Court of Appeal holds title insurance escrows fall within insurance-related work exclusion, affirming summary judgment for GMSR’s client

Chicago Title Ins. Co. v. St. Paul Mercury Ins. (2011) 2011 Cal.App. Unpub. LEXIS 9627 (California Court of Appeal, Second Appellate District, Division Two) [unpublished]. The Court of Appeal affirmed summary judgment for GMSR’s client, St. Paul Mercury Insurance. Chicago Title’s officers and employees were implicated in a mortgage/real estate fraud scheme that resulted in nearly $100 million in settlements and judgments. Chicago Title tendered its defense to its general liability carrier St. Paul. The Court of Appeal held that there was no duty to defend because of an “insurance and related work” exclusion. The Court rejected the argument that the escrows used for the fraudulent transactions were non-insurance work, based among other things on a statute in the Insurance Code that defines “the business of title insurance” as including the conduct of escrows through which title insurance is issued.