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District Court did not allocate the proceeds among petitioner’s
claims.
If a settlement agreement lacks express language stating
what the settlement amount was paid to settle, we look to the
intent of the payor, on the basis of all the facts and
circumstances of the case, including the complaint filed and
details surrounding the litigation. United States v. Burke, 504
U.S. 229 (1992); Robinson v. Commissioner, 102 T.C. 116, 127
(1994) affd. in part and revd. in part on another issue 70 F.3d
34 (5th. Cir 1995); Knuckles v. Commissioner, T.C. Memo. 1964-33,
affd. 349 F.2d 610 (10th Cir. 1965). A key question to ask is
“‘In lieu of what were the damages awarded?’” Robinson v.
Commissioner, supra at 126 (quoting Raytheon Prod. Corp. v.
Commissioner, 144 F.2d 110, 113 (1st Cir. 1944), affg. 1 T.C. 952
(1943). Accordingly, the Court must determine the intent of the
payor upon the basis of the facts and circumstances including
petitioner’s complaint in the class action lawsuit.
Petitioner argues that the first amended complaint includes
a cause of action and remedy for bodily injury and physical
distress. Petitioner testified that he was verbally and
physically harassed by other residents of Sun City. According to
petitioner, this harassment and the stress of the lawsuit caused
him to suffer numerous headaches, stomach aches, and breathing
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