- 33 - payment directly to Olimpia, Whelan, & Lively. The settlement agreement does not refer to the attorney’s fee as being incurred “in connection with” Mr. Biehl’s duties as an employee, or as having been incurred “for” NCMI or “on behalf of” NCMI or incurred by Mr. Biehl “as an agent” of NCMI, nor does it make any reference to a reimbursement arrangement. It is clear that the terms of the settlement (and events subsequent thereto) providing for NCMI’s direct payment to Mr. Biehl’s attorney of his attorney’s fee in prosecuting his termination claim served Mr. Biehl’s tax purposes, not any designated business purpose of NCMI. As Mr. Biehl admitted in his motion and supporting affidavit in the California Superior Court to enforce the settlement agreement, the form and method of making the settlement payment or payments was a matter to which NCMI was completely indifferent. The exhibits made part of the stipulation of facts on which this case has been submitted for decision include not only the settlement agreement pursuant to which NCMI paid $799,000 to Mr. Biehl and $401,000 to the account of his attorney, Olimpia, Whelan, & Lively, but also petitioners’ motion papers subsequently filed with the California Superior Court in the termination lawsuit to enforce the terms of the settlement. The gravamen of petitioners’ motion was that NCMI had violated the terms of the settlement by issuing a single Form 1099 to Mr.Page: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Next
Last modified: May 25, 2011