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Attorneys for Joe Miller press borough legal fight over $1,401.72

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Posted: Wednesday, October 24, 2012 11:25 pm | Updated: 11:52 am, Mon Jan 21, 2013.

FAIRBANKS — In June, we thought the legal fight between Joe Miller and the borough about his employment record was over when Miller signed off on a $5,000 deal in which the borough accepted no fault in the matter.

After signing the paperwork, however, Miller’s attorneys said they didn’t like the part of it in which the borough said it did not accept any fault.

They argued that it was a judgment, not a settlement and that the part about the borough declining any fault didn’t count.

In September, we thought the case was over again when a judge said Miller’s attorneys had signed the deal in June, meaning $5,000 would be paid and the borough would admit no fault.

But that didn’t end it either.

In the days that followed that announcement, Miller’s lawyers developed a new line of attack.

In one sense this latest twist is a fight about $1,401.72. In another sense, it’s about trying to find a way for the former U.S. Senate candidate to proclaim victory in the case and say the borough was at fault, despite the statement Miller accepted to the contrary.

In looking at the court files, it is clear that a great deal  more than $1,401.72 has been generated in legal expenses in the past month, with attorneys making a few hundred dollars per hour running up the hours in an argument about a relatively small sum.

It is one of many strange twists in this strange case.

Before giving him his money to end the case, the borough made numerous requests to Miller for a W-9 form.

A W-9 form is one of the simplest IRS documents, containing a taxpayer identification number and details about withholding, which are sent to the IRS by the person seeking the W-9.

The borough said it asked for the W-9 five times, but Miller did not respond.

Because Miller did not provide a W-9, the borough said it had to withhold federal income taxes from the $5,000, following the normal IRS withholding rules.

It gave him a check for $3,604.44 and withheld $1,401.72 or about 28 percent of the total. The settlement also included $6.16 interest for the 12 days that elapsed after the deal was approved by the court Aug. 29.

Miller’s attorney said a W-9 was not needed because this was a “judgment” and not a settlement and a judgment does not require a W-9.

For Miller and his attorneys, the refusal to produce a W-9 was part of the strategy to argue this was a legal win, a battle that has been unsuccessful so far in court.

Had they wished to make the strongest case that the borough was at fault, they should have said in June they would agree to the $5,000 deal, but not the section about the borough admitting no fault.

They didn’t do that, however, and accepted the borough language. Later, they said the statement accepting no fault was irrelevant.

In refusing to provide a W-9 form, Miller attorney John Tiemessen wrote Sept. 10 to a borough lawyer that nothing less than the full $5,000 would be acceptable, the latest chapter in the “This is a judgment, not a settlement” campaign.

“If we receive anything less than the full $5,000 judgment amount, be advised that we will pursue all legally available options for collection of the full judgment amount,” Tiemessen wrote to Greg Fisher, the attorney for the borough.

That same day the borough hand-delivered a check to the office of Miller’s lawyer for $3,604.44.

The next day Fisher wrote to Miller’s attorney to say IRS rules do not “distinguish between a judgment and a settlement for purposes of withholding.”

Fisher concluded his letter by saying: “If your client follows through on your threat of renewed litigation, the borough will defend its interests and seek Rule 11 sanctions against you and your client.”

Rule 11 sanctions deal, in part, with frivolous legal documents filed by attorneys.

The latest action in this case occurred Friday. After reviewing numerous documents, Anchorage Judge Stephanie Joannides ruled Miller must file a W-9 with the borough to get his $1,401.72.

She gave Miller 10 days to file the W-9 and said the borough must pay him $1,401.72 within three days of receiving that form. She said the question of whether the $5,000 is taxable is a matter for the IRS to decide.

I hesitate to say that the case is over.

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