Diamond Claims & Investigation Services, Inc. - Page 11

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          respect to their claims for damages for lost profits on account             
          of FIG's breaches of contract and fraudulent misrepresentations.            
          That evidence included the testimony of Donald Wharton (Mr.                 
          Wharton), a certified public accountant whom the plaintiffs had             
          retained for the purpose of determining the profits lost by DCI             
          and by the Diamonds as a result of those actions of FIG.                    
               At the damages hearing, Mr. Wharton testified that, in                 
          determining lost profits, he took account of the profits lost by            
          DCI, as well as the profits lost by ETS, and that he treated ETS            
          as a division of DCI.  In this connection, Mr. Wharton testified            
          that it was his understanding that ETS was owned by the Diamonds,           
          that it was formed sometime during 1982, and that it provided               
          services almost exclusively for DCI.                                        
               Mr. Wharton further testified at the damages hearing that he           
          and others working under his supervision had prepared several               
          analyses of the profits lost by DCI and by ETS as a result of               
          FIG's breaches of contract and fraudulent misrepresentations and            
          that, in determining those profits, he relied principally on one            
          of those analyses referred to as Analysis 1 (Analysis 1) that was           
          entitled "Additional Profits due to DCI - 1981-1985, Measure                
          number one - Using historical hourly rates for investigators'               
          services and historical markups on other revenues".6  Analysis 1            

          6  Although the title of Analysis 1 referred only to DCI, as                
          stated above, in reaching the conclusions shown in Analysis 1,              
          Mr. Wharton aggregated the operations of DCI and ETS.                       

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