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It ain't over till it's over: Joe Miller continues borough legal challenge over $1,401.72

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Posted: Tuesday, October 23, 2012 12:27 am | Updated: 1:58 pm, Wed Jan 16, 2013.

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.

Attorneys for Miller continued to file paperwork in the court system after accepting the borough's terms.

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

Last month we thought the case was over again when a judge said Miller's attorneys had agreed to the deal and a deal is a deal—$5,000 would be paid and the borough would admit no fault.

But wait, there's more.

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 over $1,401.72. In another sense, it's about finding a way in which Miller can proclaim victory in the case and say that the borough was at fault, despite the statement Miller accepted to the contrary.

In looking over the court files, it is clear that a great deal  more than $1,401.72 has been generated in legal expenses in the last month, with attorneys making a few hundred dollars an hour arguing 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 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 withholding rules.

It gave him a check for $3,604.44 and withheld $1,401.72 or about 28 percent of the total, following the normal backup withholding rules. The borough said this  is required by the IRS. 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 that a W-9 was not needed because this was a "judgement" and not a settlement. A judgment does not require a W-9, they said.

For Miller and his attorneys,  the disagreement is part of the strategy to argue that this was a legal win, a battle that has been unsuccessful so far in court.

A key mistake they made was to sign the document June 18 in which the borough said it was admitting no fault. Had they wished to make a better case that the borough was at fault, they should have said they would  agree to the $5,000 deal, but not the section about the borough admitting no fault.

They didn't do that, however.

So they came up with the weak argument that the borough statement they approved was irrelevant to the judgment against the borough.

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 that 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 that 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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