Douglas A. Gibson - Page 10

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          District Court did not allocate the proceeds among petitioner’s             
               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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Last modified: November 10, 2007