                       T.C. Memo. 2006-118



                      UNITED STATES TAX COURT



                TIMOTHY J. COBURN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 6695-04.                 Filed June 8, 2006.



     Richard A. Siegal and Mark S. Gregory, for petitioner.

     Michael J. Proto, for respondent.



                        MEMORANDUM OPINION


     WELLS, Judge:   The instant matter is before the Court on

petitioner’s motion for litigation fees and costs pursuant to

section 7430 and Rule 231.   The issues to be decided are whether

respondent’s position in the court proceeding was substantially

justified and whether the litigation costs petitioner claims are
                                - 2 -

reasonable.   Unless otherwise indicated, all section references

are to the Internal Revenue Code, and all Rule references are to

the Tax Court Rules of Practice and Procedure.

                              Background

     The parties have not requested a hearing on the instant

motion.   Consequently, we base our decision on the parties’

submissions and the record.    The underlying facts of this case

are set forth in detail in Coburn v. Commissioner, T.C. Memo.

2005-283 (Coburn I), and we incorporate by reference the portions

of Coburn I that are relevant to our disposition of the instant

motion.   The following represents a brief summary of the factual

and procedural background of the instant case.

     At the time of filing the petition, petitioner resided in

Glastonbury, Connecticut.   During 1996, petitioner received stock

of PhyMatrix Corp. (PhyMatrix) and CareMatrix Corp. (CareMatrix)

with an aggregate value of $1,675,000, and petitioner incurred a

related income tax liability of $621,980.    On April 15, 1997,

CareMatrix lent petitioner $621,980, and petitioner pledged

57,248 shares of PhyMatrix common stock (the collateral) as

security on the loan.1   To complete the loan transaction,

petitioner executed a promissory note (the promissory note), a

stock pledge agreement (the stock pledge agreement), and a stock


     1
      Petitioner concedes that the purpose of the loan was to
provide him with the money necessary to pay the aforementioned
income tax liability.
                               - 3 -

transfer power (the stock transfer power).     The promissory note,

stock pledge agreement, and stock transfer power are collectively

referred to as the loan documents.

     The promissory note became due and payable on April 15,

2000.   CareMatrix subsequently demanded payment, but petitioner

refused to pay on grounds that the promissory note was

nonrecourse and that CareMatrix held the collateral.     CareMatrix

made no further collection efforts.

     Respondent determined that petitioner’s default on the

promissory note resulted in cancellation of indebtedness income

of $750,000 in 2000 and that petitioner was liable for an income

tax deficiency of $277,951 and a section 6662 accuracy-related

penalty of $55,590.20 for that year.     Petitioner timely

petitioned this Court for a redetermination.     The parties

submitted the case fully stipulated, without trial, pursuant to

Rule 122.   In Coburn I, we held that petitioner did not realize

discharge of indebtedness income in 2000 and that petitioner is

not liable for a section 6662 accuracy-related penalty.      On

January 17, 2006, petitioner filed the instant motion for award

of litigation costs of $94,860.81.

                            Discussion

     Section 7430(a) provides that a taxpayer may recover

litigation costs incurred in a court proceeding brought against

the United States in connection with the determination of a tax
                                - 4 -

or penalty.   Litigation costs may be awarded pursuant to section

7430 if (1) the taxpayer has exhausted administrative remedies,

(2) the taxpayer has not unreasonably protracted the court

proceedings, (3) the taxpayer is the prevailing party, and (4)

the claimed litigation costs are reasonable.    Sec. 7430(a),

(b)(1), (3), (c)(4).    Respondent concedes that petitioner

exhausted all administrative remedies and did not unreasonably

protract the court proceedings.    We must decide whether

petitioner is the prevailing party and whether the amount of

petitioner’s claimed litigation costs is reasonable.

Prevailing Party

     To qualify as the prevailing party pursuant to section

7430(c)(4)(A), the taxpayer must substantially prevail with

respect to either the amount in controversy or the most

significant issue or set of issues presented, and the taxpayer

must satisfy the net worth requirement of section

7430(c)(4)(A)(ii).2    Respondent concedes that petitioner

substantially prevailed with respect to the amount in controversy

and the most significant issue presented and that petitioner

satisfies the net worth requirement.




     2
      Sec. 7430(c)(4)(A)(ii), as relevant here, effectively
limits the award of litigation costs to individuals with a net
worth of $2 million or less. Stieha v. Commissioner, 89 T.C.
784, 789-790 (1987).
                               - 5 -

     Notwithstanding a taxpayer’s satisfaction of the prevailing

party requirements of section 7430(c)(4)(A), section

7430(c)(4)(B)(i) provides that a taxpayer is not treated as the

prevailing party if the United States establishes that its

position in the court proceeding was substantially justified.

Accordingly, the Commissioner has the burden of proof on the

issue of whether the Commissioner’s position was substantially

justified.   To be considered substantially justified, the

Commissioner’s position must be justified to a degree that could

satisfy a reasonable person and must have a reasonable basis in

both law and fact.   Corkrey v. Commissioner, 115 T.C. 366, 373

(2000).   In deciding whether the Commissioner acted reasonably,

we consider both the basis for the Commissioner’s legal position

and the manner in which the position was maintained.    Id. at 373.

The mere fact that the Commissioner loses a case does not

establish that the Commissioner’s position was unreasonable, but

the loss of the case may be considered as a factor.    Maggie Mgmt.

Co. v. Commissioner, 108 T.C. 430, 443 (1997).

     Generally, the Commissioner’s position in a court proceeding

is established in the Commissioner’s answer to the petition.    See

Huffman v. Commissioner, 978 F.2d 1139, 1148 (9th Cir. 1992),

affg. in part, revg. in part and remanding T.C. Memo. 1991-144;

Maggie Mgmt. Co. v. Commissioner, supra at 442.   In the instant

case, the petition in relevant part states that the
                               - 6 -

“determination of the income tax and penalty set forth in the

notice of deficiency is based upon an erroneous determination

that the debt was forgiven by * * * [CareMatrix] during 2000.”3

Respondent’s answer to the petition responded as follows:

“Denies; alleges that the respondent determined a deficiency and

a penalty in income tax.”   We understand respondent’s position in

the answer to be that petitioner realized discharge of

indebtedness income from forgiveness of indebtedness of $750,000

in 2000 and that petitioner is liable for an income tax

deficiency of $277,951 and a section 6662 accuracy-related

penalty of $55,590.20.4

     We now turn to our analysis of whether respondent has proved

that respondent’s legal position was substantially justified.     We

base our analysis on the facts and legal precedents which formed

the basis of that position.   See Maggie Mgmt. Co. v.

Commissioner, supra at 443.   Relying on Cozzi v. Commissioner, 88

T.C. 435, 445 (1987), respondent contends in the instant motion

that a debt is viewed as having been discharged the moment that

it becomes clear that the debt will never have to be paid and

     3
      The notice of deficiency’s explanation of adjustments in
relevant part states: “It is determined that $750,000.00 from
the discharge of indebtedness (commonly referred to as COD
income) by CareMatrix is includible in income. Accordingly,
taxable income is increased $750,000.00 for the tax year ended
December 31, 2000.”
     4
      We note that the parties do not dispute that the loan from
CareMatrix constitutes bona fide indebtedness.
                                - 7 -

that the moment is determined by applying a facts and

circumstances analysis.    On the basis of the following facts,

respondent contends that a reasonable person could conclude that

no expectation of repayment remained after petitioner’s refusal

to pay in 2000, and, consequently, that respondent’s position was

substantially justified:    (1) A “unique relationship” existed

between petitioner and CareMatrix as demonstrated by the loan to

cover petitioner’s income tax liability; (2) the terms of the

loan documents on their face provide for a recourse liability;

(3) petitioner had made no payment as of April 15, 2000; (4)

petitioner abandoned the collateral in 2000; (5) CareMatrix took

no action to collect the liability in 2000, either by selling the

collateral or by commencing an action against petitioner,5 and

(6) nearly 4 years passed from the date on which the promissory

note became due and payable until the date on which respondent

issued the notice of determination.




     5
      Specifically, respondent’s response to the instant motion
states that respondent’s position was substantially justified on
the basis of, inter alia, the following facts:

          f. The note became due in 2000, [petitioner] did
     not perform on the note, and [CareMatrix] did not take
     advantage of any of the aforementioned recourse
     provisions available to it.

          g. Upon petitioner’s default, [CareMatrix] did not
     foreclose or otherwise take legal title in the
     collateral.
                                 - 8 -

     We agree with respondent that a debt is discharged when it

becomes clear that the debt will never have to be paid and that a

facts and circumstances analysis is applied to determine the

timing of the discharge.     Cozzi v. Commissioner, supra at 445.

We do not agree, however, that respondent’s legal position was

reasonable on the basis of the facts and legal precedents which

formed the basis of that position.

     We note, however, that respondent’s position in the instant

proceedings was not based on the absence of collection activities

by CareMatrix after 2000, the year in issue.6    The test for

determining the time of discharge requires a practical assessment

of the facts and circumstances relating to the likelihood of

repayment.    Id.   Facts and circumstances after 2000 were

unavailable for assessing the likelihood of repayment during

2000.    Accordingly, in deciding whether respondent’s position was

substantially justified, we do not consider any acts or omissions

of CareMatrix after 2000, the year of the alleged discharge.    See

Maggie Mgmt. Co. v. Commissioner, supra at 443.

     Moreover, while respondent’s position at trial, as stated in

respondent’s trial memorandum, was that the liability was

     6
      Specifically, respondent contends that the “passage of
nearly four years between the note’s maturity and the issuance of
the notice of deficiency, allowed the reasonable conclusion that,
at the time respondent filed his answer to the petition, there
was no ‘likelihood of payment’”. Below, we separately address
the absence of collection activities during 2000, the year in
issue.
                               - 9 -

nonrecourse, respondent’s position in the answer was not based on

the fact now alleged in respondent’s response to the instant

motion that the loan documents on their face provide for a

recourse liability.   Respondent’s answer did not address the

issue of whether the liability was recourse or nonrecourse.     Even

though respondent’s trial memorandum took the position that the

liability was nonrecourse, respondent’s opening brief contended

that the Federal income tax result in the instant case does not

depend on whether the loan is recourse or nonrecourse.7    Clearly,

as we noted in Coburn I, respondent has not been of one mind

concerning the facts of the instant case.   In deciding whether

respondent’s position was substantially justified, we will not

consider the fact now alleged in respondent’s response to the

instant motion, that the loan documents on their face provided

for a recourse liability.   See id.

     With respect to the “unique relationship” of petitioner and

CareMatrix now alleged by respondent, we understand respondent to

contend that CareMatrix discharged the liability on account of

either mutual interests with petitioner or sympathy for him.    We

recognize that the facts demonstrate the existence of an

interrelationship among petitioner, CareMatrix, and PhyMatrix:

     7
      Although respondent contended that the Federal income tax
result in the instant case does not depend on whether the
liability is recourse or nonrecourse, respondent’s opening brief
disputed petitioner’s contention that the liability was
nonrecourse.
                              - 10 -

During 1996, petitioner received stock of CareMatrix and

PhyMatrix valued in the aggregate at $1,675,000; Abraham D.

Gosman served as chief executive officer and chairman of the

board of CareMatrix at all relevant times and appears to have

simultaneously served as chief executive officer and chairman of

the board of PhyMatrix;8 CareMatrix advanced a loan to petitioner

for the purpose of covering petitioner’s income tax liability

incurred in relation to petitioner’s receipt of the CareMatrix

and PhyMatrix stock; and the loan from CareMatrix was secured

solely by petitioner’s PhyMatrix stock.   However, despite the

evidence of that interrelationship, respondent conceded that the

loan constituted bona fide indebtedness and offered no evidence

to the contrary.   Respondent chose to submit the instant case

fully stipulated without trial rather than placing the issue of

the bona fides of the CareMatrix loan before the Court and

questioning the intent of petitioner and CareMatrix at trial.

Given respondent’s concession, and absent the raising of the

issue of the bona fides of the loan, we will not consider the

facts relating to the interrelationship among petitioner,

CareMatrix, and PhyMatrix for the purpose of the instant motion.



     8
      Abraham D. Gosman appears to have signed the stock
certificate for the collateral as chairman, president, and chief
executive officer of PhyMatrix. The stock certificate was dated
May 19, 1997. The record contains no further evidence with
respect to the relationship of Abraham D. Gosman and PhyMatrix.
                              - 11 -

     As we held in Coburn I, regardless of whether the liability

in the instant case is nonrecourse or recourse, petitioner’s

default on the loan and abandonment of the collateral in 2000 did

not result in petitioner’s realizing discharge of indebtedness

income in 2000.   In Coburn I, we held that, if the loan were

nonrecourse, any income realized upon petitioner’s loan default

and abandonment of collateral in satisfaction of the liability

would constitute gain on the sale or other disposition of the

collateral pursuant to section 1001(a) rather than discharge of

indebtedness income.   See L&C Springs Associates v. Commissioner,

188 F.3d 866, 868 (7th Cir. 1999), affg. T.C. Memo. 1997-469;

sec. 1.1001-2(a)(1), Income Tax Regs.   We also held,

alternatively, that, if the loan were recourse, petitioner’s loan

default and abandonment of collateral, alone, would not discharge

the underlying liability because the collateral would not

represent the only source of repayment of the loan.     See Lockwood

v. Commissioner, 94 T.C. 252, 260 (1990).

     Moreover, in Coburn I, we held that, regardless of whether

the liability is nonrecourse or recourse, the absence of action

by CareMatrix to collect the liability in the year of default did

not result in petitioner’s realizing discharge of indebtedness

income in 2000.   With respect to nonrecourse indebtedness, the

liability was satisfied upon petitioner’s abandonment of the

collateral to CareMatrix.   See L&C Springs Associates v.
                              - 12 -

Commissioner, supra at 868; Carlins v. Commissioner, T.C. Memo.

1988-79.   Consequently, no collection activity was necessary.

With respect to recourse indebtedness, CareMatrix could take

action to collect the liability in a subsequent year.    Upon a

default by petitioner, the stock pledge agreement provided that

CareMatrix could sell the collateral and apply the proceeds

toward the payment of the loan, and the loan documents did not

preclude the commencement of an action by CareMatrix to recover

directly from petitioner.   However, neither the loan documents

nor Massachusetts law required that such a collection action be

commenced during the year of default.    On the contrary, the

promissory note expressly provided that a delay by CareMatrix did

not constitute a waiver of its rights:

     [CareMatrix] shall not, by any act, delay, omission or
     otherwise be deemed to waive any of its rights or
     remedies hereunder unless such waiver be in writing and
     signed by * * * [CareMatrix], and then only to the
     extent expressly set forth therein.

Respondent made no contention and offered no evidence that

CareMatrix affirmatively waived its right to payment from

petitioner.   Additionally, the period of limitations for

CareMatrix to commence an action to enforce petitioner’s

repayment did not expire until April 15, 2006.9    See Mass. Gen.

Laws ch. 106, sec. 3-118 (1998 & Supp. 2005).     Consequently, if

     9
      State statutes of limitation are of evidentiary value as to
the timing of the realization of income. Policy Holders Agency,
Inc. v. Commissioner, 41 T.C. 44, 49 (1963).
                                  - 13 -

the loan were recourse, the absence of any action by CareMatrix

during 2000 to collect the liability would in no way preclude

CareMatrix from commencing such a collection action after 2000.

Because CareMatrix had not forfeited its right to payment as of

the close of 2000, an expectation of repayment remained.

     In addition to the aforementioned facts, respondent relied

on the precedent of Cozzi v. Commissioner, 88 T.C. 435 (1987).

In Cozzi v. Commissioner, supra at 437, a limited partnership,

Hap Production Co. (debtor), was formed to provide services

related to the production of motion picture films, and the

taxpayers invested in the debtor as limited partners.10       In 1975,

the debtor received a nonrecourse loan from Sargon Etablissement

(lender).   Id. at 438.    The debtor agreed to repay principal and

interest under a repayment schedule ending in 1980.     Id.    As

security for the nonrecourse loan, the lender retained a first

position lien in all proceeds generated under a motion picture

production agreement between the debtor and Map Films, Ltd. (the

production agreement).11    Id.   The production agreement




     10
      In Cozzi v. Commissioner, 88 T.C. 435, 447 (1987), we
stated, “The record makes clear that Hap was a tax shelter which
generated significant tax benefits”.
     11
      Pursuant to the production agreement, the debtor agreed to
perform certain services related to the production of a motion
picture in return for the payment of $1,160,000 and certain costs
incurred by the debtor. Cozzi v. Commissioner, supra at 437.
                                   - 14 -

represented the lender’s sole security on the loan.       See id. at

439.

       The debtor made no payment and engaged in no communication

with the lender with respect to the loan during 1977, 1978, 1979,

1980, and 1981.       Id. at 439-440.   The Commissioner contended that

the production agreement became worthless and was abandoned by

the debtor in 1980, that the debtor was released from the debt in

1980, and that the debtor realized income as a result of that

release.       Id. at 446.   The taxpayers conceded that an abandonment

of the production agreement would result in ordinary income but

contended that the production agreement did not lose its value

and that the debtor did not abandon the production agreement in

1980.    Id.    Applying a facts and circumstances analysis, we held

that the production agreement had become worthless as of 1980,

that the debtor had no intention of enforcing its rights under

the production agreement, and that the lender had no intention of

enforcing its rights against the debtor under the loan agreement.

Id. at 446-447.      We further held that the failure of the debtor

to make the scheduled final payment to the lender in 1980

constituted an “identifiable event” evidencing the debtor’s

abandonment of the worthless production agreement.        Id. at 447.

We concluded that the abandonment by the debtor demonstrated

that the discharge occurred in 1980 as asserted by the

Commissioner.       Id. at 445-448.
                               - 15 -

     In the instant case, respondent confused both the facts and

the holding of Cozzi.   Respondent’s trial memorandum stated as

follows:

          I.R.C. § 61(a)(12) provides that gross income
     includes income from discharge of indebtedness. On
     April 15, 2000, when petitioner’s liability for a loan
     from CareMatrix for $621,980 plus interest of $128,080
     (total of $750,000,) became due, petitioner defaulted.
     Petitioner had executed a non-recourse promissory note,
     and the only collateral for the loan involved
     petitioner’s 57,248 shares of common stock of
     PhyMatrix. CareMatrix opted not to take those shares
     of stock pursuant to the default.

          In Cozzi v. Commissioner, 88 T.C. 435 (1987), the
     lender abandoned the loan’s security due to its nominal
     value. The Court determined that there was income from
     discharge of indebtedness income in that situation,
     stating: “The moment it becomes clear that a debt will
     never have to be paid, such debt must be viewed as
     having been discharged.” Id. at 445.

          Thus, petitioner received $750,000 in income from
     discharge of indebtedness for the year 2000 pursuant to
     section 61(a)(12).

Respondent’s trial memorandum therefore suggests that Cozzi,

stands for the proposition that a debtor realizes discharge of

indebtedness income upon the lender’s abandonment of collateral

securing a nonrecourse loan.   Respondent’s opening brief also

cites Cozzi, for the proposition that a lender’s abandonment of

collateral securing a nonrecourse loan results in discharge of

indebtedness income to the borrower, and the opening brief argues

at length that CareMatrix abandoned the collateral in 2000.

Respondent’s reply brief summarizes respondent’s position as

follows:   “In sum, * * * [CareMatrix] ignored all of its rights
                              - 16 -

and remedies under the Note and abandoned the collateral in 2000.

Such abandonment was the ‘identifiable event’ that made it clear

[petitioner] would not have to repay his obligation to

* * * [CareMatrix].   As a result, * * * [petitioner] realized

discharge of indebtedness income of $750,000 in 2000.”

     In Cozzi v. Commissioner, supra at 445-447, however, we held

that the abandonment of the collateral by the debtor--not the

lender--evidenced the moment of discharge.    The lender could not

have abandoned the collateral because the lender never exercised

control over the production agreement.     Id. at 440 (“During

* * * [the years 1977, 1978, 1979, 1980, and 1981], * * * [the

debtor] did not take any action to cause the collateral securing

the debt to * * * [the lender] to be conveyed to * * * [the

lender].”).   Even if the lender exercised control over the

collateral upon the debtor’s abandonment in 1980, a borrower’s

abandonment of the sole collateral securing a nonrecourse loan

terminates the debt, and the income tax consequences to the

borrower are determined at the time of the termination.12     See

L&C Springs Associates v. Commissioner, 188 F.3d at 868; Carlins

v. Commissioner, T.C. Memo. 1988-79.     Consequently, any



     12
      We note that the actions of the lender with respect to the
loan might, as in Cozzi v. Commissioner, 88 T.C. at 446-447,
evidence the debtor’s abandonment of the collateral by
demonstrating the collateral’s worthlessness.
                              - 17 -

subsequent abandonment of the collateral by the lender would have

no Federal income tax consequences for the debtor.

     Moreover, as we noted in Coburn I, Cozzi v. Commissioner, 88

T.C. 435 (1987), is of limited precedential value under the facts

of the instant case.   The parties in Cozzi did not dispute

whether the abandonment of collateral results in gain on the sale

or other disposition of property or in discharge of indebtedness

income, and, consequently, the Court did not address the issue.

     On the basis of the foregoing, we conclude that respondent’s

position did not have a reasonable basis in either law or fact.

Additionally, respondent failed to maintain that position with

consistency and accuracy throughout the instant proceedings.

Accordingly, we hold that, for purposes of section

7430(c)(4)(B)(i), respondent has failed to establish that

respondent’s position was substantially justified.   We now turn

to our analysis of whether the amount of litigation costs

petitioner seeks is reasonable.

Reasonable Litigation Costs

     “Reasonable litigation costs” include reasonable court costs

and reasonable fees paid or incurred for the services of

attorneys in connection with the court proceeding.   Sec.

7430(c)(1)(A), (B)(iii).   Pursuant to section 7430(c)(1), the

amount of attorney’s fees that may be awarded is limited to a

statutorily prescribed amount, as adjusted for inflation.     For
                                   - 18 -

purposes of the instant motion, the inflation-adjusted statutory

rate is $150 per hour.       See Rev. Proc. 2003-85, sec. 3.33, 2003-2

C.B. 1184, 1190; Rev. Proc. 2004-71, sec. 3.35, 2004-2 C.B. 970,

976.    Attorney’s fees, however, may be awarded at a higher rate

if justified by a special factor such as the limited availability

of qualified attorneys, the difficulty of the issues presented in

the case, or the local availability of tax expertise.        Sec.

7430(c)(1)(B)(iii).    Petitioner bears the burden of proving that

claimed litigation costs are reasonable for purposes of section

7430(c)(1).     See Rule 232(e).

       Petitioner seeks to recover the following attorney’s fees:13

            Attorney            Hours         Rate    Amount Billed

       Mark S. Gregory           36.7       $496.39    $18,217.50
       Richard Siegal            92.2        439.91     40,560.00
       D. W. Knight-Brown        66.0        381.43     25,174.50
       Jeffrey A. Letalien        6.1        220.00      1,342.00
       Kelley Galica-Peck         7.3        395.00      2,883.50
         Total                  208.3                   88,177.50

Respondent contends that any award of attorney’s fees should be

limited to the statutory rate of $150 per hour on grounds that no

special factor justifies a higher rate.         Petitioner contends that

the aforementioned rates are justified because (1) the attorney’s

fees are based on the standard hourly rates charged by



       13
      Remaining fees that petitioner seeks to recover in the
instant motion do not constitute attorney’s fees for purposes of
sec. 7430(c)(1)(B)(iii) and are, therefore, treated as court
costs. Respondent’s objection to the court costs petitioner
seeks are addressed below.
                              - 19 -

petitioner’s attorneys; (2) the hourly rates charged by

petitioner’s attorneys are consistent with the hourly rates

prevailing in the community for the type of work involved, as

demonstrated by the affidavits of Connecticut tax attorneys

Samuel M. Hurwitz and Mark G. Sklarz; (3) petitioner’s attorneys

possessed expertise in both tax law and relevant Massachusetts

commercial law; (4) the representation of petitioner was made

more difficult by respondent’s changing legal theory during the

court proceeding; (5) the effectiveness of petitioner’s

representation is demonstrated by the Court’s holding in

Coburn I; and (6) respondent rejected numerous offers from

petitioner to settle the matter.

     We conclude that petitioner has not established that there

was a limited availability of qualified attorneys for the instant

proceedings, that there was a limited availability of tax

expertise, or that the issues presented in Coburn I were of

sufficient difficulty to qualify as a special factor under

section 7430(c)(1)(B)(iii).   Accordingly, we limit the award of

the aforementioned attorney’s fees to the statutory rate of $150

per hour.

     Finally, we turn to our analysis of whether the amount of

costs petitioner seeks is reasonable.   Those claimed costs

include (1) fees of $608.50 for the services of paralegals,

clerks, and law clerks and (2) disbursements of $6,074.81.
                                   - 20 -

        Respondent disputes the award of costs for certain

disbursements that respondent contends petitioner did not

adequately describe.        Rule 231 provides that a party claiming

litigation costs for which the parties have not reached an

agreement must file a written motion that includes a statement of

the specific litigation costs claimed and a supporting affidavit

setting forth the nature and amount of each item.         Rule

231(a)(2), (b), (d).        Petitioner timely filed a motion with this

Court in compliance with Rule 231.          With the motion, petitioner

filed the supporting affidavit of his attorney Richard A. Siegal

and a detailed billing record (the billing record) identifying

each “out-of-pocket disbursement” billed to petitioner with

respect to the instant proceedings.14         The billing record

chronologically sets forth the date and amount of each

disbursement and identifies each disbursement with a numeric

code.        The billing record separately describes each numeric code.

For instance, the billing record sets forth a disbursement of

$461.66 on February 8, 2005, and identifies the disbursement with

the numeric code “00256”.       Separately, the billing record

describes the numeric code “00256” as “Lexis Research”.15          On the


        14
      Petitioner also filed an additional affidavit in
compliance with Rule 232(d).
        15
      As noted above, respondent generally contends that
petitioner’s descriptions of the claimed costs were inadequate.
With respect to this example, respondent contended that
                                                   (continued...)
                              - 21 -

basis of the foregoing, we conclude that the billing record

sufficiently describes the nature and amount of each item of

costs petitioner claims.   Respondent makes no further objections.

Consequently, we hold that the litigation costs petitioner claims

are reasonable.16

     In conclusion, we hold that petitioner is entitled to an

award of reasonable litigation costs of $37,928.31, including

attorney’s fees of $31,245 and costs of $6,683.31.

     To reflect the foregoing,


                                       An appropriate order will be

                                 issued.




     15
      (...continued)
petitioner provided no description. As explained above, however,
the description of those charges is evident upon a careful review
of the billing record.
     16
      Respondent’s response to petitioner’s motion for an award
of litigation costs states: “Unless already stated above,
respondent has no additional disagreement with other allegations
in the motion.”
