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INSURER LOSES ON FACTS, BUT WINS ON PRINCIPLE NEW YORK — In a convoluted legal malpractice case, an insurance company won on principle but lost on the facts in its efforts to deny coverage to an Albany, N.Y., law firm. Senior U.S. District Judge Neal McCurn left intact a legal assumption that in New York an insurer seeking to deny coverage on the ground of late notice need not show that actual prejudice occurred because of the lateness. But he also said that Chicago Insurance Co. must defend and indemnify the firm of Cade & Saunders. The notice at issue was not late, he ruled. Cade & Saunders was sued by the aunt and uncle of one of its attorneys after the firm represented them in an unsuccessful personal injury action. The insurer attempted to disclaim coverage because of allegedly late notice. It prevailed in its argument that prejudice, or harm, is irrelevant in a New York late-notice case. But it is still responsible for defending Cade & Saunders and paying any damages resulting from the malpractice action, the court said. The case is Cade & Saunders v. Chicago Insurance, 1:02-CV-1203. — New York Law Journal

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