**Exhibit31.2**

 

CERTIFICATION

 

I, Deborah S. Maddocks,certify that:

 

1.                     I havereviewed this quarterly report on Form 10-QSB of PAULA Financial;

 

2.                     Based on myknowledge, this report does not contain any untrue statement of a material factor omit to state a material fact necessary to make the statements made, inlight of the circumstances under which such statements were made, notmisleading with respect to the period covered by this report;

 

3.                     Based on myknowledge, the financial statements, and other financial information includedin this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the small business issuer asof, and for, the periods presented in this report;

 

4.                     The smallbusiness issuer’s other certifying officer and I are responsible forestablishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15e and 15d-15e) for the small business issuer and wehave:

 

a)                    Designed suchdisclosure controls and procedures, or caused such disclosure controls andprocedures to be designed under our supervision,  to ensure that material information relating to the smallbusiness issuer, including its consolidated subsidiaries, is made known to usby others within those entities, particularly during the period in which thisreport is being prepared;

 

b)                   Evaluated theeffectiveness of the small business issuer’s disclosure controls and proceduresand presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by thisreport based on such evaluation; and

 

c)                    Disclosed inthis report any change in the small business issuer’s internal control overfinancial reporting that occurred during the small business issuer’s mostrecent fiscal quarter (the small business issuer’s fourth fiscal quarter in thecase of an annual report) that has materially affected, or is reasonably likelyto materially affect, the small business issuer’s internal control overfinancial reporting; and

 

5.                     The smallbusiness issuer’s other certifying officer and I have disclosed, based on ourmost recent evaluation of internal control over financial reporting, to thesmall business issuer’s auditors and the audit committee of the small businessissuer’s board of directors (or persons performing the equivalent functions):

 

a)                    Allsignificant deficiencies and material weaknesses in the design or operation ofinternal control over financial reporting which are reasonably likely toadversely affect the small business issuer’s ability to record,  process, summarize and report financialinformation; and

 

b)                   Any fraud,whether or not material, that involves management or other employees who have asignificant role in the small business issuer’s internal control over financialreporting.

 
| Date:  August 13, 2004 | By:                           | /s/ Deborah S. Maddocks |   |
|----------------------------------|-------------------------------|-------------------------|--------|
|                             | Vice President – Finance |

 

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