-8- A legal award may be excluded from income if two conditions are met. Id. at 337. A legal award may be excluded if the underlying cause of action is based upon tort or tort-type rights, and if the proceeds were for damages received on account of personal physical injury or physical sickness.7 Id. Emotional distress is not a personal physical injury or physical sickness. Sec. 104(a)(2) (flush language). The parties agree that petitioner’s underlying cause of action is based upon tort or tort-type rights. Accordingly, the first condition is met. The parties dispute, however, whether any portion of the economic or non-economic damages from the jury award was for damages received on account of personal physical injury or physical sickness. Petitioner did not allege in the complaint against the University that she suffered personal physical injury or physical sickness as a result of its discrimination or retaliation, or that she was entitled to recover any amount from the University for any such personal physical injury or physical sickness. In addition, the jury’s verdict did not contain any reference to personal physical injury or physical sickness. The jury awarded petitioner $1.5 million of economic damages to compensate her for the loss of earnings, loss of employment, and loss of employment 7The Supreme Court in Commissioner v. Schleier, 515 U.S. 323 (1995), analyzed sec. 104(a)(2) before its amendment by the SBJPA sec. 1605(a), when the restrictive modifier “physical” was added to limit the scope of “personal injuries”.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011