Emp'rs Reinsurance Corp. v. Mission Equities Corp.

FEINBERG, Acting P. J.

We are asked in this appeal to decide which of two insurance companies must bear a loss occasioned by a claim of negligence on the part of an attorney.

There is no dispute as to the relevant facts. Mission Equities Corporation (hereinafter Mission) issued its malpractice policy to a firm of attorneys (hereinafter Attorneys) effective January 1, 1968 to January 1, 1969. Employers Reinsurance Corporation (hereinafter Employers) issued its policy to the Attorneys effective January 2, 1969, through January 2, 1970. On February 22, 1971, at which time the Employers’ insurance policy was in effect through renewal, a malpractice action was filed against the Attorneys. The action alleged 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. Employers defended the action and settled the case for $13,000. Mission was given notice of the suit by a letter from Attorneys but did not participate in the defense. On May 29, 1974, Employers filed suit against Mission, requesting a…