Abelson

I. Introduction

A. Background

This is an appeal and cross-appeal from the second multimillion dollar judgment rendered in bad faith actions brought by investors in Technical Equities Corporation (Technical Equities) against National Union, the company’s primary insurance carrier. Respondents and cross-appellants herein are the plaintiff-investors in what has become known as the Abelson actions (hereafter, plaintiffs or Abelson plaintiffs).

Technical Equities was a diversified financial services company which offered an array of investment services. Following its financial collapse in February 1986, hundreds of investors successfully sued the company’s officers and directors for fraud, negligent misrepresentation, breach of fiduciary duty and negligence. The scores of individual suits had been coordinated in order to try common issues of law and fact.

National Union insured Technical Equities under a directors and officers liability policy (D & O policy) as well as a comprehensive general liability policy (CGL policy). Coverage disputes arose at the inception of the coordinated investor litigation. Several plaintiffs pursued two declaratory relief actions to resolve…