Diamond Claims & Investigation Services, Inc. - Page 8

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                    9.   Sometime in 1981 or 1982, CID began using                    
               outside investigators other than plaintiffs in Oregon,                 
               Washington, Idaho, Utah and Montana for cases which                    
               should have been assigned to plaintiffs under the                      
               agreement.  This practice continued up to the present.                 
               This practice was in breach of defendants' agreement                   
               with plaintiffs.                                                       
                       *     *     *     *     *     *     *                          
                    16. In May, 1984, Mr. Conn on behalf of all                       
               defendants promised plaintiffs that agreements between                 
               plaintiffs and defendants would be extended for a                      
               period of two years.  * * *                                            
                       *     *     *     *     *     *     *                          
                    18. On November 9, 1984, Ronald Burlison wrote a                  
               letter to plaintiffs stating that they should "cease                   
               all work" on defendants' files.  Since that time defen-                
               dants have assigned no cases to plaintiffs.                            
                       *     *     *     *     *     *     *                          
                    20. Defendants breached their agreements with                     
               plaintiffs as follows:                                                 
                         a)   CID failed to assign to plaintiffs all                  
               of its investigations done by outside investigators in                 
               Oregon, Washington, Utah, Montana and Idaho, from                      
               December 1980 to May, 1986.                                            
                        *     *     *     *     *     *     *                         
                    21.  Plaintiffs were damaged by defendants'                       
               breaches as follows:                                                   
                        *     *     *     *     *     *     *                         
                         b)   They lost profits on investigations                     
               defendants assigned to other investigators from 1981 to                
               May, 1986, in the approximate amount of $5.5 million.                  
                        *     *     *     *     *     *     *                         
                    22. Defendants repeatedly made false misrepresen-                 
               tations to plaintiffs and concealed the true state of                  
               affairs from plaintiffs with the knowledge and intent                  
               that plaintiffs would rely on the representations to                   




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