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31, 1997, and continue for 143 months until December 31, 2008.
The defendants were required to pay petitioners $13,321 each
month, which included interest at the rate of 8-1/2 percent per
year, calculated from December 31, 1996. If the defendants
failed to comply with the stipulation, judgment would be entered
in favor of petitioners for the unpaid balance of the purchase
price, with interest, and petitioners’ reasonable attorney’s
fees.
NCMI issued a Form 1099 to Mr. Biehl showing $1.2 million
paid to him in 1996. On October 16, 1997, petitioners filed a
motion in Santa Clara County Superior Court to enforce the
settlement agreement. Petitioners alleged that NCMI violated the
settlement agreement by issuing one Form 1099 to Mr. Biehl for
$1.2 million, rather than two Forms 1099, one to Mr. Biehl for
$799,000 and one to Olimpia, Whelan,& Lively for $401,000.
Petitioners’ motion to enforce the settlement agreement states
that the income tax consequences of the settlement were a major
concern to Mr. Biehl in the settlement negotiations, and that he
had been satisfied with the settlement agreement because it
required NCMI to pay the attorney’s fee directly to Olimpia,
Whelan, & Lively. Mr. Biehl’s stated concern was that if NCMI
issued a single Form 1099, he would have to include $1.2 million
as his income from the settlement, versus $799,000 had NCMI
issued two Forms 1099. According to the motion, the tax
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