Diamond Claims & Investigation Services, Inc. - Page 14

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          total direct costs and the variable overhead to arrive at the               
          total profits that DCI and ETS lost during the period 1981                  
          through 1985, which he labeled in Analysis 1 as "Additional                 
          Profit due DCI".                                                            
               With respect to the portion of the total lost profits                  
          reflected in Analysis 1 that was attributable to ETS, Mr. Wharton           
          testified at the damages hearing that although he was unable to             
          determine that portion precisely, "the bulk of what is in the               
          office profitability would have been from Evergreen."  In that              
          regard, Mr. Wharton further testified with respect to Analysis 1            
          that:  (1) The lost revenues of $553,745 that he allocated to the           
          office category were lost revenues from clerical and secretarial            
          services such as typing, photocopying, and transcribing; (2) the            
          direct costs of $174,939 that he allocated to the office category           
          were costs that would have been associated with the lost revenues           
          in that category including variable office costs, such as hourly            
          rates charged by typists; and (3) the variable overhead of                  
          $155,132 included additional costs that would have been associ-             
          ated with the lost revenues in the office category.                         
                    The District Court's Award of Damages                             
               On January 20, 1987, the District Court issued an opinion              
          (opinion) in the Farmers lawsuit.  In that opinion, the District            
          Court concluded that the effects of the entry of default in favor           
          of the plaintiffs and against FIG were (1) to treat as estab-               
          lished the plaintiffs' factual allegations in the pretrial order            

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