Employers Reinsurance Corporation v. Mission Equities Corporation

74 Cal. App. 3d 826, 141 Cal. Rptr. 727 (1977)

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Nature of the Case

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Facts

D issued its malpractice policy to a firm of attorneys effective January 1, 1968, to January 1, 1969. Employers Reinsurance Corporation (P) issued its policy to the Attorneys effective January 2, 1969, through January 2, 1970. On February 22, 1971, at which time P's insurance policy was in effect through renewal, a malpractice action was filed against the Attorneys. It claimed that the Attorneys filed an action on August 6, 1963 and that as a result of Attorneys' failure to prosecute the action in a timely fashion, the case was dismissed on September 20, 1968, pursuant to Code of Civil Procedure section 583. P defended the action and settled the case for $13,000. D was given notice of the suit by a letter but did not participate in the defense. On May 29, 1974, P filed suit against D, requesting a declaration that D afforded primary coverage for the alleged negligence and that D owed P $13,000 plus interest, attorney's fees, and for costs of the suit. P and D filed motions for summary judgment. The trial court concluded that D's escape provision was disfavored because of its potential for leaving the insured without coverage. P's motion was granted and P was eventually awarded $15,580.17 plus costs. D appealed.