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turer of Benlate, in the Court of the Ninth Judicial Circuit in
and for Orange County, Florida. In that suit, the Fabrys alleged
that du Pont had allowed Benlate to become contaminated so as to
cause the damages that they suffered from having used it on their
stock of plants. The Fabrys demanded a judgment for monetary
damages from du Pont under theories of negligence and strict
liability in tort. Under both theories, the Fabrys claimed that
they sustained damages in the form of the lost value of destroyed
or injured plants, damage to their business reputation, lost
income, and the lost value of their business. After mediation,
the suit which the Fabrys instituted against du Pont was con-
cluded pursuant to a stipulation under which du Pont agreed to
pay them $3,800,000. See id.
The Commissioner of Internal Revenue (Commissioner) conceded
in Fabry I that $500,000 of the $3,800,000 that du Pont paid to
the Fabrys constituted damages for injury to their business
reputation. See id. Thus, there was no dispute between the
parties in Fabry I, as there was in Henry I, that a specified
amount of the total damages paid was paid as damages for injury
to business reputation. The only question presented to us in
Fabry I was whether, as argued by the Fabrys, the $500,000 that
du Pont paid to them as such damages was received on account of
personal injuries, as that term is used in section 104(a)(2).
See id. at 308.
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