Legal Counsel Seeks Settlement Agreement for Congressman San Nicolas

153

SAN NICOLAS VERSUS DEPARTMENT OF REV AND TAX

The legal counsel of Congressman Michael San Nicolas and his wife recently requested that the District Court enforce the settlement agreement made by both San Nicolas’ and
Department Revenue and Taxation.

The motion to have the court acknowledge that a settlement agreement was made between the petitioners, the San Nicolas, and the respondents, Rev and Tax, follow a lawsuit filed by the Congressman and his wife in December 2020.

The lawsuit was made in response to Rev and Tax saying that San Nicolas owed nearly 10,000 dollars in both income taxes and penalties in 2016. In the lawsuit, San Nicolas claimed that DRT’s findings of deficiencies and penalties are flawed:

  • saying DRT ignored that the San Nicolas were issued a corrected 2016 1099-MISC
    form,
  • that DRT ignored a realized capital loss which was substantiated in the aforementioned
    form,
  • and that DRT incorrectly asserted that repairs and supplies for the maintenance of
    income-producing property should be disallowed.

In March 2021, three months after the lawsuit was filed, DRT denied the allegations by San Nicolas that the agency had incorrectly calculated the deficiencies and penalties.
DRT admitted that San Nicolas did receive over 5000 dollars in dividends in 2016, but denied that it was the most serious accusation of the agency’s notice of deficiency.

In February 2022, San Nicolas sent a settlement offer to DRT. After months of
negotiations, final revisions to the settlement agreement were agreed upon in writing this past May. Throughout June, while the Court waited for a confirmation of the settlement, DRT’s legal team held off on officially signing the settlement agreement.

This posed a concern for the San Nicolas legal team as they deem that an agreement was met between both parties, even though nothing was signed off on – citing a law that says “an agreement on the record becomes binding even if a party has a change of heart after they agreed to its terms but before the terms are reduced to writing.”

Even further, court documents from the San Nicolas legal counsel say that “the offer from
petitioners to respondent represents an offer to settle the case. The acceptance from the
respondent to settle the matter for a sum certain represents acceptance,” – which, according to Guam Law, may fall under essential elements of a contract.

Because of this, the San Nicolas legal counsel filed a motion to the court to enforce the settlement agreement, believing that the essential elements have been met. According to the Attorney General’s Office, the settlement agreement was not signed and accepted by both parties and a settlement has not been reached.