Diamond Claims & Investigation Services, Inc. - Page 7

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               gators by CID on behalf of any defendant, for a period                 
               of five years from December, 1980, in Oregon, Washing-                 
               ton, Idaho, Utah and Montana.                                          
                       *     *     *     *     *     *     *                          
                         c)   That plaintiffs would perform investiga-                
               tions of suspected criminal and fraudulent activities                  
               among defendants' insureds, employees, agents and                      
               brokers in connection with CID's investigation and                     
               attempted prosecution of insurance fraud; provide                      
               equipment necessary thereto; and provide consulting                    
               services, training and assistance necessary to enable                  
               CID to establish and develop internal units with per-                  
               sonnel capable of conducting such investigations on an                 
               in-house basis.                                                        
                       *     *     *     *     *     *     *                          
                    4.   From 1980-1984, plaintiffs performed investi-                
               gations described in paragraph VI-2(c) on behalf of                    
               defendants.                                                            
                       *     *     *     *     *     *     *                          
                    6.   * * * During 1980 to 1984, plaintiffs as-                    
               sisted in training CID's regional (in-house) Criminal                  
               Investigators.  Plaintiffs built their own organization                
               capable of handling the defendants' investigation                      
               needs.  * * *  Plaintiffs Peter and Shirley Diamond                    
               devoted substantial time, effort and resources to their                
               performance of their agreement with defendants.  * * *                 
                    7.   In the summer of 1982, DCI started a business                
               called Evergreen Typing Service (hereinafter ETS) for                  
               the purpose of providing transcription services to                     
               defendants in connection with investigations.  Owner-                  
               ship of the business was later transferred to Peter and                
               Shirley Diamond.  From time to time, plaintiffs in-                    
               vested in new equipment for ETS and hired employees for                
               the purpose of dealing with CID's workload.  From 1982                 
               to 1984, ETS provided services to defendants.                          
                    8.   Plaintiffs' actions in performance of their                  
               agreement with defendants were done at the request of                  
               defendants and with their knowledge, and were necessary                
               to the performance of plaintiffs' agreement with defen-                
               dants.  Plaintiffs have performed all of their obliga-                 
               tions under their agreement with defendants.                           




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