- 13 - economic harm to HGTG and petitioner; and (3) the defendants were unaware that petitioner was asserting any claims for mental anguish, and, accordingly, the defendants did not intend to settle any particular claims for mental anguish. As previously explained, petitioner must meet a two-prong test for exclusion of any part of the settlement proceeds. As to the first part, petitioner must show that the underlying cause of action giving rise to the recovery is based upon tort or tort type rights. In that regard, some of the 13 counts alleged in the pleadings sounded in tort, and would therefore satisfy the first prong of the Schleier test. We note, however, that petitioner’s factual allegations in the pleading concerned commercial loss, and no allegations were made with respect to petitioner’s emotional distress or sickness. In fact, the format used by petitioner’s attorneys to formulate the pleadings was derived from another proceeding that concerned fraud and misrepresentation that resulted in commercial loss. Petitioner, in the trial of this case, produced testimony from Alabama attorneys that the broad-based tort allegations in petitioner’s pleadings would, under Alabama law, provide a foundation for subsequent allegations and proof of damages caused by personal injuries.3 3 We find it unnecessary to analyze petitioner’s position that he was able, at the time of the settlement, to subsequently (continued...)Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
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