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tort or tort type claims for personal injury. Pursuant to the
definition of credible evidence contained in the legislative
history of section 7491(a)(1), our finding that petitioners have
presented credible evidence is made before considering any
contrary evidence submitted by respondent. We therefore hold
that pursuant to section 7491, the burden of proof on whether
$25,130 from DHS was received on account of a tort or tort type
claim for personal injury shifted to respondent.
IV. Respondent Failed To Meet Burden of Proof
After petitioners presented their case, respondent called
only one witness, Mr. Ladd. Mr. Ladd negotiated the Forste
settlement on behalf of DHS. Mr. Ladd was in charge of human
resources for DHS and was its national personnel partner. He was
in charge of the retirement and severance pay issues that
resulted from DHS’s decision to terminate the employment of
partners and directors in 1985. On the other hand, Mr. Forste’s
situation involving tort and tort type personal injury claims was
unique to Mr. Forste. Nevertheless, Mr. Ladd had almost no
recollection of the reasons for the critical language in the
various proposed drafts and the final settlement document in Mr.
Forste’s case. Mr. Ladd’s failure to recall the circumstances
and whether DHS intended to compensate Mr. Forste for personal
injury claims might raise an inference that DHS’s reason for
entering into the agreement was no different than DHS’s reasons
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