Pasternak

This appeal, from a judgment granting a writ of administrative mandamus (Code Civ. Proc., § 1094.5), concerns the statutory responsibility of appellant Escrow Agents’ Fidelity Corporation (EAFC) to indemnify for losses suffered by member escrow agents as the result of fraudulent misappropriation of trust obligations by their owners, officers, or employees. (Fin. Code, § 17300 et seq.) At issue is the superior court’s rejection of a decision by the acting Commissioner of Corporations (commissioner), which denied an administrative appeal by David J. Pasternak (receiver), receiver of Escrow Plus, Inc. (EP), from EAFC’s denial of the receiver’s claim for compensation on account of approximately $24 million taken by EP’s president, as part of fraudulent scheme purportedly involving viatical purchases of life insurance policies. The trial court held that the commissioner had erred in concluding that the EP transactions did not involve escrows, and that two particular findings of fact were not supported by substantial evidence.

Appealing, EAFC defends the commissioner’s findings and decision. Amicus curiae Escrow Institute of California further contends that a release by the…