Nierenhausen v. May Department Stores Co.
This is a breach of contract case. Defendant The May Department Stores Company (hereinafter, May Co.) appeals from a judgment awarding liquidated damages of $10,000, plus attorney fees and costs, to plaintiff Luanne Nierenhausen for May Co.s breach of the terms of a settlement agreement resolving her claim of wrongful termination. May Co. issued an Internal Revenue Service (IRS) Form 1099 to Nierenhausens law firm, as required by the terms of the settlement agreement. But by also issuing a Form 1099 to Nierenhausen personally, reflecting the same payment made to her law firm, May Co. breached the settlement agreement.
May Co. contends, in essence, as follows: (1) it was required by law to issue a Form 1099 directly to Nierenhausen; (2) it did not breach the terms of the agreement because nothing in the agreement specifically prohibited it from issuing a Form 1099 to Nierenhausen; and (3) any interpretation that it breached the agreement by complying with tax laws contravenes public policy. Court find May Co.s contentions unavailing, because the plain terms of the agreement and federal law at the time only required one Form 1099, and agreeing to issue the Form 1099 to counsel was appropriate at the time of the settlement agreement when the issue of tax liability for attorney fees in personal injury matters was not yet resolved by the United States Supreme Court.
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