter, we
observe that because res judicata and collateral estoppel are
affirmative defenses and neither was pleaded by petitioner, they
are deemed waived.7 See Rule 39; Monahan v. Commissioner, 109
7 We note, however, that even if petitioner had pleaded
these affirmative defenses, res judicata and collateral estoppel
would not apply if for no other reason than the characterization
of the settlement's tax consequences was not essential to the
prior proceeding. See Peck v. Commissioner, 90 T.C. 162, 166-167
(1988), affd. 904 F.2d 525 (9th Cir. 1990), setting forth the
following five conditions that must be satisfied prior to
application of issue preclusion in the context of a factual
(continued...)
Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 NextLast modified: May 25, 2011