Wade H. Griffin, III - Page 13




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          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...)           





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