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other parties2 involved in the construction and design of
petitioners’ house. In their complaint, petitioners alleged
negligence, negligent misrepresentation, fraud, unfair trade
practices, breach of warranty, breach of duty of good faith and
fair dealing, breach of contract, prima facie tort, and emotional
distress.3
In October 2001, before trial, petitioners and the parties
whom they had sued agreed to settle the lawsuit for $130,000,
$40,500 of which was to be paid by Mr. Green. The settlement
agreement provided, among other things, that no party was to
admit “any responsibility or wrongdoing whatsoever.” On February
4, 2002, the State court granted a joint motion to dismiss the
lawsuit filed by petitioners and dismissed that lawsuit with
prejudice. No criminal charges were ever filed against Mr.
Green, or any of the other parties involved in the design and
construction of petitioners’ house, for any matter relating to
the design and construction of petitioners’ house.
In January 2003, petitioners filed a Form 1040X, Amended
U.S. Individual Income Tax Return, for the 2001 taxable year in
which they claimed a net theft loss deduction of $172,904 for
2 Those parties included Mr. Cabber and, ultimately, eight
subcontractors.
3 Petitioners also filed three amended complaints. Those
amended complaints, other than adding as defendants two of the
eight subcontractors, do not differ materially from the original
complaint so as to warrant discussion.
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Last modified: March 27, 2008