Estate of Jacqueline A. Stotz, Deceased, Trent McGee and Leo Kaplan, Co-Executors and Jackie Stotz Trust, Trent McGee and Leo Kaplan, Co-Trustees - Page 5

                                        - 5 -                                         

               We have held that the existence or validity of parties’                
          settlements may be interpreted under general contract principles.           
          Robbins Tire & Rubber Co. v. Commissioner, 52 T.C. 420, 435-436             
          (1969), supplemented by 53 T.C. 275 (1969).  In that regard, as             
          expressed in Bankamerica Corp. v. Commissioner, 109 T.C. 1, 11              
          (1997):                                                                     
                    It is clear that we may reopen an otherwise valid                 
               settlement agreement based on the existence of mutual                  
               mistake.  Callen v. Pennsylvania R. Co., 332 U.S. 625,                 
               630 (1948); Dorchester Indus. Inc. v. Commissioner, 108                
               T.C. 320, 334 (1997).  We may also relieve a party of a                
               stipulation where justice requires.  Cf. Rule 91(e);                   
               Adams v. Commissioner, 85 T.C. 359, 375 (1985); Shaw v.                
               Commissioner, T.C. Memo. 1991-372 n.3.  On the other                   
               hand, unilateral mistake is generally not a ground for                 
               reforming a settlement or stipulation.  Stamm Intl.                    
               Corp. v. Commissioner, 90 T.C. 315, 320 (1988); see                    
               Markin v. Commissioner, T.C. Memo. 1989-665.  * * *                    
               Petitioners do not contend that a basis for settlement was             
          not reached or that a settlement was not agreed to.  Accordingly,           
          the parties entered into a contract to settle, but petitioners              
          contend that there was a mutual mistake as to respondent’s                  
          position in this case.  Respondent counters that his position was           
          set forth in his trial memorandum, and that position was in                 
          accord with respondent’s litigation position expressed in his               
          reply brief in Estate of Davis v. Commissioner, supra.  We agree            
          with respondent.                                                            
               Although petitioners allege that respondent’s counsel orally           
          precluded the possibility that capital gains tax could be taken             
          into account in this case, the written documents in this case do            




Page:  Previous  1  2  3  4  5  6  7  Next

Last modified: May 25, 2011