Christopher J. and Vickilynn M. McCann - Page 8




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          F.3d 1040, 1047 (10th Cir. 1996); Kovacs v. Commissioner, 100               
          T.C. 124, 130 (1993), affd. without published opinion 25 F.3d               
          1048 (6th Cir. 1994); Greer v. Commissioner, T.C. Memo. 2000-25;            
          Delaney v. Commissioner, T.C. Memo. 1995-378, affd. 99 F.3d 20              
          (1st Cir. 1996).                                                            
          B.   Whether LPCF Paid More Than $400,000 for Personal Injuries             
               The following facts show that LPCF did not pay petitioners             
          more than $400,000 for personal injuries.                                   
               1.   LPCF Had No Reason To Pay More Than $400,000 for                  
                    Personal Injuries                                                 
               The maximum liability under La. Rev. Stat. Ann. section                
          40:1299.42(B)(1) for medical malpractice claims is $500,000.  The           
          State court credited LPCF with $100,000 for petitioners’ earlier            
          settlement with Pendleton Hospital.  Thus, LPCF’s liability for             
          personal injury damages was limited to $400,000 under Louisiana             
          law.  Id.  We infer from this fact that LPCF did not pay more               
          than $400,000 in damages for personal injuries.                             
               2.   LPCF’s Allocation                                                 
               LPCF allocated $400,000 of the $839,000 payment to general             
          damages and $439,000 to interest.                                           
               3.   The Settlement Negotiations and Settlement Agreement              
               Petitioners contend that the settlement negotiations and               
          settlement agreement show that the entire $839,000 payment was              
          damages for personal injuries.  Petitioners contend that LPCF               
          negotiated the settlement to replace the State court judgment               





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