Ticor Title Insurance v. Employers Insurance of Wausau

I. Introduction and Background

This appeal involves yet another insurance squabble in the tangle of litigation stemming from the demise of Technical Equities Corporation (TEC), a diversified investment services company that sought bankruptcy court protection in February 1986. Appellant is Employers Insurance of Wausau (Wausau), provider of second layer excess general liability insurance to respondent Ticor Title Insurance Company and Ticor Title Insurance Company of California (Ticor).

The bankruptcy estate of TEC (Estate) sued Ticor for its alleged acts or omissions in preparing and recording title documents which obscured the illusory underpinnings of a TEC real estate option program and thereby aided TEC directors and officers in their scheme to loot and defraud the company. Certain investors in TEC also asserted claims against Ticor arising out of the same conduct.

Ticor tendered defense of the Estate’s claims to Wausau in December 1990, appending the Estate’s petition to “add on” Ticor as a defendant in its existing, coordinated actions. The next month Wausau denied coverage for Ticor’s claims and the Estate filed its first amended complaint formally targeting…