Edward P. Knoll and Mary K. King-Knoll - Page 12

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          changed even after petitioner had introduced the personal injury            
          element into the negotiations.                                              
               During the audit examination, petitioner asserted, in a June           
          8, 1998, letter, that his settlement payment from Winston was for           
          a release of his claims for IIED, defamation, and diminishment of           
          personal reputation.  Petitioner contended that the defamation              
          and diminishment of personal reputation claim was based on                  
          certain improprieties of Winston’s managing partner, at the time            
          petitioner left the firm.  The managing partner’s improprieties             
          were not discovered or made public until approximately 9 months             
          after petitioner proposed the personal injury clause be added to            
          the agreement.  Petitioner did not raise a specific defamation              
          and diminishment of personal reputation claim in negotiations               
          with Winston and did not assert that position at trial.                     
               Between June 12, 1992, and January 13, 1993, Winston made              
          five separate payments to petitioner, which totaled $48,420.21.             
          The payments were issued pursuant to petitioner’s request and he            
          used them to pay estimated State income tax bills and to make a             
          Keogh plan contribution.  Upon receiving each payment, petitioner           
          signed documents confirming that he received an “advance” from              
          Winston on each of the five respective dates.  The signed                   
          documents also contained the condition that the advances would be           
          recaptured from any lump-sum payment the firm might agree to give           
          petitioner upon his transition from status as an active partner.            






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