This section contains the nature of the case and procedural background.

Escrow was a non-profit corporation established by the California state legislature to act as a fidelity surety for the trust obligations of licensed escrow agents in California. The purpose of Escrow was to indemnify its members against loss of trust obligations from embezzlement, theft, or mysterious disappearance. Abelman was alleged to have embezzled over $4 million from Citi Escrow and a related company 1031 Exchange. Both of these entities filed for bankruptcy. The Citi trustee in bankruptcy made a claim against Escrow in excess of $4 million. Escrow (P) then filed an action against Abelman (D) to which D demurred. The court sustained the demurrer without leave to amend for the equitable relief quia timet and imposition of a constructive trust. P then appealed that decision. While the appeal was pending, D filed Chapter 7 bankruptcy in Hawaii. Eventually, the case was transferred to California and that Bankruptcy Court granted relief from the automatic stay imposed under bankruptcy law allowing the appeal court in California to rule on the petition for a writ of mandate.

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