Court Opinion

ID: 6939141
Source: CourtListenerOpinion
Date Created: 2022-07-24 00:54:59.907805+00
Date Added: 2024-06-11T16:07:37.502315
License: Public Domain

VAN GRAAFEILAND, Circuit Judge,
concurring:
New York is one of the minority of states that apply the “no prejudice” rule in cases involving late notices of occurrence. See Ostrager and Newman, Handbook on Insurance Coverage Disputes §§ 4.02[c][l]-[2], 4.04 (7th ed.1988). The question not yet answered by the New York Court of Appeals is whether New York will apply the same unyielding doctrine in cases involving late notices of claim or suit, or whether it will follow the majority of jurisdictions by holding that an “insured’s failure to forward demands or other court papers will not relieve an insurer of its duties to defend or indemnify absent a showing of prejudice to the insurer.” Id. § 402[b][2], at 90.
In addition to the cases of Lauritano v. American Fidelity Fire Ins. Co., 3 A.D.2d *629564, 162 N.Y.S.2d 553 (1957), aff'd, 4 N.Y.2d 1028, 177 N.Y.S.2d 530, 152 N.E.2d 546 (1958), Home Indem. Co. v. State Farm Mut. Auto. Ins. Co., 64 A.D.2d 212, 409 N.Y.S.2d 673 (1978), and Brooklyn Union Gas Co. v. North River Ins. Co., 124 A.D.2d 621, 508 N.Y.S.2d 26 (1986), cited by my colleague, there are other lower court decisions in New York that inject the requirement of prejudice into carriers’ defenses against coverage in cases of this nature. See, e.g., Aetna Ins. Co. v. Millard, 25 A.D.2d 341, 343-44, 269 N.Y.S.2d 588 (1966); Cohen v. East Coast Ins. Co., 54 Misc.2d 813, 815, 283 N.Y.S.2d 371 (1967); Zappia v. Allstate Ins. Co., 28 Misc.2d 723, 724, 212 N.Y.S.2d 698 (1961). These eases hold in substance that where, despite an insured’s failure to turn over process, the insured’s carrier is given an opportunity to defend, the carrier may not disclaim because of such failure.
The differences between the “no prejudice” adherents and the requirement-of-prejudice adherents are highlighted in Lauritano, supra. The insurance policy in that case contained a notice of claim provision almost identical with the one at issue herein. There, the majority in the Appellate Division distinguished between notices of occurrence or accident, on the one hand, and notices of claim or suit, on the other, stating with regard to the latter that “[i]t would be a rare occasion indeed when the carrier could not be placed in just as good a position as it would have enjoyed had the insured complied fully with his obligations.” 3 A.D.2d at 571, 162 N.Y.S.2d 553.
The dissent in Lauritano put this holding squarely in issue when it said:
The provisions of the policy are unambiguous, and state that no action is maintainable “unless, as a condition precedent thereto, the insured shall have fully complied with all the terms of the policy.”
Id. at 581, 162 N.Y.S.2d 553.
The dissent followed this statement with the unqualified holding that the insured’s failure to deliver the summons and complaint to the carrier was “fatal to this action.” Id.
In the face of this clear-cut divergence between the majority and the dissent, the Court of Appeals’ affirmance, albeit without opinion, should not be lightly dismissed. This affirmance made the Court of Appeals “responsible only for the point decided, and did not make [the Court’s members] guarantors of all the reasons given or opinions expressed.” See Rogers v. Decker, 131 N.Y. 490, 493, 30 N.E. 571 (1892). However, although an affirmance without opinion does not make the Appellate Division’s decision binding authority, it does make the decision “persuasive” authority. See Tepper v. Tannenbaum, 65 A.D.2d 359, 360-61, 411 N.Y.S.2d 588 (1978).
In the light of all the foregoing, I am not convinced that the New York Court of Appeals would apply its “no prejudice” rule generally and without exception in all notice of claim or suit cases. I therefore would limit our holding to the facts of the instant case, where the carrier was required to spend time and money to cure the default, thereby establishing at least some degree of prejudice. With this limitation, I concur.