Prince George's County v. Local Government Insurance Trust

RAKER, J. This appeal is an excess insurance case arising from a claim of police brutality against Prince George’s County and three of the County’s police officers. The excess insurer for the County denied coverage because the County failed to inform the excess insurer of the incident, claim, and lawsuit until after the trial. The insured sought declaratory judgment in the Circuit Court for Prince George’s County, and the Circuit Court granted summary judgment to the excess insurer. The Court of Special Appeals affirmed, holding that the insured violated the notice requirements of the policy and that the excess insurer was prejudiced as a matter of law.

We affirm. I. Respondent Local Government Insurance Trust (“the Trust”) was established by Maryland local governments, pursuant to Md.Code (1997, 2002 RepLVol., 2004 Cum.Supp.), § 19-602 of the Insurance Article, 1 to pool together to provide insurance protection to themselves and their employees. 2 The Trust consists of separate pools providing coverage for differ ¹⁶⁷ ent types of risk. Members may participate in any one or in several pools. The Maryland Municipal League, the Maryland Association of Counties, and approximately 163 Maryland local governments participate in the Trust through the execution of a Trust Agreement, designation of one or more pools, and contribution of premiums into the selected pools.

The premiums cover administrative expenses, claim costs, loss reserves, and other expenses. If a pool runs a deficit, the trustees may assess a premium adjustment or increase premiums for the following years. Petitioner, Prince George’s County (“the County”), was a member of the Trust and participated in its Excess Liability Program from July 1, 1996 through July 1, 1998. 3 The County self-insured for up to one million dollars, and the Excess Liability Program covered losses by the County in excess of one million dollars and up to live million dollars. Underlying the instant case is a civil action brought by Freddie McCollum, Jr. and his family in the United States District Court for the District of Maryland against the County and three of its police officers.

The McCollums alleged that on June 28, 1997, following a traffic stop, the three officers, accompanied by a police dog, entered McCollum’s home without a warrant and savagely beat him. McCollum suffered severe injuries, including the loss of his right eye. McCollum notified the County of his fifty million dollar claim by letter on November 7, 1997 and filed suit on March 19, 1998. The federal jury found that the entry of one of the officers into McCollum’s home violated his federal and state constitutional rights and awarded him nominal damages of one dollar.

The jury also found that all the officers had used excessive force in violation of McCollum’s federal and state constitutional rights and had battered him maliciously. The jury awarded him damages of over $4,100,000. The District Court granted the County and the officers’ request for remittitur and entered ¹⁶⁸ judgment for $1,597,670. The County and the officers appealed to the United States Court of Appeals for the Fourth Circuit, which affirmed the judgment per curiam in an unreported opinion.

The County paid the judgment. At no point prior to the jury verdict did the County notify the Trust of the incident involving the officers and McCollum or of McCollum’s suit against the County and its officers. On April 13, 2000, ten days after the jury returned its verdict, the County first wrote to the Trust, informed the Trust of the judgment, noted the excess coverage policy, and expressed the expectation that the Trust would want to participate in an upcoming settlement conference. The Trust replied to the County and denied coverage and indemnification.

The County filed suit against the Trust in the Circuit Court for Prince George’s County, alleging a breach of contract and seeking a declaratory judgment. The two parties filed cross-motions for summary judgment. Following a hearing, the court granted summary judgment in favor of the Trust. The court concluded that the Trust was not obligated to indemnify the County because the County had failed to give notice as required by the policy.

Additionally, the court found that the underlying suit by McCollum against the County did not meet the coverage requirements of the Commercial General Liability section of the policy. The County noted a timely appeal to the Court of Special Appeals. That court affirmed, holding that the County breached the notice requirement of the policy and that the Trust was prejudiced by the breach as a matter of law. See Prince George’s v. LGIT, 159 Md.App. 471, 484, 487 , 859 A.2d 353, 360, 362 (2004).

The court did not reach the issue of whether the underlying claims otherwise qualified under the policy. Id. at 475 , 859 A.2d at 355 . This Court granted the County’s petition for a Writ of Certiorari. 384 Md. 581 , 865 A.2d 589 (2005). Three questions are presented for our consideration: ¹⁶⁹ “1.

Whether an endorsement to an excess insurance policy .. . [conflicts with and] supersedes the ‘Conditions’ provisions of the main policy part.” “2. Whether an excess insurer ... is prejudiced as a matter of law by the insured’s late notice [given after judgment was entered in the underlying suit].... ” “8. Whether the use of excessive force by a County’s police officers wThich caused the plaintiffs bodily injury, mental anguish, and other harms, constitutes an ‘occurrence’ and ‘personal injury’ as defined by a commercial general liability policy.” In response to the first question, we hold that the Circuit Court did not err in finding that the main part of the policy and the endorsement did not conflict, that both required the County to notify the Trust well before the judgment, and that the County violated the notice requirements of the policy. In considering the second question, we first determine whether the Trust was required to show prejudice.

We conclude that the Trust is exempted from the statute requiring a showing of prejudice, but that the Trust was required to show prejudice under the common law. The Trust was prejudiced as a matter of law because it did not receive notice until after the verdict. Accordingly, we hold that the Trust was entitled to deny the County coverage. 4 II. The Excess Liability Program provided coverage for four types of liability: Commercial General Liability, Police Legal Liability, Public Officials Liability, and Business Automobile.

In this appeal, the County claims coverage only under the Commercial General Liability coverage. 5 The terms of the Program were governed by three documents: the ¹⁷⁰ Coverage Declaration Form, the Excess Liability Scope of Coverage (“Scope of Coverage”), and the Self-Insurance Program Excess Coverage Endorsement (“Endorsement”). 6 The position of the County is that the “Claim Reporting” conditions in the Endorsement contradict and supercede the notice provisions in the Scope of Coverage. The County argues that the notice provisions in the Scope of Coverage applied only to the Trust members for whom the Trust was their primary coverage. Unlike those members, members who self-insured for primary coverage and only participated in the Excess Liability Program were responsible for the investigation, settlement, and defense of any claims or suits brought against them. The County reasons that the Trust only required pre-trial notice for claims and suits it was required to investigate, settle, and defend.

The County fulfilled its notice obligations under the Endorsement, the County claims, and, therefore, the Trust could not deny coverage. Additionally, the County argues that even viewing the Scope of Coverage by itself, the County was not required to notify the Trust before the judgment. ¹⁷¹ The County next argues that the Court of Special Appeals erred in holding that the Trust was prejudiced as a matter of law. According to the County, the Trust suffered no prejudice because the Trust, as an excess insurer, did not have the right to control the defense, investigation, and settlement of the suit. At the least, the County argues, the issue of whether the Trust suffered prejudice is a question of fact.

Specifically, the County notes that it vehemently disputed in the Circuit Court the allegations of the Trust that the County had made strategic mistakes in defending the underlying suit. The Trust responds that the County violated the express terms of the Scope of Coverage and the Endorsement by failing to notify the Trust of the incident between McCollum and the police and of the subsequent legal action and by failing to furnish the Trust with relevant documents. The Trust rejects the contention of the County that the Endorsement conflicted with and superceded the notice requirements detailed in the Scope of Coverage. First, the Trust notes that it maintains an interest in the outcome of suits brought against its members participating in its Excess Liability Program and possesses a right to participate in the defense of the suits, despite the fact that it is not obligated to investigate, settle, or defend the suits.

Second, the Trust argues that even if the Scope of Coverage and the Endorsement conflict, the express language of the Scope of Coverage mandates that the conflict be resolved in favor of the provision in the Scope of Coverage. The Trust argues that it was not required to show prejudice and that even if it were, the Court of Special Appeals did not err in finding that it had shown prejudice as a matter of law. The Trust disputes the conclusion of the Court of Special Appeals that it was statutorily required to show prejudice. It argues that it is exempted from the statutory requirement.

Accordingly, the Trust asserts, this Court should apply the common law rule, which does not require a showing of prejudice. In the alternative, the Trust argues that it was prejudiced as a matter of law because the County deprived it of the opportunity to investigate the claim, encourage the County to ¹⁷² settle, recommend trial strategies to the County, and dissuade the County from adopting ineffective trial strategies. Specifically, the Trust characterizes a number of the County’s decisions as strategic mistakes. Generally, the Trust argues that an adverse verdict or judgment should establish prejudice as a matter of law because otherwise an insurer would face the impossible burden of proving what could have happened had it known of the suit.

This case reaches us as an appeal from summary judgment. Under Md. Rule 2-501(e)(2), a circuit court “shall enter judgment in favor of or against the moving party if the motion and response show that there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law.” In this case, there is no dispute of material fact. The standard of review is whether the trial court was legally correct. Arroyo v. Board of Education, 381 Md. 646, 654 , 851 A.2d 576, 581 (2004).

III

The Trust denied coverage to the County because the County did not comply with the notice provisions of the Scope of Coverage and the Endorsement. The first issue for review is whether the Circuit Court erred in finding that the County did not comply with the notice provisions. It is undisputed that the County did not provide notice until after the jury reached its verdict. Still, the County does not concede that it breached the terms of the policy.

Rather, the County argues that the notice requirements of the policy were governed by the Endorsement and that the Endorsement required notice only sixty days after the judgment. Accordingly, we review the interpretation by the Circuit Court of the notice requirements of the policy. In interpreting an insurance policy, as with any contract, the primary task of the circuit court is to apply the terms of the policy itself. See Cole v. State Farm, 359 Md. 298, 305 , 753 A.2d 533, 537 (2000); Bausch & Lomb v. Utica ¹⁷³ Mutual, 355 Md. 566, 581 , 735 A.2d 1081, 1089 (1999).

The circuit court must initially look to the terms of the insurance policy to determine the scope and limitations of its coverage. See Cole, 359 Md. at 305 , 753 A.2d at 537 ; Chantel Associates v. Mt. Vernon, 338 Md. 131, 142 , 656 A.2d 779, 784 (1995). In construing the terms of the insurance contract, the court must accord the terms their “customary, ordinary, and accepted meaning,” unless there is an indication that the parties intended to use the words in a technical sense.

See Bushey v. Northern Assurance, 362 Md. 626, 631 , 766 A.2d 598, 600 (2001); Cole, 359 Md. at 305 , 753 A.2d at 537 ; Bausch & Lomb, 355 Md. at 581 , 735 A.2d at 1089 ; Sullins v. Allstate Ins. Co., 340 Md. 503, 508 , 667 A.2d 617, 619 (1995); Chantel Associates, 338 Md. at 142 , 656 A.2d at 784 . The court also must construe the instrument as a whole, examining the character of the contract, its purpose, and the facts and circumstances of the parties at the time of execution. See Cole, 359 Md. at 305 , 753 A.2d at 537 ; Chantel Associates, 338 Md. at 142 , 656 A.2d at 785 ; Pacific Indem. v. Interstate Fire & Cas., 302 Md. 383, 388 , 488 A.2d 486, 488 (1985).

In general, the main insurance policy and an endorsement constitute a single insurance contract, and an effort should be made to construe them harmoniously. See Bausch & Lomb, 355 Md. at 583 , 735 A.2d at 1091 ; Truck Ins. Exc. v. Marks Rentals, 288 Md. 428, 436, 418 A.2d 1187, 1191 (1980). If the endorsement conflicts with the main policy, the endorsement controls.

See id. The Scope of Coverage for the Excess Liability Program contains extensive notice requirements. The relevant subsection, under the “Conditions” section, provides in pertinent part as follows: “C. INSURED’S DUTIES — In the Event of Occurrence, Claim or Lawsuit “Failure to comply with the provisions of this Scope of Coverage may result in the Trust’s denying coverage with respect to such Claim or Lawsuit. ¹⁷⁴ “1. The Insured must see to it that the Trust is notified promptly of an Occurrence, Wrongful Act or Accident, which is likely to create an obligation under this Scope of Coverage.

Notice shall include: a. How, when and where the Occurrence, Wrongful Act or Accident took place; and b. The names and addresses of any injured persons and witnesses. “2. If a Claim is made or Lawsuit is brought against any Insured, the Named Insured must see to it that the Trust receives prompt written notice of the Claim or Lawsuit. “3.

With respect to a Claim or Lawsuit of which the Trust has been notified, an Insured shall: a. Immediately send the Trust copies of any demands, notices, summonses or legal papers received in connection with a Claim or Lawsuit; b. Authorize the Trust to obtain records and other information; c. Cooperate with the Trust in the investigation, settlement or defense of the Claim or Lawsuit; and d.

Assist the Trust, upon the Trust’s request, in the enforcement of any right against any person or organization which may be liable to the Insured for a Loss.” The Endorsement contains notice requirements as well. The relevant subsection of the Endorsement, within the “Conditions” section, provides as follows: “B. CLAIM REPORTING “The Insured shall be responsible for the investigation, settlement and defense of any Claim made or Lawsuit brought against the Insured. Within sixty (60) days of gaining actual knowledge thereof, the Insured must report the following Losses to the Trust: “1. Claims reserved at $100,000 or more; ¹⁷⁵ “5.

All amputation and or permanent loss of use or sensation of a major extremity; “6. All head/brain injuries; “7. Loss of sight and/or hearing; * * * “9. All violations of civil rights protected under those federal or Maryland State civil rights statutes. “The Insured, when reporting a Claim, shall promptly furnish the Trust with copies of accident and investigation reports, demands, summonses or other legal papers received in connection with a Claim.

The Insured shall also, at the Trust’s request, provide the Trust or its designated representatives with complete access to Claim files and all documents for any reported Claim. The Insured shall provide the Trust with quarterly reports on the status of each reported Claim including the Insured’s most recent loss reserve value for each Claim.” The Endorsement defines “Claim,” in pertinent part, as follows: “Claim means the direct or indirect assertion of any legal right alleging liability or responsibility on the part of an Insured arising out of an Occurrence or Wrongful Act and shall include (i) a Lawsuit filed by a claimant or a representative of a claimant, (ii) a demand letter from a claimant or a representative of a claimant or (iii) any other written communication from a claimant or a representative of a claimant.” The notice provisions in the Scope of Coverage and the Claim Reporting provisions in the Endorsement can be read in harmony. The Scope of Coverage requires the Insured to notify the Trust of potential claims — “of an Occurrence, Wrongful Act or Accident, which is likely to create an obligation.” Additionally, the Scope of Coverage mandates “prompt written notice” of an actual claim or lawsuit. The ¹⁷⁶ Claim Reporting provisions of the Endorsement mandate that the Insured report actual claims to the Trust within sixty days.

The terms of the Scope of Coverage and Endorsement overlap: both require notice of actual claims or lawsuits, provision of copies of legal documents, and authorization of access to other records. The two documents each contain information that is not contained in the other, but that does not conflict with any provision from the other document. For example, the Scope of Coverage refers to “prompt” notice, while the Endorsement specifies sixty days. 7 The harmonious reading of the two documents is consistent with the purpose of those documents of ensuring that the Trust is informed of lawsuits well before the judgment. This notice provides the Trust the opportunity to defend its interests and to prevent or mitigate adverse judgments that would be covered under its policies.

The County is correct in noting that the Endorsement states that “[t]he Insured shall be responsible for the investigation, settlement and defense of any Claim made or Lawsuit brought against the Insured.” The Trust, however, maintains under the Scope of Coverage “the right to participate in the defense and trial of any Claims or Lawsuits which relate to any Occurrence, Wrongful Act or Accident or Claim that the Trust feels may create liability on the part of the Trust under the terms of this Scope of Coverage.” While the Trust cannot direct the defense strate ¹⁷⁷ gy for the Excess Liability Program participant, the Trust can encourage settlement or propose trial strategies. The notice requirements in the Scope of Coverage and the Endorsement ensure that the Trust has the information necessary to exercise its right to participate. Two subsections following on the same page as the “Claim Reporting” subsection further indicate that the Endorsement does not supercede the notice provisions of the Scope of Coverage. First, the “Disputes, Other Coverage” subsection begins with the following sentence: “The Scope of Coverage will determine the duties, liabilities, obligations and responsibilities of the Named Insured and the Trust.” The notice provisions encompass almost the entire “Insured’s Duties” subsection of the Scope of Coverage.

Second, the “Notice” subsection of the Endorsement provides that “[a]ny notice, request, demand, communication or other paper required to be given under the Scope of Coverage shall be sufficiently given and shall be deemed given when mailed... . ” These two subsections of the Endorsement presume the applicability of the notice requirements in the Scope of Coverage. To argue that the Endorsement contradicts the Scope of Coverage, the County isolates the word “Losses” in the second sentence of the “Claim Reporting” subsection, a sentence which states as follows: “Within sixty (60) days of gaining actual knowledge thereof, the Insured must report the following Losses to the Trust....” The Endorsement does not define the term “Losses.” The Scope of Coverage defines “Loss” as follows: “Loss means all sums actually paid or sums which the Insured is legally obligated to pay in the settlement or satisfaction of a Claim to which this Scope of Coverage applies after making proper deductions for all recoveries and salvage.” Based on this definition, the County interprets the “Claim Reporting” subsection as requiring the Insured to report a loss after it had been suffered — in other words, to report the adverse judgment within sixty days of the verdict. ¹⁷⁸ Reading the entire sentence and its context makes clear that the Endorsement requires notice within sixty days of gaining actual knowledge of Claims — not of Losses or judgments. The sentence falls within a subsection entitled “Claim Reporting,” not “Loss Reporting.” The first sentence of the subsection details the responsibility of the Insured to investigate, settle, and defend “any Claim made or Lawsuit brought.” The next sentence begins: “Within sixty (60) days of gaining actual knowledge thereof.” “Thereof” refers to that which was mentioned in the preceding sentence — “any Claim made or Lawsuit brought.” The sentence concludes, “the Insured must report the following Losses to the Trust.” “Losses” necessarily refers to what follows, which is a list of injuries or types of claims. The paragraph immediately following the list, the last part of the “Claim Reporting” subsection, further belies the position of the County that the “Claim Reporting” provision concerns Losses, not Claims.

The paragraph refers repeatedly to Claims and contains no mention of Losses. It requires the insured, “when reporting a Claim,” to provide information that the Trust would need for an ongoing action, a Claim. The Insured must provide all legal papers “received in connection with a Claim,” including accident and investigative reports, demands, and summonses. Upon the Trust’s request, the Insured must provide complete access to “Claim files and all documents for any reported Claim.” The Insured must update the Trust with quarterly reports on “the status of each reported Claim” and these reports must include the “most recent loss reserve value for each Claim.” Each of these requirements are consistent with a Claim, defined as assertions of a legal right alleging liability, not a Loss, or judgment.

We conclude that the Circuit Court did not err in finding that the County was bound by the notice provisions in the Scope of Coverage and the Endorsement and that it violated those provisions. It is clear that the County failed to comply with its duties under the policy. Far from notifying the Trust “promptly” of the occurrence (the incident involving ¹⁷⁹ McCollum in June 1997) or of the claim or lawsuit (the suit brought by the McCollums in March 1998), the County waited until ten days after the jury verdict, in April 2000, before notifying the Trust. Correspondingly, the County did not fulfill its duties to forward the Trust copies of court documents, authorize the Trust to obtain records, and cooperate and assist the Trust.

Indeed, the Trust had no opportunity to participate in the investigation, settlement, or defense before the verdict was issued. The attempts of the County to argue that it complied with the requirements of the policy are unavailing. First, the County argues that the requirements under the “Insured’s Duties” subsection of the Scope of Coverage were not “conditions precedent to the policy” because the subsection states that failure to comply “may” result in a denial of coverage. The County’s attempt to convert “duties” into suggested actions is strained.

See Black’s Law Dictionary 543 (8th ed.2004) (defining “duty” as “[a] legal obligation that is owed or due to another and that needs to be satisfied”). The plain and unambiguous meaning of the sentence is that the Trust has discretion whether to deny coverage when the Insured violates a duty of the Scope of Coverage. Second, the County argues again that notice is not a “condition precedent” to coverage by pointing to the word “likely” in the provision that requires that “[t]he Insured must see to it that the Trust is notified promptly of an Occurrence, Wrongful Act or Accident, which is likely to create an obligation under this Scope of Coverage.” Even were the County able to show that it reasonably could have determined that the incident involving its police officers which resulted in severe injuries to McCollum was not “likely” to exceed the underlying coverage of one million dollars under provision “1.,” provision “2.” required the County to notify the Trust when the McCollums brought their action. Finally, the County notes that the Insured’s Duties subsection only applied “[i]n the Event of Occurrence, Claim or Lawsuit” and argues that none of these events were met.

The ¹⁸⁰ position of the County is contradicted by its own argument in the third question presented. There the County argues that the excessive force by the police officers constituted an “occurrence.” For example, the County stated as follows: “The County has maintained throughout this litigation that the harms sustained by McCollum were caused by an ‘occurrence’ as defined by the policy.” IV. A. After concluding that the Circuit Court did not err in finding that the County breached its obligation under the policy to provide notice to the Trust, the Court of Special Appeals held that the Trust had a statutory obligation to establish prejudice before it could deny coverage. 159 Md.App. at 484 , 859 A.2d at 360 . The Trust argues that it is exempted from this statutory requirement.

We agree. Md.Code (1997, 2002 Repl.Vol., 2004 Cum.Supp.), § 19-110 of the Insurance Article requires that an “insurer” establish by a preponderance of the evidence that it suffered “actual prejudice” from the lack of notice before the insurer may deny coverage. Section 19-110 provides as follows: “An insurer may disclaim coverage on a liability insurance policy on the ground that the insured or a person claiming the benefits of the policy through the insured has breached the policy by failing to cooperate with the insurer or by not giving the insurer required notice only if the insurer establishes by a preponderance of the evidence that the lack of cooperation or notice has resulted in actual prejudice to the insurer.” Section l-101(v) defines “insurer” as follows: “ ‘Insurer’ includes each person engaged as indemnitor, surety, or contractor in the business of entering into insurance contracts.” Section l-101(t) defines the business of insurance as follows: “(1) ‘Insurance business’ includes the transaction of: (i) all matters pertaining to an insurance contract, either before or after it takes effect; and ¹⁸¹ (ii) all matters arising from an insurance contract or a claim under it. “(2) ‘Insurance business’ does not include pooling by public entities for self-insurance of casualty, property, or health risks.” Section 19-602 authorizes public entities to form insurance pools. See supra, note 1.

As discussed supra, the Trust is an insurance pool under § 19-602. Therefore, the Trust does not engage in “insurance business” under § l-101(t), and, consequently, is not an “insurer” under § l-101(v). Accordingly, it is not included under § 19-110 and is not required by that statute to show actual prejudice. B. We next consider whether the Trust must prove prejudice under the common law.

The Legislature originally enacted § 19-110, then Article 48A, § 482, in 1964. See 1964 Md. Laws, Chap. 185. 8 In passing the statute, the Legislature apparently aimed to abrogate the common law rule as articulated in Watson v. U.S.F. & G. Co., 231 Md. 266 , 189 A.2d 625 (1963). See Allstate v. State Farm, 363 Md. 106, 122 , 767 A.2d 831, 840 (2001); Sherwood v. Hartford, 347 Md. 32, 42 , 698 A.2d 1078, 1082-83 (1997); T.H.E. Ins. v. P.T.P. Inc., 331 Md. 406, 414 , 628 A.2d 223, 227 (1993); St. Paul Fire & Marine Ins. v. House, 315 Md. 328, 332 , 554 A.2d 404, 406 (1989). In Watson , we held that an insurer need not show prejudice in order to deny coverage to an insured who breached the notice provision of an insurance policy.

The insurer sought declaratory judgment that it could deny coverage to the insured motor vehicle owner and the driver of the vehicle because the insured had not notified the insurer promptly of the accident. This Court held that the breach alone eonstitut ¹⁸² ed sufficient grounds for the insurer to deny coverage, without any showing of prejudice. The Watson Court reasoned that the notice provision of the policy should be enforced as a provision of a contract. 231 Md. at 271 , 189 A.2d at 627 . The Court considered the notice provision as a “condition precedent” to coverage and stated that “[sjuch a condition precedent ... must be performed before any obligation on the part of the assurer commences.” Id.

In rejecting the insured’s position that the insurer must show prejudice, the Watson Court emphasized that the majority rule did not require prejudice. The Court stated that the insured’s position was “not in accord with the Maryland decisions, nor with the weight of authority elsewhere in this country.” Id. at 272, 189 A.2d at 627 (emphasis added). We cited Maryland opinions that emphasized the violation of the notice provision or other policy provisions as a breach of contract, and, accordingly, rejected a prejudice requirement. Id. at 272-3 , 189 A.2d at 628 (citing Lennon v. Amer.

Farm. Mut. Ins. Co., 208 Md. 424 , 118 A.2d 500 (1955); Assurance Corporation v. Perkins, 169 Md. 269 , 181 A. 436 (1935); Casualty Co. v. Purcella, 163 Md. 434 , 163 A. 870 (1933); Amer.

Etc. Ins. Co. v. Fid. & Cas. Co., 159 Md. 631 , 152 A. 523 (1930); Lewis v. Commercial Cas.

Ins. Co., 142 Md. 472 , 121 A. 259 (1923)). We then cited cases from other states to support the proposition that “[tjhese decisions of the Court of Appeals are in accord with the great weight of authority in this country.” 231 Md. at 273 , 189 A.2d at 628 . In particular, we quoted an opinion of the Nevada Supreme Court as rejecting a prejudice requirement and stating that “[ijt would be presumptuous on our part to establish a rule of law in this state which departs from the overwhelming majority of decisions throughout the United States.” Id.

(quoting State Farm Mut. Auto. Ins. Co. v. Cassinelli, 67 Nev. 227 , 216 P.2d 606, 615 (1950)).

In the four decades since we last considered the common law rule, the majority “no-prejudice rule” (now “the traditional view”) that the Watson Court relied upon became the minority rule. See Alcazar v. Hayes, 982 S.W.2d 845, 850 (Tenn.1998) ¹⁸³ (noting that “[wjhile once the overwhelming majority approach in this country, the number of jurisdictions that still follow the traditional view has dwindled dramatically”); 22 Eric Mills Holmes, Holmes’ Appleman on Insurance 2d § 139.4 (2003) (tracing the “national shift of weight of authority away from the no-prejudice rule ” and describing the prejudice rule as the rule in the “overwhelming majority of states”). See generally Charles C. Marvel, Annotation, Modem Status of Rules Requiring Liability Insurer to Show Prejudice to Escape Liability Because of Insured’s Failure or Delay in Giving Notice of Accident or Claim, or in Forwarding Suit Papers, 32 A.L.R.4th 141 (1984); 1 Barry R. Ostrager & Thomas R. Newman, Handbook on Insurance Coverage Disputes § 4.04 (12th ed.2004). 9 State courts adopt the “prejudice rule” primarily to prevent the insurer from depriving an insured of coverage based on a ¹⁸⁴ technicality. They recognize that the purpose of a notice provision is to protect the interests of the insurer — for example, by affording the insurer the opportunity to acquire full information about the circumstances of the case, assess its rights and liabilities, and take early control of the proceedings.

See Brakeman v. Potomac Ins. Co., 472 Pa. 66 , 371 A.2d 193 , ¹⁸⁵ 197 (1977); Coop. Fire Ins. Ass’n of Vermont v. White Caps, Inc., 166 Vt. 355 , 694 A.2d 34, 38 (1997).

If the insured violates the notice provision without harming the interests of the insurer — ie. without prejudice' — then there is no reason to deny