848 F.2d 81 (6th Cir. 1988), 87-1511, Threlkeld v. C.I.R.

Docket Nº:87-1511, 87-1592.
Citation:848 F.2d 81
Party Name:USTC P 9370 James E. THRELKELD, Petitioner-Appellee, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellant.
Case Date:June 01, 1988
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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Page 81

848 F.2d 81 (6th Cir. 1988)

USTC P 9370

James E. THRELKELD, Petitioner-Appellee,

v.

COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellant.

Nos. 87-1511, 87-1592.

United States Court of Appeals, Sixth Circuit

June 1, 1988

Argued April 25, 1988.

Gary R. Allen and Michael Paup, Chief Appellate Section, Tax Div. Dept. of Justice, Bruce R. Ellisen (argued), Michael C. Durney, Ann Durney, William F. Nelson, Chief Counsel, I.R.S., Washington, D.C., for respondent-appellant.

G. Keith Rogers, Jr. (argued), James E. Threlkeld, Threlkeld, Howard, McPherson & Rogers and Walt, Dyer & James, Memphis, Tenn., for petitioner-appellee.

Before MERRITT and KENNEDY, Circuit Judges, and CONTIE, Senior Circuit Judge.

CONTIE, Senior Circuit Judge.

The Commissioner of Internal Revenue (Commissioner) appeals from the February 25, 1987 and March 20, 1987 decisions of the United States Tax Court. For the following reasons, we affirm the Tax Court's judgments.

I.

On May 10, 1979, taxpayer James Threlkeld filed a diversity action against J.B. Williams in the United States District Court for the Western District of Tennessee, alleging malicious prosecution. Williams had contracted to purchase some real estate from taxpayer and another, and then initiated and subsequently lost chancery court proceedings in an attempt to rescind the contract.

In his complaint, Threlkeld alleged that Williams "instituted, continued, and prosecuted his claims" in the chancery suit "without probable cause and with malice." Taxpayer also alleged that Williams' actions in bringing the chancery court suit caused various injuries described as follows:

Plaintiff was subjected to indignity, humiliation, inconvenience, and pain and distress of mind, was prevented from attending to his usual professional pursuits, incurred expenses and costs in defending defendant's claims in and pertaining to the chancery suit, suffered injury to his professional reputation, and suffered injury to his credit reputation.

Additionally, taxpayer filed two other suits against Williams and others which alleged that certain fraudulent conveyances of property were made in an effort to insulate those properties from taxpayer's original chancery court judgment.

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On December 8, 1980, Threlkeld settled his malicious prosecution suit. Taxpayer agreed to release all other pending claims and to assign the original chancery court judgment. In consideration of settlement of his claims, taxpayer received $300,000 allocated as follows:

$75,000

For the release of taxpayer's claims against J.B. Williams asserted in the malicious prosecution action for damage to his professional reputation.

$75,000

For the release of taxpayer's claims against J.B. Williams asserted in the malicious prosecution action for damage to his credit reputation.

$74,980

For the release of taxpayer's claims against J.B. Williams asserted in the malicious prosecution action for indignity, humiliation, inconvenience, and pain and distress of mind.

$20

...

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