Estate of Adams v. Continental Insurance Co.

Beachley, J. In this opinion, we attempt to finally resolve asbestos-related litigation stemming from complaints filed in the Circuit Court for Baltimore City more than twenty years ago. Appellants consist of plaintiffs represented by three different groups of law firms: 1) the Law Offices of Peter Angelos (“LOPA plaintiffs” or “LOPA”); 2) Goodman, Meagher & Enoch, LLP and Clifford Cuniff; Ashcraft & Gerel (“GME/Cuniff/A & G Plaintiffs”); and 3) Skeen, Goldman, LLP (“Goldman Plaintiffs”). 1 ⁶ Appellants were plaintiffs in asbestos-related litigation against MCIC Inc. (formerly McCormick Asbestos Company, “MCIC”). In a lawsuit filed in the Circuit Court for Baltimore City on May 20, 2005, appellants sought, for the second time, additional insurance coverage and proceeds pursuant to a 1994 settlement agreement with appellees, MCIC and its insurers: United States Fidelity and Guaranty Company (“USF & G”); Royal Insurance Company (“Royal”); 2 Liberty Mutual Insurance Company; Continental Insurance Company (“Continental”); 3 and Hartford Accident and Indemnity Company (“Hartford”). Appellants brought claims against appellees for negligent misrepresentation, fraudulent misrepresentation, and fraud by concealment.

Specifically, appellants claim that the appellees fraudulently obtained the settlement by intentionally misrepresenting the extent of MCIC’s available insurance coverage, and that the appellees knew that their misrepresentations regarding the available coverage were false. In August 2012, appellees filed motions for summary judgment, arguing that appellants’ claims were time-barred pursuant to the three-year statute of limitations in Maryland Code (1973, 2013 Repl. Vol.) § 5-101 of the Courts and Judicial Proceedings Article (“CJP”). 4 Appellees argued, inter alia, that appellants were on inquiry notice of their claims as early as 1997 or 1998, shortly after this Court published its opinion in Commercial Union Ins. Co. v. Porter Hayden Co., 116 ⁷ Md.App. 605, 698 A.2d 1167 (1997), cert. denied, 348 Md. 205 , 703 A.2d 147 (1997).

On November 20, 2012, the circuit court dismissed appellants’ claims on the basis that they were time-barred. Appellants present several questions for our review, 5 which we have rephrased as follows: 1. Did the circuit court err in finding that, as a matter of law, the appellants’ claims were barred by the statute of ⁸ limitations because appellants were on inquiry notice of the misrepresentations as early as 1997? 2. Did the circuit court err in granting summary judgment without permitting appellants to conduct additional discovery?

We answer the first question in the negative, and need not decide the second. Accordingly, we affirm the judgment of the circuit court. FACTUAL AND PROCEDURAL BACKGROUND Appellants Litigate Abate I while MCIC and Its Insurers Pursue Settlement MCIC, which was founded in 1934, sold and installed asbestos insulation products. By the early 1970s, it was clear that asbestos was hazardous, and MCIC ceased selling and installing asbestos-containing products in approximately 1973.

In the late 1980s, several law firms, including those representing appellants, collectively filed several thousand lawsuits against MCIC asserting personal injury claims resulting from exposure to asbestos-containing products. In April 1990, the cases of 8,555 plaintiffs were consolidated for trial (“Abate I”). While the Abate I lawsuit was pending, MCIC and its insurers pursued settlement of the lawsuits against MCIC. On February 14, 1992, MCIC’s attorney, John Nagle III, Esq.

(“Nagle”), wrote a letter to LOPA attorney Thomas Friedman, Esq. (“Friedman”), with an attached schedule of all available insurance policies sold to MCIC. The schedule contained a note claiming that the list was prepared by USF & G on behalf of MCIC, and the information provided was “based primarily on secondary evidence of coverage.” The schedule also contained two columns under the heading “products coverage,” one listing “per person limit[s],” and the other listing “per occurrence limit[s].” Framing the settlement discussion in terms of available “products coverage” had, as we will explain, a significant impact on the amount of coverage appellants received in settlement, as well as on the eventual causes of action in this case. ⁹ On February 27, 1992, Friedman responded, submitting a total demand of $19,527,900. Mr. Friedman concluded his letter saying: From the insurance information you supplied, it appears that your client may, in a best case scenario, not have sufficient insurance coverage to satisfy our demand.

Under these circumstances, we are prepared to recommend in settlement of all our claims the total amount of your insurance coverage. It is imperative, therefore, that you determine as expeditiously as possible the exact amount of insurance coverage and that our tender is submitted to your principal. 6 (Emphasis added). Notably, Friedman recommended seeking all available coverage, and not just “products coverage.” On July 8, 1992, the jury found MCIC strictly liable for asbestos-related injuries suffered by foreseeable users and foreseeable bystanders. 7 Settlement discussions pertaining to damages ensued, with counsel for MCIC repeatedly stating that there were “limited assets available to MCIC,” and that bankruptcy proceedings or a settlement with another claimant could likely impact the amount appellants could recover. On December 7, 1992, Nagle sent a letter to Friedman enclosing a revised schedule of insurance (dated November 6, 1992) that was, in most respects, identical to the earlier version.

The schedule identified the “per person” and “per occurrence” limits as “products coverage.” Nagle indicated that he was providing the information “as it [was] related to [him] by USF & G,” noting that “no physical copies of policies of insurance exist with respect to coverage provided to MCIC by its various insurers over the decades,” and explaining that “the policies were disposed of prior to the time when MCIC ¹⁰ was first named as a defendant,” and “[a]ll reasonable efforts have been made to locate such policies.” The 1994 Settlement Agreement On September 14, 1993, Baltimore City Circuit Court Administrative Judge Joseph H.H. Kaplan held a conference to discuss settlement. Nagle had requested the conference so that MCIC could propose to pay approximately $13 million, all of MCIC’s remaining insurance coverage, to settle all of the cases pending against MCIC. At the conference, appellants’ attorneys requested all of the policies that the insurers had ever issued to MCIC, but counsel for the insurers claimed that the policies could not be produced for review. Nagle insisted that the approximately $13 million offer represented MCIC’s remaining insurance assets.

Appellants’ counsel insisted on reviewing the policies before accepting any settlement, and Judge Kaplan instructed the insurers to provide whatever policy documents they possessed in anticipation of future settlement discussions. The Nagle Documents On October 15, 1993, Nagle sent a letter to appellants’ counsel with “insurance coverage documents” attached, which he indicated were “recently provided to [him] by the respective carriers of MCIC, Inc.” 8 We shall refer to these documents as the “Nagle Documents.” The letter stated that Royal had not yet provided him with policy information, but that he would deliver those documents once he received them. The letter also included two tables which summarized the “limits of each carrier and MCIC (exclusive of Royal).” The letter concluded that the total amount of coverage available was $12,300,000.00 with $11,877,054.90 remaining. 9 ¹¹ Royal, unable to locate a copy of any insurance policy it sold to MCIC, wrote a letter to Nagle on October 21, 1993, conceding that, although it could not locate them, it had, in fact, issued insurance policies to MCIC. Royal provided a schedule that listed the policies it issued to MCIC and concluded that the total amount of coverage it provided to MCIC was $1,200,000 based on the “Bodily Injury Limits” of $25,-000/50,000 for the first two years and $50,000/100,000 for the remaining 11 years. 10 Royal reiterated that it did not possess any copies of actual policies, and therefore it claimed that the information it provided was “extremely sketchy.” Nagle forwarded Royal’s letter to appellants’ counsel on October 21, 1993.

Contents of the Nagle Documents—Types of Coverage and Limits of Coverage The Nagle Documents included Declaration sheets 11 for the available policies, which were standard Comprehensive General Liability (“CGL”) policies. The Declaration sheets themselves distinguished the available limits of liability. For example, the USF & G Declaration sheet provided maximum limits to the insured for bodily injury in the following ways: $300,000 each occurrence; and $300,000 in the aggregate. The section titled “Limits of Liability” provides, in pertinent part: The total liability of the Company for all damages ... because of bodily injury sustained by one or more persons as the result of any one occurrence shall not exceed the limit of bodily injury liability stated in the declarations as applicable to “each occurrence.” Subject to the above provision respecting “each occurrence,” the total liability of the ¹² Company for all damages because of (1) all bodily injury included within the completed operations hazard and (2) all bodily injury included within the products hazard shall not exceed the limit of bodily injury liability stated in the declarations as “aggregate.” (Emphasis added).

This language explains that a standard CGL policy provides an aggregate limit for bodily injury claims that fall under the “products hazard” or “completed operations hazard.” Both of these hazards fall within the “products coverage” umbrella. By only imposing aggregate limits for the specifically mentioned bodily injury claims, the policies implicitly permitted non-aggregated limits for “non-produets coverage” claims. The distinction between “products coverage” and “non-products coverage” is at the heart of appellants’ claims. Reaching the Agreement On November 2, 1993, Judge Kaplan convened a second settlement conference.

At that conference, Nagle stated that, having provided the Nagle Documents, he had now offered all insurance coverage, primary as well as excess, in exchange for full settlement and relief from further defense obligation. Nagle admitted that the Nagle Documents were incomplete, but insisted that the total amount of unused and available coverage for MCIC was $13,077,054.90, based on the insurers taking a worst case scenario in calculating that sum. 12 Appellants’ counsel insisted on substantiating that the Na-gle Documents included all available policy documents, arguing that they needed to verify the limits of MCIC’s coverage or the total remaining coverage before agreeing to settle. To address these concerns, the parties agreed that the insurers would provide affidavits that stated that MCIC’s total remaining coverage was approximately $13 million, that the appellees were tendering the limits of remaining unpaid funds, and that ¹³ the appellees were not aware of any other applicable or available coverage. Judge Kaplan directed the parties to begin drafting a settlement agreement that would include these affidavits.

On August 10, 1994, Judge Kaplan approved the settlement agreement for $12,351,000 which both the appellants and appellees signed. 13 Section 2.2 of the settlement agreement provided, at a minimum, a contractual cause of action if more insurance coverage was found. The Defendant agrees that if in addition to the insurance coverage disclosed by Insurers and confirmed by their affidavits ... other insurance is discovered which would be applicable to claims made, the Defendant will promptly notify Participating Plaintiffs’ Counsel and arrange for a pro rata distribution to them for payment to the Plaintiffs .... 14 Attached to the settlement agreement were affidavits from each of the appellees, stating: (1) “a diligent and thorough search” had been made for MCIC’s insurance policies; (2) those searches produced information leading each insurer to report the amounts of coverage listed in the settlement agreement; (3) there was no indication that there were any other policies or coverages available other than what was represented; and (4) there was no indication that the stated limits and unpaid funds were other than what was represented. An additional affidavit, provided by Robert I. McCormick, Treasurer of MCIC, stated that, as of April 30, 1994, the assets of MCIC had a total value of $299.89. Porter Hayden and an Alternative Theory of Claim Classification On August 29, 1997, this Court issued its decision in Porter Hayden, 116 Md.App. 605 , 698 A.2d 1167 (1997).

There, Com ¹⁴ mercial Union provided liability insurance to Porter Hayden, a company that installed insulation containing asbestos. Id. at 617, 698 A.2d 1167 . Commercial Union’s policies for Porter Hayden only provided “premises-operations” coverage, or coverage for bodily injury that occurred during the installation or operations process—not to be confused with “Products Hazard” or “products coverage”—coverage for injuries resulting from exposure to completed, hazardous products. Id. at 687-88, 698 A.2d 1167 .

Noting the narrow scope of coverage in its policy, Commercial Union argued that it had no duty to defend Porter Hayden in asbestos litigation. Id. at 688, 698 A.2d 1167 . We disagreed. The complaints and allegations against Porter Hayden showed that some plaintiffs alleged they had been exposed to asbestos during installation.

Id. at 691-92, 698 A.2d 1167 . We held that, “it is evident that Porter Hayden could be held liable for the manner in which it conducted its operations in installing the asbestos-containing products. In that light, it is not solely covered by the ‘Products Hazard’ insurance it declined to purchase.” Id. at 692, 698 A.2d 1167 , We concluded that, The “Products Hazard” insurance is concerned with injury occurring after possession of the goods or the product has been relinquished or the operation has been completed or abandoned. The nature of some of the allegations in the Master Complaint, however, concern exposure and injury occurring during the operation, such as the emission of asbestos dust during the installation process.

We affirm the ruling ... that, as a matter of law, there is a potentiality that the asbestos-related claims are covered and that there is, therefore, a duty on Commercial Union to defend and, depending on the ultimate findings on the merits, potentially to indemnify. Id. at 692-93, 698 A.2d 1167 . The ramifications of our decision in Porter Hayden were immense to asbestos litigants, and appellants took notice. As explained above, a standard CGL policy provides for aggregate limits—but only as applied to “products coverage” claims. ¹⁵ By recognizing a new theory of recovery, and one without aggregate limits, plaintiffs in Maryland could claim that CGL policies provided much greater coverage than previously thought.

On October 3, 1997, a mere thirty-five days after we published Porter Hayden , Angelos sent a letter to MCIC’s treasurer inquiring about the possibility of additional insurance available, stating: As you will recall, there is a Settlement Agreement dated August 10, 1994[,] between MCIC, Inc., several insurance companies, and various plaintiffs’ law firms. One of the representations made by MCIC, Inc. and its insurers was that there was a limited amount of insurance available to pay to victims of asbestos-related disease. In fact, each of the insurers signed affidavits set[ting] forth the limited amount of money available to MCIC, Inc. for asbestos-related claims. This representation was the major reason we entered into this agreement and recommended to our clients settlements for such small amounts.

Also, this was the primary reason we stopped naming MCIC as a defendant. It has recently come to my attention that information provided by the insurers may be inaccurate, and additional insurance funds may be available under the terms of the policies. Under Section 2.2 of the Settlement Agreement, any additional insurance funds are to be distributed to the plaintiffs. In light of the above, I think it appropriate that my office review the policies of insurance as quickly as possible so that I can determine what, if any, additional funds may be available to the plaintiffs.

(Emphasis added). On October 7, 1997, MCIC attorney Bruce R. Chapper responded to Angelos, stating that, on “August 10, 1994, MCIC tendered what it believed to be the total aggregate of insurance coverage available.” Chapper assured Angelos that, “in response to [Angelos’s] request, there [were] no insurance policies for [his] office to review,” but he was “happy to ¹⁶ discuss” with Angelos whatever information had “recently-come to [his] attention.” On February 11, 1998, Angelos replied by letter that it was “absolutely necessary that [his firm] independently verify whether or not additional coverage exists for MCIC, Inc.” He asked that MCIC “cooperate fully in providing [him] copies of the insurance policies.” On February 20, 1998, Chapper responded, stating that there were “not now and never have been in the course of [the Abate I litigation] any insurance policies for review.” Clifford Cuniff, an attorney for GME, called Nagle on April 1,1998, to learn the status of MCIC with reference to his case. Nagle explained to Cuniff that MCIC no longer had counsel for that litigation, that MCIC would not respond to service of process, and that MCIC no longer had any assets. Three weeks later, on April 22, 1998, Chapper met with LOPA attorneys.

His notes indicated that at the meeting, the LOPA attorneys explained that recent court decisions had interpreted old policies containing provisions for contractors general liability so as not to have any total limit on the policies. Thus they contended that the insurance carriers may be liable for considerably more than the insurance carriers had certified in the affidavits which accompanied the settlement agreement. After preliminarily reviewing certain of the evidences of insurance coverage which were in our file, namely, insurance certificates, bills, etc., they made arrangements to have those documents copied .... ” Neither party took any significant action in reference to this case until January 4, 2001, when Chapper met with LOPA attorneys to discuss the 1994 settlement and MCIC’s insurance coverage. In a follow-up letter, dated February 2, 2001, Chapper stated that The offer was made to you, however, to assign the plaintiffs whatever rights you believe exist under various insurance policies, the limits of which were believed to have been ¹⁷ tendered as part of the settlement.

In conjunction with the settlement, MCIC informed plaintiffs of all of its past insurance carriers and all applicable policy numbers. He stated his impression that LOPA was “going to investigate the possibility of such an assignment and would forward such documentation as may be required to effect the same.” On May 25, 2001, Chapper again met with LOPA to discuss their “desire to make claims under various insurance policies which may have insured” MCIC. The Wallace & Gale Case Adopts the Holding in Porter Hayden In February 2002, a federal court in the District of Maryland decided the case In re Wallace & Gale Co., 275 B.R. 223 (D. Md. 2002). 15 There, plaintiffs sought recovery from insurance companies for asbestos-related bodily injuries. Id. at 227 .

The court acknowledged that Porter Hayden created a new theory in which plaintiffs insured by a CGL policy could pursue installation or operations claims in addition to “products coverage” claims. Id. at 239. The court crystalized the significance of that holding with reference to standard CGL policies, stating: “If a claimant’s initial exposure occurred while Wallace & Gale was still conducting operations, policies in effect at that time will not be subject to any aggregate limit.” Id. at 241. Notably, LOPA was involved in the Wallace & Gale case as early as 1995, providing representation to a group of intervening plaintiffs.

For Wallace & Gale, LOPA hired Scott D. Gilbert, Esq., an expert in insurance law, to prepare a report (the “Gilbert Report”) evaluating the application of the insurance policies. LOPA filed tjie Gilbert Report, dated May 1998, ¹⁸ with the U.S. Bankruptcy Court to explain its theory of recovery. In the Gilbert Report, Gilbert noted that, “None of these policies has an aggregate limit for ‘nonproducts’ claims .... The language of the Travelers Policies follows the standard form language used by the Insurance Services Office (“ISO”).

Since 1973, ISO has written standard CGL form policies used by insurers throughout the United States.” After establishing that the policies at issue were standard CGL policies, where “nonproducts” claims such as operations claims are not subject to aggregate limits, Gilbert discussed the Porter Hayden decision: The Maryland courts have adopted the view that asbestos installation claims are nonproducts claims not subject to aggregate limits. In a case directly on point, the Maryland Court of Special Appeals has held that, for purposes of assessing the duty to defend, asbestos bodily injury claims arising from asbestos installation activities are nonproducts claims. See Commercial Union Ins. Co. v. Porter Hayden Co. (Citations omitted).

Therefore, based on its expert’s report, LOPA knew, no later than May of 1998, that Porter Ha/yden had created a new theory of recovery under standard CGL policies. LOPA Piles a Motion to Enforce Settlement Agreement and Receives the “Chapper Documents” in Discovery On June 11, 2002, LOPA sent a letter to appellees arguing that there was additional insurance coverage beyond what was provided in the 1994 settlement agreement. LOPA cited the section of the settlement agreement which required MCIC to promptly notify appellants of newly discovered coverage and stated: “We believe that such additional coverage does now, in fact, exist.” LOPA attached a copy of the order in the Wallace & Gale case, and noted that, As you will see in that opinion, asbestos contractors, such as Wallace & Gale and MCIC, are afforded much more exten ¹⁹ sive coverage under standard CGL policies than what you and the other insurance carriers represented in the Settlement Agreement. In light of the Wallace <& Gale decision and your familiarity therewith, we assume that you have undertaken a review of your policies and discovered that additional coverage now exists to fully compensate all previous ... and pending claims against your insured.

Enclosed ... is a copy of the ... cases which, pursuant to the Settlement Agreement, should receive additional compensation because additional insurance is now available .... However, please note that we are not willing to accept the rather small amounts contained in the Settlement Agreement. Those amounts were accepted only because we relied upon the insurance carriers’ material misrepresentation of the insurance coverage available. (Emphasis added).

On October 17, 2002, in the absence of a satisfactory response from appellees, LOPA filed, under seal and unknown to the other appellants, a Motion to Enforce Settlement Agreement in the Circuit Court for Baltimore City. In the motion, LOPA requested the court to order each insurance company to tender all insurance coverage available, or in the alternative, to pay the LOPA plaintiffs an equitable amount taking the new insurance coverage into account. On October 30, 2002, the LOPA plaintiffs and appellees entered into a Standstill and Tolling Agreement, agreeing to halt litigation while they discussed LOPA plaintiffs’ claims. 16 This agreement was amended several times, extending the tolling of limitations for a total of 334 days. On April 26, 2004, MCIC responded to a LOPA discovery request and produced over one thousand pages of what appellants have designated as the “Chapper Documents.” The Chapper Documents consist of various correspondence, notes, ²⁰ and memoranda generated between MCIC and its insurers from June 1981 through November 1994.

According to LOP A, the Chapper Documents demonstrate that MCIC knew as early as 1985 that appellants had claims for operations coverage because many of the plaintiffs were exposed to asbestos during installation. Almost two years after LOPA filed its Motion to Enforce Settlement Agreement under seal, the Non-LOPA plaintiffs learned of LOPA’s motion. The Non-LOPA plaintiffs filed motions to intervene, which the court granted on June 7, 2004. The Circuit Court Dismisses the Motion to Enforce Settlement Agreement On August 5, 2004, the circuit court dismissed appellants’ Motion to Enforce Settlement Agreement on the ground that the motion was time-barred.

The court explained its holding: Assuming that the development of a new legal theory of coverage amounted to a “discovery” of the “fact” that additional coverage existed under the settled policies, such discovery by MCIC occurred no later than 1998 when the Angelos plaintiffs’ counsel met with counsel for MCIC, explained their legal theory of recovery and opined that the Insurers owed more under the Settlement Agreement than the amounts represented in their affidavits. Upon MCIC’s discovery of this additional “other insurance,” the Angelos plaintiffs could have brought their Motion to Enforce Settlement Agreement. They sat on their claim, however, until October 17, 2002, over a year after the analogous limitations period for contract actions had lapsed. Ultimately, Plaintiffs have “failed to act with due diligence in the pursuit and enforcement of [their asserted] rights,” and prejudice is demonstrated by their failure to bring their Motion to Enforce within the length of the analogous limitations period.

(Citations omitted). Appellants appealed and a panel of this Court affirmed in an unreported opinion. See Anderson v. Royal Indemnity, No. 1962, Sept. Term 2004 (filed May 15, 2006). In holding that ²¹ appellants’ claims pursuant to the Motion to Enforce Settlement Agreement were time-barred, the Anderson panel stated that, the appellants were on inquiry notice of their potential claims for additional insurance coverage under the 1994 settlement agreement well over three years before they filed their respective motions to enforce in 2002 (and beyond).

When we filed the reported opinion in the Porter Hayden case in August of 1997, and that case became part of the public domain, any Maryland attorney whose practice involved asbestos litigation and insurance coverage for such cases was on notice that there might be nonproducts liability, and correspondingly, insurance coverage for such non-products liability, that exceeded the liability coverage previously assumed to be applicable. The Gilbert report makes [it] clear that by May of 1998, this development in the asbestos field was widely known, and that the prospect of insurance coverage that was not subject to aggregate limits was not ignored by asbestos plaintiffs’ attorneys. Id., slip op. at 23. 17 The Court of Appeals subsequently denied appellants’ petition for writ of certiorari. Anderson v. Royal Indemnity, 394 Md. 479 , 906 A.2d 943 (2006).

The Instant Case: Claims for Misrepresentation and Concealment On May 10, 2005, while the Anderson appeal was pending, LOPA filed a new complaint in the Circuit Court for Baltimore City. The complaint, and its subsequent history, form the basis for this appeal. In the operative complaint, LOPA alleged that MCIC and its insurers had committed: 1) negligent misrepresentation, 2) fraudulent misrepresentation, and 3) fraud by concealment. 18 By virtue of these misrepresentations and con-cealments, LOPA argued, the appellees settled with appellants ²² for sums not representative of the full amount of MCIC’s available insurance coverage. In early 2007, the circuit court permitted the non-LOPA plaintiffs to intervene and file complaints of their own.

All appellants alleged that the Chapper Documents indisputably demonstrated that the appellees knew prior to and during settlement negotiations that appellants maintained claims that were operational in nature for which non-products coverage would be available. The Circuit Court Dismisses Appellants’ Claims for Negligence and Fraud On November 20, 2012, the circuit court granted appellees’ motions for summary judgment, dismissing appellants’ claims for negligent misrepresentation, fraudulent misrepresentation, and fraud by concealment on the ground that the claims were time-barred. The circuit court began its discussion of the time-barred counts by noting that “the running of the statute [of limitations] is ‘activated by actual knowledge—that is express cognition, or by awareness implied from knowledge of circumstances which ought to have put a person of ordinary prudence on inquiry.’ ” (Citing Bacon v. Arey, 203 Md.App. 606, 652 , 40 A.3d 435 (2012)) (internal quotation marks omitted). In the context of fraud, the court explained that, “being ‘on notice’ means having knowledge of circumstances which would cause a reasonable person in the position of the plaintiffs to undertake an investigation which, if pursued with reasonable diligence, would have led to knowledge of the alleged fraud.” (Citing O’Hara v. Kovens, 305 Md. 280, 302 , 503 A.2d 1313 (1986) (internal quotation marks omitted)).

Having established the applicable rules for the running of limitations, the court next found the undisputed facts of the case. The court found that although the Nagle Documents consisted of fragmentary policy materials, the Declaration pages and other forms made clear the nature and scope of the policies insuring MCIC. In reviewing three largely complete policies, the trial court found that “each of those policies ²³ contains the exact same language relating to the products hazard, the completed operations hazard, the occurrence definition, and the limits of liability. Each provides for an aggregate limit for claims within the completed operations and products hazards.” The court explained that, because the form explicitly states the circumstances in which aggregate limits do apply, inferentially, these aggregate limits do not apply to any other form of coverage.

After establishing what appellants could and should have understood from the Nagle Documents, the court turned to the issue of when the appellants should have been on notice of their claims. For the third time, a Maryland court found that the date we decided Porter Hayden put these appellants on notice that they had claims against the appellees. The circuit court found that, Regardless of what they may or may not have known prior to Porter Hayden about the legal categorization of asbestos-related injuries for purposes of insurance coverage, all plaintiffs’ counsel are charged with knowing that such injuries could be covered under non-products CGL provisions after its publication on August 29,1997. The trial court rejected the notion that the appellants had raised a genuine dispute of material fact sufficient to survive a motion for summary judgment.

Instead, it found that possession of the Nagle Documents, coupled with the publishing of Porter Hayden , put appellants on notice that the settlement agreement and the incorporated affidavits were wrong. Because appellants filed their claims more than three years after being on inquiry notice of those claims, the trial court granted summary judgment against appellants based on limitations. It is this legal conclusion that appellants challenge on appeal. STANDARD OF REVIEW The Court of Appeals recently set forth the appropriate standard of review in cases where the circuit court grants summary judgment: We review the Circuit Court’s grant of summary judgment as a matter of law.

Goodwich v. Sinai Hosp. of Balt., ²⁴ Inc., 343 Md. 185, 204 , 680 A.2d 1067, 1076 (1996) (“The standard of review for a grant of summary judgment is whether the trial court was legally correct.” (citation omitted)). Before determining whether the Circuit Court was legally correct in entering judgment as a matter of law in favor of [appellees], we independently review the record to determine whether there were any genuine disputes of material fact. Hill v. Cross Country Settlements, LLC, 402 Md. 281, 294 , 936 A.2d 343, 351 (2007). A genuine dispute of material fact exists when there is evidence “upon which the jury could reasonably find for the plaintiff.” Beatty v. Trailmaster Prods., Inc., 330 Md. 726, 739 , 625 A.2d 1005, 1011 (1993) (citation omitted). “We review the record in the light most favorable to the nonmoving party and construe any reasonable inferences that may be drawn from the facts against the moving party.” Myers v. Kayhoe, 391 Md. 188, 203 , 892 A.2d 520, 529 (2006) (citation omitted).

Windesheim v. Larocca, 443 Md. 312, 326 , 116 A.3d 954 (2015). “We generally limit our review to the grounds relied upon by the trial court.” Benway v. Md. Port Admin., 191 Md.App. 22, 46 , 989 A.2d 1239 (2010). Accord PaineWebber Inc. v. East, 363 Md. 408, 422 , 768 A.2d 1029 (2001) (stating that, “In appeals from grants of summary judgment, Maryland appellate courts, as a general rule, will consider only the grounds upon which the lower court relied in granting summary judgment.”). “We may, however, affirm the grant of summary judgment on a ground not relied upon by the circuit court if the alternative ground is one upon which the circuit court would have no discretion to deny summary judgment.” Rogers v. Home Equity USA, Inc., 228 Md.App. 620, 635 , 142 A.3d 616 (2016) (internal quotation marks and citations omitted) (quoting Warsham v. James Muscatello, Inc., 189 Md.App. 620, 635 , 985 A.2d 156 (2009)). DISCUSSION Inquiry Notice The trial court correctly granted summary judgment in dismissing the claims as time-barred. “A civil action at law ²⁵ shall be filed within three years from the date it accrues unless another provision of the Code provides a different period of time within which an action shall be commenced.” CJP § 5-101 (emphasis added), in determining when an action accrues, Maryland courts recognize the discovery rule. Originally, the discovery rule was an exception that prevented the statute of limitations from starting to run until a victim became aware of a wrong.

Lumsden v. Design Tech Builders, Inc., 358 Md. 435, 442 , 749 A.2d 796 (2000). The exception became the rule in Poffenberger v. Risser, where the Court of Appeals held “the discovery rule to be applicable generally in all actions and the cause of action accrues when the claimant in fact knew or reasonably should have known of the wrong.” 290 Md. 631, 636 , 431 A.2d 677 (1981). A claimant should know of the wrong “if the claimant has ‘knowledge of circumstances which ought to have put a person of ordinary prudence on inquiry [thus, charging the individual] with notice of all facts which such an investigation would in all probability have disclosed if it had been properly pursued.’ ” Lumsden, 358 Md. at 445 , 749 A.2d 796 (quoting Poffenberger, 290 Md. at 637 , 431 A.2d 677 ). The concept of “inquiry notice” controls when limitations begin to run.

A claimant is on inquiry notice when the claimant “has ‘knowledge of circumstances which would cause a reasonable person in the position of the plaintiff! 1 to undertake an investigation which, if pursued with reasonable diligence, would have led to knowledge of the alleged [tort].’ ” Lumsden, 358 Md. at 446 , 749 A.2d 796 (citation omitted) (quoting O’Hara v. Kovens, 305 Md. 280, 302 , 503 A.2d 1313 (1986)). Inquiry Notice: The Similarities Between Negligent and Fraudulent Misrepresentation A claim for negligent misrepresentation requires the defendant to make a false statement negligently. Lloyd v. General Motors Corp., 397 Md. 108, 136 , 916 A.2d 257 (2007) (citations omitted). Fraud claims differ only in that they require the defendant to know the falsity of the statement, or to have made the statement with such reckless disregard for ²⁶ the truth as to impute knowledge.

Univ. Nursing Home, Inc. v. R.B. Brown & Assocs., Inc., 67 Md.App. 48, 61 , 506 A.2d 268 (1986). Maryland courts have used the term “scienter” to refer to the legally culpable state of mind that encompasses either reckless indifference or actual knowledge. See Ellerin v. Fairfax Sav., F.S.B., 337 Md. 216, 232 , 652 A.2d 1117 (1995) (recognizing that the tort of fraud or deceit requires scien- ter—the defendant’s knowledge that either his statement was false, or that he was recklessly indifferent as to whether his statement was true or false.) When Porter Hayden became part of the public domain, and the controlling law in Maryland, all appellants knew that they had been wronged—they had settled a case based on the misrepresentation that only products coverage was available—and then learned that operations coverage had been available all along.

The publication of Porter Hayden combined with possession of the Nagle Documents put all appellants on inquiry notice that the assurances in the affidavits and settlement agreement were false. All appellants were on inquiry notice, at the very least, that the statements may have been made negligently. Generally, “[o]nce on notice of one cause of action, a potential plaintiff is charged with responsibility for investigating, within the limitations period, all potential claims and all potential defendants with regard to the injury.” Doe v. Archdiocese of Washington, 114 Md.App. 169, 188 , 689 A.2d 634 (1997). We note that reckless indifference, a basis for a fraudulent misrepresentation claim, is the next step up the evidentiary ladder from mere negligence.

Because here these torts stem from the same false statements and the same harm, we hold that appellants were also on inquiry notice of their claims for fraudulent misrepresentation. The Scienter in Fraudulent Misrepresentation is Not Limited to Actual Knowledge of the Falsity of the Statement All appellants incorrectly classify the scienter here in terms of a “knowing” falsity. The LOPA plaintiffs, in their opening brief, state that, “Defendants concealed all of the ²⁷ many key facts showing that their settlement representations were knowingly false and made with the intent to deceive.” The Goldman plaintiffs wrote in their opening brief that, “fraud requires scienter, and the fraud claim here arose from facts that the Insurers concealed what they all knew the true ‘limits’ of the policies to be in 1994.” (Emphasis added). Finally, the GME plaintiffs wrote that, “The fact that MCIC and the Insurers knew the ‘public classification’ was false, and hence the ‘knowledge’ or ‘scienter1 element of the fraud, would never have been discovered but for the production of ... [the Chapper Documents].” (Emphasis added).

The inherent error in these statements is that they all treat scienter as if it only means actual knowledge. This is not always the case. In Ellerin , the Court of Appeals reaffirmed that the scienter element in a fraud claim can also refer to reckless indifference, a mental state falling short of actual knowledge. The Court acknowledged that most fraud cases contain allegations of actual knowledge, but stated that Maryland still recognizes reckless indifference as a basis for fraud: Although Maryland cases since McAleer v.