                    T.C. Summary Opinion 2002-110



                       UNITED STATES TAX COURT



         JARED R. NIELD AND NAYLENE M. NIELD, Petitioners v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 11828-01S.               Filed August 27, 2002.



     Leasa M. Tripp, for petitioners.

     S. Mark Barnes, for respondent.



     CHIECHI, Judge:    This case was heard pursuant to section

7463 of the Internal Revenue Code in effect at the time the

petition was filed.1   The decision to be entered is not

reviewable by any other court, and this opinion should not be

cited as authority.


     1
      Unless otherwise indicated, all subsequent section refer-
ences are to the Internal Revenue Code in effect for the year at
issue.
                                - 2 -

     Respondent determined a deficiency in petitioners’ Federal

income tax (tax) for 1998 in the amount of $4,763.

     The issue for decision is whether the $29,000 settlement

amount (settlement amount at issue) that petitioner Naylene M.

Nield (Ms. Nield) received in 1998 in settlement of a claim

against her employer is excludable from petitioners’ gross income

under section 104(a)(2).   We hold that it is not.

                              Background

     Most of the facts have been stipulated and are so found.

     Petitioners resided in Cedar City, Utah, at the time they

filed the petition in this case.

     On September 5, 1989, Ms. Nield began working for Goer

Manufacturing, Inc. (Goer).    On or about July 9, 1992, Goer

terminated her employment.

     On December 31, 1992, Ms. Nield filed a claim (State claim)

against Goer with the State of Utah Industrial Commission, Anti-

Discrimination Division (Utah Industrial Commission) consisting

of two affidavits by Ms. Nield (Ms. Nield’s affidavits) in which

she alleged employment discrimination, sexual harassment, and

retaliation.2   One of Ms. Nield’s affidavits alleged that “when

* * * [Ms. Nield’s supervisor] would walk past me he would lift

up his elbow and bump into my breast.”



     2
      Although the record is unclear, it appears that at some
time after Ms. Nield filed the State claim, that claim was
referred to the Equal Employment Opportunity Commission (EEOC).
                               - 3 -

     On or about October 4, 1996, Ms. Nield received a “Notice of

Right to Sue” from the Phoenix District Office of the EEOC.

     In December 1996, Ms. Nield filed a complaint (complaint)

against Goer in the United States District Court for the Southern

District of Utah (United States District Court).     In that com-

plaint, Ms. Nield alleged both a claim for sexual harassment

under “Title VII of the Act of Congress known as ‘The Civil

Rights Act of 1964' (42 U.S.C. §2000e) et seq.)”, and a State law

claim for wrongful termination “in violation of Title [sic] 35-9-

11, Utah Code Annotated.”

     Ms. Nield’s complaint alleged in pertinent part:

          11. During and throughout the period of Plain-
     tiff’s employment with Defendant [Goer], and culminat-
     ing with the Defendants [sic] termination of the Plain-
     tiff, the Plaintiff was subject to sexual harassment in
     violation of Section 704, Title VII (42 U.S.C. §2000e-
     3), to wit:

               a. The Defendant, Goer Manufacturing Company
     subjected her to a hostile and sexually demeaning work
     environment due to repeated acts of sexual harassment
     by her supervisor * * * by subjecting the Plaintiff to
     such things as:

                    i.   comments about her anatomy;

                   ii.   degrading sexual remarks;

                  iii. pressure to date and give sexual
     favors to a co-worker in return for money;

                   iv. having sexually explicit calendars
     and cartoons in the workplace; and

                    v. other acts and omissions of and
     causing sexual harassment.
                           - 4 -


          b. Defendant, acted in a discriminatory
manner towards her because Defendant retaliated against
her by terminating her employment because she com-
plained to management about the alleged sexual harass-
ment, to wit:

               i. the supervisor about whom she com-
plained had threatened to “get even” with her if she
ever reported him to management again

              ii. Plaintiff s [sic] supervisor was
instrumental in the decision to terminate her

             iii. and was retaliating against her
because she had reported his acts of sexual harassment
to management.

     12. As a further result of the Defendant’s above-
stated actions, the Plaintiff has been and is being
deprived of income in the form of wages and of prospec-
tive retirement benefits, social security and other
benefits due to her as a worker solely because of her
sex in the sum to be proven at the trial.

   *        *       *        *       *       *       *

     14. Plaintiff invokes this court’s jurisdiction
* * * [to] adjudicate claims arising out of the trans-
actions set forth above that violate rights and duties
established by the law of Utah, to wit:

          a. That the Plaintiff s [sic] termination
was wrongful in that it violates of [sic] the public
policy set forth in 42 U.S.C. § 2000e.

          b. That the Plaintiff s [sic] termination
was in violation of Title 35-9-11, Utah Code Annotated.

     15. The treatment of Plaintiff by Defendant and
by Supervisor were [sic] intentional and with the
purpose and intent of causing Plaintiff severe and
grievous mental and emotional harm which in turn re-
sulted in severe physical consequences in violation of
the common law of Utah.

                     PRAYER FOR RELIEF

       WHEREFORE, Plaintiff respectfully prays this Court
                              - 5 -

     to:

          1. Grant Plaintiff a preliminary injunction
     requiring the Defendant to reinstate plaintiff as an
     employee * * * and enjoining defendant * * * from
     terminating Plaintiff and from harassing her or from
     retaliating against her and the class she represents
     for asserting their rights under Title VII;

          2. Grant Plaintiff a permanent injunction enjoin-
     ing the Defendant Company * * * from engaging in any
     employment policy or practice which discriminates
     against any employee or member or applicant for employ-
     ment on the basis of sex;

          3. Order defendant to make whole the Plaintiff
     herein by providing appropriate back pay and reimburse-
     ment for lost sick leave pay, health and disability
     insurance benefits, pension, social security and other
     benefits in an amount to be shown at trial, and other
     affirmative relief including, but not limited to, an
     affirmative action program designed to eliminate the
     effects of the discriminatory practices complained of
     herein;

        *       *       *       *       *       *       *

          6. Plaintiff prays for an award of actual damages
     to compensate plaintiff for the humiliation and associ-
     ated personal suffering caused by Defendant’s unlawful
     treatment in the amount to be proven at the time of
     trial of this matter but in an amount not less than
     $100,000.00.

          7. Plaintiff prays for an award of punitive
     damages in an amount believed by the court to be appro-
     priate to punish Defendant for the willful and mali-
     cious misconduct and necessary to deter Defendant from
     engaging in such misconduct in the future;

     On January 19, 1998, Goer’s attorney conducted a deposition

(deposition) of Ms. Nield with respect to her complaint.    Ms.

Nield testified during her deposition that

               There was another occasion where there was a
     bunch of –- in my area it was –- I was in the light
                               - 6 -

     department of Spartan Showcase, and in my area we had
     our work tables, and then right behind us we had bins
     –- well, they weren’t really bins but they were wood
     things that had the sheets for the lights in it. And
     there was not very much room between there because we
     had a bunch of stuff stacked in there, and he had
     brushed by me and did this type of thing into my breast
     (indicating).

In connection with Ms. Nield’s foregoing testimony during her

deposition, Goer’s attorney asked her the following questions, to

which she gave the following answers:

          Q   Talking about elbowing?

          A Bumped his elbow right into my breast.    And I
     told her about that.

          Q   What else did you tell her?

          A The way he talked, the way he swore.    I told
     her everything that I have told you.

          Q   So you told her about how he broke things?

          A   Yes.

          Q Told her about how he would scream and abuse
     everybody?

          A   Yes, and the derogatory statements, harassing
     women.   I told her everything.

          Q   What did she say after you told her all that?

          A   She said, okay, thank you, and continued her --

          Q You mentioned something about the elbow in the
     breast. When did that happen and what happened?

          A He just had –- he was joking with somebody over
     down farther from me, and I don’t know what was going
     on. I could just hear everybody laughing. * * * [the
     supervisor] was there, * * * [coworker 1] was there,
     and I don’t know who else was there. But I could hear
     * * * [the supervisor] and * * * [coworker 1] laughing,
                             - 7 -

because they did it all the time.

          And then he came through, there wasn’t room
to get through so he was pushing his way through and
then started laughing and just kept going.

       Q   So you were standing --

       A   I was standing there working at my table.

       Q   At your table.   And he was walking behind you?

     A Well, he –- he kind of had to zigzag through
all the stuff that was stacked right there, and * * *
[coworker 2] was there too because she worked and
helped me there. And he had –- there was more room in
between her and him or her and the stuff, and so he
just walked normal past her. But to get around me I
had to turn sideways and kind of move out of the way,
and when he did –- or when I turned he did that.

       Q   Do you believe he did that on purpose?

       A   Well, he was laughing about it.   So yes, I did.

     Q And because he was laughing you felt he did
that on purpose?

       A   Yes.

     Q In your mind is it just as possible that he did
it by accident and then at that point thought it was
amusing?

     A No, because if he had done it on accident he
wouldn’t have even realized he did it. He would have
just kept going and doing his –-

       Q   So what did you say to him?

     A I just said –- I just made a -– I didn’t really
say anything. I just was disgusted.

       Q   When did that happen?

       A That was probably somewhere in between ‘90 and
‘91.    That never happened again after that.
                                    - 8 -

          Q Anything else that he said or did, that * * *
     [the supervisor] said or did that you thought was
     sexually harassing other than everything we’ve talked
     about so far?

              A    Well, there’s nothing that stands out in my
     mind.

     On March 20, 1998, Ms. Nield and Goer executed a document

entitled “SETTLEMENT AGREEMENT AND GENERAL RELEASE” (settlement

agreement).        The settlement agreement provided in pertinent part:

          1. Payment Terms. The Company [Goer] shall pay
     Nield and her attorneys the amounts set forth below
     within fourteen (14) days after receipt by the Com-
     pany’s counsel of an original of this Settlement Agree-
     ment and General Release executed and dated by Nield.

     The payment shall be made in the following manner:

     a.       The Company will pay and cause to be delivered to
              Nield’s attorney, David T. Berry a check made
              payable to Naylene Nield in the gross amount of
              Three Thousand Dollars and No/100 ($3,000.00),
              less required payroll deductions. An IRS Form W-2
              will be issued to Nield by the Company.

     b.       In addition to the foregoing payment, the Company
              will pay Nield the sum of Twenty-nine Thousand
              Dollars and No/100 ($29,000.00) as non-wage con-
              sideration for general compensatory damages for
              pain and suffering incurred by Nield relating to
              her claims of intentional discrimination and al-
              leged sexually hostile working environment experi-
              enced by Nield while working at Goer. This amount
              will be paid by separate check made payable to
              Nield, and the Company will issue an IRS Form 1099
              reflecting this amount.

          *           *       *       *       *       *       *

              2.    Mutual Release and Covenant Not To Sue.

          a. * * * Nield, hereby fully, finally and uncon-
     ditionally releases and forever discharges Goer from
     and for any and all claims, liabilities, suits, dis-
                               - 9 -

     crimination or other charges, personal injuries, de-
     mands, debts, liens, damages, costs, grievances, inju-
     ries, actions or rights of action of any nature whatso-
     ever, known or unknown, liquidated or unliquidated,
     absolute or contingent, in law or in equity, which
     could have been filed with any federal, state, local or
     private court, agency, arbitrator or any other entity,
     based directly or indirectly upon Nield’s employment
     with Goer * * *.

     On March 26, 1998, Goer issued to Ms. Nield a check in the

amount of $2,644.50, which represented the $3,000 in wages, less

required payroll deductions, to which Ms. Nield was entitled

under paragraph 1.a. of the settlement agreement.   Pursuant to

the settlement agreement, Goer issued to Ms. Nield Form W-2, Wage

and Tax Statement, for 1998 showing the $3,000 in wages and the

payroll deductions.

     On March 27, 1998, Goer issued to Ms. Nield a check in the

amount of $29,000, which represented the $29,000 in “non-wage

consideration for general compensatory damages for pain and

suffering” to which Ms. Nield was entitled under paragraph 1.b.

of the settlement agreement.   Pursuant to the settlement agree-

ment, Goer issued to Ms. Nield Form 1099-MISC, Miscellaneous

Income (Form 1099), for 1998 showing “Other income” of $29,000.

     Petitioners filed a tax return (return) for their taxable

year 1998.   In that return, petitioners included in gross income

the $3,000 in wages, and excluded from gross income the $29,000

settlement amount at issue, that Ms. Nield received from Goer.

     On June 26, 2001, respondent issued to petitioners a notice
                                 - 10 -

of deficiency (notice) for 1998.       In that notice, respondent

determined that petitioners are not allowed to exclude from gross

income the settlement amount at issue that Ms. Nield received

from Goer.

                               Discussion

     We must determine whether the settlement amount at issue is

excludable from petitioners’ gross income for 1998.3

     Section 61(a) provides the following sweeping definition of

the term “gross income”:      “Except as otherwise provided in this

subtitle, gross income means all income from whatever source

derived”.     Not only is section 61(a) broad in its scope, Commis-

sioner v. Schleier, 515 U.S. 323, 328 (1995), exclusions from

gross income must be narrowly construed, id.; United States v.

Burke, 504 U.S. 229, 248 (1992).

     Section 104(a)(2) on which petitioners rely provides that

gross income does not include

                  (2) the amount of any damages (other than
             punitive damages) received (whether by suit or
             agreement and whether as lump sums or as periodic
             payments) on account of personal physical injuries
             or physical sickness;

         *        *       *        *        *       *       *

     For purposes of paragraph (2) [of section 104(a)],
     emotional distress shall not be treated as a physical

     3
      The resolution of the issue presented does not depend on
who bears the burden of proof in this case.
                             - 11 -

     injury or physical sickness. * * *

     The regulations under section 104(a)(2) restate the statu-

tory language of that section and further provide:

     The term “damages received (whether by suit or agree-
     ment)” means an amount received (other than workmen’s
     compensation) through prosecution of a legal suit or
     action based upon tort or tort type rights, or through
     a settlement agreement entered into in lieu of such
     prosecution. [Sec. 1.104-1(c), Income Tax Regs.]

     The Supreme Court summarized the requirements of section

104(a)(2) as follows:

          In sum, the plain language of § 104(a)(2), the
     text of the applicable regulation, and our decision in
     Burke establish two independent requirements that a
     taxpayer must meet before a recovery may be excluded
     under § 104(a)(2). First, the taxpayer must demon-
     strate that the underlying cause of action giving rise
     to the recovery is “based upon tort or tort type
     rights”; and second, the taxpayer must show that the
     damages were received “on account of personal injuries
     or sickness.” * * * [Commissioner v. Schleier, supra
     at 336-337.]

     When the Supreme Court issued its opinion in Commissioner v.

Schleier, supra, section 104(a)(2), as in effect for the year at

issue in Schleier, required, inter alia, that, in order to be

excluded from gross income, an amount of damages had to be

received “on account of personal injuries or sickness.”   After

the Supreme Court issued its opinion in Schleier, Congress

amended (1996 amendment) section 104(a)(2), effective for amounts

received after August 20, 1996, by adding the requirement that,
                              - 12 -

in order to be excluded from gross income, any amounts received

must be on account of personal injuries that are physical or

sickness that is physical.   Small Business Job Protection Act of

1996, Pub. L. 104-188, sec. 1605, 110 Stat. 1755, 1838-1839.    The

1996 amendment does not otherwise change the requirements of

section 104(a)(2) or the analysis set forth in Commissioner v.

Schleier, supra; it merely imposes an additional requirement for

an amount to qualify for exclusion from gross income under that

section.

     Each of the two independent requirements described in

Commissioner v. Schleier, supra, that a taxpayer must satisfy in

order to qualify an amount for exclusion from gross income under

section 104(a)(2) involves two inquiries that are similar.    In

the instant case, the dual inquiries under the first requirement

are whether Ms. Nield’s underlying claims were based on tort or

tort type rights and, if they were, whether such claims gave rise

to the payment by Goer of the settlement amount at issue.    The

dual inquiries under the second requirement are whether Ms.

Nield’s alleged injuries were personal and physical in nature

and, if so, whether the settlement amount at issue was received

on account of such personal physical injuries.

     Respondent contends that the claims set forth in the com-

plaint that Ms. Nield filed in the United States District Court

were not based on tort or tort type rights and that Ms. Nield did
                               - 13 -

not receive the settlement amount at issue on account of personal

physical injuries or physical sickness.    Petitioners disagree.

     We turn to the parties’ dispute regarding whether the

settlement amount at issue was received on account of personal

physical injuries or physical sickness.    That is because our

findings and conclusions with respect to that dispute resolve the

issue presented to us under section 104(a)(2).

     Where damages are received pursuant to a settlement agree-

ment, such as is the case here, the nature of the claim that was

the actual basis for settlement controls whether such damages are

excludable under section 104(a)(2).     United States v. Burke,

supra at 237.   The determination of the nature of the claim is

factual.    Robinson v. Commissioner, 102 T.C. 116, 126 (1994),

affd. in part, revd. in part, and remanded on another issue 70

F.3d 34 (5th Cir. 1995); Seay v. Commissioner, 58 T.C. 32, 37

(1972).    Where there is a settlement agreement, that determina-

tion is usually made by reference to it.    See Knuckles v. Commis-

sioner, 349 F.2d 610, 613 (10th Cir. 1965), affg. T.C. Memo.

1964-33; Robinson v. Commissioner, supra.    If the settlement

agreement lacks express language stating what the settlement

amount was paid to settle, the intent of the payor is critical to

that determination.    Knuckles v. Commissioner, supra; see also

Agar v. Commissioner, 290 F.2d 283, 284 (2d Cir. 1961), affg. per

curiam T.C. Memo. 1960-21.   Although the belief of the payee is
                               - 14 -

relevant to that inquiry, the character of the settlement payment

hinges ultimately on the dominant reason of the payor in making

the payment.   Agar v. Commissioner, supra; Fono v. Commissioner,

79 T.C. 680, 696 (1982), affd. without published opinion 749 F.2d

37 (9th Cir. 1984).

     In support of her position that she received the settlement

amount at issue on account of personal physical injuries, Ms.

Nield relies on:    (1) Her testimony, (2) the settlement agree-

ment, (3) her deposition taken in connection with the complaint

filed in the United States District Court, and (4) Ms. Nield’s

affidavits that comprised her State claim with the Utah Indus-

trial Commission.

     With respect to Ms. Nield’s self-serving testimony regarding

her contention that she received the settlement amount at issue

on account of personal physical injuries, we find that testimony

to be questionable in certain material respects.    Moreover, Ms.

Nield called no witnesses, such as the attorney who represented

her with respect to her claims against Goer, in order to corrobo-

rate her testimony.    Under the circumstances, we are not required

to, and we shall not, rely on Ms. Nield’s testimony regarding her

position that Goer paid her the $29,000 at issue on account of

her personal physical injuries.    Lerch v. Commissioner, 877 F.2d

624, 631-632 (7th Cir. 1989), affg. T.C. Memo. 1987-295; Geiger

v. Commissioner, 440 F.2d 688, 689-690 (9th Cir. 1971), affg. per
                               - 15 -

curiam T.C. Memo. 1969-159; Tokarski v. Commissioner, 87 T.C. 74,

77 (1986).

     An example of Ms. Nield’s testimony that we find to be

questionable is her testimony that her supervisor at Goer (super-

visor) bumped “into * * * [her] breast with his elbow” (alleged

elbowing incident) and that that alleged elbowing incident caused

her bruising.4   Except for Ms. Nield’s testimony at the trial in

the instant case, the record before us, including her State

claim, her complaint, and her deposition, shows that Ms. Nield

did not make any claims that she suffered bruising or other

physical injury as a result of her supervisor’s having bumped

into her breast with his elbow.   Moreover, Ms. Nield admitted at

trial, and the instant record establishes, that she did not seek

medical treatment for the alleged bruising from the alleged

elbowing incident, which she claimed for the first time during

her testimony in this case.5

     Another example of Ms. Nield’s testimony that we find to be

questionable is her testimony that her supervisor once tackled


     4
      Ms. Nield did not testify at the trial in this case how
many times her supervisor allegedly brushed his elbow against her
breast. However, as discussed below, Ms. Nield testified during
her deposition that the alleged elbowing incident occurred only
once.
     5
      According to Ms. Nield’s testimony at the trial in the
instant case, she did not seek medical treatment as a result of
the elbowing incident “because it was just bruising that healed.
It was very sore.”
                               - 16 -

her in the parking lot at work (alleged tackling incident).6

Ms. Nield did not mention any such alleged incident in her State

claim, her complaint, or her deposition.    That was because,

according to Ms. Nield, she was afraid of her supervisor, and she

did not mention the alleged tackling incident until an alleged

arbitration of her claims against Goer, which she contends took

place after her deposition, when Ms. Nield asserts her supervisor

was in jail, and which she contends led to the settlement agree-

ment.    Ms. Nield’s explanation about why she did not mention the

alleged tackling incident in her State claim, her complaint, or

her deposition is belied by the fact that Ms. Nield showed no

fear of her supervisor in advancing her various claims against

him and Goer in her State claim, her complaint, and her deposi-

tion.

     A further illustration of Ms. Nield’s testimony that we find

to be questionable is her testimony that her complaint, which she

testified her attorney drafted on the basis of written informa-

tion that she provided to him, did not allege any personal

physical injuries because she did not have the opportunity to

review the complaint before it was filed.    We find Ms. Nield’s

     6
      Unlike her claim that she suffered bruising as a result of
the alleged elbowing incident, Ms. Nield did not claim at the
trial in this case, and the instant record does not establish,
that the alleged tackling incident caused her any personal
physical injuries. Moreover, the record establishes that Ms.
Nield did not seek medical treatment for any alleged bruising
from the alleged tackling incident.
                                - 17 -

explanation to be incredible.     We do not believe that if Ms.

Nield had communicated to her attorney that she suffered personal

physical injuries related to her employment, her attorney would

have failed to allege any such injuries in the complaint, espe-

cially since Ms. Nield’s attorney filed the complaint on her

behalf in December 1996 after Congress amended section 104(a)(2)

to require that any amounts received after August 20, 1996, be

received on account of personal physical injuries or physical

sickness in order to be excludable from gross income.     See Small

Business Job Protection Act of 1996, Pub. L. 104-188, sec. 1605,

110 Stat. 1755, 1838-1839.7

     Another example of Ms. Nield’s testimony that we find to be

questionable is her testimony that her attorney advised her that

the tax law did not require her to include the settlement amount

at issue in gross income.     That testimony is belied by the

settlement agreement which required Goer to issue Form 1099 to

     7
      Nowhere in the complaint is there an allegation that Ms.
Nield suffered any personal physical injuries. In fact, the only
use of the word “physical” in the complaint is an allegation that
Goer caused Ms. Nield “severe and grievous mental and emotional
harm which in turn resulted in severe physical consequences”.
That claim in Ms. Nield’s complaint was a claim for damages on
account of “severe and grievous mental and emotional harm”. Sec.
104(a) provides that emotional distress is not to be treated as a
physical injury or physical sickness for purposes of sec.
104(a)(2). In this connection, the legislative history of the
1996 amendment states: “It is intended that the term emotional
distress includes symptoms (e.g., insomnia, headaches, stomach
disorders) which may result from such emotional distress.” H.
Conf. Rept. 104-737, at 301 n.56 (1996), 1996-3 C.B. 741, 1041
n.56.
                                - 18 -

Ms. Nield reflecting the $29,000 settlement amount at issue.

        With respect to the settlement agreement on which Ms. Nield

relies to support her position in this case, we have reviewed

that agreement and find that it does not support Ms. Nield’s

contention that she received the settlement amount at issue on

account of personal physical injuries.    The settlement agreement

supports a contrary finding.     Nowhere in the settlement agreement

were there any references to the alleged elbowing incident and

the alleged tackling incident that Ms. Nield contends caused her

physical injuries for which Goer compensated her by paying her

the settlement amount at issue.8    Moreover, as discussed above,

the settlement agreement required Goer to issue Form 1099 to Ms.

Nield showing the settlement amount at issue as “Other income”

for 1998, thereby reflecting the intention of Goer as well as Ms.

Nield, the parties to the settlement agreement, that Ms. Nield

was to report the settlement amount at issue as income for that

year.

     With respect to Ms. Nield’s deposition on which she relies,

we have reviewed that deposition and find that it does not

support Ms. Nield’s position that she received the settlement

amount at issue on account of personal physical injuries.    The


        8
      There is not even any reference to “physical injuries”, and
only one reference to “personal injuries”, in the settlement
agreement. The reference to “personal injuries” is in a para-
graph in the settlement agreement that appears to be boilerplate,
and we do not attribute any particular weight to it.
                              - 19 -

deposition supports a contrary finding.   Although Ms. Nield

raised the alleged elbowing incident in her deposition, nowhere

in the deposition did she allege that she suffered any physical

injuries as a result of that incident.9

     With respect to Ms. Nield’s affidavits that comprise her

State claim with the Utah Industrial Commission on which she

relies, we have reviewed those affidavits and find that they do

not support her position that she received the settlement amount

at issue on account of personal physical injuries.   Ms. Nield’s

affidavits support a contrary finding.    Although Ms. Nield raised

the alleged elbowing incident in her State claim, nowhere in the

affidavits did she allege that she suffered any physical injuries

as a result of that incident.10

     9
      Ms. Nield claimed in her deposition that her supervisor
once brushed his elbow against her breast while he was walking
past her in an area where there was a limited amount of space for
two people. Based upon Ms. Nield’s recitation in the deposition
of how the alleged elbowing incident occurred, we believe that it
was highly unlikely that she suffered any physical injury from
that incident.

     Nowhere in the deposition did Ms. Nield make any reference
to the alleged tackling incident or any physical injuries as a
result of that incident. However, we note that Ms. Nield testi-
fied at the trial in the instant case that she first mentioned
the alleged tackling incident and alleged physical injuries
resulting therefrom after her deposition took place.
     10
      Although her State claim could be read to assert that the
alleged elbowing incident happened at various times, she later
clarified in her deposition that only one alleged elbowing
incident took place.
                                                   (continued...)
                             - 20 -

     Based upon our examination of the entire record before us,

we find that Ms. Nield’s claims against Goer did not include any

claims for personal physical injuries.    On that record, we

further find that Ms. Nield did not receive the settlement amount

at issue on account of personal physical injuries.    On the

instant record, we find that petitioners are not entitled to

exclude from gross income under section 104(a)(2) the settlement

amount at issue that Ms. Nield received from Goer.

     We have considered all of the contentions and arguments of

the parties that are not discussed herein, and we find them to be

without merit, irrelevant, and/or moot.

     To reflect the foregoing,



                                      Decision will be entered

                                 for respondent.




     10
      (...continued)
     Nowhere in the State claim did Ms. Nield make any reference
to the alleged tackling incident or any physical injuries as a
result of that incident. However, we note that Ms. Nield testi-
fied at the trial in the instant case that she first mentioned
the alleged tackling incident and alleged physical injuries
resulting therefrom after her deposition took place. See supra
note 9.
