Victims of Crime May not Profit From a Restitution Order
Post 5097
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In California criminal cases, restitution is mandatory in every case in which a victim has suffered economic loss as a result of the defendant’s conduct.
In The People v. Alex Dadourian, B329218, California Court of Appeals, Second District, Fourth Division (June 6, 2025) there was a crime but no evidence of economic loss incurred by the victims.
THE FRAUD
Alex Dadourian was convicted on multiple fraud-related counts, all stemming from sending false information to obtain residential mortgage loans.
Some of the fraudulently obtained loans had already been repaid in full to the lenders with interest and without loss.
When there is no showing of economic loss at all, a restitution award is an abuse of discretion.
BACKGROUND
The trial court sentenced Dadourian to five years and four months in state prison.
The trial court ordered Dadourian to pay $8,128,823 in victim restitution.
DISCUSSION
Legal Principles
Restitution is normally mandatory when a criminal victim suffers an economic loss. But when there is no economic loss there is no entitlement to restitution.
While the trial court’s discretion in calculating restitution is broad, it is not limitless.
ANALYSIS
The restitution award at issue here was based on the amount of the loans and trial court ordered restitution in the amount of $8,128,823, the full original face amount of the loans. The Court of Appeals found this was error.
That a loan was made is not enough to show, without more, that a lender suffered an economic loss on that loan.
Six of the loans had been paid off in full (either by sale or refinance) with no realized losses.
The trial court’s order did not “restore” an economic “status quo.” Providing the lenders with additional funds via restitution in the amount of the original loan amounts was a windfall, not restoring the status quo that existed before the loans were made in the first place. Therefore, the victim restitution order was reversed.
ZALMA OPINION
Restitution is available only to make the victim of a crime whole, not to allow he victim to profit from being a victim nor is it proper as additional punishment to the criminal. Dadourian was a bad man who was properly sentenced to state prison. Making him pay the full amount of loans that were obtained fraudulently but which caused no loss to the lenders was wrongfully adding a more than $8 million punishment in addition to prison. Even a fraud perpetrator is entitled to a fair and reasonable sentence.
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Zalma’s Insurance Fraud Letter – August 15, 2025
Posted on August 15, 2025 by Barry Zalma
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
ZIFL Volume 29, Issue 16
Post 5169
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See the full video at https://lnkd.in/gKmEeN7f and at https://lnkd.in/gV687Vt9
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication. It is provided FREE to anyone who visits the site at https://lnkd.in/gVT5G9s
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Subscribe to the e-mail Version of ZIFL, it’s Free!
Post 5169
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written...
Award Signed by Two of Three Appraisers Binding on Insured and Insurer
Post 5168
See the full video at https://rumble.com/v6xj16m-appraisal-award-sets-amount-of-loss.html and at https://youtu.be/XBy4m31c0AM, and at https://zalma.com/blog plus more than 5150 posts.Dispute Over Extent of Damages is not Bad Faith
Kelly Mallady filed a lawsuit against Homeowners of America Insurance Company due to damages sustained from a nearby explosion in January 2020 that the insurer rejected in part.
In Kelly Mallady v. Homeowners Of America Insurance Company, No. 14-24-00147-CV, Court of Appeals of Texas, Fourteenth District (August 7, 2025) resolution was obtained of the disputes.
CASE BACKGROUND:
1 Mallady’s homeowners insurance policy was effective from September 15, 2019, to September 15, 2020 .
2 The initial claim was acknowledged, and an independent adjuster estimated the property damage to be $13,014.79, covering only the dwelling and fence.
3 Mallady invoked appraisal, demanding $247,860.40 for property and contents damages, plus...
Exclusions Defeat Claim for Defense & Indemnity
Genuine Dispute Dispels Claim of Bad Faith
Post 5167
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In Diversified Restaurant Group, LLC, et al. v. Houston Casualty Company, et al., No. 25-cv-02344-EMC, United States District Court, N.D. California (July 31, 2025) Diversified Restaurant Group, LLC (DRG) and Golden Gate Bell, LLC (GGB) sued Houston Casualty Company (HCC), Pennsylvania Manufacturers Indemnity Company (PMIC), and Manufacturer’s Alliance Insurance Company (MAIC) around the denial of insurance coverage for a lawsuit filed by a former employee who alleged sexual harassment and assault by a supervisor.
Insurance Policies and Denial of Coverage:
DRG and GGB had insurance policies with PMIC and MAIC, which included general liability, workers’ compensation, and employer’s liability coverage. Both PMIC and MAIC denied coverage for the underlying lawsuit, citing various exclusions in their policies.
Exclusions:
The PMIC policy ...
Rulings on Motions Reduced the Issues to be Presented at Trial
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CASE OVERVIEW
In Richard Bernier v. State Farm Mutual Automobile Insurance Company, No. 4:24-cv-00002-GMS, USDC, D. Alaska (May 28, 2025) Richard Bernier made claim under the underinsured motorist (UIM) coverage provided in his State Farm policy, was not satisfied with State Farm's offer and sued. Both parties tried to win by filing motions for summary judgment.
FACTS
Bernier was involved in an auto accident on November 18, 2020, and sought the maximum available UIM coverage under his policy, which was $50,000. State Farm initially offered him $31,342.36, which did not include prejudgment interest or attorney fees.
Prior to trial Bernier had three remaining claims against State Farm:
1. negligent and reckless claims handling;
2. violation of covenant of good faith and fair dealing; and
3. award of punitive damages.
Both Bernier and State Farm dispositive motions before ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
