## Facts

- A law firm was insured for professional liability by Mission from January 1, 1968 to January 1, 1969, and then by Employers from January 2, 1969 to January 2, 1970; Employers’ coverage was renewed and in force in 1971.
- The law firm filed a client action in 1963 that was dismissed on September 20, 1968 for delay in prosecution.
- On February 22, 1971, the client sued the law firm for legal malpractice based on the 1968 dismissal.
- Employers defended the law firm and settled the malpractice case for $13,000; Mission received notice but did not participate in the defense.
- Employers sued Mission for declaratory relief and reimbursement, alleging Mission provided primary coverage for the malpractice claim.
- Mission’s policy promised to indemnify the insured against claims for breach of professional duty “which may be made against them during” the policy period by reason of negligent acts, errors, or omissions.
- The trial court granted summary judgment to Employers on liability and, after a bench trial on damages, entered judgment against Mission for $15,580.17 plus costs.
- Mission appealed, arguing the policy covered only claims asserted during its policy period.

## Issues

1. Whether Mission’s professional liability policy covered a malpractice claim when the malpractice cause of action accrued during Mission’s policy period but the malpractice suit was filed after the policy expired.
2. Whether Mission owed primary coverage and reimbursement to Employers, which defended and settled the malpractice action.

## Decision

- The Court of Appeal affirmed the judgment for Employers.
- The court held Mission’s policy covered claims that matured (accrued) during the policy period even if they were not asserted until later.
- The malpractice claim matured when the client’s case was dismissed on September 20, 1968, within Mission’s policy term; Mission therefore provided primary coverage.
- Employers was entitled to reimbursement for the settlement and related amounts awarded.

## Legal Principles

- Where identical policy language has been authoritatively construed, that construction controls later disputes involving the same operative wording.
- A professional liability insuring clause covering claims “which may be made” during the policy period can be construed to cover claims that mature during the policy period, even if asserted after expiration.
- For attorney malpractice coverage under such language, the relevant timing inquiry is when the cause of action accrued (matured), not when suit was filed.
- Ambiguities in insurance policy language are construed against the insurer and in favor of coverage when the insurer drafted the wording.
- Between successive insurers, the policy in force when the claim matured may be primary, permitting reimbursement to a later insurer that defended and paid the loss.

## Conclusion

Because the malpractice cause of action matured upon the 1968 dismissal of the client’s case within Mission’s policy period, Mission’s policy provided primary coverage notwithstanding the 1971 filing date, and Mission was liable to reimburse Employers for the settlement and related sums.


Emp'rs Reinsurance Corp. v. Mission Equities Corp., 74 Cal. App. 3d 826, 141 Cal. Rptr. 727 (Ct. App. 1st Dist. 1977)