84 F.

3d 622

AXA MARINE AND AVIATION INSURANCE (UK)

LIMITED, and Marine
Insurance Co. Ltd., Plaintiffs-Appellees,
v.
SEAJET INDUSTRIES INC., Sea Jet Trucking Inc., and
A.P.A.
Warehouse Inc., Defendants-Appellants.
No. 1107, Docket 95-7821.

United States Court of Appeals,

Second Circuit.
Argued Feb. 29, 1996.
Decided May 24, 1996.

Mark I. Silberblatt, New York City (Edward H. Burnbaum, Lynch Rowin

Novack Burnbaum & Crystal, New York City, of counsel), for Appellants.
Brendan J. Malley, New York City (Mendes & Mount, New York City, of
counsel), for Appellees.
Before: VAN GRAAFEILAND, MESKILL and WINTER, Circuit
Judges.
MESKILL, Circuit Judge:

This is an appeal from a final judgment of the United States District Court for
the Southern District of New York, Leisure, J., Axa Marine and Aviation Ins.
(UK) Ltd. v. Seajet Indus., 891 F.Supp. 978 (S.D.N.Y.1995), denying the
motion for summary judgment by defendants-appellants Seajet Industries, Inc.,
Seajet Trucking Inc., and A.P.A. Warehouse, Inc. (Insureds), and granting the
cross-motion for summary judgment by plaintiffs-appellees AXA Marine and
Aviation Insurance (UK) Limited, and The Marine Insurance Co., Limited
(Underwriters). We have appellate jurisdiction under 28 U.S.C. 1291.
Underwriters brought the present action under the Declaratory Judgment Act,

28 U.S.C. 2201, seeking a declaration that their obligation to defend and/or

indemnify Insureds was excused by Insureds' failure to provide timely notice of
claim, as required by the governing policy. The district court held that New
York's "no prejudice" rule applied to the instant dispute, and that Underwriters
therefore were entitled to refuse to defend and/or indemnify Insureds without
making a showing of prejudice resulting from the failure by Insureds to provide
timely notice of claim. Insureds appealed.

BACKGROUND
3

The facts of this case are not in dispute. Insureds owned and operated a trucking
business and a number of warehouses located in Brooklyn, New York.
Underwriters issued a policy covering Insureds' liability incurred between
March 29, 1990 and March 28, 1991 resulting from damage to or loss of the
property of others while in the care of Insureds. On December 5, 1990, the
Brooklyn warehouses were robbed, and property belonging to several bailors
was taken. Insureds gave prompt notice of the robbery to their insurance broker,
Coverage Consultants, Inc., which in turn notified Underwriters. One of the
bailors, Cherry Stix, Ltd., was insured by American Motorists Insurance
Company (American Motorists). American Motorists, as subrogee of Cherry
Stix, Ltd., brought an action against Insureds in New York State Supreme
Court, and served a summons on Insureds some time after December 20, 1991.

Insureds never responded to the summons and never forwarded a copy of the
summons to Underwriters as required by the policy. Subsequently, on March
30, 1992, American Motorists gave notice to Insureds that a motion for default
would be made within the next thirty days. Again, Insureds did not respond or
notify Underwriters. On or about July 20, 1992, American Motorists served a
motion for default judgment in the amount of $595,032. Again, there was no
response by Insureds and no notice given to Underwriters. Finally, on
September 16, 1992, default judgment was entered against Insureds.

After entry of the default judgment, Insureds notified Underwriters of the

American Motorists action. Underwriters assigned counsel to the matter,
subject to a reservation of rights, in an effort to have the default judgment
vacated. Counsel was successful in vacating the default judgment, but while the
motion to vacate was pending, Underwriters denied coverage under the policy
on the ground that Insureds failed to provide prompt notice of the American
Motorists action. Underwriters then brought this action seeking a declaratory
judgment that their obligations under the policy were terminated.

The relevant provision of the policy provided that:

7 any claim(s), whether groundless or not, be made against the Insured on account
If
of loss of or damage to property, the Insured shall notify the Company as soon as
practicable and if suit is filed against the Insured to enforce any claim(s), the Insured
shall immediately forward to the Company all summons or other notice(s) served
upon the Insured.
8

The district court concluded as a matter of law, and the parties agree, that
Insureds failed to notify Underwriters of the American Motorists claim or
forward the relevant suit papers in a reasonable time. However, the parties
disagree as to the need for Underwriters to show that they were prejudiced to
deny coverage.

DISCUSSION
A. Standard of Review
9

We review de novo the district court's grant of summary judgment. Tomka v.

Seiler Corp., 66 F.3d 1295, 1304 (2d Cir.1995). Summary judgment is not
appropriate unless there are no genuine issues of material fact and unless the
undisputed facts warrant judgment as a matter of law for the moving party. Id.
The facts in this case are not in dispute, thus summary judgment is proper if
Underwriters are entitled to judgment as a matter of law. The district court
properly held that New York law governs this dispute. Steinbach v. Aetna Cas.
& Sur. Co., 81 A.D.2d 382, 385, 440 N.Y.S.2d 637, 640 (1st Dep't 1981)
(holding that a court should apply the law of the state "which the parties
understood would be the principal location of the insured risk and the one most
intimately concerned with the outcome of the litigation." (quotations omitted)).

B. The Alleged Harms Suffered by Underwriters

10
11

Underwriters allege several harms resulting from Insureds' failure to give

Underwriters notice of the American Motorists claim. They cite the default
judgment entered against their insured, for which Underwriters could have been
held directly responsible under N.Y. Ins. Law 3420(a)(2) (McKinney 1985).1
Underwriters also incurred legal expenses in persuading the New York
Supreme Court to vacate the default judgment. Furthermore, Underwriters
claim that the delay caused them to lose the opportunity to settle the American
Motorists claim early, before litigation positions hardened.

12

If Underwriters proved that these alleged harms prejudiced them, they would be
legally justified in terminating their duty to defend and indemnify. Unigard
Security Ins. Co. v. North River Ins. Co., 79 N.Y.2d 576, 581, 584 N.Y.S.2d

290, 292, 594 N.E.2d 571, 573 (1992); Restoration Realty Corp. v. Robero, 58
N.Y.2d 1089, 1091, 462 N.Y.S.2d 811, 812, 449 N.E.2d 705, 705-06 (1983);
Toyomenka Pacific Petroleum v. Hess Oil V.I. Corp., 771 F.Supp. 63, 68
(S.D.N.Y.1991). However, Underwriters need not demonstrate prejudice to
justify terminating their obligations under the policy. The New York Court of
Appeals has adopted the no prejudice rule in cases involving a failure to give
notice of occurrence and we believe that that court would apply the same rule
to a case like this one, involving the failure to give notice of claim. See
Travelers Ins. Co. v. 633 Third Assocs., 14 F.3d 114, 119 (2d Cir.1994) (stating
that "[w]here the substantive law of the forum state is uncertain or ambiguous,
the job of the federal courts is carefully to predict how the highest court of the
forum state would resolve the uncertainty or ambiguity." (citation omitted)).
C. New York's "No Prejudice" Rule
13

Under the no prejudice rule, "the notice provision for a primary insurer operates
as a condition precedent and ... the insurer need not show prejudice to rely on
the defense of late notice." Unigard Security, 79 N.Y.2d at 581, 584 N.Y.S.2d
at 292, 594 N.E.2d at 573 (citations omitted). Thus the no prejudice rule is an
exception to two principles of the common law of contracts:

14 that ordinarily one seeking to escape the obligation to perform under a contract
(1)
must demonstrate a material breach or prejudice ...; and (2) that a contractual duty
ordinarily will not be construed as a condition precedent absent clear language
showing that the parties intended to make it a condition.
15

Id. (citations omitted).

16

The New York Court of Appeals has characterized the no prejudice rule as a
"presumption of prejudice." Unigard Security, 79 N.Y.2d at 584, 584 N.Y.S.2d
at 294, 594 N.E.2d at 575 (stating, in a late notice of occurrence case, that a
"reinsurer must demonstrate how [late notice] was prejudicial and may not rely
on the presumption of prejudice that applies in the late notice disputes between
primary insurers and their insureds" (emphases added)). Except in cases where
some excuse makes the delayed notice reasonable, it is clear that the
presumption is a conclusive one. New York v. Blank, 27 F.3d 783, 793-94 (2d
Cir.1994) (stating that "under New York law, '[a]bsent a valid excuse' the
insured's failure to provide notice 'vitiates coverage' ") (quoting In re Allcity
Ins. Co. and Jiminez, 78 N.Y.2d 1054, 1055, 576 N.Y.S.2d 87, 88, 581 N.E.2d
1342, 1343 (1991)).

17

The no prejudice rule relieves the burden on the insurer to prove that prejudice

resulted from the insured's failure to provide notice. The New York Court of
Appeals recently noted that other courts have articulated the various rationales
for the no prejudice rule. Unigard Security, 79 N.Y.2d at 581-82, 584 N.Y.S.2d
at 292, 594 N.E.2d at 573. Among those rationales cited by the Unigard
Security Court were
18 'the insurer [must have] an opportunity to protect itself' ...; that without timely
that
notice, 'an insurer may be deprived of the opportunity to investigate a claim and is
rendered vulnerable to fraud' ...; and that late 'notification may ... prevent the insurer
from providing a sufficient reserve fund' ( ...; and see, Security Mut. Cas. Co. v.
Century Cas. Co., 531 F.2d 974, 978 [ (10th Cir.), cert. denied, 429 U.S. 860, 97
S.Ct. 161, 50 L.Ed.2d 137 (1976) ] [prompt notice permits the primary insurer to
make an early estimate of potential exposure, to investigate the claim while
witnesses and facts are available, and to take steps to prevent fraud]; Commercial
Union Ins. Co. v. International Flavors & Fragrances, 822 F.2d 267, 271 [ (2d
Cir.1987)] [early notice enables the insurer, inter alia, to exercise early control over
the claim and enhances the possibility of settlement] ).
19

Id. (citations omitted). Underlying all of these distinct rationales is the

difficulty of measuring or proving the harm caused by untimely notice. Cf.
American Ins. Co. v. Fairchild Indus., 56 F.3d 435, 440-41 (2d Cir.1995)
(stating that "[a]n insurer cannot be expected to show precisely what the
outcome would have been had timely notice been given. This uncertainty,
however, is the result of the failure of the insured to comply with the policy.").

20

There are two types of notice provisions in an ordinary insurance policy; notice
of occurrence and notice of claim. The typical notice of occurrence provision
requires that an insured notify its insurer of events that reasonably might give
rise to liability covered by the policy. Id. at 439. A notice of claim provision
requires that an insured notify its insurer whenever any assertion of liability is
made by a third party. Id.

21

The New York Court of Appeals has held that the no prejudice rule applies to
disputes between primary insurers and their insureds in the context of failure to
give timely notice of occurrence. However, there is no reported Court of
Appeals decision addressing whether the no prejudice rule applies to the failure
to give timely notice of claim. Thus we must determine how the New York
Court of Appeals would rule. Travelers Ins. Co., 14 F.3d at 119.

22

In Unigard Security, the Court of Appeals recited many rationales supporting

the no prejudice rule. One of those rationales was that prompt notice allows an
insurer to control litigation and enhances the chance of settlement. Unigard

Security, 79 N.Y.2d at 582, 584 N.Y.S.2d at 292, 594 N.E.2d at 573. Although
Unigard Security was a notice of occurrence case, the court addressed the no
prejudice rule in general terms. We believe that an insurer's interest in early
control over litigation is served as much by prompt notice of claim as by
prompt notice of occurrence, Blank, 27 F.3d at 794, and that this rationale
supports the conclusion that the no prejudice rule also applies to the untimely
notice of claim.
23

Insureds contend that the no prejudice rule does not apply where the insured
gives untimely notice of claim but prompt notice of occurrence. They rely on
Appellate Division decisions that distinguish between notice of occurrence
provisions and notice of claim provisions on the ground that notice of claim is
of little value to an insurer. We do not believe that these cases accurately reflect
how the Court of Appeals would decide this question. The Court of Appeals'
decision in Unigard Security recognized an insurer's interest in taking early
control of litigation and in early settlement of claims, an interest not taken into
account by the Appellate Division cases cited by Insureds. The loss an insurer
suffers when it misses the early opportunity to settle a case, like the loss of the
chance to promptly investigate an occurrence, is difficult to quantify or prove.
Moreover, our cases decided since Unigard Security support our determination
that the no prejudice rule should apply to notice of claim provisions.

24

We recognize that decisions of lower courts of the forum state must be given
"proper regard" when a state's highest court has not spoken directly to an issue.
Travelers Ins. Co., 14 F.3d at 119 (quoting Commissioner of Internal Revenue
v. Estate of Bosch, 387 U.S. 456, 465, 87 S.Ct. 1776, 1783, 18 L.Ed.2d 886
(1967)). However, it is also proper to consider the decisions of "federal cases
which construe the state [rule]." Travelers Ins. Co., 14 F.3d at 119 (quoting In
re E. and S. Dist. Asbestos Litig., 772 F.Supp. 1380, 1391 (E. &
S.D.N.Y.1991), rev'd in part on other grounds sub nom. In re Brooklyn Navy
Yard Asbestos Litig., 971 F.2d 831 (2d Cir.1992)).

25

The Appellate Division cases cited by Insureds rely on the argument that
prompt notice of occurrence is of far greater value to an insurer than is prompt
notice of claim. Lauritano v. American Fidelity Fire Ins. Co., 3 A.D.2d 564,
571, 162 N.Y.S.2d 553, 559 (1st Dep't 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, 214, 409 N.Y.S.2d 673, 674 (3d Dep't 1978);
Brooklyn Union Gas Co. v. North River Ins. Co., 124 A.D.2d 621, 621-22, 508
N.Y.S.2d 26, 26 (2d Dep't 1986). Even accepting the overriding importance of
notice of occurrence, several factors, including the Unigard Security decision,
lead us to conclude that the New York Court of Appeals would apply the no

prejudice rule to our case.

26

In Lauritano, the dispute was over the contours of Insurance Law section 167(c)
(now N.Y. Ins. Law 3420(a)(3) (McKinney 1985)), which allows an injured
party to give notice to the liable party's insurer to protect its right of direct suit
against the insurer under section 3420(a)(2). Lauritano, 3 A.D.2d at 568, 162
N.Y.S.2d at 556. The majority held that an injured party should not be subject
to as strict a standard in judging the reasonableness of delay in giving notice as
should an insured, id., especially because notice of claim pales in comparison to
notice of occurrence, and the insurer nearly always could be placed in as good a
position as if timely notice were given. Id. at 571, 162 N.Y.S.2d at 559; see
also Aetna Ins. Co. v. Millard, 25 A.D.2d 341, 344, 269 N.Y.S.2d 588, 591
(3rd Dep't 1966) (finding no prejudice to the insurer because the injured party
did not take a default judgment against insurer). The crux of the Lauritano case
was the reasonableness of the delay, however, not the necessity of
demonstrating prejudice from the delay. In fact, the no prejudice rule was not at
issue in Lauritano.

27

We realize that the Brooklyn Union and Home Indemnity Courts, citing
Lauritano, held that the insurer in each case had not been prejudiced by the
untimely notice of claim, thus implying that the insurer needed to demonstrate
prejudice to escape its obligations on the grounds of late notice of claim. Those
courts apparently relied on Lauritano 's quick dismissal of the benefits to an
insurer of timely notice of claim to decide that the no prejudice rule did not
apply to those cases. However, the Home Indemnity and Brooklyn Union cases
are inapposite because the insurers there actually did have notice of the claims,
although not from their insured. Home Indemnity, 64 A.D.2d at 213, 409
N.Y.S.2d at 674 (noting that the insurer raising the defense of late notice of
claim had received a communication from the attorney of the injured party
informing the insurer of the accident with the insured's vehicle and that a
question existed as to whether the driver had permission to drive the vehicle);
Brooklyn Union, 124 A.D.2d at 621, 508 N.Y.S.2d at 26 (stating that the "
[insurer] received timely notice of the accident and the main action to recover
damages for personal injuries" (emphasis added)). Moreover, like the Lauritano
Court, the Home Indemnity and Brooklyn Union Courts did not address the
insurer's interest in early settlement.

28

Our cases decided since Unigard Security also support our conclusion that the
no prejudice rule applies here. We noted in Blank that the considerations
expressed by the Unigard Security and other courts in support of the no
prejudice rule, "particularly the concerns over an insurer's capacity to conduct
litigation and settlement negotiations, apply equally to notice-of-claim

provisions." Blank, 27 F.3d at 794; see also American Ins. Co., 56 F.3d at 440
(stating that "[t]he lack of notice of a claim thus relieves Fireman's Fund of any
obligation under most of the insurance policies at issue" without requiring a
showing of prejudice). The value to an insurance company of the opportunity to
settle a claim early should not be underestimated. Early settlements limit the
company's exposure and may protect the insured from a judgment in excess of
the policy coverage. When notice of claim is delayed, the ability of the
insurance company to approach the injured party with a settlement offer early
in the litigation is often lost.
29

It is difficult to quantify the prejudice to an insurer who has lost the opportunity
to reach an early settlement. To prove prejudice, the insurer would have to
show what the offer would have been and the likelihood that the injured party
would have accepted it. The unlikelihood of succeeding in this daunting task
suggests that fairness requires the application of the no prejudice rule. See
American Ins. Co., 56 F.3d at 440-41 (stating that the "uncertainty ... is the
result of the failure of the insured to comply with the policy, and it should not
be permitted to use that uncertainty as a weapon against the insurer"). If the
prejudice suffered were quantifiable and proven, insurers would be entitled to
deny coverage. Unigard Security, 79 N.Y.2d at 581, 584 N.Y.S.2d at 292, 594
N.E.2d at 573. Because the prejudice of untimely notice of claim is likely and
may be significant but unquantifiable, the no prejudice rule is appropriate.

30

Early notice of claim is important to an insured for several reasons. An early

settlement can cap liability as to those injuries or damages that the parties were
aware of at the time of settlement and the results of those injuries or damages.
Mangini v. McClurg, 24 N.Y.2d 556, 568, 301 N.Y.S.2d 508, 518, 249 N.E.2d
386, 393 (1969) (holding that a party seeking to overturn a general release must
show that "he did not know and could not know of the later revealed injuries");
Pokora v. Albergo, 130 A.D.2d 473, 515 N.Y.S.2d 56, 56-57 (2d Dep't 1987).

31

In cases where the insured or its employees are likely to testify in pretrial
proceedings, obtaining counsel for the insured and the insured's employees is
critical. If the notice of claim is delayed, the insured's employees might make
inappropriate statements to investigators for the injured party, thus providing
information harmful to the insured's exposure and that of the insurer.

32

The insurer's own investigative interests served by prompt notice of occurrence

are also served by prompt notice of claim. See Blank, 27 F.3d at 794 (noting
that the interest in early investigation, and other interests "apply equally to
notice-of-claim provisions"). Whereas notice of the robbery in this case
allowed Underwriters to investigate promptly the facts pertaining to the actual

robbery, the investigation could not at that time focus on the particular claims
made by the individual claimants. While an occurrence may, at first blush,
seem to be unsuspicious, a particular claim, in light of the facts of the
occurrence, may indicate collusion between the insured and the claimant.
33

In this case, the stolen transport containers were sealed and the manifests
indicated only that the containers held ladies' apparel. In making a claim
against Insureds, the claimed contents of those containers would have come to
light, and while there is no evidence or allegation of collusion or wrongdoing
on the part of Insureds or Cherry Stix, Ltd., the possibility of fraudulent claim
is something an insurer is entitled to minimize. Prompt notice of claim is a
valuable tool which insurers may use to protect themselves from fraud.
Moreover, other contractual defenses might be available which depend on
circumstances not investigated at the time of the occurrence. Thus the need for
prompt investigation supports the application of the no prejudice rule to notice
of claim cases. Id. at 794.

34

In sum, we conclude that the New York Court of Appeals would apply the no
prejudice rule to this case, and conclude that Underwriters are entitled to a
declaration that their obligations under the policy are excused by Insureds'
failure to give notice of claim in a reasonable time.

D. Judicial Estoppel
35

Insureds contend that Underwriters are judicially estopped from denying

coverage as a result of the representations made by the attorneys retained by
Underwriters to vacate the default judgment in the American Motorists action.
The attorneys stated, in their motion to vacate, that "[c]overage under the policy
to defendants for legal liability arising out of the incident which forms the basis
of this action, has not, to date, been declined by underwriters."

36

Judicial estoppel is a doctrine that forbids a party from advancing contradictory

factual positions in separate proceedings. The doctrine attempts to insure "the
sanctity of the oath and the integrity of the judicial process." Bates v. Long
Island R.R., 997 F.2d 1028, 1037 (2d Cir.), cert. denied, 510 U.S. 992, 114
S.Ct. 550, 126 L.Ed.2d 452 (1993). A party invoking judicial estoppel must
show that (1) the party against whom judicial estoppel is being asserted
advanced an inconsistent factual position in a prior proceeding, and (2) the prior
inconsistent position was adopted by the first court in some manner. Id. at
1038.

37

The district court relied on the first prong of the above standard and held that

37

The district court relied on the first prong of the above standard and held that
judicial estoppel was not applicable in this case because the in-court statement
made by the attorneys assigned by Underwriters was not inconsistent with
AXA's denying coverage now. The district court held that their statement
placed the New York Supreme Court on notice that the coverage was subject to
being declined, and that AXA's subsequent denial of coverage was entirely
consistent with the prior statement. We agree. By stating that coverage had not
been declined, "to date," the attorneys expressly avoided committing
Underwriters to any future course. Thus they were not estopped from later
denying coverage.

CONCLUSION
38

For the reasons stated above, the judgment of the district court is affirmed.
VAN GRAAFEILAND, Circuit Judge, concurring:

39

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]-, 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], at 90.

40

In addition to the cases of Lauritano v. American Fidelity Fire Ins. Co., 3

A.D.2d 564, 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 cases 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.

41

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.
42

The dissent in Lauritano put this holding squarely in issue when it said:

43 provisions of the policy are unambiguous, and state that no action is

The
maintainable "unless, as a condition precedent thereto, the insured shall have fully
complied with all the terms of the policy."
44

Id. at 581, 162 N.Y.S.2d 553.

45

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.

46

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).

47

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.

N.Y. Ins. Law 3420(a)(2) (McKinney 1985) requires that all insurance
policies insuring against damage to property include a provision that

in case judgment against the insured or his personal representative in an action

brought to recover damages for injury sustained or loss or damage occasioned
during the life of the policy or contract shall remain unsatisfied at the expiration
of thirty days from the serving of notice of entry of judgment upon the attorney
for the insured, or upon the insured, and upon the insurer, then an action may ...
be maintained against the insurer under the terms of the policy or contract.
If such a provision is not included in the policy, a court construing the policy
will enforce it as if it did include the provision. N.Y. Ins. Law 3103(a)
(McKinney 1985).