- 15 -
intent of the payor, which is the most important factor in
determining “in lieu of what was the settlement amount
paid.” See, e.g., Bagley v. Commissioner, 105 T.C. at
406; Stocks v. Commissioner, 98 T.C. 1, 10-11 (1992).
Neither respondent’s memorandum nor the record in
this case answers this question or permits the Court, in
the context of deciding respondent’s motion for summary
judgment which requires the Court to draw all factual
inferences in petitioners’ favor, to find that State Farm
did not intend the settlement payment to satisfy
petitioner’s tort claims, at least in part. Even if, as
argued by respondent, prosecution of the claims was barred
by the statutes of limitations in Arizona, we believe
that the claims were nevertheless extant. Clearly,
petitioner’s claims are unlike the “Claims for potential
future personal injuries” which the court in the case
cited by respondent, Greer v. United States, supra at
327 said “are insufficient.” Moreover, the nature of
petitioner’s claims, and not the validity of the claims,
controls whether a payment in settlement thereof is
excludable under section 104(a)(2). See, e.g., Robinson
v. Commissioner, 102 T.C. at 126; Stocks v. Commissioner,
supra at 10.
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011