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Terra Nova Insurance Co. v. Associates Commercial Corp.

United States District Court for the Eastern District of Wisconsin
697 F. Supp. 1048 (1988)


Scharbarth (defendant) arranged for his truck to be stolen in order to receive the insurance money. Scharbarth’s insurance company, Terra Nova Insurance Company (plaintiff), investigated the incident and had a strong suspicion that Scharbarth’s truck had not actually been stolen. However, because Terra Nova could not prove beyond a reasonable doubt that the truck had not been stolen, the company paid the insurance claim to the payee on Scharbarth’s policy, Associates Commercial Corporation (defendant). Associates was unaware of Scharbarth’s fraud. Subsequently, a grand jury indicted Scharbarth for mail fraud in connection with the incident. At this point, Terra Nova sought to recoup its money. Terra Nova sued Associates and Scharbarth, seeking restitution. Terra Nova moved for summary judgment.

Rule of Law


Holding and Reasoning (Evans, J.)

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