Prejudice Still Required for Late Notice of SUM Claim Where Timely Notice of Accident Was Given

AUTO – SUM – LATE NOTICE – PREJUDICE REQUIREMENT
Bhatt v. Nationwide Mut. Ins. Co.
(4th Dept., decided 4/24/2009)

Guess it may have been a fool's errand, after all.  Where timely notice of the original accident had been given, the claimant's delay of nearly 35 months in notifying Nationwide of her SUM claim was not enough without a showing of prejudice to deny SUM coverage based on late notice of the SUM claim:

"[W]here an insured previously gives timely notice of the accident, the carrier must establish that it is prejudiced by a late notice of SUM claim before it may properly disclaim coverage" (Rekemeyer v State Farm Mut. Auto. Ins. Co., 4 NY3d 468, 476). Here, it is undisputed that plaintiff timely notified defendant of the accident and, shortly thereafter, filed a claim for no-fault benefits. Defendant failed to establish that it was prejudiced by plaintiff's delay in providing notice of the SUM claim (see id. at 475-476).

I argued this case for Nationwide, but apparently did not convince the Fourth Department that the Rekemeyer prejudice-required rule cannot apply to every matter in which timely notice of the injury-causing accident was given.  What persuaded the Court of Appeals to change New York's common law and opt for a prejudice requirement in Rekemeyer was State Farm's opportunity to monitor and manage the claimant's active and longstanding no-fault claim in that case, an opportunity Nationwide did not have in this case.  Nonetheless, it's admittedly hard to ask the Appellate Division to carve out an exception to a Court of Appeals' rule that, in its face, seems so clear and absolute:  if there was timely notice of the accident, there must be prejudice from the late notice of the SUM claim in order to disclaim SUM coverage.