            REPORTED

IN THE COURT OF SPECIAL APPEALS
         OF MARYLAND

               No. 0511

        September Term, 2013



         JEANNINE MORSE


                  v.


   ERIE INSURANCE EXCHANGE




 Woodward,
 Matricciani,
 Moylan, Charles E., Jr.
  (Retired, Specially Assigned),

                               JJ.



         Opinion by Moylan, J.
  Dissenting Opinion by Woodward, J.


       Filed: April 29, 2014
       In this uninsured motorist insurance coverage dispute, we must choose between two

diverging roads: one requiring compliance with a statutory scheme, the other excusing

compliance in favor of a more equitable (or at least less harsh) result. Unlike Robert Frost,1

we feel constrained to choose the first road, more traveled as it may be. For the parties here

– Jeannine Morse, the appellant, and Erie Insurance Exchange, the appellee – that will make

all the difference.

                       The Acceptance of the Settlement Offer

       This case arises out of an April 28, 2007 automobile accident between Jeannine

Morse and Paula Smallwood in New Castle, Delaware. The accident itself is not relevant

to this appeal, and the parties agree that Smallwood was at fault. Smallwood maintained

an automobile insurance policy with Nationwide Insurance Company that provided up to

$15,000 in liability coverage. Morse maintained her own uninsured motorist coverage

through Erie Insurance Exchange. The uninsured motorist endorsement on Morse's policy

contained a consent to settle clause that mirrors the settlement procedures set forth in Md.

Code, § 19-511 of the Insurance Article.2


       1
           Robert Frost, "The Road Not Taken."

       ... Two roads diverged in a wood, and I –
       I took the one less traveled by,
       And that has made all the difference.
       2
        The "Uninsured/Underinsured Motorists Coverage Endorsement" of Morse's Erie
policy contained the following clause under the heading "Rights and Duties – General Policy
Conditions":

                                                                                (continued...)
      On October 13, 2008, Nationwide offered Morse the full $15,000 policy limit in

settlement of her claim against Smallwood. On October 14 or 15, 2008, Morse's then-

attorney notified Erie of the settlement offer by telephone. On October 27, 2008, she




      2
       (...continued)
      The following duties are added:

             ...

              3. "Anyone we protect" must notify "us" by certified mail of any offer
      to settle a claim for bodily injury or death that, in combination with any other
      settlement for the same loss, would exhaust the applicable bodily injury or
      death limits of the liability insurance policy. Within 60 days after receipt of
      such notice, "we" will send "anyone we protect:"

                     a. written consent to accept the settlement and to the execution
      of releases; or

                     b. written refusal not to accept the settlement offer [sic]. Within
      30 days of such notice of refusal, "we" will pay "anyone we protect" the
      amount of the settlement offer. Payment of the amount of the settlement offer
      to "anyone we protect" preserves "our" right of recovery from anyone else
      held responsible. Once this payment is made, "anyone we protect" is required
      to transfer the right of recovery up to the amount of such payment to "us" and
      to do nothing to harm this right. Anyone receiving payment from "us" and
      from someone else for the same accident or loss will reimburse "us" up to the
      amount of "our" payment.

             If "we" fail to meet all of the requirements imposed on "us" under this
      section, "anyone we protect" may accept a settlement offer and execute
      releases from [sic] anyone held responsible for the loss without prejudice to
      any uninsured motorists claim.

(Emphasis supplied).

                                            -2-
notified Erie of the offer by mail. Morse's attorney did not send the notice by certified mail,

however, and Erie claims it did not receive the notice until December 5 or 6, 2008.

       In the meantime, on November 3, 2008, without obtaining Erie's consent to the

settlement, Morse accepted Nationwide's offer and signed a release of all claims against

Smallwood. Morse's attorney stamped the release with a notation: "Nothing contained in

this release waives, limits, or extinguishes any future claims for UM/UIM or PIP benefits."

Erie learned that Morse had accepted the settlement on February 4, 2009, but did not receive

a copy of the executed release agreement until July 8, 2009.

       On November 5, 2009, Erie denied Morse's claim for uninsured motorist benefits.

Erie gave three reasons: 1) "Ms. Morse signed the Release agreement and negotiated the

Nationwide settlement check prior to sending ERIE the notice as required by [Md. Code, §

19-511 of the Insurance Article]"; 2) "the subject release agreement signed by Ms. Morse

was a global release and served to preclude any and all claims, including the subject

Underinsured Motorists claim";3 and 3) Morse "settled her claim against the tortfeasor

without ERIE's written consent," in violation of the policy.

                                    The Jury's Verdict




       3
        Although the terms "uninsured" and "underinsured" may have distinct meanings in
the insurance industry, and both terms are used in the Insurance Article of the Maryland
Code, for ease of reference, we shall employ the term "uninsured" to refer to both
"uninsured" and "underinsured" motorist insurance.

                                             -3-
       On June 17, 2011, through her present attorneys, Morse filed suit against Erie in the

Circuit Court for Cecil County for breach of the insurance contract. On April 22-23, 2013,

the case was tried to a jury on the issues of whether Erie breached the contract by denying

Morse's uninsured motorist claim and, if so, the extent of Morse's damages resulting from

the automobile accident. Morse moved for judgment on the ground that Erie had failed to

show any prejudice resulting from her failure to obtain its consent to settle with Nationwide.

The court denied the motion. The court also denied Morse's request for a jury instruction

to the effect that her failure to notify Erie of the settlement offer would relieve Erie from its

responsibility to provide coverage only if Erie showed actual prejudice.4 The jury found in

favor of Erie. Morse has appealed from that adverse jury verdict.

                                   The Statutory Milieu


       4
       Morse requested the following jury instruction, a modified version of MPJI-Civil
14:11, Cooperation by Insured:

              The insurance policy issued to the insured contains a provision
       requiring the insured to send to her insurer a copy of the other driver's written
       settlement offer.

               The failure of the insured to give this notice frees the insurance
       company from responsibility for the claimed injury, damage, or loss provided
       that the failure actually prejudiced the insurance company in investigating or
       defending against the claim. The insurer insurance company [sic] must
       establish by a preponderance of the affirmative evidence that it actually was
       prejudiced by the failure to give the necessary notice.

(Pattern instruction modified as indicated). The court was correct in not giving this
instruction because, as we shall explain, it is not a correct statement of the law as it applies
to this case.

                                              -4-
       Our analysis in this case revolves around two sections of the Insurance Article of the

Maryland Code. First, § 19-110 prohibits an insurer from disclaiming coverage on a liability

insurance policy on the ground that an insured failed to cooperate or to provide "required

notice," unless the insurer shows "actual prejudice" resulting therefrom. Section 19-110

provides:

       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.

       Second, § 19-511 creates a procedure that allows an injured insured to settle her claim

against a tortfeasor's liability insurer for full policy limits without prejudice to her claim for

uninsured motorist benefits. Upon receiving from its insured a settlement offer from a

liability insurer for policy limits, the uninsured motorist insurer is afforded sixty days to

choose to consent to the settlement (thereby waiving its subrogation rights against the

tortfeasor), or to refuse to consent and instead pay its insured the amount of the offer directly

(thereby preserving its subrogation rights). If the injured insured has complied with § 19-

511 but the uninsured motorist insurer has not timely responded or paid out, the injured

insured still may accept the settlement offer without prejudice to her uninsured motorist

claim, just as if the uninsured motorist insurer had consented to the settlement. See Kritsings

v. State Farm Mut. Auto. Ins. Co., 189 Md. App. 367, 378, 984 A.2d 395, 401 (2009), cert.



                                              -5-
denied, 413 Md. 229 (2010). See also Buckley v. Brethren Mut. Ins. Co., 207 Md. App.

574, 586-87, 53 A.3d 456, 463 (2012), aff'd, ___ Md. ___, 86 A.3d 665 (2014).5


      5
          Section 19-511 provides, in full:

             (a) Settlement offers sent to insurers providing uninsured motorist
      coverage – If an injured person receives a written offer from a motor vehicle
      insurance liability insurer or that insurer's authorized agent to settle a claim for
      bodily injury or death, and the amount of the settlement offer, in combination
      with any other settlements arising out of the same occurrence, would exhaust
      the bodily injury or death limits of the applicable liability insurance policies,
      bonds, and securities, the injured person shall send by certified mail, to any
      insurer that provides uninsured motorist coverage for the bodily injury or
      death, a copy of the liability insurer's written settlement offer.

             (b) Consent or refusal to consent to acceptance of settlement offer –
      Within 60 days after receipt of the notice required under subsection (a) of this
      section, the uninsured motorist insurer shall send to the injured person:

                    (1) written consent to acceptance of the settlement offer and to
      the execution of releases; or

                       (2) written refusal to consent to acceptance of the settlement
      offer.

             (c) Payment of amount of settlement offer by uninsured motorist
      insurer – Within 30 days after a refusal to consent to acceptance of a
      settlement offer under subsection (b)(2) of this section, the uninsured motorist
      insurer shall pay to the injured person the amount of the settlement offer.

                (d) Preservation of uninsured motorist insurer’s subrogation rights –

                     (1) Payment as described in subsection (c) of this section shall
      preserve the uninsured motorist insurer's subrogation rights against the
      liability insurer and its insured.

                       (2) Receipt by the injured person of the payment described in
                                                                              (continued...)

                                              -6-
      In construing this statutory scheme, we take our guiding principles from Government

Employees Ins. Co. v. Insurance Comm'r of Md., 332 Md. 124, 630 A.2d 713 (1993):

      [T]he primary goal ... is determining the intent of the Legislature when it
      enacted the subject statute. We begin our search for legislative intent with the
      words of the statute to be interpreted, considered in light of the context in
      which the statute appears. Context may include related statutes, pertinent
      legislative history and "other material that fairly bears on the ... fundamental
      issue of legislative purpose or goal ..." Where the statute to be construed is a


      5
       (...continued)
      subsection (c) of this section shall constitute the assignment, up to the amount
      of the payment, of any recovery on behalf of the injured person that is
      subsequently paid from the applicable liability insurance policies, bonds, and
      securities.

             (e) Acceptance of settlement offer and execution of releases – The
      injured person may accept the liability insurer's settlement offer and execute
      releases in favor of the liability insurer and its insured without prejudice to
      any claim the injured person may have against the uninsured motorist insurer:

                     (1) on receipt of written consent to acceptance of the settlement
      offer and to the execution of releases; or

                   (2) if the uninsured motorist insurer has not met the
      requirements of subsection (b) or subsection (c) of this section.

             (f) Construction of written consent to acceptance of settlement offer –
      Written consent by an uninsured motorist insurer to acceptance of a settlement
      offer under subsection (b)(1) of this section:

                    (1) may not be construed to limit the right of the uninsured
      motorist insurer to raise any issue relating to liability or damages in an action
      against the uninsured motorist insurer; and

                    (2) does not constitute an admission by the uninsured motorist
      insurer as to any issue raised in an action against the uninsured motorist
      insurer.

                                            -7-
       part of a statutory scheme, the legislative intention is not determined from that
       statute alone, rather it is to be discerned by considering it in light of the
       statutory scheme. When, in that scheme, two statutes, enacted at different
       times and not referring to each other, address the same subject, they must be
       read together, i.e., interpreted with reference to one another, and harmonized,
       to the extent possible, both with each other and with other provisions of the
       statutory scheme. Neither statute should be read, however, so as to render the
       other, or any portion of it, meaningless, surplusage, superfluous or nugatory.
       In attempting to harmonize them, we presume that, when the Legislature
       enacted the later of the two statutes, it was aware of the one earlier enacted.

              Even though two statutes may require conflicting results with regard
       to their common subject, they are not thereby necessarily rendered
       irreconcilable. Where provisions of one of the statutes deal with the common
       subject generally and those of the other do so more specifically, the statutes
       may be harmonized by viewing the more specific statute as an exception to the
       more general one.

Id. at 131-33, 630 A.2d at 717-18.

                                Competing Contentions

       Morse contends that the court should have granted her motion for judgment on the

breach of contract issue because Erie failed to present evidence of actual prejudice resulting

from her failure to obtain Erie's consent to settle with Nationwide. She does not contend

that she complied with § 19-511. Instead, she asks us to extend the safety net of § 19-110

to require a showing of actual prejudice for disclaimers of coverage based not only on an

insured's failure to provide required notice, but also on an insured's failure to obtain consent

to settlement. She classifies both as "technical" violations that should not merit the harsh

sanction of forfeiture of insurance coverage. She asserts that Erie could not have been




                                             -8-
prejudiced by her settlement with Nationwide because the settlement was for the full limit

of the only liability insurance policy Smallwood had.

       Erie takes a very different view of the statutory provisions. Erie contends that § 19-

511 created a mandatory procedure that an insured and insurer must follow in order for the

insured to accept a settlement offer from a tortfeasor without prejudice to her claim for

uninsured motorist benefits. Erie contends that § 19-110 is strictly limited to denials of

liability coverage based on an insured's failure to provide notice or to cooperate, and that it

cannot be extended to cover a denial of uninsured motorist coverage based on an insured's

failure to obtain consent to settle. Erie views a mere failure to provide notice as something

altogether different from Morse's denial of its opportunity to review the offer and decide

whether to grant or refuse consent to the settlement.

                                        In a Nutshell

       The issue before us is whether an injured insured's failure to obtain her uninsured

motorist insurer's consent to settle with a tortfeasor's liability insurer for policy limits, in

violation of her insurance policy and § 19-511, triggers either the § 19-110 or common law

prejudice rules. We hold that it does not. The § 19-110 prejudice rule is not a safe harbor

that would excuse noncompliance with § 19-511. By its terms, § 19-110 is limited to denials

of liability coverage based on an insured's failure to cooperate or failure to provide required

notice. Obtaining an uninsured motorist insurer's consent to settle with a tortfeasor's liability




                                              -9-
insurer is not equivalent to providing required notice. Maryland's common law prejudice

rule is not noticeably broader than § 19-110.

       Section 19-511, by contrast, sets forth a specific procedure an injured insured must

follow in order to settle with a tortfeasor's liability insurer without prejudice to her uninsured

motorist claim. Extending the prejudice rule to also excuse failure to obtain consent to settle

would render § 19-511 a nullity. Reading the statutory provisions in harmony with each

other, as we must, we hold that an uninsured motorist insurer may disclaim coverage based

on its insured's failure to comply with § 19-511, without having to show actual prejudice.

                                    The Prejudice Rule

       Since 1964, as a matter of statute, and since 2005, as a matter of common law,

Maryland has followed a "prejudice rule," whereby

       [a]n insurer may not disclaim coverage for either lack of notice or failure to
       cooperate unless it demonstrates that the deficiency has resulted in actual
       prejudice to the insurer.

See Allstate Ins. Co. v. State Farm Mut. Auto. Ins. Co., 363 Md. 106, 122, 767 A.2d 831,

840 (2001). In Maryland, it is the insurer who bears the burden of "establish[ing] by a

preponderance of affirmative evidence that the delay in giving notice has resulted in actual

prejudice to the insurer." See Sherwood Brands, Inc. v. Hartford Accident & Indem. Co.,

347 Md. 32, 42, 698 A.2d 1078, 1083 (1997). The rule avoids the "disproportionate"

forfeiture that would result "when [a] notice provision is enforced in the absence of

prejudice," in which case "the insurer suffers no harm and the insured forfeits the premiums


                                              - 10 -
and loses coverage." See Prince George's County v. Local Gov't Ins. Trust, 388 Md. 162,

187, 879 A.2d 81, 96 (2005).

       Although the majority of states follow some form of prejudice rule today,6 that was

not always the case. In Watson v. U.S.F. & G. Co., 231 Md. 266, 272, 189 A.2d 625, 627

(1963), the Court of Appeals rejected a prejudice rule as "not in accord with the Maryland

decisions, nor with the weight of authority elsewhere in this country." The General

Assembly overruled that decision the next year by enacting the forerunner of present § 19-

110, former Article 48A, § 482. See 1964 Md. Laws Chap. 185. The statute originally was

limited to "motor vehicle liability insurance"; it was extended to all liability insurance in

1966. See 1966 Md. Laws Chap. 205. According to the Code Revisor's Note, the current

§ 19-110, adopted in 1997, is "new language derived without substantive change" from

former Article 48A, § 482. In 2005, the Court of Appeals adopted the prejudice rule as a

matter of common law. Prince George's, 388 Md. at 187, 879 A.2d at 96 ("In accordance

with the overwhelming weight of authority of courts across the country and the expression

of public policy by the Maryland General Assembly as stated in § 19-110, we adopt the

prejudice rule."). See also Sherwood Brands, Inc. v. Great American Ins. Co., 418 Md. 300,

322 n.18, 13 A.3d 1268, 1282 n.18 (2011).

A.     Section 19-110 Applies Only to Failure to Cooperate and Failure to
       Provide Notice


       6
       As of 2005, thirty-eight states and two territories had adopted a prejudice rule. See
Prince George's, 388 Md. at 183 n.9, 879 A.2d at 94 n.9.

                                           - 11 -
       Although Maryland courts have now fully embraced the prejudice rule as articulated

in § 19-110, they have uniformly recognized its narrow scope. By its terms, § 19-110

requires an insurer to show actual prejudice only where the insurer disclaims liability

coverage as a consequence of its insured's "fail[ure] to cooperate with the insurer" or failure

to "giv[e] the insurer required notice."

       In Government Employees Ins. Co. v. Harvey, 278 Md. 548, 366 A.2d 13 (1976), the

Court of Appeals explained that the General Assembly had already limited the types of

failures by an insured that would be protected by the prejudice rule. The version of the

statute originally proposed would have required an insurer to show prejudice when it

disclaimed liability "for any reason." The version of the statute actually enacted restricted

application of the prejudice rule to disclaimers based on failure to cooperate or failure to

provide notice.

               As originally introduced before the General Assembly, § 482 provided
       that an insurance company was required to prove actual prejudice in an action
       under a motor vehicle liability insurance policy where it filed a disclaimer of
       insurance for "any reason." The words "any reason" were deleted from the bill
       prior to final passage. As amended and ultimately enacted, § 482 required
       insurance companies to prove actual prejudice only where the disclaimer was
       based on the insured's failure "to cooperate with the insurer or by not giving
       requisite notice to the insurer."

Id. at 552, 366 A.2d at 16-17 (emphasis supplied).

       In Harvey, the injured insured notified her insurer that she had been in an accident

nine days after it occurred. The insurer responded by providing the insured with forms

necessary to submit proof of claim with regard to personal injury protection ("PIP") benefits.

                                            - 12 -
The insured retained an attorney, and the insurer sent the attorney two reminders that,

according to the policy and a statute governing PIP coverage, proof of claim for PIP benefits

needed to be submitted within six months of the accident. The insured finally submitted

proof of claim seven-and-a-half months after the accident. The insurer denied coverage.

The insured brought suit and obtained a judgment in the District Court. The Baltimore City

Court affirmed on the ground that the insured's failure to timely submit proof of claim was

protected by the statutory prejudice rule.

       The Court of Appeals reversed, holding that the prejudice statute did not apply to an

insured's failure to provide timely proof of loss, which is "separate and distinct from a notice

of accident." The Court explained:

               We think it clear from the history and language of § 482 that its
       provisions do not apply to insurance disclaimers grounded on the insured's
       failure to submit proof of loss within the time specified in the policy. That a
       proof of loss or claim is separate and distinct from a notice of accident is well
       recognized.

Id. at 553, 366 A.2d at 17 (emphasis supplied). Thus, the insurer was entitled to deny the

PIP claim solely because the proof of loss was untimely, without having to show prejudice.

       In Phillips Way, Inc. v. American Equity Ins. Co., 143 Md. App. 515, 517, 795 A.2d

216, 217 (2002), this Court dealt with a professional liability insurance policy with a no-

action clause providing that the insured could not maintain an action to recover under the

policy unless and until the amount of loss was fixed by a final judgment rendered after trial

or "by agreement between the parties with the written consent of the [insurer]." Instead of


                                             - 13 -
trying the case to judgment, however, the insured "settled a claim made against it by a third

party but did so without the knowledge or consent of its insurer." Id. The insured sued to

collect on the insurance policy. The circuit court granted summary judgment in favor of the

insurer, and this Court affirmed.

       On appeal, we rejected the insured's argument that § 19-110 applied to its failure to

obtain consent to settle. We recalled the legislative history of § 19-110, as explained in

Harvey. We noted that the General Assembly had "specifically rejected" an approach that

would make § 19-110 "applicable to any defense raised by the insurer." Id. at 521, 795 A.2d

at 219. We reiterated the Harvey Court's conclusion "[t]hat an insurer must show prejudice

only if it raises a failure to cooperate defense or a defense based on lack of notice." Id. We

reasoned that extending the prejudice rule to an insured's breach of a no-action clause would

"put the nearly impossible burden on the [insurer] of showing collusion [between the insured

and the other party to the settlement] or demonstrating, after the fact, the true worth of the

settled claim." Id. at 524, 795 A.2d at 221.

       In Perini/Tompkins Joint Venture v. ACE American Ins. Co., 738 F.3d 95 (4th Cir.

2013), the United States Court of Appeals for the Fourth Circuit applied Phillips Way to

similar facts and reached the same result, concluding that § 19-110 did not apply to an

insured's failure to obtain its insurer's consent to settle in violation of a no-action clause.

B.     "Providing Notice" Is Not Equivalent to "Obtaining Consent to Settle"




                                             - 14 -
       Sensing the outer limits of § 19-110, Morse has attempted to squeeze her situation

into one of the statute's two areas of applicability. She argues only that her failure to obtain

Erie's consent to settle was a form of failure to provide required notice, not that it was a

failure to cooperate. In our view, providing required notice and obtaining consent to settle

are simply not the same thing.

       Maryland courts have rejected attempts to equate mere notice violations, which

trigger the § 19-110 prejudice rule, with other deficiencies by insureds, which do not trigger

the § 19-110 prejudice rule. In Harvey, the Court refused to equate an insured's failure to

timely submit a "proof of loss or claim" with an insured's failure to provide a "notice of

accident."

       That a proof of loss or claim is separate and distinct from a notice of accident
       is well recognized. A proof of loss enables the insurer to ascertain the nature,
       extent and character of the loss and to set reserves accordingly. The chief
       purpose of a proof of loss "is to acquaint the insurance company with certain
       facts and circumstances relative to the loss, forming a basis for further steps
       to be taken by the company, ranging from full settlement to absolute
       repudiation of liability." The insurer's right to a proof of loss, where required
       by the policy, has been characterized as "an important one to the insurer, and
       one in which it is to be protected."

278 Md. at 553, 366 A.2d at 17.

       In a case that predates § 19-511, Waters v. U.S.F. & G. Co., 328 Md. 700, 616 A.2d

884 (1992), the Court of Appeals noted that a consent to settle clause provides an uninsured

motorist insurer with greater protection against undesired settlements than a mere notice

clause. The policy in that case contained a notice clause, but not a consent to settle clause.


                                             - 15 -
The insured provided notice of a liability insurer's pending settlement offer, but accepted the

offer without obtaining its uninsured motorist insurer's consent. The Court held that the

insurer still was bound by the settlement, even though it did not consent, because it had

notice of the pending settlement offer and was a party to the action between the insured and

the tortfeasor.

       When the uninsured motorist carrier fails to include a consent to settle clause
       in the uninsured motorist provisions of the policy, and when the carrier, with
       notice of the tort suit, does not attempt to litigate at trial the underlying tort
       issues of liability and/or damages, the carrier will ordinarily be bound by a
       settlement of the tort suit entered into between its insured and the uninsured
       tortfeasor.

Id. at 719, 616 A.2d at 893 (emphasis supplied). The Court explained that the insurer could

have "protect[ed] itself from an allegedly inappropriate settlement between its insured and

the uninsured tortfeasor" by inserting a consent to settle clause into its policy, or by

intervening in the action and litigating the liability and damages issues, but it chose not to

do so. Id. at 718-19, 616 A.2d at 892-93.

       In West American Ins. Co. v. Popa, 352 Md. 455, 723 A.2d 1 (1998), another pre-

§ 19-511 case, the uninsured motorist policy provided that no judgment against a tortfeasor

would be binding upon the uninsured motorist insurer unless the insured had provided

"reasonable notice of the pendency of the suit" and the insurer had a "reasonable

opportunity" to protect its interests. The policy did not contain a consent to settle clause.

After trial against the tortfeasor proceeded to judgment, the insured made a claim for

uninsured motorist benefits. The insurer argued that it could not be bound by the judgment

                                             - 16 -
because, at the time, it did not know that an uninsured motorist claim would eventually be

made. The Court rejected that argument and held that the insurer was afforded due process

because it had notice of the tort suit and an opportunity to intervene prior to trial. Id. at 464,

723 A.2d at 5.

       The insurer also argued that its insured had no right to recover more on a judgment

against one of the parties than it already had recovered, because the insured had filed an

"order of satisfaction" as to that judgment. The Court reiterated

       that when an insured plaintiff gives his uninsured/underinsured motorist
       carrier timely notice of the tort action, and when the uninsured/underinsured
       provisions of the insurance policy do not contain a clause requiring the
       carrier's consent before the insured can settle with the tortfeasor, the insured
       is entitled to enter a settlement or a consent judgment with the tortfeasor
       without obtaining the consent of or without further notice to the carrier.

Id. at 468, 723 A.2d at 7 (emphasis supplied).7

       In Phillips Way, we rejected an insured's attempt to equate its failure to obtain

consent to settle with a failure to provide notice. As we have noted, the insured in that case

had violated a no-action clause in a professional liability policy that, under the

circumstances, operated as a consent to settle clause. We explained that, even if the insured

had notified its insurer of the pending settlement agreement and had cooperated by giving


       7
         Although the Popa Court also discussed how other states had handled the situation
we face here, where an insured settles with a tortfeasor for policy limits in violation of a
consent to settle clause, the Court made clear that it was not presented with that situation and
that it "need not ... address [it]." 352 Md. at 468 n.3, 723 A.2d at 7 n.3. The Court made
no mention of the § 19-511 settlement procedure, which existed but was not applicable
because the accident at issue occurred before the statute's effective date.

                                              - 17 -
the insurer an opportunity to decide whether to consent, the policy still would have been

breached because the insurer had not consented. Thus, the failure to obtain consent was

something more than a failure to provide notice or to cooperate and it did not trigger the

prejudice rule.

               The appellant's argument, while ingenious, is unpersuasive. First of all,
       it is not technically true that to obtain American Equity's consent to the
       settlement, Phillips Way would have had to notify the insurer of the pending
       settlement – such notification could have been made by UMCP or even by an
       officious intermeddler. But even if it were technically true that in order for
       American Equity to give its consent to the intended settlement, Phillips Way
       would have had to notify and cooperate with its insurer, that fact is irrelevant.
       If Phillips Way had notified American Equity of the intended settlement and
       gave the latter its full cooperation, the condition precedent would still have
       been breached if American Equity failed to give its written consent to that
       settlement.

143 Md. App. at 520, 795 A.2d at 218 (emphasis supplied).

       An insurer's right to consent to settle takes on even greater importance in the context

of uninsured motorist insurance. By contrast to a mere right to notice, which does not

necessarily trigger anything in terms of the ongoing litigation, an uninsured motorist

insurer's statutory right to consent to certain settlements can effectively put the action on

hold for up to sixty days while the insurer makes a decision. See § 19-511(b). An insurer's

decision whether to grant or refuse consent is not as simple or inconsequential as Morse

would have it. The insurer must consider much more than the obvious question whether to

waive or to preserve its subrogation rights against the tortfeasor, who may or may not be

"judgment-proof." By refusing consent and advancing the amount of the settlement offer


                                            - 18 -
to its insured, the insurer assumes the risk that it could recover less than that amount, or

nothing at all, in a subrogation action against the tortfeasor. Under the law that applies to

this case, by granting consent, an insurer became bound by the settlement and waived any

right to assert the tortfeasor's lack of negligence or its own insured's contributory negligence

as a defense to liability on the policy.

       By refusing consent to settle, an insurer takes on the risk that it may later recover less

than the non-refundable amount it must advance to its insured, or even that it may later

recover nothing at all. In Ohio Cas. Ins. Co. v. Chamberlin, 172 Md. App. 229, 914 A.2d

160 (2007), the uninsured motorist insurer refused to consent to a liability insurer's offer to

settle for policy limits of $20,000 and, in accordance with § 19-511(c), advanced the

$20,000 to its insured. The action against the tortfeasor proceeded to trial, and a jury

returned a verdict in favor of the insured for only $5,445. The uninsured motorist insurer

then sought repayment from its insured of the $20,000 it had advanced. The circuit court

denied that request, and we affirmed. We held

       that when a UIM [carrier] chooses to thwart a proposed settlement between
       a plaintiff and an alleged tortfeasor by substituting payment of the settlement
       amount, it bears the risk that a jury might return a verdict in an amount less
       than the amount advanced or in favor of the defendant(s) and it is not entitled
       to a refund of any amount paid.

Id. at 240, 914 A.2d at 167.

       By granting consent to settle – under the law as it stood at the time that, had Morse

complied with § 19-511, Erie would have had to decide whether to grant or refuse consent


                                             - 19 -
– an insurer was precluded from later contesting tort liability. In Maurer v. Pennsylvania

Nat. Mut. Cas. Ins. Co., 404 Md. 60, 945 A.2d 629 (2007), the insured followed the

procedures set forth in § 19-511 and obtained his uninsured motorist insurer's consent to

settle with the tortfeasor's insurer. After that settlement, the insured sued his insurer on the

policy. The court granted partial summary judgment in favor of the insured, ruling that the

tortfeasor had been negligent as a matter of law. Nevertheless, the court submitted the case

to a jury on the issues of whether the insured had been contributorily negligent or had

assumed the risk of his injuries. An affirmative finding on either question would preclude

recovery. The jury found contributory negligence and the insured appealed.

       The Court of Appeals reversed based on erroneous jury instructions, but went on to

address the effect of the uninsured motorist insurer's consent to settle with the tortfeasor.

By consenting to a settlement, an uninsured motorist insurer became bound by it. Id. at 74,

945 A.2d at 637 (quoting Nationwide Mut. Ins. Co. v. Webb, 291 Md. 721, 739-40, 436

A.2d 465, 476 (1981) (holding that "consent to sue" clauses in uninsured motorist policies

are invalid, but noting that "consent to settle" clauses have generally been upheld)). A

consenting insurer was thus precluded from "contest[ing] the issues of tort liability" in the

insured's action to recover on the policy. Id. at 75, 945 A.2d at 638. The Court concluded

that the insurer in Maurer should not have been allowed to raise the issues of its insured's




                                             - 20 -
contributory negligence or assumption of risk, and the Court directed that "[a]ny new trial

shall be limited to the matter of damages." Id.8

       In 2012, the General Assembly tempered the effect of an insurer's written consent to

settle with a tortfeasor. By 2012 Md. Laws Chaps. 268, 269, the legislature added

subsection (f) to § 19-511, which provides:

              (f) Construction of written consent to acceptance of settlement offer –
       Written consent by an uninsured motorist insurer to acceptance of a settlement
       offer under subsection (b)(1) of this section:

                     (1) may not be construed to limit the right of the uninsured
       motorist insurer to raise any issue relating to liability or damages in an action
       against the uninsured motorist insurer; and

                     (2) does not constitute an admission by the uninsured motorist
       insurer as to any issue raised in an action against the uninsured motorist
       insurer.

The legislation provided "[t]hat this Act shall take effect October 1, 2012." Under current

law, an insurer will not be bound by a settlement to which it has given written consent.

Notwithstanding its consent, an insurer still may raise in its defense "any issue relating to

liability or damages." Consent to settlement "does not constitute an admission ... as to any

issue raised in an action against the uninsured motorist insurer."




       8
         As we have noted, the Court had earlier held in Waters, before the enactment of §
19-511, that an uninsured motorist insurer that did not employ a consent to settle clause in
its policy would be bound by a settlement to which it did not consent if it had notice of the
pending offer and an opportunity to intervene in the tort action. 328 Md. at 718-19, 616
A.2d at 892-93.

                                            - 21 -
       Although, today, an uninsured motorist insurer may consent to settlement with a

tortfeasor without waiving its right to contest tort liability, that was not true at the time Erie

would have decided whether to grant consent to Morse's settlement with Nationwide, had

Morse given it the opportunity. By its terms, the 2012 legislation did not take effect until

October 1, 2012 – well after Morse's 2007 accident, 2008 settlement, and 2011 filing of suit

against Erie. If Morse had complied with § 19-511 and given Erie an opportunity to grant

or refuse consent to settle, Erie would have had to consider the more weighty, pre-§ 19-

511(f) consequences of its decision.

       The 2012 amendment has no effect on this case. Statutes are presumed to apply only

prospectively, absent "clear expressions in the statute to the contrary ... particularly ... where

the statute adversely affects substantive rights." See State Farm Mut. Auto Ins. Co. v.

Hearn, 242 Md. 575, 582, 219 A.2d 820, 824 (1966). See also Keeney v. Allstate Ins. Co.,

130 Md. App. 396, 402-07, 746 A.2d 947, 951-53 (2000). The addition of subsection (f)

clearly affected substantive rights, as it drastically altered the effect of an insurer's granting

consent to settle, vis-à-vis both insurer and insured, and did not merely "alter[] procedural

machinery." Hearn, 242 Md. at 582, 219 A.2d at 824. There is absolutely no indication that

the General Assembly intended for 2012 Md. Laws Chaps. 268, 269, to apply

retrospectively. On the contrary, the legislation specifically provided that it would take

effect October 1, 2012. The 2012 change in the law is immaterial to our analysis.




                                              - 22 -
       In this case, to be sure, Erie never contested Smallwood's negligence or raised

Morse's contributory negligence as an affirmative defense to its liability on the policy. Even

if Erie had determined, before Nationwide extended the settlement offer, that Morse had not

been at all negligent and Smallwood was completely at fault, that is not material to our

analysis. Although this may be evidence that Erie was not prejudiced by Morse's settlement

with Nationwide, our task here is only to determine whether, in the abstract, obtaining

consent to settle is equivalent to providing required notice. As we have determined that they

are not equivalent, the prejudice rule is not implicated and Erie's lack of prejudice in this

case is irrelevant.

C.     The Common Law Prejudice Rule is Unavailing

       Morse also invokes Prince George's County v. Local Gov't Ins. Trust, 388 Md. 162,

879 A.2d 81 (2005), which, she claims, created a common law prejudice rule that is broader

than § 19-110. In that case, Prince George's County was found liable for the actions of three

county police officers that deprived a citizen of his state and federal constitutional rights.

The County did not inform its excess liability insurer, the Local Government Insurance

Trust, of the incident or the lawsuit until ten days after the jury returned its verdict. The

Trust denied coverage on the ground that the County had failed to give notice, as required

by the policy, and the County filed suit.

       The trial court granted summary judgment in favor of the Trust. This Court affirmed,

as did the Court of Appeals. The Court of Appeals held that the County had indeed violated


                                            - 23 -
the notice requirements of the policy, but that § 19-110 did not apply because the Trust did

not fit the statutory definition of an "insurer."9 Nevertheless, the Court held that the Trust

was required to show prejudice under the common law. In any event, the Trust was

prejudiced as a matter of law by the County's failure to provide notice until after an adverse

verdict was rendered, and it was thus entitled to deny coverage.

        In holding that the Trust was required to show prejudice under the common law, the

Court overruled its earlier rejection of a prejudice rule in Watson v. U.S.F. & G. Co., 231

Md. 266, 189 A.2d 625 (1963). The Court took note of the fact that, although no-prejudice

was the majority rule at the time Watson was decided, the majority of states now support a

prejudice rule. 388 Md. at 182-83, 879 A.2d at 93. Furthermore, the General Assembly's

swift rejection of Watson, by enacting the forerunner of § 19-110, "announced the public

policy of this state that an insurer must show prejudice before disclaiming coverage based

on the insured's breach of a notice provision." Id. at 187, 879 A.2d at 96. Thus, the Court

held:

        An insurer may not disclaim coverage to an insured based on the insured's
        violation of a notice provision, unless the insurer has been prejudiced by the
        violation.

Id., 879 A.2d at 96-97 (emphasis supplied).




        9
        The Court found that the Trust was an insurance pool formed by public entities under
Ins. § 19-602, not an "insurer" engaged in the insurance business under Ins. § 1-101. 388
Md. at 180-81, 879 A.2d at 92.

                                            - 24 -
       To the extent that a common law prejudice rule even exists, it does not extend to an

insured's failure to obtain consent to settle. By its facts, the Prince George's decision

extended the § 19-110 prejudice rule to cover entities that do not meet the strict definition

of "insurer" contained in Ins. § 1-101, and made clear that the prejudice rule applies to both

primary and excess liability insurers. This may support Morse's argument that the prejudice

rule applies to uninsured motorist insurance policies, which are not, strictly speaking,

liability insurance policies.10 Nevertheless, nothing in the Prince George's decision remotely

suggested that the rule could be extended to anything other than "the insured's violation of

a notice provision."

       In fact, in a subsequent case, the Court has taken an even more limited view of its

Prince George's holding. In Sherwood Brands, Inc. v. Great American Ins. Co., 418 Md.

300, 322 n.18, 13 A.3d 1268, 1282 n.18 (2011), the Court explained:

       In [Prince George's], we – noting § 19-110's embodiment of "the public policy
       of this state that an insurer must show prejudice before disclaiming coverage
       based on the insured's breach of a notice provision" – did "adopt the prejudice
       rule." That is not to say, however, that, prior to [Prince George's], we did not
       require a showing of prejudice. Section 19-110 requires as much. Rather, we
       stated merely that, in requiring an insurer to show prejudice when it denies
       coverage based on a breach of a notice provision, we were not unlike the
       overwhelming majority of our sister states.



       10
         In General Accident Ins. Co. v. Scott, 107 Md. App. 603, 614-15, 669 A.2d 773,
779, cert. denied, 342 Md. 115 (1996), we noted that, "[a]rguably, [Article 48A,] § 482
applies to uninsured motorist coverage, because that kind of coverage is a part of the liability
insurance policy." Nevertheless, we did not "decide whether § 482 actually applies to
uninsured motorist coverage." Id.

                                             - 25 -
(Emphasis supplied). Whatever common law prejudice rule Maryland may have, it is not

noticeably broader than § 19-110.

                        The Statutory Settlement Procedure

       Our conclusion that Erie's denial of coverage did not trigger the § 19-110 or common

law prejudice rules is strengthened by the fact that the procedure for settling with an

uninsured tortfeasor is itself a creature of statute. We cannot apply one statute to excuse

Morse's noncompliance with another statute, especially where the two statutes do not

overlap or conflict. As we have explained, § 19-110 requires an insurer to show actual

prejudice only where it disclaims liability coverage based on an insured's failure to cooperate

or provide required notice. It does not apply where a disclaimer of coverage is based on an

insured's failure to comply with the § 19-511 settlement procedure.

       In Harvey, the Court held that the § 19-110 prejudice rule did not apply to an insurer's

denial of PIP coverage. Like uninsured motorist insurance, PIP coverage is mandatory in

Maryland, unless affirmatively waived, and is governed by its own statutory provisions. See

Ins. §§ 19-505 et seq. Consistent with the PIP coverage statute, the insurer had written into

its policy a six-month time limit for submitting proof of claim. The Court held that the

insurer was entitled to deny PIP coverage based on its insured's failure to timely submit

proof of claim, without having to show prejudice.




                                            - 26 -
               In view of the cases, and of the express legislative authorization
       contained in [Art. 48A, §] 544(a)(1)[11] permitting a time limit for submission
       of the original proof of loss, we think GEICO had a contractual right to deny
       liability based on appellee's failure to comply with the condition precedent
       requiring that proof of claim be made within six months after the accident.
       This is so, we hold, irrespective of prejudice and notwithstanding the fact that
       PIP coverage is compulsory.

278 Md. at 554, 366 A.2d at 17 (emphasis supplied). Similarly, an uninsured motorist

insurer may deny coverage based on an insured's failure to comply with a statutory

settlement procedure, § 19-511, irrespective of prejudice and notwithstanding the fact that

uninsured motorist coverage is compulsory.

       We do not suggest that § 19-511 removes all uninsured motorist coverage disputes

from the ambit of § 19-110. On the contrary, if an uninsured motorist insurer denies

coverage based on an insured's failure to provide notice or to cooperate, it will have to show

actual prejudice. In General Accident Ins. Co. v. Scott, 107 Md. App. 603, 669 A.2d 773,

cert. denied, 342 Md. 115 (1996), this Court affirmed a circuit court's grant of summary

judgment in favor of an injured insured whose uninsured motorist insurer denied coverage

based on the insured's twenty-nine-month delay in providing notice of the accident. Without



       11
            Today, Ins. § 19-508(a)(2) provides, in pertinent part:

               (2) A policy that contains the coverage described in § 19-505 of this
       subtitle may:

                      (i) set a period of not less than 12 months after the date of the
       motor vehicle accident within which the original claim for benefits must be
       filed with the insurer[.]

                                              - 27 -
deciding whether the forerunner of § 19-110 actually applied to uninsured motorist

coverage, we concluded that "an insurer cannot avoid coverage under an uninsured motorist

policy on the grounds of an unreasonably late notice, unless the insurer proves that it

suffered 'actual prejudice.'" Id. at 615, 669 A.2d at 779.12

       Section 19-511 exists primarily for the benefit of an injured insured. It was first

enacted in 1995 as Article 48A, § 542(b). See 1995 Md. Laws Chap. 516. It was conceived,

in part, as a short cut allowing an injured insured to obtain at least some compensation for

her injury without having to wait for a global settlement involving both the tortfeasor's

liability insurer and her own uninsured motorist insurer. See Kritsings v. State Farm Mut.

Auto Ins. Co., 189 Md. App. 367, 378-79, 984 A.2d 395, 401-02 (2009), cert. denied, 413

Md. 229 (2010). It is a carefully brokered legislative solution that "sets forth a settlement

procedure to be followed by claimants." See Brethren Mut. Ins. Co. v. Buckley, ___ Md.

___, 86 A.3d 665, 674 (2014).

       In Keeney v. Allstate Ins. Co., 130 Md. App. 396, 403-04, 746 A.2d 947, 951 (2000),

we explained the situation before § 19-511, when liability insurers' unwillingness to settle




       12
         Section 19-511 did not apply in the Scott case because the action was commenced
well before the statute took effect in 1995. Even if it had applied, however, § 19-511 would
not have been implicated because the case was argued and decided based on the insured's
failure to provide notice, not the insured's failure to obtain consent to settle.

                                           - 28 -
without a release was pitted against uninsured motorist insurers' unwillingness to grant a

release and waive subrogation.13 We recounted the legislative purpose behind the bill:

              Senate Bill 253 [of 1995], which was to become Article 48A, Section
       542(b), was sponsored by Senator Vernon Boozer of Baltimore County. The
       purpose of Senator Boozer's bill, according to the "Senate floor report," was
       to provide a

              remedy to a problem that has existed in Maryland's tort system
              for some time. Currently, an injured person who makes a claim
              against a liability carrier for limits available under the liability
              policy is frequently not allowed by their uninsured/
              underinsured motorist carrier to give the liability carrier a full
              release of their claim. Therefore, if the injured person wishes
              to make an additional claim for their injuries against their
              underinsured motorist coverage, they get caught in a situation
              where the liability carrier will not give them the limits of the
              at-fault party's policy without a release and the
              uninsured/underinsured motorist carrier will not allow them to
              give a release to the liability carrier. As a result, they are unable
              to recover funds from either carrier. This dilemma can cause a
              lengthy delay in settlement.

                     Senate Bill 253 would eliminate this dilemma by
              requiring the uninsured/underinsured motorist carrier to: (1)
              allow their injured insured to settle with the liability carrier and
              provide a release; or (2) pay their injured insured themselves to
              fully maintain their subrogation rights against the liable party.
              Therefore, the insured party gets his money more quickly and



       13
         Even after the enactment of § 19-511, some insurers (including Erie in its initial
denial of Morse's claim) have argued that an insured's general release of a tortfeasor can also
release the uninsured motorist insurer's obligation to provide coverage. The Court of
Appeals rejected that argument in Brethren Mut. Ins. Co. v. Buckley, ___ Md. ___, 86 A.3d
665 (2014), holding that an insured may execute a general release, not explicitly limited to
the tortfeasor and the tortfeasor's liability insurer, without prejudice to her claim for
uninsured motorist benefits.

                                             - 29 -
               the uninsured/underinsured motorist carrier would have "up
               front" the liability settlement.

               The summary of the bill provided in the Senate floor report was terse,
       viz:

               SENATE BILL 253 ESTABLISHES A SETTLEMENT
               PROCEDURE TO BE FOLLOWED WHEN A CLAIMANT
               IS INJURED BY A PARTY WHOSE LIABILITY
               INSURANCE LIMIT IS LESS THAN THE CLAIMANT'S
               UNINSURED MOTORIST LIMITS.

Id. at 401-02, 746 A.2d at 950.

       In exchange for allowing injured insureds to obtain some compensation earlier on in

the process, without prejudice to their remaining claims for uninsured motorist benefits, §

19-511(b) grants an uninsured motorist carrier the right to consent to settlement and a sixty-

day period to make that decision. This is true even if the policy does not contain a consent

to settle clause. Section 19-511 effectively writes into all uninsured motorist policies a

consent to settle clause that applies where the settlement offer would exhaust liability policy

limits. See Maurer, 404 Md. at 73 n.4, 945 A.2d at 637 n.4 ("Under some circumstances,

where the amount of the settlement or settlements, arising out of the same occurrence, would

exhaust liability policy limits, the uninsured/underinsured carrier is by statute given the

option to consent or not to consent to the settlement. Under such circumstances, there exists

a 'consent to settle' clause by statute.").

       If an injured insured follows the settlement procedures of § 19-511, she cannot lose.

If the uninsured motorist insurer grants consent to the settlement, she will obtain prompt


                                              - 30 -
compensation from the tortfeasor's liability insurer. If the uninsured motorist insurer refuses

consent to the settlement, it must promptly remit to her the same compensation, as an

advance against any future recovery. If the uninsured motorist insurer does not respond

within the statutorily established time limit, she may accept the liability insurer's offer as if

her insurer had consented. Upon settling with a liability insurer, pursuant to § 19-511(e),

or accepting equivalent payment from her uninsured motorist insurer, pursuant to § 19-

511(c), the injured insured no longer bears any risk that her claim will later be found to be

worth less than the limit of the tortfeasor's liability policy. Once she accepts payment, the

money is hers to keep.14 In short, an injured insured cannot prejudice her claim for

uninsured motorist benefits by following § 19-511.

       In this case, Morse made no attempt to comply with § 19-511. Section 19-511 was

triggered when Nationwide extended an offer to settle for the full limit of the only liability

policy Smallwood had. Instead of sending Erie a copy of Nationwide's offer by certified

mail, as required by § 19-511(a), Morse's previous attorney first notified Erie by telephone

and later by non-certified mail. Instead of giving Erie sixty days to decide whether to grant

or refuse consent to the settlement, as required by § 19-511(b), Morse accepted Nationwide's

offer and signed a release, twenty-one days after the offer was extended, nineteen or twenty


       14
          Although the amount of payment the insured receives will be set off against any
later higher recovery against a responsible party or the uninsured motorist insurer, see §§ 19-
509(g), 19-511(d)(2), the insured will not have to return any money should subsequent
litigation result in a recovery lower than the initial payment, or even no recovery at all. See
Ohio Cas. Ins. Co. v. Chamberlin, 172 Md. App. 229, 914 A.2d 160 (2007).

                                             - 31 -
days after her attorney notified Erie by telephone, seven days after her attorney sent notice

by non-certified mail, and thirty-two or thirty-three days before Erie actually received the

written offer.

       We are mindful that "the purpose of uninsured motorist statutes is 'that each insured

under such coverage have available the full statutory minimum to exactly the same extent

as would have been available had the tortfeasor complied with the minimum requirements

of the financial responsibility law,'" see, e.g., Nationwide Mut. Ins. Co. v. Webb, 291 Md.

721, 737, 436 A.2d 465, 474 (1981), as well as "the remedial nature of the statutory plan,

which dictates a liberal construction in order to effectuate its purpose of assuring recovery

for innocent victims of motor vehicle accidents," see, e.g., State Farm Mut. Auto. Ins. Co.

v. Maryland Auto. Ins. Fund, 277 Md. 602, 605, 356 A.2d 560, 562 (1976). Nevertheless,

even a liberal construction of a remedial statute cannot excuse total noncompliance.

       In Buckley v. Brethren Mutu. Ins. Co., 207 Md. App. 574, 53 A.3d 456 (2012), this

Court held that an insured's general release, given in exchange for settlement with a

tortfeasor's liability insurer, that released the tortfeasor "and all other persons, firms or

corporations," did not also release the insured's uninsured motorist carrier from providing

benefits. We explained that to hold otherwise would be contrary to the text, spirit, and

purpose of § 19-511. Nevertheless, we remanded for further factfinding with regard to

whether the insurer had consented to the settlement with the tortfeasor. The answer to that

question would determine whether the insurer could contest tort liability at trial or be limited


                                             - 32 -
to a trial on damages only. The Court of Appeals affirmed our decision in all respects,

though it did not reach the question whether the insurer had actually consented to the

settlement. Brethren Mut. Ins. Co. v. Buckley, ___ Md. ___, 86 A.3d 665 (2014). Nothing

in either opinion casts any doubt on an insured's obligation to comply with § 19-511.

       We are not moved by Morse's assertion that Erie could not have been prejudiced by

her settlement with Nationwide because the settlement was for the full limits of the only

liability insurance policy Smallwood had. As we have explained, no prejudice rule was

triggered in this case and Erie's lack of prejudice is irrelevant. We note, however, that, if we

were to apply a prejudice rule as Morse suggests, such a lack of prejudice would almost

always excuse noncompliance with § 19-511, because § 19-511 only applies where "the

amount of the settlement offer, in combination with any other settlements arising out of the

same occurrence, would exhaust the bodily injury or death limits of the applicable liability

insurance policies, bonds, and securities." § 19-511(a). We cannot apply a strained

construction of the § 19-110 prejudice rule to eviscerate § 19-511, a carefully brokered

legislative compromise that already is stacked in favor of an injured insured who complies

with it.

                    Out-of-State Cases are Not Persuasive Here

       Morse presents us with decisions of twenty-eight states which, she claims, apply a

prejudice rule to a denial of uninsured motorist coverage based on violation of a consent to




                                             - 33 -
settle clause.15 Those decisions are easily distinguished from the case at bar. Only two of

those states, Nebraska16 and North Dakota,17 have statutory provisions concerning consent

to settle with a tortfeasor. All the rest have dealt with the matter by common law. Unlike

        15
          She also acknowledges six states that have rejected a prejudice rule. See Downey
v. Travelers Prop. Cas. Ins. Co., 74 So. 3d 952 (Ala. 2011); Dalke v. Allstate Ins. Co., 935
P.2d 1067 (Kan. Ct. App. 1997); Lee v. Auto-Owners Ins. Co., 554 N.W.2d 610 (Mich. Ct.
App. 1996); Stevens v. Merchants Mut. Ins. Co., 599 A.2d 490 (N.H. 1991); Fraioli v.
Metropolitan Prop. & Cas. Ins. Co., 748 A.2d 273 (R.I. 2000); Osborne v. National Union
Fire Ins. Co., 465 S.E. 2d 835 (Va. 1996). Dalke involved an uninsured motorist settlement
statute very similar to Maryland's § 19-511, Kan. Stat. § 40-284(f), which does not contain
a prejudice provision. The court declined to imply one.
        16
             Nebraska law provides that uninsured motorist coverage "shall not apply" where

        the insured or his or her representative makes, without the written consent of
        the insurer, any settlement with or obtains any judgment against any person
        who may be legally liable for any injuries if such settlement adversely affects
        the rights of the insurer, except that this subdivision shall not apply to
        underinsured motorist coverage when the insured has given notice to the
        insurer, in compliance with subsection (2) of section 44-6412, and the insurer
        has failed to make the required payment to protect its right of subrogation[.]

Neb. Rev. Stat. § 44-6413(1)(a) (emphasis supplied).
        17
             North Dakota law provides that uninsured motorist coverage "do[es] not apply"
where

        the insured, without the written consent of the insurer, shall make any
        agreement or settlement with any person who may be legally liable therefor,
        if such agreement adversely affects the rights of the insurer. The insurer is not
        bound by any agreement or settlement without its prior knowledge and
        consent. This limitation does not apply to underinsured motorist coverage
        when the insured has advised the insurer, in compliance with subsection 2 of
        section 26.1-40-15.5, and the insurer has failed to advance the required
        payment to protect its right of reimbursement and subrogation[.]

N.D. Cent. Code § 26.1-40-15.6(7) (emphasis supplied).

                                             - 34 -
Maryland's § 19-511, the Nebraska and North Dakota statutes explicitly contain a prejudice

provision.

       In Sherwood Brands, Inc. v. Great American Ins. Co., 418 Md. 300, 327-28, 13 A.3d

1268, 1285 (2011), the Court of Appeals cautioned against "squeez[ing] a square peg – that

is, Maryland's notice-prejudice statute, as embodied in § 19-110, and our jurisprudence –

into a round hole – that is, the notice-prejudice jurisprudence of other states and

jurisdictions." The Court noted that, "[o]f the more than three-dozen states adopting a

notice-prejudice rule, it appears that only two did so legislatively, as Maryland has." Id.

That assessment applies equally to the cases Morse has cited here. We may not read a

prejudice rule into § 19-511 on the authority that other state legislatures have included one

in their statutes, or that other state courts have included one in their judicially-crafted

remedies, when the Maryland General Assembly has not seen fit to do so.

                                         Conclusion

       Morse argues that our result would be inequitable. Erie, to be sure, made no showing

at all that it was prejudiced by Morse's failure to obtain its consent to settle with Nationwide.

The result Morse feels is harsh could have been easily avoided by complying with the

straightforward settlement procedure the General Assembly provided in § 19-511. We will

not nullify a finely tuned and completely valid statutory procedure simply to excuse Morse's

noncompliance in this particular case. As Morse's noncompliance did not trigger a prejudice




                                             - 35 -
rule, Erie was entitled to disclaim liability on the basis of that noncompliance, with or

without prejudice.

                                                  JUDGMENT AFFIRMED; COSTS TO
                                                  BE PAID BY APPELLANT.




                                         - 36 -
            REPORTED

IN THE COURT OF SPECIAL APPEALS

          OF MARYLAND

               No. 0511

        September Term, 2013




         JEANNINE MORSE

                  v.

   ERIE INSURANCE EXCHANGE




    Woodward,
    Matricciani,
    Moylan, Charles E., Jr.
      (Retired, Specially Assigned),

                 JJ.




  Dissenting Opinion by Woodward, J.


        Filed: April 29, 2014
       I respectfully dissent.

       At the outset, it is important to note that under the facts of this case, Erie does not

claim, nor is there anything in the record to support a claim, that Erie was actually prejudiced

by Morse’s failure to obtain Erie’s written consent prior to settling her claim against the

tortfeasor for the limits of the tortfeasor’s liability policy. Thus, if the consent to settle

requirement of § 19-511 is enforced in the absence of actual prejudice, as Erie urges and the

majority holds, “the insurer [Erie] suffers no harm and the insured [Morse] forfeits the

premiums and loses coverage.” Prince George’s Cnty. v. Local Gov’t Ins. Trust, 388 Md.

162, 187 (2005). Notwithstanding the majority’s assertion that Erie’s lack of actual prejudice

is “irrelevant,” I believe that such lack of actual prejudice is very relevant to a proper

construction of § 19-511.

       In Town of Oxford v. Koste, 204 Md. App. 578 (2012), aff’d, 431 Md. 14 (2013), this

Court set forth the principles that guide the construction of a statute:

                    This case presents an issue of statutory construction, like
           many, resolvable on the basis of judicial consideration of three
           general factors: 1) text; 2) purpose; and 3) consequences. Text is
           the plain language of the relevant provision, typically given its
           ordinary meaning, viewed in context, considered in light of the whole
           statute, and generally evaluated for ambiguity. Legislative purpose,
           either apparent from the text or gathered from external sources, often
           informs, if not controls, our reading of the statute. An examination of
           interpretive consequences, either as a comparison of the results of
           each proffered construction, or as a principle of avoidance of an
           absurd or unreasonable reading, grounds the court’s interpretation in
           reality.

Id. at 585-86 (emphasis added) (citations omitted). When the text is ambiguous, we must

look beyond the statute’s plain language to determine legislative intent:
            “While the language of the statute is the primary source for
            determining legislative intention, the plain meaning rule of
            construction is not absolute; rather, the statute must be construed
            reasonably with reference to the purpose, aim, or policy of the
            enacting body. The Court will look at the larger context,
            including the legislative purpose, within which statutory language
            appears. Construction of a statute which is unreasonable,
            illogical, unjust, or inconsistent with common sense should be
            avoided.”

Consol. Constr. Servs., Inc. v. Simpson, 372 Md. 434, 457 (2002) (emphasis added) (quoting

Tracey v. Tracey, 328 Md. 380, 387 (1992)). The Court of Appeals has emphasized the

importance of legislative purpose, stating that “[t]he cardinal rule [of statutory interpretation]

is to ascertain and effectuate legislative intent.” Id. at 456 (alterations in original) (internal

quotation marks omitted).

       Regarding the text of § 19-511, in Buckley v. Brethren Mutual Insurance Co., 207 Md.

App. 574 (2012), aff’d, ___ Md. ___, No. 10, September Term 2013 (filed March 4, 2014),

we summarized the procedure to be followed by the insured and the uninsured motorist

carrier (“UM carrier”) when the liability insurer of the alleged tortfeasor offers the policy

limits to the injured person. We stated:

            Pursuant to § 19-511(a), when the liability insurer of the alleged
            tortfeasor offers its policy limits to the injured person, the injured
            insured must send a copy of the offer by certified letter to the injured
            insured’s UM carrier. § 19-511(a). Within 60 days after receipt of
            the notice, the UM carrier “shall send to the injured person: (1)
            written consent to acceptance of the settlement offer and to the
            execution of releases; or (2) written refusal to consent to acceptance
            of the settlement offer.” § 19-511(b). If the UM carrier refuses to
            consent to acceptance of the settlement offer, the UM carrier must pay
            the amount of the settlement offer to the injured person within 30 days

                                              -2-
           following the refusal. If the UM insurer consents to the settlement
           offer, or otherwise fails to respond to the settlement offer as required
           by subsections (b) and (c) of § 19-511, then the injured insured may
           accept the settlement offer from the liability insurer and execute a
           release “in favor of the liability insurer and its insured without
           prejudice to any claim the injured person may have against the
           uninsured motorist insurer.” § 19-511(e).

Id. at 586-87 (footnote omitted).

       There is no language in § 19-511 that sets forth the consequences of an insured’s

failure to follow the statute’s procedure prior to accepting the tortfeasor’s liability policy

limits. According to the majority, the consequence of such failure is that the UM carrier may

deny coverage regardless of whether it suffered actual prejudice. Morse, on the other hand,

construes § 19-511 to require actual prejudice to the UM carrier before it can deny coverage.

Given the absence of statutory language, § 19-511 is ambiguous, and the question thus

presented is which construction is consistent with the purpose and policy of § 19-511, and

how do the results of each construction compare with each other.1 See Simpson, 372 Md. at

457 (holding that ambiguity in a statute requires the court to consider the purpose and policy

behind the statute and avoid unjust results); Koste, 204 Md. App. at 586 (noting that statutory

interpretation should be grounded in a consideration of the interpretive consequences of the

statutes’s proffered constructions).




       1
         Although Morse relies on § 19-110 to arrive at her construction of § 19-511, I do
not believe that such reliance is necessary to come to the same conclusion.

                                             -3-
       In Buckley, this Court articulated the purpose and policy of the uninsured motorist

statute, as well as the underlying reasons for enacting § 19-511. We said:

           The purpose of the uninsured motorist statute is to provide
           minimum protection for individuals injured by uninsured
           motorists and should be liberally construed to ensure that
           innocent victims of motor vehicle collisions are compensated for
           their injuries. Consistent with the public policy of affording minimal
           protection for innocent victims, an insured can purchase a higher
           amount of uninsured motorist insurance which will become available
           when the insured’s uninsured motorist coverage, as well as his
           damages, exceed the liability coverage of the tortfeasor. The effect
           [i]s to provide an injured insured with compensation equal to that
           which would have been available had the tortfeasor carried liability
           insurance in an amount equal to the amount of the injured insured’s
           UM coverage.

207 Md. App. at 589 (alteration in original) (emphasis added) (citations and internal

quotation marks omitted).     Similarly, Maryland has a “strong public policy favoring

compensation of those injured by UM drivers.” Id. at 591.

       The primary reason for enacting § 19-511 was to eliminate the potential lengthy delay

caused by “‘a situation where the liability carrier w[ould] not give [the injured persons] the

limits of the at-fault party’s policy without a release and the [UM] carrier w[ould] not allow

them to give a release to the liability carrier.’” Id. at 590 (first and fourth alterations in

original) (quoting Keeney v. Allstate Ins. Co., 130 Md. App. 396, 401 (2000)). Moreover,

§ 19-511 sought to strike a balance between the right of the insured to a speedy recovery of

the liability policy limits and the protection of the UM carrier’s subrogation rights.




                                             -4-
       When the constructions of § 19-511 advanced by the majority and Morse are

considered in the context of the purpose and policy of Maryland’s uninsured motorist statute

and the reasons underlying § 19-511, the result clearly favors Morse’s construction. Morse’s

construction would further the public policy of affording protection for innocent victims by

allowing recovery of uninsured motorist compensation unless the UM carrier can show actual

prejudice occasioned by the insured’s failure to comply with the procedural requirements of

§ 19-511. Where there is no actual prejudice, an insured who paid for uninsured motorist

coverage equal to his or her liability coverage would receive what the statute intended:

“‘[C]ompensation equal to that which would have been available had the tortfeasor carried

liability insurance in an amount equal to the amount of the injured insured’s UM coverage.’”

Id. at 589 (quoting Kritsings v. State Farm Mut. Auto. Ins. Co., 189 Md. App. 367, 375

(2009)). In addition, the balance between the insured’s right to speedy recovery and the

protection of the UM carrier’s subrogation rights would be maintained by Morse’s

construction, because the UM carrier would still be able to deny coverage where its

subrogation rights were actually prejudiced.

       A comparison of the results of the different constructions of § 19-511 also support

Morse’s construction. Adoption of the majority’s view results, in effect, in a windfall to the

UM carrier—the UM carrier is allowed to keep the premiums paid for uninsured motorist

coverage while avoiding its obligation to pay an otherwise valid claim, where the actions of

the insured did not increase the risk inherent with such coverage or prejudice any subrogation



                                             -5-
rights of the UM carrier. Morse’s construction would protect a UM carrier from any real

adverse impact on its subrogation rights while allowing the recovery of compensation under

uninsured motorist coverage that was bought and paid for by the insured.

       Finally, the views expressed in this dissent are consistent with those of Andrew

Janquitto, who wrote in his treatise, Maryland Motor Vehicle Insurance:

                  The issue of whether an unauthorized settlement by a
           claimant can relieve the claimant’s insurer of its obligation to pay
           UM benefits is a difficult one . . . . A short answer is that the 1995
           amendment that created what is now Section 19-511 provides a
           mandatory procedure that must be followed and, if it is not followed,
           the UM insurer is relieved of its obligation to pay UM benefits. This
           short answer may not be correct. Of note, Section 19-511 does not
           indicate that the failure to abide by its provisions relieves the UM
           insurer of its contractual obligation to pay. Hence, if the UM insurer
           can escape its obligation, it must do so by relying on a contractual
           consent-to-settle clause.[2] But using a breach of a consent-to-settle
           clause to avoid the obligation to pay UM benefits is also problematic.
           Not only is there no provision in the UM Statute that creates an
           insurer’s subrogation right, there is no provision that states that a
           claimant’s unauthorized release of a tortfeasor is grounds for the
           insurer to escape paying UM benefits. Even assuming an insurer
           could escape its contractual and statutory obligations by
           enforcing a consent-to-settle provision, it should be able to do so
           only if that is an equitable result. Subrogation, even when it [ ]
           arises out of a contract or a statute, is equitable in nature. . . . [A]
           court must seek to strike a balance between the claimant’s right
           to compensation and the insurer’s right to subrogation. Certainly,
           a mere loss of a theoretical right of subrogation rights should not
           cause the loss of an injured claimant’s right of recovery, for such a
           holding would not be an equitable one. An insurer, simply put, must
           show that there was a realistic likelihood that it would have recovered


       2
       In the instant case, Erie relied upon its contractual consent-to-settle clause to deny
Morse her UM claim.

                                             -6-
           had it exercised the subrogation rights. In other words, an insurer
           must show that it has been actually or materially prejudiced by
           the release of the tortfeasor.

Andrew Janquitto, Maryland Motor Vehicle Insurance § 8.12(B), at 471 (3d ed. 2011)

(footnote omitted).

       For the foregoing reasons, I would reverse the judgment of the circuit court.




                                           -7-
