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Inc. and Little Rascals Child Care Centers, Inc.” It provides
that “John Jorgl and Sharon Illi will not compete with Little
Rascals”.
The allocation of purchase price at issue here was made in a
second pair of documents. The BUYER’S CLOSING STATEMENT, signed
by Mr. Shah, and the SELLER’S CLOSING STATEMENT, signed by the
trustee, each state: “Purchase price of Covenant Not to Compete
(pay to Seller): 300,000.00". The separate covenant document
signed by petitioners makes no reference to price or payment.
The purchase agreement provides that $650,000 is the “purchase
price of the stock and any covenant not to compete”.
Applicability of the Danielson Rule or the Strong Proof Rule
Given this scenario, the first question that must be
addressed is whether either the Danielson rule or the strong
proof rule applies. We note as a threshold matter that appeal
would normally lie to the Court of Appeals for the Eleventh
Circuit, where decisions handed down by the Court of Appeals for
the Fifth Circuit prior to October 1, 1981, are precedential.
See Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.
1981). Since the Court of Appeals for the Fifth Circuit adopted
the Danielson rule in Spector v. Commissioner, 641 F.2d 376, 384,
386 (5th Cir. 1981), revg. 71 T.C. 1017 (1979), we shall examine
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