TERRA NOVA INSURANCE CO. V. ASSOCIATES COMMERCIAL CORP.
697 F.Supp.1048 (1988)
NATURE OF THE CASE: This was a dispute over the recovery an insurance payment that was
fraudulently induced.
FACTS: Scharbarth did not like his present truck and decided to have it stolen in Sparks,
Nevada. He did it for the insurance money. Scharbarth then made a claim for his loss with
his insurance company (P). P hired a private investigator, however, by the next month, P
paid the claim based on good faith considerations. P sent a check to Scharbarth and
Associates (D) for $62,210 on the policy. D held the security interest in the truck and knew
nothing of the alleged fraud. Scharbarth owed $49,647.51 and it conveyed the interest in the
truck to P and another $11,500 went for a replacement tractor unit and Scharbarth only
netted $1057.49. The FBI got involved and eventually Scharbarth was indicted for mail fraud.
He was sentenced to two years. P then wrote D looking for a return of the $62,210. D refused
to pay so P sued D and both parties moved for summary judgment. The court granted summary
judgment to D against P and to P against Scharbarth.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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