It should be axiomatic that an insurance company is entitled to determine for itself what risks it will accept, and therefore to know all the facts relative to the applicant’s physical condition. “It has the unquestioned right to select those whom it will insure and to rely upon him who would be insured for such information as it desires as a basis for its determination to the end that a wise discrimination may be exercised in selecting its risks.” (Robinson v. Occidental Life Ins. Co.  (1955) 131 Cal. App. 2d 581, 586 [281 P.2d 39].

When Providing a Defense to Questionable Coverage Always Reserve Rights

The plaintiffs filed suit against their insurer, Auto-Owners, for breach of contract and bad faith, claiming that Auto-Owners was liable for the total loss of their vacation home that was uninhabitable and unsaleable as a result of the accumulation of bat guano between the home’s siding and walls.  The Supreme Court of Wisconsin was asked to resolve the question whether the pollution exclusion in the Auto Owners policy defeated the claim in Joel Hirschhorn and Evelyn F. Hirschhorn v. Auto-Owners Insurance Company, 2012 WI 20 (Wis. 03/06/2012).

Insurance fraud has been estimated to take between $80 billion and $300 billion a year from the insurance industry in the United States. Every state has a statute making insurance fraud a crime including the federal crimes of mail and wire fraud and the Racketeer Influenced and Corrupt Organization Act (RICO). RICO can also be a civil action which allows for treble damages or punitive damages.

Some insurer victims of insurance fraud have become proactive. In State Farm Mutual Automobile Insurance Company; State Farm Fire and v. Arnold Lincow, D.O.; Richard Mintz, D.O.; Steven Hirsh; 7622 Medical, No. 10-3087 (3d Cir. 09/16/2011) the Third Circuit dealt with an appeal from State Farm’s successful trial against some doctors and clinics who defrauded it and those it insured.

Facts

After a four-week jury trial plaintiff State Farm successfully convinced the jury that defendants, a number of health care providers (“Defendants”), engaged in various schemes to defraud State Farm by billing it for medical services that were either not provided or provided unnecessarily, and were illegal under RICO, fraud statutes, and common law fraud. Following trial, Defendants filed motions for judgment as a matter of law or, in the alternative, for a new trial or, in the alternative, to alter or amend the judgment. The District Court denied Defendants’ motions in their entirety.

Plaintiff alleged that Defendants were members of a conspiracy that sharply inflated the costs of medical care for car accident victims by prescribing tests and treatments, as well as prescriptions and medical equipment – whether medically necessary or not – and then routinely billed State Farm for additional treatments that were never provided. At trial, State Farm’s proof of Defendants’ fraud consisted of State Farm’s claim files and testimony of patients, physicians at Defendants’ medical facilities, Defendant physicians, and experts.
After a four-week trial, the jury awarded Plaintiff over $4 million against all Defendants jointly and severally, and individual Defendants were found liable for punitive damages totaling $11.4 million

Analysis

The Third Circuit’s reviews a district court’s order granting or denying a motion for a new trial for abuse of discretion unless the court’s denial of the motion is based on the application of a legal precept, in which case the review is plenary. A new trial may be granted on the basis that a verdict was against the weight of the evidence only if a miscarriage of justice would occur if the verdict were to stand.

State Farm noted that RICO is distinct because the members of the association-in-fact enterprise include all the defendants, there is a complete identity between the enterprise and the defendants and, therefore, no distinctiveness among the defendants.  As the District Court noted and State Farm urged, the intracorporate conspiracy doctrine is not universally accepted, and it is questionable whether the Defendant’s version is completely accurate.

The defendants argued that State Farm failed to prove: (1) the elements of an association-in-fact enterprise; (2) that defendant Mintz conspired with the other Defendants to defraud, as § 1962(d) requires; (3) that Mintz’s actions proximately caused State Farm’s injuries; (4) that Mintz’s conduct fulfilled the elements of common law fraud; and (5) that Mintz’s conduct fulfilled the elements of statutory fraud under Pennsylvania law. The Third Circuit rejected all of Mintz’s claims to the contrary and held that the weight of the evidence supports the jury’s finding against Mintz and the other defendants. Therefore, the Third Circuit concluded that to let the verdict stand would not result in a miscarriage of justice.

The Third Circuit agreed with State Farm’s assertion that a violation of the Insurance Fraud statute is a civil tort and that, as the jury found and the District Court upheld, the Defendants together contributed to State Farm’s injuries and are thus jointly and severally liable. Moreover, as the District Court correctly noted, there is no requirement for district courts to instruct juries to award damages against each defendant separately and individually. Because State Farm elected to receive treble damages the Third Circuit had no reason to address the contention that the punitive damages award should be reduced.

Lesson

Insurers who are the victims of fraud cannot rely on police agencies to investigate and prosecute perpetrators of insurance fraud. Prosecutions are few and far between. As readers of Zalma’s Insurance Fraud Letter, available FREE at http://www.zalma.com/ZIFL-CURRENT.htm, know prosecutions are increasing but are still anemic and those who are prosecuted and convicted usually receive minor punishments. By being proactive insurers can recover from the fraud perpetrators, like the doctors involved in this case, the insurer can recover what it lost, a bonus of three times the compensatory damages, and actually deter insurance fraud by hitting the perpetrators where it hurts them most, in their wallet.

It is time that insurers emulate the actions of State Farm and the few other insurers who are using civil suits to defeat insurance fraud by taking the profit out of the crime.

Federal courts in Florida have finally learned what is needed to cut into Medicare Fraud, long prison sentences to those convicted of stealing from Medicare. 

Lawrence Duran, 49, the owner of Miami-based American Therapeutic Corp, a Miami businessman was sentenced to 50 years in prison on September 16, 2011 for masterminding a healthcare fraud scheme that sought to bilk the U.S. government out of more than $200 million. Duran was arrested last October on charges that he executed what prosecutors described in court documents as "one of the largest and most brazen healthcare fraud conspiracies in recent memory." 

His prison sentence was believed to be the harshest ever for defrauding Medicare, the federal insurance plan for the elderly and disabled. He also was ordered to pay $87.5 million in restitution. American Therapeutic was one of the nation's largest chains of community mental health centers licensed by Medicare.

His co-conspirator, Marianella Valera,  will spend the next 35 years in prison for taking part in the $200 million Medicare fraud scam that targeted mental health centers. Marianella Valera manipulated records in order to keep patients at a facility longer than medically required which allowed for higher billings to Medicare bills.

Prosecutors said the company, operating out of the southeastern city widely viewed by law enforcement officials as the healthcare fraud capital of the United States, billed Medicare for more than $205 million in claims over eight years for mental health services that were either unnecessary or never provided to patients.

ZIFL agrees, this has to be the most severe sentence imposed for this type of crime. Judges, like the one in Miami, should understand that Medicare and other insurance fraud will never be deterred unless they impose severe sentences like that imposed on Duran.

California Insurance Commissioner Dave Jones announced August 19, 2011 that Susana Ragos Chung, 60, a Los Angeles area based attorney has been sentenced in Alameda Superior Court for Insurance Fraud. Chung entered pleas of no contest on two felony counts for violations of Section 549 of the Penal Code, recklessly submitting fraudulent insurance claims. She was sentenced to five years formal probation and to also pay $117,561 in restitution to insurance companies for 15 separate fraudulent claims. In addition, she was ordered to pay $235,123 to the state restitution fund. Chung agreed to place herself on inactive status with the California State Bar pending its mandatory investigation into her criminal conduct, which may result in her disbarment.

In August 2003, the California Department of Insurance (CDI), Benicia Regional Office, Fraud Division, Urban Auto Fraud Task Force initiated an investigation known as "Phantom Menace" into organized automobile insurance fraud in the Bay Area. The Task Force included Investigators from the California Highway Patrol, and Alameda and San Francisco County District Attorney's Offices. As a result of the information and evidence gathered by the Task Force CDI began an undercover investigation in July 2004, which included contacting numerous auto body shops, medical offices and law offices.

Task force members were able to infiltrate a sophisticated auto fraud organized crime ring operating in the Bay Area. This ring was working with law offices in the Los Angeles area. One of these law offices was owned and operated by Chung. In November 2004, task force members acting in undercover capacities were solicited to participate in staged collisions. Numerous collisions were staged and undercover officers were referred to auto body repair shops, medical offices and law offices in an effort to file false automobile insurance claims and secure substantial bodily injury claim settlements.

Between 2003 and 2007, Chung participated in this fraud ring by submitting insurance claims for suspects who staged these collisions for profit. Chung represented the claimants who were allegedly "injured" in these fake collisions. The majority of the people she represented never met her, and many did not even know they had an attorney. Nearly 100 people have been convicted in Alameda County over the last several years as part of this conspiracy, including more than 90 staged collision participants, and three chiropractors. The majority of the participants in these staged collisions readily admitted to law enforcement that no accident had ever occurred.

I understand that California jails are crowded and criminals are being let loose to ease the crowding but running a major fraud ring, in the opinion of ZIFL, requires some real jail time and seizure of the guilty lawyer’s assets. Mr. Jones should not be bragging about this result he should be complaining that the court is being too kind.

From Zalma's Insurance Fraud Letter, September 1, 2011 available free at – http://www.zalma.com/ZIFL-CURRENT.htm.

The United States court system is fair to all who seek redress even if they are not citizens of the United States. People from across the world have been allowed to sue multi-national corporations who do business in the United States to affirm a foreign judgment that could not be collected in the country where the judgment was entered.

Because countries in South America and other areas of the world do not have the same stringent rules of evidence and judicial morality than those in the U.S. courts, suits in the U.S. to enforce foreign judgments and claims of injuries are rife with fraud.

For example, In July 2009, the Second Appellate Division of the Court of Appeal of California remanded the Tellez case to the Superior Court, with an order for the plaintiffs to show cause why that case should not also be dismissed. After several hearings, trial Judge Chaney dismissed the Tellez case in July 2010, noting that the case was rife with blatant fraud, witness tampering, and active manipulation. Judge Chaney also found that the Nicaraguan court system is, at best, fragile in its ability to present consistent rule of law and outcomes and that while many Nicaraguans live in relative poverty and with limited economic opportunity, the lawsuit was not the appropriate vehicle to rectify this situation.

If you are interested in a detailed analysis of the problem read Think Globally, Sue Locally: Trends and Out-of-Court Tactics in Transnational Tort Actions by Jonathan C. Drimmer and Sarah R. Lamoree available at http://www.boalt.org/bjil/documents/Drimmer_Macro2.pdf which covers in at least 72 pages the issues raised in detail.

The report by Mr. Drimmer and Ms. Lamoree is disturbing and makes clear that at least some of these cases are so rife with fraud that some lawyers have been disciplined for misrepresentations made to the court. Evidence of fraud and witness tampering is rampant and the only people who profit from these actions are the lawyers for the plaintiffs and the lawyers for the defendants.

© 2011, Barry Zalma. Barry Zalma, Esq., CFE, is a California attorney, insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud. Mr. Zalma serves as a consultant and expert, almost equally, for insurers and policyholders. He founded Zalma Insurance Consultants in 2001 and serves as its senior consultant. He recently published the e-books, “Heads I Win, Tails You Lose — 2011,” “Zalma on Rescission in California,” “Zalma on Diminution in Value Damages,” “Arson for Profit,” “Insurance Fraud,” “Zalma on California Claims Regulations,” “Murder and Insurance Fraud Don’t Mix” and others that are available at on his website.  Mr. Zalma can be contacted via his website http://www.zalma.com,or via email at zalma@zalma.com or you can access his free “Zalma on Insurance Fraud” newsletter. You can also access Mr. Zalma’s Martindale-Hubbell profile on martindale.com.

Contrary to the belief of those insured, property insurance does not insure property. As a risk spreading device property insurance only insures people, partnerships or corporations against the risk of loss of property described in the policy.

Insurance against the loss of property is a contract of personal indemnity. It only insures the person(s) named in the policy against certain risks of loss to property in which that person has an interest. A person who has an interest in the property, but is not named as an insured, cannot recover under the policy unless the policy is changed. Similarly, a person named on a policy who has no interest cannot ever recover.

As the California Supreme Court observed in Garvey v. State Farm Fire and Casualty Co., 48 Cal. 3d 395, 770 P.2d 704, 257 Cal. Rptr. 292 (Cal. 03/30/1989), a first party insurance policy provides coverage for loss or damage sustained directly by the insured (e.g., life, disability, health, fire, theft, and casualty insurance). A third party liability policy, on the other hand, provides coverage for liability of the insured to a third party (e.g., a Commercial General Liability (CGL), a directors’ and officers’ (D & O) liability, or an errors and omissions (E & O) policy).

The term “perils” in traditional property insurance language refers to fortuitous, active physical forces such as fire, lightning, wind, and explosion, which bring about or cause the loss.

The cause of loss in the context of a property insurance contract is totally different from that in a liability policy. On the contrary, the right to indemnity in the third party liability insurance context draws on traditional tort concepts of fault, proximate cause, and duty. The liability analysis differs substantially from the coverage analysis in the property insurance context, which draws on the relationship between perils that are either covered or excluded by the contract of insurance. In liability insurance, by insuring for personal liability, and agreeing to cover the insured for his own negligence, the insurer agrees to cover the insured for a broader spectrum of risks than those insured by a property policy.

For example, in Smith v. Jim Dandy Markets, 172 F.2d 616 (1949) the Ninth Circuit found that “regardless of Smith’s interest in the building, he suffered no loss from its destruction. Under California law, which the federal court was required to follow, a fire insurance policy is a personal indemnity contract and a showing of pecuniary damage is prerequisite to recovery. See also Davis v. Phoenix Insurance Co., 111 Cal. 409, 415, 43 P. 1115; and  Alexander v. Security-First Nat’l. Bank, 7 Cal.2d 718, 62 P.2d 735; 14 Cal.Jur. 464, 37.”

For additional commentary in the field see:

1.     Balandran v. Safeco Ins. Co. of Am., 972 S.W. 2d 738, 740–41 (Tex. 1998); National Union Fire Ins. Co. v. CBI Indus., 907 S.W. 2d 517, 520 (Tex. 1995).

2.     Security Mut. Cas. Co. v. Johnson, 584 S.W. 2d 703, 704 (Tex. 1979).

3.     Balandran, 972 S.W. 2d at 741 [quoting State Farm Life Ins. Co. v. Beaston, 907 S.W. 2d 430, 433 (Tex. 1995) and Forbau v. Aetna Life Ins. Co., 876 S.W. 2d 132, 133 (Tex. 1994)].

4.     United States v. Winstar Corporation, 1996.SCT.143 (1996).

© 2011, Barry Zalma. Barry Zalma, Esq., CFE, is a California attorney, insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud. Mr. Zalma serves as a consultant and expert, almost equally, for insurers and policyholders. He founded Zalma Insurance Consultants in 2001 and serves as its senior consultant. He recently published the e-books, “Heads I Win, Tails You Lose — 2011,” “Zalma on Rescission in California,” “Zalma on Diminution in Value Damages,” “Arson for Profit,” “Insurance Fraud,” “Zalma on California Claims Regulations,” “Murder and Insurance Fraud Don’t Mix” and others that are available at on his website.  Mr. Zalma can be contacted via his website http://www.zalma.com,or via email at zalma@zalma.com or you can access his free “Zalma on Insurance Fraud” newsletter. You can also access Mr. Zalma’s Martindale-Hubbell profile on martindale.com.

Arturo Fonseca, 47; Isis Torres, 37; Francisco Portillo, 41; Eduardo Romero, 44; and William Madrigal, 56, five South Floridians pleaded guilty in Miami federal court to their roles in a massive Medicare fraud scheme.

Fonseca, Torres, Portillo, Romero and were among 26 suspects in three states indicted in December 2009 on charges of running the scheme that totaled $61 million, according to the U.S. Department of Justice. At the plea hearing, Fonseca admitted to being an owner and operator of Courtesy Medical Group Inc., a purported medical clinic in Miami. According to court documents, Courtesy provided medical documents so that the home health agencies could bill the Medicare program for expensive home health services and therapy for beneficiaries that did not need and in some cases did not receive the treatments. According to the indictment, approximately 344 prescriptions were issued through Courtesy and signed by Fonseca’s co-defendant, Dr. Fred Dweck. As a result, the Medicare program was fraudulently billed approximately $16.6 million for home health services.

According to plea documents, Romero admitted to being a patient recruiter for ABC Home Health Care Inc., and Florida Home Health Care Providers Inc., two Miami-area home health care agencies. Romero admitted that in his role as a patient recruiter, he would solicit and receive kickbacks and bribes from the owners of ABC and Florida Home Health in return for providing Medicare beneficiaries that the home health agencies could use to bill the Medicare program for unnecessary home health care services. Romero also admitted to paying kickbacks and bribes to the owners and operators of Courtesy in return for the prescriptions for unnecessary home health care services.

Medicare was billed approximately $391,593 for home health care services that were not medically necessary or were not rendered for the patients recruited by Romero and one of his co-defendants. The owners and operators of ABC and Florida Home Health pleaded guilty in a separate case and are awaiting sentencing.

According to plea documents, Portillo and Torres were nurses and falsified patient files for ABC and Florida Home Health to make it appear that the patients qualified for home health care services, when they did not and in some instances never received any treatments. According to court documents, Portillo was responsible for approximately $142,000 in fraudulent Medicare billing and Torres was responsible for approximately $528,400 in fraudulent Medicare billing. According to plea documents, Madrigal, a Medicare beneficiary, admitted that he solicited and received kickbacks and bribes in return for allowing ABC and Florida Home Health to bill Medicare for home health care services for which he did not qualify. Madrigal admitted that as a result of his role in the scheme, approximately $68,760 was fraudulently billed to Medicare for unnecessary home health care and therapy.

Why are these people allowed to plea to obtain smaller sentences and keep a good chunk of their ill-gotten gains? Is it time for the anti-fraud effort to go nationwide instead of just a few states?

From Zalma’s Insurance Fraud Letter, available free at http://www.zalma.com/ZIFL-CURRENT.htm

Since 2001 when the Georgia Supreme Court decided State Farm Mutual Automobile Insurance Co. v. Mabry, 274 Ga. 498, 556 S.E.2d 114 (Ga. 11/28/2001) the right to recover damages for diminution of value of property even after the damaged property is repaired has been the subject of much litigation.  The subject caused concern to the insurance industry, every person insured with a policy of insurance that promised to pay only the cost to repair or replace the property with material of like kind and quality, appraisers, adjusters, and lawyers.

Because of the apparent confusion I wrote an E-Book to more thoroughly review how the United States deals with questions of diminution in value.  It covers each of the fifty states of the United States, the District of Columbia, the 12 federal Circuit Courts of Appeal and the U.S. Supreme Court, and how they dealt with the issue of establishing the amount of loss to property.

It also covers in detail how each of the jurisdictions dealt with the question of how much an insurer must pay for claims to property the risk of loss of which it insured.  It also will explain how much tortfeasors, or their insurers, must pay to those whose property is damaged by their actions.

History of Insurance
Since insurance was invented in ancient Sumeria when insurance policies were written on clay tablets, insurers and their insureds have struggled with establishing a fair method to properly and fairly compensate the person insured for the property lost or damaged as a result of a peril insured against.

Insurance is a contract whereby one undertakes to indemnify another against loss, damage, or liability arising from a contingent or unknown event.  The key question to be answered by an insurer is: How much is needed to indemnify the person insured?  The concept of indemnity requires that the person indemnified receives sufficient funds to put him or her back in the financial place he or she was in moments before the loss.  The U.S. Supreme Court said: “Indemnity means an obligation to make good a loss...”¹  Although, on its face, calculating indemnity seems to be a simple task, as the cases in the are reviewed the reader should be in a position to understand why diminution in value is a concept that has given litigants, insurers and courts serious problems and what seems to be a constant deluge of litigation.

Measure of Damages
The measure of damages should be that amount necessary to compensate the injured party for the damages proximately caused by the conduct of the person causing injury.²  The measure is often difficult to determine.  The measure seldom fits into a hard rule of thumb.  Every possible means of providing complete indemnity is required when dealing with tort damages, contract damages, and the proper amounts of payment required by a contract of insurance.

The courts of the various states and federal jurisdictions do not use identical rules to calculate the proper measure of damages.  To understand the issue and to apply the proper remedy requires an understanding of how each state applies, what it believes to be, the proper measure of damages for tort, for contract breaches and for insurance claims situations.  Although each court should reach the result of true indemnity the same way diversity of opinion is the rule rather than the exception.

For example, automobile insurance policies usually promise to pay the insured, when an automobile is damaged by collision or some other insured cause, the costs to repair the vehicle or if unrepairable, the actual cash value of the vehicle.  Most policies say nothing about the difference in value of a vehicle that is repaired after an accident.  Because the policies were silent and only promised repair or actual cash value, insurers decided it was unnecessary to even mention the difference in value before the accident and the value after repairs.  Since no promise was made to pay for more than actual cash value or the cost of repair the issue was ignored until the 2001 decision of the Georgia Supreme Court in State Farm Mutual Automobile Insurance Co. v. Mabry, 274 Ga. 498, 556 S.E.2d 114 (Ga. 11/28/2001).  Mabry caused serious concern among insurers. It awarded the insured both the cost to repair and the diminution in value of the car after it was repaired.  Insurers believed this decision was a judicial rewriting of the wording of the policy and generated suits across the country seeking recovery for diminution of value in suits against insurers and third-party-defendants.

Since Mabry, virtually all of the courts finding no coverage for diminution of value have done so because the word “repair” has a plain meaning that does not encompass repair of diminished market value after the repair is completed.  Rather, the plain meaning of repair contemplates physical restoration.  Many insurers, to avoid argument, now add wording to their policies that establishes that the insurer does not intend to, nor will it, pay for diminution of value.

When property of any kind is damaged and repaired the resale value of the property can easily be diminished because of the stigma carried by the repair.  An automobile is likely to suffer this type of diminution in value after it is damaged in an accident and repaired.  The resale value most likely will be less than that for a comparable automobile that has not been damaged.  In other words, the damage results in a reduction — or “diminution”— in the resale value of the automobile.  On the other hand, when real property is repaired replacing old material with new the resale value of the real property is often increased.  No one, however, has suggested that the insurer or tortfeasor is entitled to a reduction in its payment for repair because the insured profits from the repair and is not, therefore, truly indemnified.

When the property is insured, the insured’s claim for this reduction in value may be made against a third party that negligently caused the damage to the insured’s automobile or it may arise from a first-party claim against the insured’s own physical damage coverage.  The key to recovery of the diminution in value depends on the particular state where the damage occurs, the wording of the insurance policy involved, mandates by state insurance departments, and the holding of the various courts.

With regard to first-party claims by a person insured against an insurer, while it is perhaps arguable, the ISO contract language — specifically the Limit of Liability condition — appears to cover only the actual cash value of the damage or the actual cost to repair the damage, some states require payment of additional sums to indemnify the owner for loss in value.  Although there is nothing in the policy wording that even appears to contractually cover any reduction in market value, some courts require that the insurer pay extra.  Even if the insured could prove the amount of reduction in value collecting from an insurer should require a change in the policy wording.

The policy usually allows the insurer to deduct for “betterment” or depreciation, although the burden of proof is on the insurer to demonstrate such depreciation or betterment.  In physical damage claims, the policy would allow the carrier to deduct for an “improvement” in value (i.e., betterment) due to repairs with newer parts, but will not compensate the insured for a reduction in value due to the same accident.

Third-party claims (claims against an insured person for damages done to the property of some third person) for “diminution of value”, on the other hand, have generally been found by the courts to be covered by auto insurance, since the measure of damage in tort claims (which the insurer promises to pay) is the difference in value of the property before the loss and the value of the property after the loss.

For example, Texas court cases have found that legal liability for third-party damages includes diminution of value. However, no single measure of damages can serve in every case to adequately compensate an injured party.³ For the award of damages to be fair, recognizing that diminution of value is not always accurate, an award of restoration damages, according to some courts, must be available to compensate a plaintiff fully for damages to property when diminution in value fails to provide an adequate remedy.⁴

The general rule in tort cases where one party causes damage to the property of another the measure of damages is not the cost of repair of the property but, rather, the standard measure is the difference between the value of the property before and after the injury, or the diminution in value,⁵ unless the cost of repairing the injury and restoring the premises to their original condition amounts to less than the diminution in value of the property, and then the cost of repair is the proper measure of damages.  If the cost of restoration will exceed such diminution in value, then the diminution in value of the property is the proper measure.  That rule seems to be in flux and most courts seem to be moving toward a more flexible rule where the measure of damages is considered the amount necessary to compensate the injured party for the damages proximately caused by the conduct of the person causing injury regardless of the method used to calculate those damages.

There is a disparity between the various states on the subject. Some apply the rules strictly, some apply the general rule of fairness while others apply the rule in one way when dealing with tort damages, another when dealing with contract damages and a third when dealing with insurance claims.  The following is a review of how the various states deal with the issue of the proper measure of damages to achieve complete indemnity.

In this new E-Book you will find explanations of how diminution in value is handled across the country with cases (including the full text of many) from each of the fifty states, Guam, the District of Columbia and all federal courts.

The introduction and table of contents is available at http://www.zalma.com/diminution.htm

¹ Williams v. United States Fidelity and Guaranty Company, 35 S. Ct. 289, 236 U.S. 549 (U.S. 02/23/1915)
² Lochaven Co. v. Master Pools by Schertle, Inc., 233 Va. 537, 541, 357 S.E.2d 534, 537 (1987)
³ Texas law is clear: no double recoveries are allowed, Parkway Co. v. Woodruff, 901 S.W.2d 434, 441 (Tex. 1995). But, under certain circumstances, a plaintiff may recover for both diminution in value and cost of repairs.  Royce Homes, L.P. v. Humphrey, 244 S.W.3d 570 (Tex.App. Dist.9 01/03/2008),  Ludt v. McCollum, 762 S.W.2d 575 (Tex. 1988); Terminix International, Inc. v. Lucci, 670 S.W.2d 657 (Tex. App. 1984)
⁴ Sunburst School District No. 2 v. Texaco, Inc., 165 P.3d 1079, 338 Mont. 259, 2007 MT 183 (Mont. 08/06/2007)
⁵ Burk Ranches, Inc. v. State, 242 Mont. 300, 790 P.2d 443 (1990); Simon Property Group, L.P. v. Brandt Construction, Inc., 830 N.E.2d 981 (Ind.App. 07/15/2005)