George W. Guill - Page 9

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               Respondent devotes much time in his opening brief to his                
          proffered method of apportioning petitioner's legal costs between            
          his business and nonbusiness activities, spending little time                
          arguing that apportionment of the legal costs is appropriate.  As            
          we understand respondent's argument on apportionment, petitioner             
          must apportion his legal costs because, respondent asserts,                  
          petitioner has not proven that he incurred 100 percent of the                
          costs in his insurance business.  We disagree.  After reviewing              
          the record, which includes 19 stipulations and 9 exhibits, we are            
          persuaded by more than a preponderance of the evidence that all              
          of petitioner's legal costs were attributable to his insurance               
          business and, more importantly, that all of the costs were                   
          connected to claims which arose in that business.  Petitioner's              
          complaint, for example, attests to the fact that each of his                 
          claims, and not simply his claim of conversion, arose from the               
          sole-proprietor insurance business.                                          
               We consider it both ordinary and necessary from a business              
          standpoint for petitioner to have filed the lawsuit against                  
          Academy and for him to have sought any and all damages to which              
          he was entitled on account of Academy's breach of contract and               
          related conversion.  The mere fact that petitioner sought and was            
          paid punitive damages to punish Academy for its "extraordinary               
          misconduct, and to serve as a warning [to it and to other                    
          persons] not to engage in such conduct in the future" does not               

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