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complaint had “no operative effect whatever on the settlement.”
Even if we were to conclude that petitioner’s claim for personal
injury was valid, the settlement agreement did not specifically
allocate any of the payment towards settlement of that particular
claim.
Intent of the Payor
Crandall, Jr. testified that the defendants had two reasons
for settling the case. First, they wanted to have clear title on
the patents. Second, they were afraid that, if they were tied up
in litigation for a period of time, they would lose their
“marketing opportunity”. Crandall, Jr. further testified that
their “main objective in settling this case, our main reason to
settle this was not over a personal injury. It was to make clear
the intellectual property that we wanted so that we could go to
market and make money.” The defendants’ counsel, Dyer, also
testified similarly that the mediation and settlement were to
transfer clearly all rights in the patents to ProGuard.
Crandall, Jr. testified that the entire mediation discussion
revolved around the contractual dispute and there was no mention
of a claim for personal injury. See Dickerson v. Commissioner,
T.C. Memo. 2001-53 (no evidence of personal injury discussed in
negotiations); Coblenz v. Commissioner, T.C. Memo. 2000-131 (no
discussion regarding tort claim during final settlement).
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